83_FR_59498 83 FR 59272 - Appraisals for Higher-Priced Mortgage Loans Exemption Threshold

83 FR 59272 - Appraisals for Higher-Priced Mortgage Loans Exemption Threshold

DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
BUREAU OF CONSUMER FINANCIAL PROTECTION

Federal Register Volume 83, Issue 226 (November 23, 2018)

Page Range59272-59274
FR Document2018-25400

The OCC, the Board, and the Bureau are finalizing amendments to the official interpretations for their regulations that implement section 129H of the Truth in Lending Act (TILA). Section 129H of TILA establishes special appraisal requirements for ``higher-risk mortgages,'' termed ``higher-priced mortgage loans'' or ``HPMLs'' in the agencies' regulations. The OCC, the Board, the Bureau, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Federal Housing Finance Agency (FHFA) (collectively, the Agencies) issued joint final rules implementing these requirements, effective January 18, 2014. The Agencies' rules exempted, among other loan types, transactions of $25,000 or less, and required that this loan amount be adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If there is no annual percentage increase in the CPI-W, the OCC, the Board, and the Bureau will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, the threshold is calculated by applying the annual percentage increase in the CPI-W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI-W had been taken into account. Based on the CPI-W in effect as of June 1, 2018, the exemption threshold will increase from $26,000 to $26,700, effective January 1, 2019.

Federal Register, Volume 83 Issue 226 (Friday, November 23, 2018)
[Federal Register Volume 83, Number 226 (Friday, November 23, 2018)]
[Rules and Regulations]
[Pages 59272-59274]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-25400]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 34

[Docket No. OCC-2018-0031]
RIN 1557-AE53

FEDERAL RESERVE SYSTEM

12 CFR Part 226

[Docket No. R-1634]
RIN 7100-AF26

BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1026

RIN 3170-AA91


Appraisals for Higher-Priced Mortgage Loans Exemption Threshold

AGENCY: Office of the Comptroller of the Currency, Treasury (OCC), 
Board of Governors of the Federal Reserve System (Board); and Bureau of 
Consumer Financial Protection (Bureau).

ACTION: Final rules, official interpretations and commentary.

-----------------------------------------------------------------------

SUMMARY: The OCC, the Board, and the Bureau are finalizing amendments 
to the official interpretations for their regulations that implement 
section 129H of the Truth in Lending Act (TILA). Section 129H of TILA 
establishes special appraisal requirements for ``higher-risk 
mortgages,'' termed ``higher-priced mortgage loans'' or ``HPMLs'' in 
the agencies' regulations. The OCC, the Board, the Bureau, the Federal 
Deposit Insurance Corporation (FDIC), the National Credit Union 
Administration (NCUA), and the Federal Housing Finance Agency (FHFA) 
(collectively, the Agencies) issued joint final rules implementing 
these requirements, effective January 18, 2014. The Agencies' rules 
exempted, among other loan types, transactions of $25,000 or less, and 
required that this loan amount be adjusted annually based on any annual 
percentage increase in the Consumer Price Index for Urban Wage Earners 
and Clerical Workers (CPI-W). If there is no annual percentage increase 
in the CPI-W, the OCC, the Board, and the Bureau will not adjust this 
exemption threshold from the prior year. However, in years following a 
year in which the exemption threshold was not adjusted, the threshold 
is calculated by applying the annual percentage increase in the CPI-W 
to the dollar amount that would have resulted, after rounding, if the 
decreases and any subsequent increases in the CPI-W had been taken into 
account. Based on the CPI-W in effect as of June 1, 2018, the exemption 
threshold will increase from $26,000 to $26,700, effective January 1, 
2019.

DATES: This final rule is effective January 1, 2019.

FOR FURTHER INFORMATION CONTACT: OCC: MaryAnn Nash, Counsel, Chief 
Counsel's Office, (202) 649-6287; for persons who are deaf or hard of 
hearing TTY, (202) 649-5597. Board: Lorna M. Neill, Senior Counsel, 
Division of Consumer and Community Affairs, Board of Governors of the 
Federal Reserve System, at (202) 452-3667; for users of 
Telecommunications Device for the Deaf (TDD) only, contact (202) 263-
4869. Bureau: Shelley Thompson, Counsel, Office of Regulations, Bureau 
of Consumer Financial Protection, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    The Dodd-Frank Wall Street Reform and Consumer Protection Act of 
2010 (Dodd-Frank Act) amended the Truth in Lending Act (TILA) to add 
special appraisal requirements for ``higher-risk mortgages.'' \1\ In 
January 2013, the Agencies issued a joint final rule implementing these 
requirements and adopted the term ``higher-priced mortgage loan'' 
(HPML) instead of ``higher-risk mortgage'' (the January 2013 Final 
Rule).\2\ In July 2013, the Agencies proposed additional exemptions 
from the January 2013 Final Rule (the 2013 Supplemental Proposed 
Rule).\3\ In December 2013, the Agencies issued a supplemental final 
rule with additional exemptions from the January 2013 Final Rule (the 
December 2013 Supplemental Final Rule).\4\ Among other exemptions, the 
Agencies adopted an exemption from the new HPML appraisal rules for 
transactions of $25,000 or less, to be adjusted annually for inflation.
---------------------------------------------------------------------------

    \1\ Public Law 111-203, section 1471, 124 Stat. 1376, 2185-87 
(2010), codified at TILA section 129H, 15 U.S.C. 1639h.
    \2\ 78 FR 10368 (Feb. 13, 2013).
    \3\ 78 FR 48548 (Aug. 8, 2013).
    \4\ 78 FR 78520 (Dec. 26, 2013).
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    The OCC's, the Board's, and the Bureau's versions of the January 
2013 Final Rule and December 2013 Supplemental Final Rule and 
corresponding official interpretations are substantively identical. The 
FDIC, NCUA, and FHFA adopted the Bureau's version of the regulations 
under the

[[Page 59273]]

January 2013 Final Rule and December 2013 Supplemental Final Rule.\5\
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    \5\ See NCUA: 12 CFR 722.3; FHFA: 12 CFR part 1222. Although the 
FDIC adopted the Bureau's version of the regulation, the FDIC did 
not issue its own regulation containing a cross-reference to the 
Bureau's version. See 78 FR 10368, 10370 (Feb. 13, 2013).
---------------------------------------------------------------------------

    The OCC's, Board's, and Bureau's regulations,\6\ and their 
accompanying interpretations,\7\ provide that the exemption threshold 
for smaller loans will be adjusted effective January 1 of each year 
based on any annual percentage increase in the Consumer Price Index for 
Urban Wage Earners and Clerical Workers (CPI-W) that was in effect on 
the preceding June 1. Any increase in the threshold amount will be 
rounded to the nearest $100 increment. For example, if the annual 
percentage increase in the CPI-W would result in a $950 increase in the 
threshold amount, the threshold amount will be increased by $1,000. 
However, if the annual percentage increase in the CPI-W would result in 
a $949 increase in the threshold amount, the threshold amount will be 
increased by $900. If there is no annual percentage increase in the 
CPI-W, the OCC, the Board, and the Bureau will not adjust the threshold 
amounts from the prior year.\8\
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    \6\ 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2) (Board); and 
12 CFR 1026.35(c)(2)(ii) (Bureau).
    \7\ 12 CFR part 34, Appendix C to Subpart G, comment 203(b)(2)-1 
(OCC); 12 CFR part 226, Supplement I, comment 43(b)(2)-1 (Board); 
and 12 CFR part 1026, Supplement I, comment 35(c)(2)(ii)-1 (Bureau).
    \8\ See 78 FR 48548, 48565 (Aug. 8, 2013) (``Thus, under the 
proposal, if the CPI-W decreases in an annual period, the percentage 
increase would be zero, and the dollar amount threshold for the 
exemption would not change.'').
---------------------------------------------------------------------------

    On November 30, 2016, the OCC, the Board, and the Bureau published 
a final rule in the Federal Register to memorialize the calculation 
method used by the agencies each year to adjust the exemption threshold 
to ensure that, as contemplated in the December 2013 Supplemental Final 
Rule (HPML Small Dollar Adjustment Calculation Rule), the values for 
the exemption threshold keep pace with the CPI-W.\9\ The HPML Small 
Dollar Adjustment Calculation Rule memorialized the policy that, if 
there is no annual percentage increase in the CPI-W, the OCC, the 
Board, and Bureau will not adjust the exemption threshold from the 
prior year. The HPML Small Dollar Adjustment Calculation Rule also 
provided that, in years following a year in which the exemption 
threshold was not adjusted because there was a decrease in the CPI-W 
from the previous year, the threshold is calculated by applying the 
annual percentage change in the CPI-W to the dollar amount that would 
have resulted, after rounding, if the decreases and any subsequent 
increases in the CPI-W had been taken into account. If the resulting 
amount calculated, after rounding, is greater than the current 
threshold, then the threshold effective January 1 the following year 
will increase accordingly; if the resulting amount calculated, after 
rounding, is equal to or less than the current threshold, then the 
threshold effective January 1 the following year will not change, but 
future increases will be calculated based on the amount that would have 
resulted, after rounding.
---------------------------------------------------------------------------

    \9\ See 81 FR 86250 (Nov. 30, 2016).
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II. 2019 Adjustment and Commentary Revision

    Effective January 1, 2019, the exemption threshold amount is 
increased from $26,000 to $26,700. This is based on the CPI-W in effect 
on June 1, 2018, which was reported on May 10, 2018. The Bureau of 
Labor Statistics publishes consumer-based indices monthly, but does not 
report a CPI change on June 1; adjustments are reported in the middle 
of the prior month. The CPI-W is a subset of the CPI-U index (based on 
all urban consumers) and represents approximately 29 percent of the 
U.S. population. The CPI-W reported on May 10, 2018, reflects a 2.6 
percent increase in the CPI-W from April 2017 to April 2018. 
Accordingly, the 2.6 percent increase in the CPI-W from April 2017 to 
April 2018 results in an exemption threshold amount of $26,700. The 
OCC, the Board, and the Bureau are revising the commentaries to their 
respective regulations to add new comments as follows:
     Comment 203(b)(2)-3.vi to 12 CFR part 34, Appendix C to 
Subpart G (OCC);
     Comment 43(b)(2)-3.vi to Supplement I of 12 CFR part 226 
(Board); and
     Comment 35(c)(2)(ii)-3.vi to Supplement I of 12 CFR part 
1026 (Bureau).
    These new comments state that, from January 1, 2019, through 
December 31, 2019, the threshold amount is $26,700. These revisions are 
effective January 1, 2019.

III. Regulatory Analysis

Administrative Procedure Act

    Under the Administrative Procedure Act, notice and opportunity for 
public comment are not required if an agency finds that notice and 
public comment are impracticable, unnecessary, or contrary to the 
public interest.\10\ The amendments in this rule are technical and 
apply the method previously set forth in the 2013 Supplemental Proposed 
Rule \11\ and the HPML Small Dollar Adjustment Calculation Rule. For 
these reasons, the OCC, the Board, and the Bureau have determined that 
publishing a notice of proposed rulemaking and providing opportunity 
for public comment are unnecessary. Therefore, the amendments are 
adopted in final form.
---------------------------------------------------------------------------

    \10\ 5 U.S.C. 553(b)(B).
    \11\ See 78 FR 48548, 48565 (Aug. 8, 2013) (``Thus, under the 
proposal, if the CPI-W decreases in an annual period, the percentage 
increase would be zero, and the dollar amount threshold for the 
exemption would not change.'').
---------------------------------------------------------------------------

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking 
where a general notice of proposed rulemaking is not required.\12\ As 
noted previously, the agencies have determined that it is unnecessary 
to publish a general notice of proposed rulemaking for this joint final 
rule. Accordingly, the RFA's requirements relating to an initial and 
final regulatory flexibility analysis do not apply.
---------------------------------------------------------------------------

    \12\ 5 U.S.C. 603 and 604.
---------------------------------------------------------------------------

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995,\13\ the 
agencies reviewed this final rule. No collections of information 
pursuant to the Paperwork Reduction Act are contained in the final 
rule.
---------------------------------------------------------------------------

    \13\ 44 U.S.C. 3506; 5 CFR part 1320.
---------------------------------------------------------------------------

Unfunded Mandates Reform Act

    The OCC analyzes proposed rules for the factors listed in Section 
202 of the Unfunded Mandates Reform Act of 1995, before promulgating a 
final rule for which a general notice of proposed rulemaking was 
published.\14\ As discussed above, the OCC has determined that the 
publication of a general notice of proposed rulemaking is unnecessary.
---------------------------------------------------------------------------

    \14\ 2 U.S.C. 1532.
---------------------------------------------------------------------------

Bureau Congressional Review Act Statement

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Bureau will submit a report containing this rule and other required 
information to the U.S. Senate, the U.S. House of Representatives, and 
the Comptroller General of the United States prior to the rule taking 
effect. The Office of Information and Regulatory Affairs (OIRA) has 
designated this rule as not a ``major rule'' as defined by 5 U.S.C. 
804(2).

[[Page 59274]]

List of Subjects

12 CFR Part 34

    Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit, 
Mortgages, National banks, Reporting and recordkeeping requirements, 
Savings associations, Truth in lending.

12 CFR Part 226

    Advertising, Appraisal, Appraiser, Consumer protection, Credit, 
Federal Reserve System, Mortgages, Reporting and recordkeeping 
requirements, Truth in lending.

12 CFR Part 1026

    Advertising, Appraisal, Appraiser, Banking, Banks, Consumer 
protection, Credit, Credit unions, Mortgages, National banks, Reporting 
and recordkeeping requirements, Savings associations, Truth in lending.

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

Authority and Issuance

    For the reasons set forth in the preamble, the OCC amends 12 CFR 
part 34 as set forth below:

PART 34--REAL ESTATE LENDING AND APPRAISALS

0
1. The authority citation for part 34 continues to read as follows:

    Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1462a, 1463, 
1464, 1465, 1701j-3, 1828(o), 3331 et seq., 5101 et seq., 
5412(b)(2)(B) and 15 U.S.C. 1639h.


0
2. In Appendix C to Subpart G, under Section 34.203--Appraisals for 
Higher-Priced Mortgage Loans, paragraph 34.203(b)(2), paragraph 3.vi is 
added to read as follows:

Appendix C to Subpart G--OCC Interpretations

* * * * *

Section 34.203--Appraisals for Higher-Priced Mortgage Loans

* * * * *

Paragraph 34.203(b)(2)

* * * * *
    3. * * *
    vi. From January 1, 2019, through December 31, 2019, the 
threshold amount is $26,700.
* * * * *

Board of Governors of the Federal Reserve System

Authority and Issuance

    For the reasons set forth in the preamble, the Board amends 
Regulation Z, 12 CFR part 226, as set forth below:

PART 226--TRUTH IN LENDING (REGULATION Z)

0
3. The authority citation for part 226 continues to read as follows:

    Authority: 12 U.S.C. 3806; 15 U.S.C. 1604, 1637(c)(5), 1639(l), 
and 1639h; Pub. L. 111-24, section 2, 123 Stat. 1734; Pub. L. 111-
203, 124 Stat. 1376.


0
4. In Supplement I to part 226, under Section 226.43--Appraisals for 
Higher-Risk Mortgage Loans, paragraph 43(b)(2), paragraph 3.vi is added 
to read as follows:

Supplement I to Part 226--Official Staff Interpretations

* * * * *
    Section 226.43--Appraisals for Higher-Risk Mortgage Loans
* * * * *

Paragraph 43(b)(2)

* * * * *
    3. * * *
    vi. From January 1, 2019, through December 31, 2019, the 
threshold amount is $26,700.
* * * * *

Bureau of Consumer Financial Protection

Authority and Issuance

    For the reasons set forth in the preamble, the Bureau amends 
Regulation Z, 12 CFR part 1026, as set forth below:

PART 1026--TRUTH IN LENDING (REGULATION Z)

0
5. The authority citation for part 1026 continues to read as follows:

    Authority: 12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353, 
5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq.

0
6. In Supplement I to part 1026, under Section 1026.35--Requirements 
for Higher-Priced Mortgage Loans, paragraph 35(c)(2)(ii), paragraph 
3.vi is added to read as follows:

Supplement I to Part 1026--Official Interpretations

* * * * *

Section 1026.35--Requirements for Higher-Priced Mortgage Loans

* * * * *

Paragraph 35(c)(2)(ii)

* * * * *
    3. * * *
    vi. From January 1, 2019, through December 31, 2019, the 
threshold amount is $26,700.
* * * * *

    Dated: November 6, 2018.
Joseph M. Otting,
Comptroller of the Currency.
    By order of the Board of Governors of the Federal Reserve System 
under delegated authority, November 13, 2018.
Ann E. Misback,
Secretary of the Board.
    Dated: November 9, 2018.
Mick Mulvaney,
Acting Director, Bureau of Consumer Financial Protection.
[FR Doc. 2018-25400 Filed 11-21-18; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 4810-AM-P



                                           59272            Federal Register / Vol. 83, No. 226 / Friday, November 23, 2018 / Rules and Regulations

                                           § 1970.11 Timing of the environmental                   DEPARTMENT OF THE TREASURY                            increase in the CPI–W to the dollar
                                           review process.                                                                                               amount that would have resulted, after
                                           *      *    *     *     *                               Office of the Comptroller of the                      rounding, if the decreases and any
                                                                                                   Currency                                              subsequent increases in the CPI–W had
                                              (b) The environmental review process
                                                                                                                                                         been taken into account. Based on the
                                           must be concluded before the obligation                 12 CFR Part 34                                        CPI–W in effect as of June 1, 2018, the
                                           of funds; except for infrastructure                                                                           exemption threshold will increase from
                                           projects where the assurance that funds                 [Docket No. OCC–2018–0031]
                                                                                                                                                         $26,000 to $26,700, effective January 1,
                                           will be available for community health,                 RIN 1557–AE53                                         2019.
                                           safety, or economic development has                                                                           DATES: This final rule is effective
                                           been determined as necessary by the                     FEDERAL RESERVE SYSTEM                                January 1, 2019.
                                           Agency Administrator. At the discretion                                                                       FOR FURTHER INFORMATION CONTACT:
                                           of the Agency Administrator, funds may                  12 CFR Part 226
                                                                                                                                                         OCC: MaryAnn Nash, Counsel, Chief
                                           be obligated contingent upon the                        [Docket No. R–1634]                                   Counsel’s Office, (202) 649–6287; for
                                           conclusion of the environmental review                                                                        persons who are deaf or hard of hearing
                                           process prior to any action that would                  RIN 7100–AF26
                                                                                                                                                         TTY, (202) 649–5597. Board: Lorna M.
                                           have an adverse effect on the                                                                                 Neill, Senior Counsel, Division of
                                                                                                   BUREAU OF CONSUMER FINANCIAL
                                           environment or limit the choices of any                 PROTECTION                                            Consumer and Community Affairs,
                                           reasonable alternatives. Funds so                                                                             Board of Governors of the Federal
                                           obligated shall be rescinded if the                     12 CFR Part 1026                                      Reserve System, at (202) 452–3667; for
                                           Agency cannot conclude the                                                                                    users of Telecommunications Device for
                                           environmental review process before the                 RIN 3170–AA91                                         the Deaf (TDD) only, contact (202) 263–
                                           end of the fiscal year after the year in                                                                      4869. Bureau: Shelley Thompson,
                                                                                                   Appraisals for Higher-Priced Mortgage                 Counsel, Office of Regulations, Bureau
                                           which the funds were obligated, or if the
                                                                                                   Loans Exemption Threshold                             of Consumer Financial Protection, at
                                           Agency determines that it cannot
                                           proceed with approval based on                          AGENCY:  Office of the Comptroller of the             (202) 435–7700.
                                           findings in the environmental review                    Currency, Treasury (OCC), Board of                    SUPPLEMENTARY INFORMATION:
                                           process. For the purposes of this                       Governors of the Federal Reserve                      I. Background
                                           section, infrastructure projects shall                  System (Board); and Bureau of
                                           include projects such as broadband,                     Consumer Financial Protection                            The Dodd-Frank Wall Street Reform
                                                                                                   (Bureau).                                             and Consumer Protection Act of 2010
                                           telecommunications, electric, energy
                                                                                                   ACTION: Final rules, official
                                                                                                                                                         (Dodd-Frank Act) amended the Truth in
                                           efficiency, smart grid, water, sewer,
                                                                                                   interpretations and commentary.                       Lending Act (TILA) to add special
                                           transportation, and energy capital
                                                                                                                                                         appraisal requirements for ‘‘higher-risk
                                           investments in physical plant and                                                                             mortgages.’’ 1 In January 2013, the
                                                                                                   SUMMARY:    The OCC, the Board, and the
                                           equipment, but not investments                                                                                Agencies issued a joint final rule
                                                                                                   Bureau are finalizing amendments to the
                                           authorized in the Housing Act of 1949.                                                                        implementing these requirements and
                                                                                                   official interpretations for their
                                           *      *    *     *     *                               regulations that implement section                    adopted the term ‘‘higher-priced
                                             Dated: November 9, 2018.                              129H of the Truth in Lending Act                      mortgage loan’’ (HPML) instead of
                                                                                                   (TILA). Section 129H of TILA                          ‘‘higher-risk mortgage’’ (the January
                                           Anne C. Hazlett,
                                                                                                   establishes special appraisal                         2013 Final Rule).2 In July 2013, the
                                           Assistant to the Secretary, Rural                                                                             Agencies proposed additional
                                           Development.
                                                                                                   requirements for ‘‘higher-risk
                                                                                                   mortgages,’’ termed ‘‘higher-priced                   exemptions from the January 2013 Final
                                           Bill Northey,                                           mortgage loans’’ or ‘‘HPMLs’’ in the                  Rule (the 2013 Supplemental Proposed
                                           Under Secretary, Farm Production and                    agencies’ regulations. The OCC, the                   Rule).3 In December 2013, the Agencies
                                           Conservation.                                           Board, the Bureau, the Federal Deposit                issued a supplemental final rule with
                                           [FR Doc. 2018–25523 Filed 11–21–18; 8:45 am]            Insurance Corporation (FDIC), the                     additional exemptions from the January
                                           BILLING CODE P                                          National Credit Union Administration                  2013 Final Rule (the December 2013
                                                                                                   (NCUA), and the Federal Housing                       Supplemental Final Rule).4 Among
                                                                                                   Finance Agency (FHFA) (collectively,                  other exemptions, the Agencies adopted
                                                                                                   the Agencies) issued joint final rules                an exemption from the new HPML
                                                                                                   implementing these requirements,                      appraisal rules for transactions of
                                                                                                   effective January 18, 2014. The                       $25,000 or less, to be adjusted annually
                                                                                                   Agencies’ rules exempted, among other                 for inflation.
                                                                                                   loan types, transactions of $25,000 or                   The OCC’s, the Board’s, and the
                                                                                                   less, and required that this loan amount              Bureau’s versions of the January 2013
                                                                                                   be adjusted annually based on any                     Final Rule and December 2013
                                                                                                   annual percentage increase in the                     Supplemental Final Rule and
                                                                                                   Consumer Price Index for Urban Wage                   corresponding official interpretations
                                                                                                   Earners and Clerical Workers (CPI–W).                 are substantively identical. The FDIC,
                                                                                                   If there is no annual percentage increase             NCUA, and FHFA adopted the Bureau’s
                                                                                                   in the CPI–W, the OCC, the Board, and                 version of the regulations under the
amozie on DSK3GDR082PROD with RULES




                                                                                                   the Bureau will not adjust this
                                                                                                                                                           1 Public Law 111–203, section 1471, 124 Stat.
                                                                                                   exemption threshold from the prior
                                                                                                                                                         1376, 2185–87 (2010), codified at TILA section
                                                                                                   year. However, in years following a year              129H, 15 U.S.C. 1639h.
                                                                                                   in which the exemption threshold was                    2 78 FR 10368 (Feb. 13, 2013).

                                                                                                   not adjusted, the threshold is calculated               3 78 FR 48548 (Aug. 8, 2013).

                                                                                                   by applying the annual percentage                       4 78 FR 78520 (Dec. 26, 2013).




                                      VerDate Sep<11>2014   16:13 Nov 21, 2018   Jkt 247001   PO 00000   Frm 00004   Fmt 4700   Sfmt 4700   E:\FR\FM\23NOR1.SGM   23NOR1


                                                            Federal Register / Vol. 83, No. 226 / Friday, November 23, 2018 / Rules and Regulations                                                  59273

                                           January 2013 Final Rule and December                    dollar amount that would have resulted,                 amendments in this rule are technical
                                           2013 Supplemental Final Rule.5                          after rounding, if the decreases and any                and apply the method previously set
                                              The OCC’s, Board’s, and Bureau’s                     subsequent increases in the CPI–W had                   forth in the 2013 Supplemental
                                           regulations,6 and their accompanying                    been taken into account. If the resulting               Proposed Rule 11 and the HPML Small
                                           interpretations,7 provide that the                      amount calculated, after rounding, is                   Dollar Adjustment Calculation Rule. For
                                           exemption threshold for smaller loans                   greater than the current threshold, then                these reasons, the OCC, the Board, and
                                           will be adjusted effective January 1 of                 the threshold effective January 1 the                   the Bureau have determined that
                                           each year based on any annual                           following year will increase                            publishing a notice of proposed
                                           percentage increase in the Consumer                     accordingly; if the resulting amount                    rulemaking and providing opportunity
                                           Price Index for Urban Wage Earners and                  calculated, after rounding, is equal to or              for public comment are unnecessary.
                                           Clerical Workers (CPI–W) that was in                    less than the current threshold, then the               Therefore, the amendments are adopted
                                           effect on the preceding June 1. Any                     threshold effective January 1 the                       in final form.
                                           increase in the threshold amount will be                following year will not change, but
                                           rounded to the nearest $100 increment.                  future increases will be calculated based               Regulatory Flexibility Act
                                           For example, if the annual percentage                   on the amount that would have resulted,                    The Regulatory Flexibility Act (RFA)
                                           increase in the CPI–W would result in                   after rounding.                                         does not apply to a rulemaking where a
                                           a $950 increase in the threshold                                                                                general notice of proposed rulemaking
                                           amount, the threshold amount will be                    II. 2019 Adjustment and Commentary
                                                                                                   Revision                                                is not required.12 As noted previously,
                                           increased by $1,000. However, if the                                                                            the agencies have determined that it is
                                           annual percentage increase in the CPI–                     Effective January 1, 2019, the                       unnecessary to publish a general notice
                                           W would result in a $949 increase in the                exemption threshold amount is                           of proposed rulemaking for this joint
                                           threshold amount, the threshold amount                  increased from $26,000 to $26,700. This                 final rule. Accordingly, the RFA’s
                                           will be increased by $900. If there is no               is based on the CPI–W in effect on June                 requirements relating to an initial and
                                           annual percentage increase in the CPI–                  1, 2018, which was reported on May 10,
                                                                                                                                                           final regulatory flexibility analysis do
                                           W, the OCC, the Board, and the Bureau                   2018. The Bureau of Labor Statistics
                                                                                                                                                           not apply.
                                           will not adjust the threshold amounts                   publishes consumer-based indices
                                           from the prior year.8                                   monthly, but does not report a CPI                      Paperwork Reduction Act
                                              On November 30, 2016, the OCC, the                   change on June 1; adjustments are
                                                                                                   reported in the middle of the prior                       In accordance with the Paperwork
                                           Board, and the Bureau published a final
                                                                                                   month. The CPI–W is a subset of the                     Reduction Act of 1995,13 the agencies
                                           rule in the Federal Register to
                                                                                                   CPI–U index (based on all urban                         reviewed this final rule. No collections
                                           memorialize the calculation method
                                                                                                   consumers) and represents                               of information pursuant to the
                                           used by the agencies each year to adjust
                                           the exemption threshold to ensure that,                 approximately 29 percent of the U.S.                    Paperwork Reduction Act are contained
                                           as contemplated in the December 2013                    population. The CPI–W reported on                       in the final rule.
                                           Supplemental Final Rule (HPML Small                     May 10, 2018, reflects a 2.6 percent                    Unfunded Mandates Reform Act
                                           Dollar Adjustment Calculation Rule),                    increase in the CPI–W from April 2017
                                           the values for the exemption threshold                  to April 2018. Accordingly, the 2.6                        The OCC analyzes proposed rules for
                                           keep pace with the CPI–W.9 The HPML                     percent increase in the CPI–W from                      the factors listed in Section 202 of the
                                           Small Dollar Adjustment Calculation                     April 2017 to April 2018 results in an                  Unfunded Mandates Reform Act of
                                           Rule memorialized the policy that, if                   exemption threshold amount of $26,700.                  1995, before promulgating a final rule
                                           there is no annual percentage increase                  The OCC, the Board, and the Bureau are                  for which a general notice of proposed
                                           in the CPI–W, the OCC, the Board, and                   revising the commentaries to their                      rulemaking was published.14 As
                                           Bureau will not adjust the exemption                    respective regulations to add new                       discussed above, the OCC has
                                           threshold from the prior year. The                      comments as follows:                                    determined that the publication of a
                                           HPML Small Dollar Adjustment                               • Comment 203(b)(2)–3.vi to 12 CFR                   general notice of proposed rulemaking
                                           Calculation Rule also provided that, in                 part 34, Appendix C to Subpart G                        is unnecessary.
                                           years following a year in which the                     (OCC);                                                  Bureau Congressional Review Act
                                           exemption threshold was not adjusted                       • Comment 43(b)(2)–3.vi to                           Statement
                                           because there was a decrease in the CPI–                Supplement I of 12 CFR part 226
                                           W from the previous year, the threshold                 (Board); and                                               Pursuant to the Congressional Review
                                           is calculated by applying the annual                       • Comment 35(c)(2)(ii)–3.vi to                       Act (5 U.S.C. 801 et seq.), the Bureau
                                           percentage change in the CPI–W to the                   Supplement I of 12 CFR part 1026                        will submit a report containing this rule
                                                                                                   (Bureau).                                               and other required information to the
                                              5 See NCUA: 12 CFR 722.3; FHFA: 12 CFR part             These new comments state that, from                  U.S. Senate, the U.S. House of
                                           1222. Although the FDIC adopted the Bureau’s            January 1, 2019, through December 31,                   Representatives, and the Comptroller
                                           version of the regulation, the FDIC did not issue its   2019, the threshold amount is $26,700.                  General of the United States prior to the
                                           own regulation containing a cross-reference to the      These revisions are effective January 1,
                                           Bureau’s version. See 78 FR 10368, 10370 (Feb. 13,
                                                                                                                                                           rule taking effect. The Office of
                                           2013).
                                                                                                   2019.                                                   Information and Regulatory Affairs
                                              6 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2)
                                                                                                   III. Regulatory Analysis                                (OIRA) has designated this rule as not
                                           (Board); and 12 CFR 1026.35(c)(2)(ii) (Bureau).                                                                 a ‘‘major rule’’ as defined by 5 U.S.C.
                                              7 12 CFR part 34, Appendix C to Subpart G,           Administrative Procedure Act                            804(2).
                                           comment 203(b)(2)–1 (OCC); 12 CFR part 226,
                                           Supplement I, comment 43(b)(2)–1 (Board); and 12           Under the Administrative Procedure
                                                                                                   Act, notice and opportunity for public
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                                                                                                                                                             11 See 78 FR 48548, 48565 (Aug. 8, 2013) (‘‘Thus,
                                           CFR part 1026, Supplement I, comment 35(c)(2)(ii)–
                                           1 (Bureau).                                             comment are not required if an agency                   under the proposal, if the CPI–W decreases in an
                                              8 See 78 FR 48548, 48565 (Aug. 8, 2013) (‘‘Thus,                                                             annual period, the percentage increase would be
                                                                                                   finds that notice and public comment                    zero, and the dollar amount threshold for the
                                           under the proposal, if the CPI–W decreases in an
                                           annual period, the percentage increase would be
                                                                                                   are impracticable, unnecessary, or                      exemption would not change.’’).
                                           zero, and the dollar amount threshold for the           contrary to the public interest.10 The                    12 5 U.S.C. 603 and 604.

                                           exemption would not change.’’).                                                                                   13 44 U.S.C. 3506; 5 CFR part 1320.
                                              9 See 81 FR 86250 (Nov. 30, 2016).                     10 5   U.S.C. 553(b)(B).                                14 2 U.S.C. 1532.




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                                           59274            Federal Register / Vol. 83, No. 226 / Friday, November 23, 2018 / Rules and Regulations

                                           List of Subjects                                        PART 226—TRUTH IN LENDING                               Dated: November 6, 2018.
                                                                                                   (REGULATION Z)                                        Joseph M. Otting,
                                           12 CFR Part 34
                                                                                                                                                         Comptroller of the Currency.
                                             Appraisal, Appraiser, Banks, Banking,                 ■ 3. The authority citation for part 226                By order of the Board of Governors of the
                                           Consumer protection, Credit, Mortgages,                 continues to read as follows:                         Federal Reserve System under delegated
                                           National banks, Reporting and                                                                                 authority, November 13, 2018.
                                           recordkeeping requirements, Savings                       Authority: 12 U.S.C. 3806; 15 U.S.C. 1604,
                                                                                                   1637(c)(5), 1639(l), and 1639h; Pub. L. 111–          Ann E. Misback,
                                           associations, Truth in lending.                                                                               Secretary of the Board.
                                                                                                   24, section 2, 123 Stat. 1734; Pub. L. 111–
                                           12 CFR Part 226                                         203, 124 Stat. 1376.                                    Dated: November 9, 2018.
                                             Advertising, Appraisal, Appraiser,                                                                          Mick Mulvaney,
                                                                                                   ■ 4. In Supplement I to part 226, under               Acting Director, Bureau of Consumer
                                           Consumer protection, Credit, Federal                    Section 226.43—Appraisals for Higher-
                                           Reserve System, Mortgages, Reporting                                                                          Financial Protection.
                                                                                                   Risk Mortgage Loans, paragraph                        [FR Doc. 2018–25400 Filed 11–21–18; 8:45 am]
                                           and recordkeeping requirements, Truth                   43(b)(2), paragraph 3.vi is added to read
                                           in lending.                                             as follows:
                                                                                                                                                         BILLING CODE 4810–33–P; 6210–01–P; 4810–AM–P

                                           12 CFR Part 1026                                        Supplement I to Part 226—Official Staff
                                             Advertising, Appraisal, Appraiser,                    Interpretations                                       FEDERAL RESERVE SYSTEM
                                           Banking, Banks, Consumer protection,
                                                                                                   *      *      *      *       *                        12 CFR Part 213
                                           Credit, Credit unions, Mortgages,
                                                                                                    Section 226.43—Appraisals for Higher-Risk
                                           National banks, Reporting and                           Mortgage Loans                                        [Docket No. R–1632]
                                           recordkeeping requirements, Savings
                                           associations, Truth in lending.                         *      *      *      *       *                        RIN 7100–AF24
                                                                                                   Paragraph 43(b)(2)
                                           DEPARTMENT OF THE TREASURY                                                                                    BUREAU OF CONSUMER FINANCIAL
                                                                                                   *      *      *      *       *                        PROTECTION
                                           Office of the Comptroller of the                          3. * * *
                                           Currency                                                  vi. From January 1, 2019, through
                                                                                                   December 31, 2019, the threshold amount is
                                                                                                                                                         12 CFR Part 1013
                                           Authority and Issuance
                                                                                                   $26,700.                                              RIN 3170–AA89
                                             For the reasons set forth in the
                                           preamble, the OCC amends 12 CFR part                    *      *      *      *       *
                                                                                                                                                         Consumer Leasing (Regulation M)
                                           34 as set forth below:                                  Bureau of Consumer Financial
                                                                                                   Protection                                            AGENCY:  Board of Governors of the
                                           PART 34—REAL ESTATE LENDING                                                                                   Federal Reserve System (Board); and
                                           AND APPRAISALS                                          Authority and Issuance                                Bureau of Consumer Financial
                                                                                                     For the reasons set forth in the                    Protection (Bureau).
                                           ■ 1. The authority citation for part 34
                                           continues to read as follows:                           preamble, the Bureau amends                           ACTION: Final rules, official
                                                                                                   Regulation Z, 12 CFR part 1026, as set                interpretations and commentary.
                                             Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a,
                                           371, 1462a, 1463, 1464, 1465, 1701j–3,
                                                                                                   forth below:
                                                                                                                                                         SUMMARY:    The Board and the Bureau are
                                           1828(o), 3331 et seq., 5101 et seq.,                                                                          finalizing amendments to the official
                                           5412(b)(2)(B) and 15 U.S.C. 1639h.                      PART 1026—TRUTH IN LENDING
                                                                                                   (REGULATION Z)                                        interpretations and commentary for the
                                           ■ 2. In Appendix C to Subpart G, under                                                                        agencies’ regulations that implement the
                                           Section 34.203—Appraisals for Higher-                   ■ 5. The authority citation for part 1026             Consumer Leasing Act (CLA). The
                                           Priced Mortgage Loans, paragraph                        continues to read as follows:                         Dodd-Frank Wall Street Reform and
                                           34.203(b)(2), paragraph 3.vi is added to                                                                      Consumer Protection Act (Dodd-Frank
                                           read as follows:                                          Authority: 12 U.S.C. 2601, 2603–2605,               Act) amended the CLA by requiring that
                                                                                                   2607, 2609, 2617, 3353, 5511, 5512, 5532,             the dollar threshold for exempt
                                           Appendix C to Subpart G—OCC                             5581; 15 U.S.C. 1601 et seq.
                                           Interpretations                                                                                               consumer leases be adjusted annually
                                                                                                   ■ 6. In Supplement I to part 1026, under              by the annual percentage increase in the
                                           *      *     *       *      *                           Section 1026.35—Requirements for                      Consumer Price Index for Urban Wage
                                           Section 34.203—Appraisals for Higher-Priced             Higher-Priced Mortgage Loans,                         Earners and Clerical Workers (CPI–W).
                                           Mortgage Loans                                          paragraph 35(c)(2)(ii), paragraph 3.vi is             If there is no annual percentage increase
                                           *      *     *       *      *                           added to read as follows:                             in the CPI–W, the Board and the Bureau
                                                                                                                                                         will not adjust this exemption threshold
                                           Paragraph 34.203(b)(2)                                  Supplement I to Part 1026—Official                    from the prior year. However, in years
                                           *      *     *       *      *                           Interpretations                                       following a year in which the exemption
                                             3. * * *                                              *      *      *      *       *                        threshold was not adjusted, the
                                             vi. From January 1, 2019, through                                                                           threshold is calculated by applying the
                                           December 31, 2019, the threshold amount is              Section 1026.35—Requirements for Higher-
                                                                                                   Priced Mortgage Loans                                 annual percentage change in the CPI–W
                                           $26,700.
                                                                                                                                                         to the dollar amount that would have
                                           *      *     *       *      *                           *      *      *      *       *                        resulted, after rounding, if the decreases
                                                                                                   Paragraph 35(c)(2)(ii)                                and any subsequent increases in the
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                                           Board of Governors of the Federal
                                           Reserve System                                          *      *      *      *       *                        CPI–W had been taken into account.
                                                                                                     3. * * *                                            Based on the annual percentage increase
                                           Authority and Issuance                                    vi. From January 1, 2019, through                   in the CPI–W as of June 1, 2018, the
                                             For the reasons set forth in the                      December 31, 2019, the threshold amount is            exemption threshold will increase from
                                           preamble, the Board amends Regulation                   $26,700.                                              $55,800 to $57,200 effective January 1,
                                           Z, 12 CFR part 226, as set forth below:                 *      *      *      *       *                        2019.


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Document Created: 2018-11-27 12:58:32
Document Modified: 2018-11-27 12:58:32
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rules, official interpretations and commentary.
DatesThis final rule is effective January 1, 2019.
ContactOCC: MaryAnn Nash, Counsel, Chief Counsel's Office, (202) 649-6287; for persons who are deaf or hard of hearing TTY, (202) 649-5597. Board: Lorna M. Neill, Senior Counsel, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452-3667; for users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263- 4869. Bureau: Shelley Thompson, Counsel, Office of Regulations, Bureau of Consumer Financial Protection, at (202) 435-7700.
FR Citation83 FR 59272 
RIN Number1557-AE53, 7100-AF26 and 3170-AA91
CFR Citation12 CFR 1026
12 CFR 226
12 CFR 34
CFR AssociatedCredit Unions; Advertising; Federal Reserve System; Appraisal; Appraiser; Banks; Banking; Consumer Protection; Credit; Mortgages; National Banks; Reporting and Recordkeeping Requirements; Savings Associations and Truth in Lending

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