[Federal Register Volume 84, Number 245 (Friday, December 20, 2019)]
[Rules and Regulations]
[Pages 69993-69995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27522]


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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 
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

[[Page 69994]]

Workers (CPI-W). Based on the 1.6 percent increase in the average of 
the CPI-W for the 12-month period ending in November 2019, the 
exemption threshold is adjusted to $47 million from $46 million. 
Therefore, banks, savings associations, and credit unions with assets 
of $47 million or less as of December 31, 2019, are exempt from 
collecting data in 2020.

DATES: This rule is effective on January 1, 2020.

FOR FURTHER INFORMATION CONTACT: Rachel Ross, Attorney-Advisor; Kristen 
Phinnessee, Senior Counsel, Office of Regulations, at (202) 435-7700. 
If you require this document in an alternative electronic format, 
please contact [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The Home Mortgage Disclosure Act of 1975 (HMDA) \1\ 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 \2\ implements HMDA.
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    \1\ 12 U.S.C. 2801-2810.
    \2\ 12 CFR part 1003.
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    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.\3\ 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.
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    \3\ 12 U.S.C. 2808(b).
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    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 2019, the threshold was $46 million. During the 
12-month period ending in November 2019, the average of the CPI-W 
increased by 1.6 percent. As a result, the exemption threshold is 
increased to $47 million for 2020. Thus, banks, savings associations, 
and credit unions with assets of $47 million or less as of December 31, 
2019, are exempt from collecting data in 2020. An institution's 
exemption from collecting data in 2020 does not affect its 
responsibility to report data it was required to collect in 2019.

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.\4\ 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.
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    \4\ 5 U.S.C. 553(b)(B).
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    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\ 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, 
2020. 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.
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    \5\ 5 U.S.C. 553(d).
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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.\6\
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    \6\ 5 U.S.C. 603(a), 604(a).
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C. Paperwork Reduction Act

    The Bureau has determined that this final rule does not impose any 
new or revise any existing recordkeeping, reporting, or disclosure 
requirements on covered entities or members of the public that would be 
collections of information requiring approval by the Office of 
Management and Budget under the Paperwork Reduction Act.\7\
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    \7\ 44 U.S.C. 3501-3521.
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D. Congressional Review Act

    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 United States Senate, the United States 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. Effective January 1, 2020, Supplement I to Part 1003--Official 
Interpretations, as amended at 82 FR 40388, further amended at 84 FR 
57946, is further amended by revising ``2(g) Financial Institution'' 
under the heading Section 1003.2--Definitions to read as follows:

Supplement I to Part 1003--Official Interpretations

* * * * *

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

[[Page 69995]]

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 2020, the 
asset-size exemption threshold is $47 million. Banks, savings 
associations, and credit unions with assets at or below $47 million 
as of December 31, 2019, are exempt from collecting data for 2020.
    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 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 17, 2019.
Thomas Pahl,
Policy Associate Director, Bureau of Consumer Financial Protection.
[FR Doc. 2019-27522 Filed 12-18-19; 4:15 pm]
BILLING CODE 4810-AM-P