[Federal Register Volume 62, Number 229 (Friday, November 28, 1997)]
[Rules and Regulations]
[Pages 63277-63278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30709]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 36

RIN 2900-AH73


Loan Guaranty: Electronic Payment of Funding Fee

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the VA loan guaranty regulations to 
require that all funding fees (including late fees and interest) for 
VA-guaranteed loans be paid electronically through the Automated 
Clearing House (ACH) program. The adoption of the ACH program will 
eliminate lost mail and eliminate data errors resulting from manual 
recording. Further accounting reconciliation will be reduced. In 
addition, banking costs will be reduced. This document also corrects a 
typographical error in the ``Allowable fees and charges: manufactured 
home unit'' section.

DATES: Effective date: January 1, 1998.

FOR FURTHER INFORMATION CONTACT: Ms. Judith Caden, Assistant Director 
for Loan Policy (264), Loan Guaranty Service, Veterans Benefits 
Administration, Department of Veterans Affairs, Washington, DC 20420, 
(202) 273-7368.

SUPPLEMENTARY INFORMATION: On May 7, 1997, VA published in the Federal 
Register (62 FR 24872) proposed regulations that would require mortgage 
lenders to pay all funding fees (including late fees and interest) for 
VA-guaranteed loans electronically through the ACH program effective 
January 1, 1998. The regulations provide three methods for making 
payments through the ACH program and specify the standard information 
the lender must provide the collection agent when submitting loan 
guaranty funding fees. Please refer to the May 7, 1997, Federal 
Register for a complete discussion of the proposed amendments.
    Public comments were requested on the proposal. The comment period 
ended July 7, 1997. VA received one comment. The comment supported the 
proposal. The commenter, the Financial Management Service of the 
Department of the Treasury, stated ``that the proposed rule change will 
bring significant cost savings to VA's internal operations and provide 
cash management savings to the Department of the Treasury.''
    Based on the rationale set forth in the proposal and this document, 
the proposed rule is adopted as a final rule without change.

Paperwork Reduction Act

    Information collection and recordkeeping requirements associated 
with the final rule (38 CFR 36.4232, 36.4254, and 36.4312) have been 
approved by OMB under the provisions of the Paperwork Reduction Act (44 
U.S.C. 3501-3520) and have been assigned OMB control number 2900-0474. 
The information collection subject to this rulemaking concerns the 
requirement that lenders provide VA information necessary to get set up 
on the ACH system to pay the funding fee electronically and the 
existing requirement that lenders provide VA certain standard 
information when submitting loan guaranty funding fees. Interested 
parties were invited to submit comments on the collection of 
information. However, no comments were received regarding the 
collection of information.
    VA is not authorized to impose a penalty on persons for failure to 
comply with information collection requirements which do not display a 
current OMB control number, if required.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. The rule implements a program that will enhance operations and be 
cost beneficial for all participating lenders. Lenders will be able to 
participate by having access to a personal computer, and personal 
computing is pervasive within the industry. Lenders will also have the 
option of paying funding fees by calling an operator who will enter the 
information into the ACH system for them. Funding fees represent 
actions that have insignificant impact on lenders. Therefore, pursuant 
to 5 U.S.C. 605(b), this final rule is exempt from the initial and 
final regulatory flexibility analysis requirements of sections 603 and 
604.
    The Catalog of Federal Domestic Assistance Program numbers are 
64.114 and 64.119.

List of Subjects in 38 CFR Part 36

    Condominiums, Housing, Individuals with disabilities, Loan 
programs--housing and community development, Manufactured homes, 
Reporting and recordkeeping requirements, Veterans.


[[Page 63278]]


    Approved: September 3, 1997.
Hershel W. Gober,
Acting Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR part 36 is amended 
as set forth below.

PART 36--LOAN GUARANTY

    1. The authority citation for part 36 continues to read as follows:

    Authority: 38 U.S.C. 501, 3701-3704, 3707, 3710-3714, 3719, 
3720, 3729, 3762, unless otherwise noted.

    2. In Sec. 36.4232, paragraph (e)(1) is amended by removing 
``(e)(4)'' and adding, in its place, ``(e)(5)''; paragraphs (e)(2) and 
(e)(3) are amended by removing ``paragraphs (e)(4) and'' and adding, in 
its place, ``paragraph''; and by redesignating paragraph (e)(4) as 
paragraph (e)(5); by adding a new paragraph (e)(4); and by revising the 
parenthetical at the end of the section to read as follows:


Sec. 36.4232  Allowable fees and charges; manufactured home unit.

* * * * *
    (e) * * *
    (4) The lender is required to pay to the Secretary electronically 
through the Automated Clearing House (ACH) system the fees described in 
paragraphs (e)(1) and (e)(2) of this section and any late fees and 
interest due on them. This shall be paid to a collection agent by 
operator-assisted telephone, terminal entry, or central processing 
unit-to-central processing unit (CPU-to-CPU) transmission. The 
collection agent will be identified by the Secretary. The lender shall 
provide the collection agent with the following: authorization for 
payment of the funding fee (including late fees and interest) along 
with the following information: VA lender ID number; four-digit 
personal identification number; dollar amount of debit; VA loan number; 
OJ (office of jurisdiction) code; closing date; loan amount; 
information about whether the payment includes a shortage, late charge, 
or interest; veteran name; loan type; sale amount; downpayment; whether 
the veteran is a reservist; and whether this is a subsequent use of 
entitlement. For all transactions received prior to 8:15 p.m. on a 
workday, VA will be credited with the amount paid to the collection 
agent at the opening of business the next banking day.

(Authority: 38 U.S.C. 3729(a))
* * * * *
(The information collection requirements in this section have been 
approved by the Office of Management and Budget under control 
numbers 2900-0474 and 2900-0516.)

    3. Section 36.4254 is amended by redesignating paragraphs (d)(4) 
and (d)(5) as paragraphs (d)(5) and (d)(6), respectively; by adding a 
new paragraph (d)(4); and by adding a parenthetical at the end of the 
section to read as follows:


Sec. 36.4254  Fees and charges.

* * * * *
    (d) * * *
    (4) The lender is required to pay to the Secretary electronically 
through the Automated Clearing House (ACH) system the fees described in 
paragraphs (d)(1) and (d)(2) of this section and any late fees and 
interest due on them. This shall be paid to a collection agent by 
operator-assisted telephone, terminal entry, or CPU-to-CPU 
transmission. The collection agent will be identified by the Secretary. 
The lender shall provide the collection agent with the following: 
authorization for payment of the funding fee (including late fees and 
interest) along with the following information: VA lender ID number; 
four-digit personal identification number; dollar amount of debit; VA 
loan number; OJ (office of jurisdiction) code; closing date; loan 
amount; information about whether the payment includes a shortage, late 
charge, or interest; veteran name; loan type; sale amount; downpayment; 
whether the veteran is a reservist; and whether this is a subsequent 
use of entitlement. For all transactions received prior to 8:15 p.m. on 
a workday, VA will be credited with the amount paid to the collection 
agent at the opening of business the next banking day.

(Authority: 38 U.S.C. 3729(a))
* * * * *
(The information collection requirements in this section have been 
approved by the Office of Management and Budget under control number 
2900-0474.)

    4. Section 36.4312 is amended by redesignating paragraph (e)(4) as 
paragraph (e)(5); by adding a new paragraph (e)(4); and by revising the 
parenthetical at the end of the section to read as follows:


Sec. 36.4312  Charges and fees.

* * * * *
    (e) * * *
    (4) The lender is required to pay to the Secretary electronically 
through the Automated Clearing House (ACH) system the fees described in 
paragraphs (e)(1) and (e)(2) of this section and any late fees and 
interest due on them. This shall be paid to a collection agent by 
operator-assisted telephone, terminal entry, or CPU-to-CPU 
transmission. The collection agent will be identified by the Secretary. 
The lender shall provide the collection agent with the following: 
authorization for payment of the funding fee (including late fees and 
interest) along with the following information: VA lender ID number; 
four-digit personal identification number; dollar amount of debit; VA 
loan number; OJ (office of jurisdiction) code; closing date; loan 
amount; information about whether the payment includes a shortage, late 
charge, or interest; veteran name; loan type; sale amount; downpayment; 
whether the veteran is a reservist; and whether this is a subsequent 
use of entitlement. For all transactions received prior to 8:15 p.m. on 
a workday, VA will be credited with the amount paid to the collection 
agent at the opening of business the next banking day.

(Authority: 38 U.S.C. 3729(a))
* * * * *
(The information collection requirements in this section have been 
approved by the Office of Management and Budget under control 
numbers 2900-0474 and 2900-0516.)

[FR Doc. 97-30709 Filed 11-26-97; 8:45 am]
BILLING CODE 8320-01-P