[Federal Register Volume 60, Number 86 (Thursday, May 4, 1995)]
[Rules and Regulations]
[Pages 22223-22225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10475]
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FEDERAL RESERVE SYSTEM
12 CFR Part 203
[Regulation C; Docket No. R-0848]
Home Mortgage Disclosure
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
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SUMMARY: The Board is publishing a final rule to amend Regulation C
(Home Mortgage Disclosure) and the instructions that financial
institutions [[Page 22224]] must use to comply with the annual
reporting requirements under the regulation. The amendments conform
Regulation C to reflect revisions adopted by the Board, the Office of
the Comptroller of the Currency, the Federal Deposit Insurance
Corporation, and the Office of Thrift Supervision to their regulations
implementing the Community Reinvestment Act (CRA). Under the joint CRA
rule (published elsewhere in today's Federal Register), banks or
savings associations that report data about their home mortgage lending
pursuant to the Home Mortgage Disclosure Act (HMDA)--and that have
assets of $250 million or more, or that are subsidiaries of a holding
company with total banking and thrift assets of $1 billion or more--
will collect and report geographic information on loans and loan
applications relating to property located outside the Metropolitan
Statistical Areas (MSAs) in which the institution has a home or branch
office, or outside any MSA. Currently, geographic identification is
required only within MSAs where these lenders have a home or branch
office. Data will be collected and reported in accordance with the
instructions in Regulation C. The agencies believe that these data will
provide geographic detail on home mortgage lending that will facilitate
more complete CRA assessments for institutions that do not qualify as
small banks or thrifts.
DATES: This final rule is effective May 1, 1995. Compliance is
mandatory for loan and application data collected beginning January 1,
1996.
FOR FURTHER INFORMATION CONTACT: Jane Jensen Gell or W. Kurt
Schumacher, Staff Attorneys, Division of Consumer and Community
Affairs, Board of Governors of the Federal Reserve System, Washington,
DC 20551, at (202) 452-2412 or (202) 452-3667. For the hearing impaired
only, contact Dorothea Thompson, Telecommunications Device for the Deaf
(TDD), at (202) 452-3544.
SUPPLEMENTARY INFORMATION:
I. Background
The Board's Regulation C (12 CFR Part 203) implements the Home
Mortgage Disclosure Act of 1975 (HMDA) (12 U.S.C. 2801 et seq). HMDA
requires most mortgage lenders located in metropolitan areas to collect
data about their housing-related lending activity. Annually, lenders
must report that data to their federal supervisory agencies and
disclose the data to the public. The reports and disclosures cover loan
originations, applications that do not result in originations (for
example, applications that are denied or withdrawn), and loan
purchases. Information reported includes the location of the property
to which the loan or application relates; the race or national origin,
gender, and gross annual income of the borrower or applicant; and the
type of purchaser for loans sold in the secondary market.
II. Summary of Amendment
In October 1994 (59 FR 51232, October 7, 1994), the federal
financial regulatory agencies proposed amendments to their CRA
regulations requiring banks or savings associations that report data
about their home mortgage lending pursuant to HMDA--and that have
assets of $250 million or more, or that are subsidiaries of a holding
company with total banking and thrift assets of $250 million or more--
to collect and report geographic information on loans and applications
relating to property located in metropolitan areas whether or not the
institution has a home or branch office there. They also would report
geographic information for property located outside any MSA. (This
proposal did not affect the current exemption in Sec. 203.3 of
Regulation C for banks and savings associations; institutions whose
assets are $10 million or less remain exempt.) Currently, lenders have
the option of collecting this information but are not required to do
so. The agencies believed that these data would provide geographic
detail on home mortgage lending that would facilitate more complete CRA
assessments for institutions that do not qualify as small banks or
thrifts.
Commenters were divided on the proposal. Several commenters
expressed concern about the administrative burden and costs of
complying with the expanded reporting requirements. Many of those
commenters asserted that comprehensive, accurate geographic information
often is difficult to obtain. Other commenters indicated that the
regulatory burden of the expanded reporting requirements would not be
significant and noted that the additional data would facilitate a more
precise and quantifiable CRA assessment process. Several commenters
believed that it would be difficult to comply with the proposed
amendment by July 1995 and that half-year data would be of limited
usefulness. These commenters suggested that expanded data collection
requirements should go into effect on January 1, 1996. A number of
commenters addressed the reporting exemption for small banks, with some
suggesting that assets should be measured at the level of the financial
institution, not the bank holding company.
The Board believes that the expanded reporting requirements will
provide information about lenders' overall mortgage lending activity
that will assist in developing a more accurate CRA assessment. The
final amendments address concerns expressed by commenters. As required
by agency regulations implementing CRA, bank and savings associations
that are subsidiaries of a holding company with total banking and
thrift assets of $1 billion or more are covered by the reporting rules;
the proposal would have covered such subsidiaries of a holding company
with total assets of $250 million or more. Institutions must collect
these data if the bank or savings association had assets of $250
million or more (or are subsidiaries of a holding company with total
banking and thrift assets of $1 billion or more) for the prior two
consecutive years (as of December 31). The data collection requirements
go into effect for calendar year 1996, with institutions required to
report the data in 1997.
The Board believes that the benefits of this additional information
outweigh any additional compliance burdens. Based on the comments
received and further analysis, the Board is adopting final amendments
to Regulation C. Set forth below is a discussion of the final rule.
Section 203.4--Compilation of Loan Data
Paragraph (e)--Data Reporting Under CRA
The final rule adds a new paragraph to implement revisions to the
agencies' CRA regulations. Under the joint CRA rule, banks or savings
associations that report data about their home mortgage lending
pursuant to HMDA--and have assets of $250 million or more, or are
subsidiaries of a holding company with total banking and thrift assets
of $1 billion or more--will collect and report geographic information
for all loans and applications, not just for loans and applications
relating to property in MSAs where the institution has a home or branch
office. The requirement also applies to property located outside any
MSA. The agencies believe that incorporating these reporting
requirements in Regulation C will facilitate compliance for lenders.
[[Page 22225]]
Appendix A--Form and Instructions for Completion of HMDA Loan/
Application Register
V. Instructions for Completion of Loan/Application Register
C. Property Location
The Board is adding a new paragraph to conform Regulation C to the
CRA reporting requirements for banks and savings associations with
assets of $250 million or more and banks and savings associations that
are subsidiaries of a holding company with total banking and thrift
assets of $1 billion or more.
III. Regulatory Flexibility Analysis
The Board's Office of the Secretary has prepared an economic impact
analysis of the amendments to Regulation C. A copy of the analysis may
be obtained from Publications Services, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551, or by telephone at
(202) 452-3245.
IV. Paperwork Reduction Act
In accordance with section 3507 of the Paperwork Reduction Act of
1980 (44 U.S.C. Ch. 35; 5 CFR 1320.13), the amended information
collection has been reviewed by the Board under the authority delegated
to the Board by the Office of Management and Budget after consideration
of comments received during the public comment period.
The collection of information in this rule is in 12 CFR 203.4. This
additional information will provide geographic detail on home mortgage
lending that will facilitate more complete CRA assessments for
institutions that do not qualify as small banks or thrifts.
The estimated annual burden per respondent varies from 10 to 10,000
hours, depending on individual circumstances, with an estimated average
of 200 hours. The revision is expected to affect about 5 percent of the
loans reported by large state members banks, adding approximately 5
minutes, on average, to the time required to complete the report. There
will be an estimated 507 state member bank reporters, averaging 202
hours and an estimated 84 mortgage banking subsidiaries, averaging 160
hours.
List of Subjects in 12 CFR Part 203
Banks, banking, Consumer protection, Federal Reserve System,
Mortgages, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Board amends 12 CFR
part 203 to read as set forth below:
PART 203--HOME MORTGAGE DISCLOSURE (REGULATION C)
1. The authority citation for part 203 continues to read as
follows:
Authority: 12 U.S.C. 2801-2810.
2. Section 203.4 is amended by adding a new paragraph (e) to read
as follows:
Sec. 203.4 Compilation of loan data.
* * * * *
(e) Data reporting under CRA for banks and savings associations
with total assets of $250 million or more and banks and savings
associations that are subsidiaries of a holding company whose total
banking and thrift assets are $1 billion or more. As required by agency
regulations that implement the Community Reinvestment Act, banks and
savings associations that had total assets of $250 million or more (or
are subsidiaries of a holding company with total banking and thrift
assets of $1 billion or more) as of December 31 for each of the
immediately preceding two years, shall also collect the location of
property located outside the MSAs in which the institution has a home
or branch office, or outside any MSAs.
3. Appendix A to Part 203 is amended by revising the introductory
text of paragraph V.C. and by adding a new paragraph V.C.7. to read as
follows:
Appendix A to Part 203--Form and Instructions for Completion of HMDA
Loan/Application Register
* * * * *
V. * * *
C. Property Location
In these columns enter the applicable codes for the MSA, state,
county, and census tract for the property to which a loan relates.
For home purchase loans secured by one dwelling, but made for the
purpose of purchasing another dwelling, report the property location
for the property in which the security interest is to be taken. If
the home purchase loan is secured by more than one property, report
the location data for the property being purchased. (See paragraphs
5., 6., and 7. of paragraph V.C. of this appendix for treatment of
loans on property outside the MSAs in which you have offices.)
* * * * *
7. Data Reporting Under CRA for Banks and Savings Associations With
Total Assets of $250 Million or More and Banks and Savings
Associations That Are Subsidiaries of a Holding Company Whose Total
Banking and Thrift Assets Are $1 Billion or More
If you are a bank or savings association with total assets of
$250 million or more as of December 31 for each of the immediately
preceding two years, you must also enter the location of property
located outside the MSAs in which you have a home or branch office,
or outside any MSA. You must also enter this information if you are
a bank or savings association that is a subsidiary of a holding
company with total banking and thrift assets of $1 billion or more
as of December 31 for each of the immediately preceding two years.
* * * * *
By order of the Board of Governors of the Federal Reserve
System, April 24, 1995.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 95-10475 Filed 5-3-95; 8:45 am]
BILLING CODE 6210-01-P