[Federal Register Volume 61, Number 194 (Friday, October 4, 1996)]
[Rules and Regulations]
[Pages 51782-51783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25637]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 3500

[Docket No. FR-3638-N-07]
RIN 2502-AG26


Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner; Amendments to Regulation X, the Real Estate Settlement 
Procedures Act: Withdrawal of Employer-Employee and Computer Loan 
Origination Systems (CLOs) Exemptions; Notice of Delay of Effectiveness 
of Rule

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Final rule; Notice of delay of effectiveness.

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SUMMARY: Due to recent legislation, this document delays until further 
notice the effectiveness of a final rule revising Regulation X, which 
implements the Real Estate Settlement Procedures Act of 1974 (RESPA). 
This final rule was published on June 7, 1996 (61 FR 29238), and it was 
corrected and revised on August 12, 1996 (61 FR 41944). Within 30 days 
of the publication of this notice, the Department will provide further 
notice indicating its time schedule for making effective the various 
provisions of these rules.

DATES: The effective date of the final rule amending part 3500 
published June 7, 1996 (61 FR 29238) and corrected August 12, 1996 (61 
FR 41944), is delayed until further notice. See Supplementary 
Information.

FOR FURTHER INFORMATION CONTACT: David Williamson, Director, Office of 
Consumer and Regulatory Affairs, Room 5241, telephone (202) 708-4560; 
or, for legal questions, Kenneth A. Markison, Assistant General Counsel 
for GSE/RESPA, Grant E. Mitchell, Senior Attorney for RESPA, or Richard 
S. Bennett, Attorney, Office of General Counsel, Room 9262, telephone 
(202) 708-1550. (The telephone numbers are not toll-free.) For hearing- 
and speech-impaired persons, these numbers may be accused via TTY (text 
telephone) by calling the Federal Information Relay Service at 1-800-
877-8339. The address for the above-listed persons is:

[[Page 51783]]

Department of Housing and Urban Development, 451 Seventh Street, SW, 
Washington, DC 20410.

SUPPLEMENTARY INFORMATION: In the rule published on June 7, 1996 (61 FR 
29238) entitled ``Amendments to Regulation X, the Real Estate 
Settlement Procedures Act: Withdrawal of Employer-Employee and Computer 
Loan Origination Systems (CLOs) Exemptions,'' the Department 
established an effective date of 120 days from publication: October 7, 
1996. Subsequently, on August 12, 1996 (61 FR 41944), the Department 
revised a document associated with that rules--Appendix D, the 
Controlled Business Arrangement (CBA) Disclosure Statement Format--in 
order to make it clearer how the format is to be completed.
    On September 30, 1996, as part of an Omnibus Consolidated 
Appropriations Act (section 2103 of the Departments of Commerce, 
Justice, and State, the Judiciary, and Related Agencies Appropriations 
Act, 1997 (Cong. Rec. H11,750-51 (daily ed. September 28, 1996))), the 
President signed legislation which delays the effectiveness of the 
amendment to Regulation X contained in the Department's June 7, 1996 
final RESPA rule relating to payments to employees. Specifically, the 
Omnibus Consolidated Appropriations Act provides that the effectiveness 
of the amendment contained in the June 7, 1996 rule which would have 
eliminated the provision of the Department's rule providing that 
section 8 of RESPA permits ``An employer's payment to its own employees 
for any referral activities'' (24 CFR 3500.14(g)(1)(vii)), is delayed. 
The Act also provides that the effectiveness of the following 
additional provisions is delayed: (1) the exemption for employer 
payments to managerial employees (Sec. 3500.14(g)(1)(viii) of the June 
7 rule); (2) the exemption for employer payments to employees who do 
not perform settlement services in any transaction 
(Sec. 3500.14(g)(1)(ix) of the June 7 rule); and (3) the provision 
clarifying that ``A payment by an employer to its own bona fide 
employee for generating business for that employer'' is permissible 
(Sec. 3500.14(g)(1)(vii) of the June 7 rule).
    Although not required by the legislation, the Department has 
determined to delay temporarily the effectiveness of the June 7 rule, 
as corrected and revised on August 12, in its entirety, and to continue 
the prior rule, as in effect on May 1, 1996 and as corrected on 
September 3, 1996 (61 FR 46510). This will provide the Department with 
an opportunity to analyze the legislation and develop an appropriate 
time schedule for making effective the various provisions of these 
rules. Within 30 days of publication of this notice, the Department 
will publish further information indicating this time schedule.
    Affected persons are advised to comply with the guidance contained 
in the three Statements of Policy published simultaneously with the 
June 7, 1996 rule (61 FR 29255-29266), except to the extent that the 
guidance in them interprets rule provisions that are delayed from 
becoming effective. To ease any compliance burden on industry, the 
Department's position is that, until further notice, persons are free 
to use the revised CBA disclosure statement format published on August 
12, 1996, if they so choose, or they may continue to use the format 
which was in effect on May 1, 1996.

    Dated: October 2, 1996.
Stephanie A. Smith,
General Deputy.
[FR Doc. 96-25637 Filed 10-3-96; 8:45 am]
BILLING CODE 4210-27-M