[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Rules and Regulations]
[Pages 61145-61147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27879]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1003


Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size 
Exemption Threshold

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; official commentary.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
issuing a final rule amending the official commentary that interprets 
the requirements of the Bureau's Regulation C (Home Mortgage 
Disclosure) to reflect the asset-size exemption threshold for banks, 
savings associations, and credit unions based on the annual percentage 
change in the average of the Consumer Price Index for Urban Wage 
Earners and Clerical Workers (CPI-W). Based on the 2.1 percent increase 
in the average of the CPI-W for the 12-month period ending in November 
2017, the exemption threshold is adjusted to increase to $45 million 
from $44 million. Therefore, banks, savings associations, and credit 
unions with assets of $45 million or less as of December 31, 2017, are 
exempt from collecting data in 2018.

DATES: This final rule is effective January 1, 2018.

FOR FURTHER INFORMATION CONTACT: Monique Chenault, Paralegal 
Specialist, Office of Regulations, Consumer Financial Protection 
Bureau, 1700 G

[[Page 61146]]

Street NW, Washington, DC 20552, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    The Home Mortgage Disclosure Act of 1975 (HMDA) (12 U.S.C. 2801-
2810) requires most mortgage lenders located in metropolitan areas to 
collect data about their housing related lending activity. Annually, 
lenders must report their data to the appropriate Federal agencies and 
make the data available to the public. The Bureau's Regulation C (12 
CFR part 1003) implements HMDA.
    Prior to 1997, HMDA exempted certain depository institutions as 
defined in HMDA (i.e., banks, savings associations, and credit unions) 
with assets totaling $10 million or less as of the preceding year-end. 
In 1996, HMDA was amended to expand the asset-size exemption for these 
depository institutions. 12 U.S.C. 2808(b). The amendment increased the 
dollar amount of the asset-size exemption threshold by requiring a one-
time adjustment of the $10 million figure based on the percentage by 
which the CPI-W for 1996 exceeded the CPI-W for 1975, and it provided 
for annual adjustments thereafter based on the annual percentage 
increase in the CPI-W, rounded to the nearest multiple of $1 million.
    The definition of ``financial institution'' in Sec.  1003.2(g) 
provides that the Bureau will adjust the asset threshold based on the 
year-to-year change in the average of the CPI-W, not seasonally 
adjusted, for each 12-month period ending in November, rounded to the 
nearest $1 million. For 2017, the threshold was $44 million. During the 
12-month period ending in November 2017, the average of the CPI-W 
increased by 2.1 percent. As a result, the exemption threshold is 
increased to $45 million. Thus, banks, savings associations, and credit 
unions with assets of $45 million or less as of December 31, 2017, are 
exempt from collecting data in 2018. An institution's exemption from 
collecting data in 2018 does not affect its responsibility to report 
data it was required to collect in 2017.

II. Procedural Requirements

A. Administrative Procedure Act

    Under the Administrative Procedure Act (APA), notice and 
opportunity for public comment are not required if the Bureau finds 
that notice and public comment are impracticable, unnecessary, or 
contrary to the public interest. 5 U.S.C. 553(b)(B). Pursuant to this 
final rule, comment 2(g)-2 in Regulation C, supplement I, is amended to 
update the exemption threshold. The amendment in this final rule is 
technical and non-discretionary, and it merely applies the formula 
established by Regulation C for determining any adjustments to the 
exemption threshold. For these reasons, the Bureau has determined that 
publishing a notice of proposed rulemaking and providing opportunity 
for public comment are unnecessary. Therefore, the amendment is adopted 
in final form.
    Section 553(d) of the APA generally requires publication of a final 
rule not less than 30 days before its effective date, except (1) a 
substantive rule which grants or recognizes an exemption or relieves a 
restriction; (2) interpretive rules and statements of policy; or (3) as 
otherwise provided by the agency for good cause found and published 
with the rule. 5 U.S.C. 553(d). At a minimum, the Bureau believes the 
amendments fall under the third exception to section 553(d). The Bureau 
finds that there is good cause to make the amendments effective on 
January 1, 2018. The amendment in this final rule is technical and non-
discretionary, and it applies the method previously established in the 
agency's regulations for determining adjustments to the threshold.

B. Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required, the 
Regulatory Flexibility Act does not require an initial or final 
regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a).

C. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3506; 5 CFR part 1320), the agency reviewed this final rule. No 
collections of information pursuant to the Paperwork Reduction Act are 
contained in the final rule.

D. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
CFPB 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).

List of Subjects in 12 CFR Part 1003

    Banking, Banks, Credit unions, Mortgages, National banks, Reporting 
and recordkeeping requirements, Savings associations.

Authority and Issuance

    For the reasons set forth above, the Bureau amends Regulation C, 12 
CFR part 1003, as set forth below:

PART 1003--HOME MORTGAGE DISCLOSURE (REGULATION C)

0
1. The authority citation for part 1003 continues to read as follows:

    Authority: 12 U.S.C. 2803, 2804, 2805, 5512, 5581.

0
2. In Supplement I to Part 1003, under Section 1003.2--Definitions, 
2(g) Financial Institution is revised to read as follows:

Supplement I to Part 1003--Official Interpretations

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Section 1003.2--Definitions

* * * * *
2(g) Financial Institution
    1. Preceding calendar year and preceding December 31. The 
definition of financial institution refers both to the preceding 
calendar year and the preceding December 31. These terms refer to the 
calendar year and the December 31 preceding the current calendar year. 
For example, in 2019, the preceding calendar year is 2018 and the 
preceding December 31 is December 31, 2018. Accordingly, in 2019, 
Financial Institution A satisfies the asset-size threshold described in 
Sec.  1003.2(g)(1)(i) if its assets exceeded the threshold specified in 
comment 2(g)-2 on December 31, 2018. Likewise, in 2020, Financial 
Institution A does not meet the loan-volume test described in Sec.  
1003.2(g)(1)(v)(A) if it originated fewer than 25 closed-end mortgage 
loans during either 2018 or 2019.
    2. Adjustment of exemption threshold for banks, savings 
associations, and credit unions. For data collection in 2018, the 
asset-size exemption threshold is $45 million. Banks, savings 
associations, and credit unions with assets at or below $45 million as 
of December 31, 2017, are exempt from collecting data for 2018.
    3. Merger or acquisition--coverage of surviving or newly formed 
institution. After a merger or acquisition, the surviving or newly 
formed institution is a financial institution under Sec.  1003.2(g) if 
it, considering the combined assets, location, and lending activity of 
the surviving or newly formed institution and the merged or acquired 
institutions or acquired branches, satisfies the criteria included in 
Sec.  1003.2(g). For

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example, A and B merge. The surviving or newly formed institution meets 
the loan threshold described in Sec.  1003.2(g)(1)(v)(B) if the 
surviving or newly formed institution, A, and B originated a combined 
total of at least 500 open-end lines of credit in each of the two 
preceding calendar years. Likewise, the surviving or newly formed 
institution meets the asset-size threshold in Sec.  1003.2(g)(1)(i) if 
its assets and the combined assets of A and B on December 31 of the 
preceding calendar year exceeded the threshold described in Sec.  
1003.2(g)(1)(i). Comment 2(g)-4 discusses a financial institution's 
responsibilities during the calendar year of a merger.
    4. Merger or acquisition--coverage for calendar year of merger or 
acquisition. The scenarios described below illustrate a financial 
institution's responsibilities for the calendar year of a merger or 
acquisition. For purposes of these illustrations, a ``covered 
institution'' means a financial institution, as defined in Sec.  
1003.2(g), that is not exempt from reporting under Sec.  1003.3(a), and 
``an institution that is not covered'' means either an institution that 
is not a financial institution, as defined in Sec.  1003.2(g), or an 
institution that is exempt from reporting under Sec.  1003.3(a).
    i. Two institutions that are not covered merge. The surviving or 
newly formed institution meets all of the requirements necessary to be 
a covered institution. No data collection is required for the calendar 
year of the merger (even though the merger creates an institution that 
meets all of the requirements necessary to be a covered institution). 
When a branch office of an institution that is not covered is acquired 
by another institution that is not covered, and the acquisition results 
in a covered institution, no data collection is required for the 
calendar year of the acquisition.
    ii. A covered institution and an institution that is not covered 
merge. The covered institution is the surviving institution, or a new 
covered institution is formed. For the calendar year of the merger, 
data collection is required for covered loans and applications handled 
in the offices of the merged institution that was previously covered 
and is optional for covered loans and applications handled in offices 
of the merged institution that was previously not covered. When a 
covered institution acquires a branch office of an institution that is 
not covered, data collection is optional for covered loans and 
applications handled by the acquired branch office for the calendar 
year of the acquisition.
    iii. A covered institution and an institution that is not covered 
merge. The institution that is not covered is the surviving 
institution, or a new institution that is not covered is formed. For 
the calendar year of the merger, data collection is required for 
covered loans and applications handled in offices of the previously 
covered institution that took place prior to the merger. After the 
merger date, data collection is optional for covered loans and 
applications handled in the offices of the institution that was 
previously covered. When an institution remains not covered after 
acquiring a branch office of a covered institution, data collection is 
required for transactions of the acquired branch office that take place 
prior to the acquisition. Data collection by the acquired branch office 
is optional for transactions taking place in the remainder of the 
calendar year after the acquisition.
    iv. Two covered institutions merge. The surviving or newly formed 
institution is a covered institution. Data collection is required for 
the entire calendar year of the merger. The surviving or newly formed 
institution files either a consolidated submission or separate 
submissions for that calendar year. When a covered institution acquires 
a branch office of a covered institution, data collection is required 
for the entire calendar year of the merger. Data for the acquired 
branch office may be submitted by either institution.
    5. Originations. Whether an institution is a financial institution 
depends in part on whether the institution originated at least 25 
closed-end mortgage loans in each of the two preceding calendar years 
or at least 500 open-end lines of credit in each of the two preceding 
calendar years. Comments 4(a)-2 through -4 discuss whether activities 
with respect to a particular closed-end mortgage loan or open-end line 
of credit constitute an origination for purposes of Sec.  1003.2(g).
    6. Branches of foreign banks--treated as banks. A Federal branch or 
a State-licensed or insured branch of a foreign bank that meets the 
definition of a ``bank'' under section 3(a)(1) of the Federal Deposit 
Insurance Act (12 U.S.C. 1813(a)) is a bank for the purposes of Sec.  
1003.2(g).
    7. Branches and offices of foreign banks and other entities--
treated as nondepository financial institutions. A Federal agency, 
State-licensed agency, State-licensed uninsured branch of a foreign 
bank, commercial lending company owned or controlled by a foreign bank, 
or entity operating under section 25 or 25A of the Federal Reserve Act, 
12 U.S.C. 601 and 611 (Edge Act and agreement corporations) may not 
meet the definition of ``bank'' under the Federal Deposit Insurance Act 
and may thereby fail to satisfy the definition of a depository 
financial institution under Sec.  1003.2(g)(1). An entity is 
nonetheless a financial institution if it meets the definition of 
nondepository financial institution under Sec.  1003.2(g)(2).
* * * * *

    Dated: December 14, 2017.
Mick Mulvaney,
Acting Director, Bureau of Consumer Financial Protection.
[FR Doc. 2017-27879 Filed 12-21-17; 4:15 pm]
 BILLING CODE 4810-AM-P