[Federal Register Volume 85, Number 187 (Friday, September 25, 2020)]
[Proposed Rules]
[Pages 60389-60402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18813]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 85, No. 187 / Friday, September 25, 2020 / 
Proposed Rules  

[[Page 60389]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 338 and 390

RIN 3064-AF35


Transferred OTS Regulations Regarding Nondiscrimination 
Requirements

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Proposed rule.

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SUMMARY: In this notice of proposed rulemaking, the Federal Deposit 
Insurance Corporation (FDIC) proposes to rescind and remove from the 
Code of Federal Regulations rules entitled ``Nondiscrimination 
Requirements'' (part 390, subpart G), and to amend FDIC regulation part 
338 to make it applicable to State savings associations. Part 390, 
subpart G was included in the regulations that were transferred to the 
FDIC from the Office of Thrift Supervision (OTS) on July 21, 2011, in 
connection with the implementation of applicable provisions of Title 
III of the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act). The FDIC's part 338 is entitled ``Fair Housing'' and 
applies to insured State nonmember banks. Several provisions for State 
savings associations in part 390, subpart G have substantively similar 
provisions in part 338. The remaining provisions in part 390, subpart G 
without a direct counterpart are largely duplicative of federal laws 
(Equal Credit Opportunity Act (ECOA), Fair Housing Act (FHA), Equal 
Employment Opportunity Act (EEOA) and other laws concerning 
nondiscrimination in lending, employment, and services) and 
implementing regulations. After careful review of part 390, subpart G, 
the FDIC proposes to rescind and remove in its entirety part 390, 
subpart G to streamline the FDIC's rules and eliminate unnecessary, 
inconsistent, and duplicative regulations and to modify the scope of 
part 338 to include State savings associations to reflect the scope of 
the FDIC's current supervisory responsibilities as the appropriate 
Federal banking agency for those institutions. The FDIC also proposes 
to define ``FDIC-supervised institution'' and ``State savings 
association.'' If the proposal is adopted in final form, insured State 
nonmember banks and State savings associations will be subject to the 
same anti-discrimination requirements. Upon removal of part 390, 
subpart G, nondiscrimination regulations related to lending applicable 
for all insured depository institutions for which the FDIC has been 
designated the appropriate Federal banking agency will be found at part 
338 and related nondiscrimination federal regulations listed above, as 
applicable.

DATES: Comments must be received on or before October 26, 2020.

ADDRESSES: You may submit comments, identified by RIN 3064-AF35, by any 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments in the portal.
     Agency Website: https://www.fdic.gov/regulations/laws/federal/. Follow the instructions for submitting comments on the 
website.
     Email: [email protected]. Include RIN 3064-AF35 in the 
subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street NW, 
Washington, DC 20429.
     Hand Delivery/Courier: Comments may be hand-delivered to 
the guard station at the rear of the 550 17th Street NW building 
(located on F Street) on business days between 7:00 a.m. and 5:00 p.m.
    Instructions: All submissions for this rulemaking must include the 
agency name and RIN 3064-AF35. Comments received will be posted without 
change to https://www.fdic.gov/regulations/laws/federal/, including any 
personal information provided.

FOR FURTHER INFORMATION CONTACT: Navid Choudhury, Counsel, Legal 
Division, (202) 898-6526, [email protected]; Jamie Goodson, Senior 
Policy Analyst, (202) 898-6685, [email protected]; Ernestine Ward, 
Policy Analyst, (202) 898-3812, [email protected]; and Evelyn Manley, 
Fair Lending Specialist, (202) 898-3775, [email protected], Division of 
Depositor and Consumer Protection.

SUPPLEMENTARY INFORMATION:

I. Background

The Dodd-Frank Act

    Title III of the Dodd-Frank Act \1\ provided for a substantial 
reorganization of the regulation of State and Federal savings 
associations and their holding companies. Beginning July 21, 2011, the 
transfer date established by section 311 of the Dodd-Frank Act,\2\ the 
powers, duties, and functions formerly performed by the OTS were 
divided among the FDIC, as to State savings associations, the Office of 
the Comptroller of the Currency (OCC), as to Federal savings 
associations, and the Board of Governors of the Federal Reserve System 
(FRB), as to savings and loan holding companies. Section 316(b) of the 
Dodd-Frank Act \3\ provides the manner of treatment for all orders, 
resolutions, determinations, regulations, and advisory materials that 
had been issued, made, prescribed, or allowed to become effective by 
the OTS. Section 316(b) states that if the materials were in effect on 
the day before the transfer date, they continue to be in effect and are 
enforceable by or against the appropriate successor agency until they 
are modified, terminated, set aside, or superseded in accordance with 
applicable law by such successor agency, by any court of competent 
jurisdiction, or by operation of law.
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    \1\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ Codified at 12 U.S.C. 5411.
    \3\ Codified at 12 U.S.C. 5414(b).
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    Section 316(c) of the Dodd-Frank Act \4\ further directed the FDIC 
and the OCC to consult with one another and to publish a list of the 
continued OTS regulations which would be enforced by the FDIC and the 
OCC, respectively. On June 14, 2011, the FDIC's Board of Directors 
approved a ``List of OTS Regulations to be Enforced by the OCC and the 
FDIC Pursuant to the Dodd-Frank Wall Street Reform and Consumer 
Protection Act.'' This list was published by the FDIC and the OCC as a 
Joint Notice in the Federal Register on July 6, 2011.\5\
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    \4\ Codified at 12 U.S.C. 5414(c).
    \5\ 76 FR 39247 (July 6, 2011).

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[[Page 60390]]

    Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act \6\ 
granted the OCC rulemaking authority relating to both State and Federal 
savings associations, nothing in the Dodd-Frank Act affected the FDIC's 
existing authority to issue regulations under the Federal Deposit 
Insurance Act (FDI Act) and other laws as the ``appropriate Federal 
banking agency'' or under similar statutory terminology. Section 312(c) 
of the Dodd-Frank Act amended the definition of ``appropriate Federal 
banking agency'' contained in section 3(q) of the FDI Act \7\ to add 
State savings associations to the list of entities for which the FDIC 
is designated as the ``appropriate Federal banking agency.'' As a 
result, when the FDIC acts as the designated ``appropriate Federal 
banking agency'' (or under similar terminology) for State savings 
associations, as it does here, the FDIC is authorized to issue, modify 
and rescind regulations involving such associations, insured State 
nonmember banks, and insured branches of foreign banks.
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    \6\ Codified at 12 U.S.C. 5412(b)(2)(B)(i)(II).
    \7\ 12 U.S.C. 1813(q).
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    As noted, on June 14, 2011, operating pursuant to this authority, 
the FDIC's Board of Directors reissued and redesignated certain 
transferred OTS regulations. These transferred OTS regulations were 
published as new FDIC regulations in the Federal Register on August 5, 
2011.\8\ When it republished the transferred OTS regulations as new 
FDIC regulations, the FDIC specifically noted that its staff would 
evaluate the transferred OTS regulations and might later recommend 
incorporating them into other FDIC regulations, amending them, or 
rescinding them, as appropriate.
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    \8\ 76 FR 47652 (Aug. 5, 2011).
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    One of the OTS rules transferred to the FDIC requires State savings 
associations to not discriminate with respect to lending, employment, 
and other services provided. The OTS rule, formerly found at 12 CFR 
part 528 (part 528), was transferred to the FDIC with only technical 
changes and is now found in the FDIC's rules at part 390, subpart G, 
entitled ``Nondiscrimination Requirements.'' Although few provisions of 
part 390, subpart G have a direct counterpart within the FDIC's 
regulations, the provisions are largely duplicative of regulations 
implementing federal laws (ECOA, FHA, EEOA, and other laws concerning 
nondiscrimination in lending, employment, and services) implemented by 
other agencies. After careful review of part 390, subpart G, the FDIC 
proposes to rescind and remove part 390, subpart G, because, as 
discussed below, it is duplicative, unnecessary, and burdensome to 
require State savings associations to comply with additional 
requirements to which insured State nonmember banks are not subject. 
The FDIC also proposes to makes technical conforming edits to part 338 
to encompass State savings associations and update the regulation.

FDIC's Existing 12 CFR Part 338 and Former OTS Part 528 (Transferred to 
FDIC Part 390, Subpart G)

    The Fair Housing Act of 1968 prohibits discrimination concerning 
the sale, rental and financing of housing based on race, religion, 
national origin or sex. Section 808 of the FHA directed all executive 
departments and agencies to administer their programs relating to 
housing and urban development (including any Federal agency having 
regulatory or supervisory authority over financial institutions, e.g., 
the OTS' predecessor, the Federal Home Loan Bank Board (FHLBB)) in a 
manner to further the purposes of the FHA. Effective May 1, 1972, the 
FHLBB amended Chapter V, subchapter B of Title 12, by issuing a new 
section part 528 which prohibited ``discrimination by member 
institutions in their lending and employment practices and in their 
advertising and requiring that such institutions display an Equal 
Housing Lender Poster.'' \9\
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    \9\ 37 FR 8436 (Apr. 3 1972).
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    Following this initial issuance of part 528 in 1972, in 1978 the 
FHLBB finalized major amendments to the regulation to update and 
strengthen its nondiscrimination in lending regulations to reflect 
provisions of the FHA, ECOA, and the Community Reinvestment Act (CRA) 
and to ``strengthen the Bank Board's ability to enforce member 
institutions' compliance with these and other Federal laws which 
prohibit discriminatory lending practices.'' \10\ Specifically, these 
amendments to the FHLBB's fair lending regulation: ``(1) [p]rohibit 
member institutions from automatically refusing to lend because of the 
age or location of a dwelling; (2) prohibit loan decisions based on 
discriminatory appraisals; (3) emphasize that there is a right to file 
a written loan application; (4) require member institutions to have 
written loan underwriting standards which are available to the public 
upon request; (5) revise the Equal Housing Lender poster which member 
institutions display in their lobbies; and (6) establish a new 
monitoring system for fair lending enforcement and analysis.'' \11\
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    \10\ 43 FR 22332 (May 25, 1978).
    \11\ 43 FR 22332 (May 25, 1978).
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    In 1993, following the President's order for federal agencies to 
review all Federal regulations and policies to eliminate over-
burdensome regulations that discourage economic growth,\12\ the OTS (as 
successor to the FHLBB) \13\ updated part 528 to eliminate certain 
definitions that were deemed unnecessary and amended Sec.  528.6, 
regarding compliance with Home Mortgage Disclosure Act (HMDA) loan/
application registers (LARs). Commenters favored elimination of the 
nondiscrimination disclosure requirements of Sec.  528.6, arguing it 
was duplicative of the requirements set forth in 12 CFR part 203, which 
made HMDA requirements applicable to savings associations. In its 
proposed rule, the OTS stated that its own ``loan application 
register'' was ``more comprehensive than required by Regulation C'' and 
that ``the additional register information is useful to examiners'' but 
also stated that the additional information was available to examiners 
through other means.\14\ In its final rule, the OTS agreed that part 
528.6 was substantially duplicative of HMDA part 203 but disagreed that 
the OTS' requirement to report ``reason for denial'' is unnecessary. At 
the time, reporting the reason for denial was optional under Regulation 
C.\15\ The OTS argued that ``[t]he `reason for denial' provides us with 
useful information that assists the examination process. We believe 
that retaining the regulatory requirement assures that this important 
data field is completed by all OTS-regulated filers, including any 
majority-owned savings association service corporations or 
affiliates.'' \16\ As a result, the OTS continued to require that 
savings associations and other OTS regulated filers required to keep 
HMDA LARs pursuant to part 203 to report the ``reason for denial'' for 
all loan denials.
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    \12\ In 1996, the Department of Housing and Urban Development 
(HUD), in accordance with the President's initiative on regulatory 
reinvention and reform which requires deletion of nonbinding 
guidance or explanations, entirely eliminated HUD's part 109 
(Advertising Guidelines), which provided a variety of nonbinding 
suggestions and examples of advertising practices that would violate 
the FHA. 61 FR 14378 (April 1, 1996).
    \13\ The updates followed the passage of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989. Public 
Law 101-73, 103 Stat. 183 (1989).
    \14\ 57 FR 40352 (Sept. 3, 1992).
    \15\ See 12 CFR 203.4(c) (1993).
    \16\ 58 FR 4309 (Jan. 14, 1993).
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    Part 528 was among the regulations that were transferred to the 
FDIC from the OTS on July 21, 2011, pursuant to

[[Page 60391]]

the Dodd-Frank Act as noted above. OTS' part 528 was adopted as FDIC's 
part 390 subpart G and was not integrated with the FDIC's rules 
contained in part 338, entitled ``Fair Housing.'' Both in 2011 when OTS 
part 528 was transferred and today, the FDIC's part 338, a regulation 
whose provisions are substantially similar to some provisions in the 
OTS' former part 528: (1) Prohibits insured State nonmember banks from 
engaging in discriminatory advertising with regard to residential real 
estate-related transactions; and (2) requires recordkeeping of certain 
home loan application data for compliance with the ECOA and HMDA with 
respect to insured State nonmember banks for which the FDIC has been 
designated the appropriate Federal banking agency.\17\ These provisions 
have direct counterparts in part 390, subpart G.
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    \17\ 12 CFR part 338.
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    Specifically, the FDIC's fair housing recordkeeping provisions (see 
Sec. Sec.  338.7 and 338.8) are a counterpart to the former OTS 
requirement to file a HMDA LAR (Sec.  390.147). The FDIC rules require 
supervised institutions to request and retain any monitoring 
information required by HMDA and its implementing Regulation C when 
receiving an application for credit for the purchase or refinancing of 
a dwelling to be occupied as a principal residence. Prior to the 
passage of the final HMDA rule in 2015 by the Bureau of Consumer 
Financial Protection (CFPB),\18\ reporting of reason for denial was 
optional for insured State nonmember banks, as mentioned earlier. 
However, reporting of reason for denial became mandatory following the 
2015 HMDA rule for covered institutions. FDIC-supervised institutions, 
under part 338, are already subject to the HMDA reporting requirement 
to provide a reason for denial as a result of the change in 2015. 
Therefore, the FDIC has not found any reasonable basis to add such a 
specific provision into its part 338, and the FDIC proposes to rescind 
and remove the former OTS rule as duplicative and unnecessary. 
Moreover, in 2018, the HMDA rule was further amended by the Economic 
Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA),\19\ 
which provided that insured depository institutions and insured credit 
unions need not report certain data points for transactions that 
qualify for a partial exemption, unless otherwise required by their 
regulator. Reason for denial is one such data point. Rescinding and 
removing former OTS's Sec.  390.147 would promote regulatory 
consistency among insured State nonmember banks and State savings 
associations and enable State savings associations to take advantage of 
the partial exemption, if eligible.
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    \18\ 80 FR 66127 (Oct. 28, 2015).
    \19\ Public Law 117-154 (2018). In recent CFPB rulemakings and 
other issuances, the requirement to report Reason for Denial in 
Sec.  390.147 is stated to be independent of the partial exemption 
from reporting that data field under HMDA.
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    In addition, FDIC requirements related to nondiscrimination in 
advertising and displaying a fair housing poster (Sec. Sec.  338.3 and 
338.4) are counterparts to substantially similar former OTS 
requirements (Sec. Sec.  390.145 and 390.146). However, the FDIC's part 
338 and the former OTS' part 390, subpart G differ with respect to 
where they require fair housing posters to be displayed and the 
presence of nonbinding recommendations about displaying Spanish-
language posters in certain offices. With respect to poster location, 
FDIC's Sec.  338.4 requires posting either the FDIC's Equal Housing 
Lender poster or the U.S. Department of Housing and Urban Development's 
Equal Housing Opportunity poster at ``a central location within the 
bank where deposits are received or where such loans are made in a 
manner clearly visible to the general public entering the area,'' 
whereas Sec.  390.146 requires posting at each of a State savings 
association's offices. The FDIC has not identified a reason for State 
savings associations to post an Equal Housing Opportunity notice at 
locations where insured State nonmember banks are not required to post. 
Therefore, the FDIC proposes to rescind and remove Sec.  390.146. As 
discussed below, the FDIC also proposes to amend Sec.  338.4 to apply 
to State savings associations, in addition to insured State nonmember 
banks and to update the address provided for the FDIC's Consumer 
Response Center (CRC).
    With respect to the presence of non-binding guidance, Sec.  390.146 
recommends, but does not require, that State savings associations 
``post a Spanish language version of the [Equal Housing Lender] poster 
in offices serving areas with a substantial Spanish-speaking 
population.'' The FDIC's part 338 does not contain guidance about 
posting supplemental foreign-language posters. The FDIC does not 
propose to add this nonbinding recommendation to the existing Equal 
Housing Lending poster requirements in Sec.  338.4.\20\
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    \20\ https://www.fdic.gov/news/news/press/2018/pr18059a.pdf.
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    Although several former OTS nondiscrimination rules codified in 
part 390, subpart G do not have direct FDIC counterparts, they are 
substantially duplicative of nondiscrimination provisions found in 
other federal laws (e.g., ECOA, FHA, EEOA, and other laws concerning 
nondiscrimination in lending, employment, and services) and 
implementing regulations of the CFPB or Department of Labor.\21\ 
Additionally, the interagency Policy Statement on Discrimination in 
Lending applies to State savings associations.\22\ The applicable 
prohibitions on discrimination addressed by these other laws, 
regulations, and policy statements apply to State savings associations 
regardless of specific references in the FDIC's regulation.
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    \21\ FDIC part 352 addresses nondiscrimination on the basis of 
disability to provide equal access to programs and activities 
conducted by the FDIC.
    \22\ 59 FR 18267 (April 15, 1994).
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    In addition, to the extent that any such provision of part 390, 
subpart G can be interpreted as applying in a case where ECOA, FHA, 
EEOA and other laws and regulations concerning nondiscrimination in 
lending, employment or services would not apply, the FDIC's authority 
to amend these former OTS provisions is not certain.\23\ The OTS had 
authority under the Home Owners' Loan Act (HOLA) to adopt regulations 
that give primary consideration of the best practices of thrift 
institutions in the United States and appears to have used such 
authority in adopting and maintaining their nondiscrimination 
requirements.\24\ However, such HOLA authority does not extend to the 
FDIC. Moreover, the FDIC has not identified cases where the OTS applied 
the nondiscrimination requirements of its part 528 to address acts or 
practices that were not prohibited by ECOA, FHA, or EEOA. The FDIC also 
has not found cases where a fair lending review of a State savings 
association identified acts or practices that were deemed appropriate 
to address under part 390 subpart G but not under ECOA or the FHA. For 
these reasons, the FDIC finds Sec. Sec.  390.142 through 390.144 and 
390.148 to be unnecessary and duplicative, as a result of the 
overlapping provisions in ECOA, FHA, or EEOA, and proposes to rescind 
Sec. Sec.  390.142 through 390.144 and 390.148 in their entirety rather 
than revise them

[[Page 60392]]

to address acts or practices not addressed by ECOA, FHA, or EEOA.
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    \23\ See, e.g., OTS, Advance Notice of Proposed Rulemaking, 
Unfair or Deceptive Acts and Practices, 72 FR 43570, 43573 (Aug. 6, 
2007) (stating that OTS' Nondiscrimination Rule, then 12 CFR part 
528, ``extends beyond the federal fair lending laws by prohibiting 
discrimination not covered by those laws'' and providing examples of 
such broader applicability).
    \24\ See id.
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    The FDIC has determined that several provisions of part 390 subpart 
G have no counterparts in either the FDIC's regulations or other 
nondiscrimination federal regulations. For these provisions, the FDIC 
has not identified a reasonable basis for retaining these requirements 
for State savings associations, given that they do not apply to insured 
State nonmember banks, and therefore proposes to rescind the following 
provisions, which--
    1. Require each State savings association to have clearly written, 
nondiscriminatory loan underwriting standards, available to the public 
upon request, at each of its offices. Require each association to 
review its standards, and business practices that implement them, at 
least annually to ensure equal opportunity in lending.\25\
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    \25\ 12 CFR 390.143(b).
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    2. Require each State savings association notify each ``inquirer'' 
of a right to obtain a copy of its loan underwriting standards.\26\
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    \26\ 12 CFR 390.144(b).
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    3. Provide supplementary guidelines to aid savings associations in 
developing and implementing nondiscriminatory lending policies and 
provide that each State savings association ``should reexamine its 
underwriting standards at least annually in order to ensure equal 
opportunity.'' \27\
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    \27\ 12 CFR 390.150(a).
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    4. Treat the age or location of a dwelling as a per se prohibited 
basis for discrimination.\28\
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    \28\ 12 CFR 390.142 through 390.144.
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    5. Provide certain guidelines relating to nondiscrimination in 
marketing practices.\29\
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    \29\ 12 CFR 390.150(d).
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    In summary, after careful review of part 390, subpart G (formerly 
part 528), and the former OTS's stated rationale for the rule, the 
FDIC, as the appropriate Federal banking agency for State savings 
associations, proposes to rescind and remove part 390, subpart G in its 
entirety. Rescinding part 390, subpart G also will serve to streamline 
the FDIC's rules and eliminate unnecessary, inconsistent, and 
duplicative regulations. If the proposal is adopted in final form, all 
insured State nonmember banks and State savings associations will be 
subject to the same anti-discrimination requirements.

II. The Proposal

    Regarding the functions of the former OTS that were transferred to 
the FDIC, section 316(b)(3) of the Dodd-Frank Act \30\ provides that 
the former OTS regulations will be enforceable by the FDIC until they 
are modified, terminated, set aside, or superseded in accordance with 
applicable law. After reviewing the Nondiscrimination Requirements rule 
currently found in part 390, subpart G, the FDIC, as the appropriate 
Federal banking agency for State savings associations, proposes to 
rescind and remove part 390, subpart G in its entirety. Further, in 
part 338, the FDIC proposes to (1) revise Sec.  338.1 to reflect that 
the advertising provisions of subpart A apply to State savings 
associations and their subsidiaries, to conform to and reflect the 
scope of FDIC's current supervisory responsibilities as the appropriate 
Federal banking agency for State savings associations; (2) in Sec.  
338.2, add a defined term ``FDIC-supervised institution,'' defined to 
mean ``either a bank [defined in Sec.  338.2(a) to mean ``an insured 
State nonmember bank as defined in section 3 of the Federal Deposit 
Insurance Act''] or a State savings association''; (3) add a new 
subsection to define ``State savings association'' as having ``the same 
meaning as in section 3(b)(3) of the Federal Deposit Insurance Act''; 
\31\ (4) make conforming technical edits throughout, including 
replacing the term ``FDIC-supervised institution'' or ``institution'' 
in place of ``bank'' throughout the rule where necessary and revising 
references to the FRB's part 202 and part 203 throughout part 338 to 
refer to the CFPB's part 1002 and part 1003, respectively; and (5) 
amend Sec.  338.4 to update the text required for the Equal Housing 
Lender poster to the correct address for the FDIC Consumer Response 
Center.
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    \30\ 12 U.S.C. 5414(b)(3).
    \31\ 12 U.S.C. 1813(b)(3).
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Part 390, Subpart G
A. Section 390.140--Definitions
    Section 390.140 defines the terms ``application,'' ``dwelling,'' 
and ``State savings association.'' In light of the proposal to rescind 
subpart G of part 390 in its entirety, these definitions need not be 
retained. Therefore, the FDIC proposes to rescind Sec.  390.140.
B. Section 390.141--Supplementary Guidelines
    Section 390.141 cross-references a policy statement transferred 
from OTS regulations to Sec.  390.151, HUD's fair housing regulations 
at 24 CFR part 100 et seq., and Regulation B and Regulation C. The 
cross-reference to the policy statement would be obsolete if Sec.  
390.151 is rescinded as proposed. Moreover, the cross-references to 
HUD's fair housing regulations and to the regulations that implement 
ECOA and HMDA are unnecessary. Therefore, the FDIC proposes to rescind 
Sec.  390.141.
C. Section 390.142--Nondiscrimination in Lending and Other Services
    Section 390.142 prohibits discrimination on a prohibited basis by 
State savings associations in lending and other services. The 
prohibited bases specified are location and age of a dwelling and race, 
color, religion, sex, handicap, familial status, marital status, or age 
of an applicant or a joint applicant, among other parties.\32\ In 
general, Sec.  390.142(a) prohibits denying a loan or other service, 
discriminating in the purchase of loans or securities, or 
discriminating in fixing the amount, interest rate, duration, 
application procedures, collection or enforcement procedures, or other 
terms or conditions of such loan or service, on a prohibited basis. 
Section 390.142(b) provides that ``[a] State savings association shall 
consider without prejudice the combined income of joint applicants for 
a loan or other service.'' Section 390.142(c) prohibits a State savings 
association from discriminating against an applicant for a loan or 
other service on any prohibited basis, as defined in Regulation B or 
HUD's FHA regulation in 24 CFR part 100.
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    \32\ The other parties specified in Sec.  390.147(a) are a 
person associated with respect to a loan or service or the purpose 
thereof, present or prospective owners, lessees, tenants, or 
occupants of the dwelling(s), or present or prospective owners, 
lessees, tenant, or occupants of other dwellings in the vicinity of 
the dwelling(s).
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    There is significant overlap between the requirements of Sec.  
390.142 and of the requirements of ECOA and Regulation B and the FHA 
and HUD's FHA regulations (the general federal fair lending laws). For 
example, under ECOA, it is ``unlawful for any creditor to discriminate 
against any applicant, with respect to any aspect of a credit 
transaction'' on a prohibited basis.\33\ Similarly, the FHA provides 
that it is ``unlawful for any person or other entity whose business 
includes engaging in residential real estate-related transactions to 
discriminate against any person in making available such a transaction, 
or in the terms or conditions of such a transaction'' because of a 
prohibited basis.\34\ Moreover, the following are prohibited bases 
under both subpart G of part 390 and the general federal fair lending 
laws: Race, color, religion, national origin, and sex.\35\
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    \33\ See 15 U.S.C. 1691(a).
    \34\ See 42 U.S.C. 3605(a).
    \35\ Prohibited bases for discrimination under ECOA but not the 
FHA are age (of an applicant), marital status, and good faith 
exercise of a right under the Consumer Credit Protection Act (or any 
state law upon which the CFPB has granted an exception). Prohibited 
bases for discrimination under the FHA but not ECOA are handicap and 
familial status. Compare 15 U.S.C. 1691(a) with 42 U.S.C. 3604, 
3605(a).

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[[Page 60393]]

    However, there are differences between Sec.  390.142 and the 
general federal fair lending laws. For example, under Sec.  390.142(a), 
prohibited bases for discrimination explicitly include the location and 
age of a dwelling, whereas prohibited bases for discrimination under 
ECOA, FHA, and their implementing regulations do not include such 
factors.
    As discussed earlier, to the extent that a provision of Sec.  
390.142 can be interpreted as applying in a case where ECOA, FHA, EEOA 
and other laws and regulations concerning nondiscrimination in lending, 
employment or services would not apply, the FDIC's authority to amend 
these former OTS provisions is not certain. Because the general federal 
fair lending laws address substantially the same acts and practices as 
are addressed by Sec.  390.142(a) and it is uncertain whether the FDIC 
could amend Sec.  390.142(a) in connection with acts or practices not 
explicitly prohibited by the general federal fair lending laws, FDIC 
proposes to rescind Sec.  390.142(a).
    Similarly, Sec.  390.142(b) addresses acts and practices addressed 
by the general federal fair lending laws but differs in ways that make 
FDIC's authority to amend Sec.  390.142(b) uncertain. As mentioned, 
Sec.  390.142(b) provides that ``[a] State savings association shall 
consider without prejudice the combined income of joint applicants for 
a loan or other service.'' By contrast, Regulation B's provisions 
establishing standards for consideration of an applicant's income in 
Sec.  1002.6(b)(5) does not require creditors to consider the combined 
income of joint applicants, and Comment 6(b)(5)-3.ii states that 
creditors need not consider income at all. In contrast with Sec.  
390.142(b), 12 CFR 1002.6(b)(5) in Regulation B prohibits treating 
joint applicants differently based on the existence, absence or 
likelihood of a marital relationship. The FDIC believes that the 
prohibition in Sec.  1002.6(b)(5) addresses substantially the same 
issue that Sec.  390.142(b) addresses and the latter is duplicative and 
arguably less clear. Therefore, the FDIC proposes to rescind Sec.  
390.142(b).\36\
---------------------------------------------------------------------------

    \36\ Section 1002.6(b)(5) prohibits discounting, or excluding 
from consideration, the income of an applicant or his or her spouse 
because of a prohibited basis or because the income is derived from 
part-time employment or is an annuity, pension, or other retirement 
benefit. The provision also prohibits treating joint applicants 
differently based on the existence, absence, or likelihood of a 
marital relationship.
---------------------------------------------------------------------------

    As mentioned, Sec.  390.142(c) prohibits a State savings 
association from discriminating against an applicant for a loan or 
other service on any prohibited basis, as defined in Regulation B or 
HUD's FHA regulation in 24 CFR part 100. The FDIC believes that Sec.  
390.142(c) is duplicative of the general federal fair lending laws and 
therefore proposes to rescind the provision.
D. Section 390.143--Nondiscriminatory Appraisal and Underwriting
    Section 390.143(a) prohibits using or relying upon a dwelling 
appraisal that a State savings association knows or reasonably should 
know is ``discriminatory on the basis of the age or location of the 
dwelling'' or is ``discriminatory per se or in effect'' under the FHA 
or ECOA. The general federal fair lending laws prohibit appraisal-
related discrimination on a prohibited basis.\37\ Although the location 
of a dwelling is not a per se prohibited basis for discrimination under 
those statutes, ECOA prohibits discrimination because of the race, 
color, religion, national origin, etc. of residents in the neighborhood 
where the property offered as collateral.\38\ To the extent that Sec.  
390.143(a) prohibits considering the age of a dwelling in a way that 
would not be prohibited under the general federal fair lending laws, 
the authority of the FDIC to amend the provision is unclear.
---------------------------------------------------------------------------

    \37\ Regulation B prohibits discrimination ``against an 
applicant on a prohibited basis regarding any aspect of a credit 
transaction.'' 12 CFR 1002.4(a). Under HUD's FHA regulations, it is 
unlawful to use ``an appraisal of residential real property in 
connection with the sale, rental, or financing of any dwelling where 
the person knows or reasonably should know that the appraisal 
improperly takes into consideration'' a prohibited basis. 24 CFR 
100.135(d)(1).
    \38\ See 12 CFR 1002.2(z) and Comment 2(z)-1.
---------------------------------------------------------------------------

    As stated, Sec.  390.143(a) also prohibits using or relying upon a 
dwelling appraisal that is discriminatory per se or in effect under the 
FHA or ECOA. The FDIC believes that prohibition is duplicative of 
prohibitions under the general fair lending laws and therefore is 
unnecessary. For these reasons, the FDIC proposes to rescind Sec.  
390.143(a).
    Section 390.143(b) requires each State savings association to have 
clearly written, nondiscriminatory loan underwriting standards 
available to the public upon request at each of its offices. In 
addition, Sec.  390.143(b) requires each association to review its 
standards, and business practices that implement them, at least 
annually to ensure equal opportunity in lending. No such requirements 
apply to insured State nonmember banks. The provision is not required 
by ECOA or the FHA, and the authority of the FDIC to amend former OTS 
requirements that were adopted pursuant to HOLA authority is unclear. 
For these reasons, the FDIC proposes to rescind Sec.  390.143(b).
E. Section 390.144--Nondiscrimination in Applications
    Section 390.144(a) prohibits discouraging or refusing to allow, 
receive, or consider any applicant, request or inquiry about a loan or 
other service on a prohibited basis. Section 390.144(b) requires a 
State savings association to ``inform each inquirer of his or her right 
to file a written loan application, and to receive a copy of the 
association's underwriting standards.''
    Section 390.144(a) is substantially similar to, and duplicative of, 
prohibitions under the general federal fair lending laws.\39\ To the 
extent that Sec.  390.144(a) relies on HOLA authority to prohibit 
discrimination with respect to a service, or with respect to the age or 
the location of a dwelling, in cases where the general federal fair 
lending laws would not apply, the FDIC's authority to amend the 
provision is unclear. Therefore, the FDIC proposes to rescind Sec.  
390.144(a).
---------------------------------------------------------------------------

    \39\ See, e.g., 15 U.S.C. 1691(a); 12 CFR 1002.4; 24 CFR 
100.120.
---------------------------------------------------------------------------

    As discussed earlier, the FDIC proposes to rescind the requirement 
in Sec.  390.143(b) for a State savings association to provide a copy 
of its underwriting standards upon request. Further, the FDIC believes 
that the requirement to post an Equal Housing Lender poster, discussed 
below in connection with 12 CFR 338.4, serves a substantially similar 
purpose as the requirement to ``inform each inquirer of his or her 
right to file a written loan application'' in 12 CFR 390.144(b). For 
the foregoing reasons, the FDIC proposes to rescind Sec.  390.144(b).
F. Section 390.145--Nondiscriminatory Advertising
    Section 390.145 prohibits directly or indirectly engaging in any 
form of advertising that implies or suggests a policy of discrimination 
or exclusion in violation of ECOA, the FHA, or subpart G of part 390. 
The provision also provides that advertisements for any loan for 
purchasing, constructing, improving, repairing, or maintaining a 
dwelling or any loan secured by a dwelling must include the Equal 
Housing Lender symbol.
    The requirement in Sec.  390.145 to include the Equal Housing 
Lender

[[Page 60394]]

symbol in dwelling-related advertising is substantially similar to the 
requirement in Sec.  338.4(a) that an insured State nonmember bank 
prominently indicate in advertisements for dwelling-related loans 
``that the bank makes such loans without regard to race, color, 
religion, national origin, sex, handicap, or familial status.'' Section 
338.4(a)(1) permits, but does not require, an insured State nonmember 
bank to comply ``by including in the advertisement a copy of the 
logotype with the Equal Housing Lender legend contained in the Equal 
Housing Lender poster prescribed in Sec.  338.4(b) of the FDIC's 
regulations or a copy of the logotype with the Equal Housing 
Opportunity legend contained in the Equal Housing Opportunity poster 
prescribed in'' Sec.  110.25(a) of HUD's FHA regulation. Because Sec.  
390.145 is substantially similar to Sec.  338.4, FDIC proposes to 
rescind Sec.  390.145 and, as discussed below, amend Sec.  338.4 to 
cover State savings associations in addition to insured State nonmember 
banks.
G. Section 390.146--Equal Housing Lender Poster
    Section 390.146(a) requires each State savings association to post 
and maintain at least one Equal Housing Lender poster prominently in 
the lobby of each of its offices, requires the use of specified text, 
establishes a minimum poster size, and requires that the text be 
legible. Also, Sec.  390.146(a) states that ``[i]t is recommended that 
savings associations post a Spanish language version of the poster in 
offices serving areas with a substantial Spanish-speaking population.'' 
Section 390.146(b) sets forth the required poster text and the Equal 
Housing Lender logotype.
    The requirements of Sec.  390.146 are substantially similar to the 
requirements applicable to insured State nonmember banks under Sec.  
338.4. As discussed later, although the FDIC's Equal Housing Lender 
poster provisions do not include the Spanish-language recommendation 
included in Sec.  390.146, the FDIC makes a Spanish-language poster 
available to the institutions it supervises. For these reasons, the 
FDIC proposes to rescind Sec.  390.146 and, as discussed below, amend 
Sec.  338.4 to also apply to State savings associations.
H. Section 390.147--Loan Application Register
    Section 390.147 requires that State savings associations and other 
lenders required to file HMDA LARs with the FDIC to enter the reason 
for denial with respect to all loan denials. As discussed earlier in 
Section I, Background, Regulation C now requires a covered financial 
institution to report ``[t]he principal reason or reasons the financial 
institution denied the application, if applicable.'' \40\ The FDIC 
believes that Sec.  390.147 is duplicative now that reporting reason 
for denial is required rather than optional under Regulation C. 
Furthermore, pursuant to the EGRRCPA, Regulation C provides a partial 
exemption from reporting reason for denial and certain other data 
points for financial institutions that meet specified conditions. Banks 
eligible for the partial exemption need not report reason for denial, 
but State savings associations supervised by the FDIC must report 
reason for denial pursuant to Sec.  390.147.\41\ The FDIC has not 
identified grounds for State savings associations that are eligible for 
the partial exemption under HMDA to be treated differently from 
similarly situated banks. For the foregoing reasons, the FDIC proposes 
to rescind Sec.  390.147.
---------------------------------------------------------------------------

    \40\ See Sec.  1003.4(a)(16).
    \41\ Financial institutions regulated by the OCC are required to 
report reasons for denial on their HMDA LARs pursuant to 12 CFR 
27.3(a)(1)(i) and 128.6.
---------------------------------------------------------------------------

I. Section 390.148--Nondiscrimination in Employment
    Section 390.148 prohibits discrimination on a prohibited basis by 
State savings associations in employment. The specified prohibited 
bases are race, color, religion, sex, and national origin. Section 
390.148(a) prohibits discrimination in the hiring, firing, promoting, 
compensating, or training of an individual or similar discriminatory 
treatment during employment or with regard to training. Section 
390.148(b) prohibits segregation or classification of employees in a 
way that would adversely affect their status as an employee on a 
prohibited basis. Section 390.148(c) prohibits State savings 
associations from retaliating against an employee for opposing an 
unlawful employment practice. Section 390.148(d) prohibits 
discrimination by State savings associations in advertisements for 
employment. Section 390.148(e) states the regulation does not apply in 
any case in which certain exemptions and exceptions under the EEOA 
apply. Section 390.148(f) states that any violation of specified laws 
or regulations, such as the EEOA and the Age Discrimination in 
Employment Act, shall be deemed a violation of this regulation.
    There is significant overlap between the requirements of Sec.  
390.148(a) through (d) and the EEOA. Under the EEOA, it is unlawful for 
an employer to discriminate in hiring, firing, compensating or 
providing training because of the same prohibited bases as under Sec.  
390.148(a).\42\ Similarly, the EEOA prohibits employers from 
segregating or classifying employees that would adversely affect their 
status as an employee on a prohibited basis.\43\ The EEOA also makes it 
unlawful for an employer to retaliate against an employee for opposing 
a practice made unlawful under a subchapter of the EEOA.\44\ The EEOA 
makes it generally unlawful for an employer to discriminate in 
advertisements for employment.\45\ The FDIC believes that Sec. Sec.  
390.148(a) through (d) are duplicative of the prohibitions under the 
EEOA and therefore are unnecessary. For these reasons, the FDIC 
proposes to rescind these provisions.
---------------------------------------------------------------------------

    \42\ See 42 U.S.C. 2000e-2(a)(1) and (d).
    \43\ See 42 U.S.C. 2000e-2(a)(2).
    \44\ See 42 U.S.C. 2000e-3(a).
    \45\ See 42 U.S.C. 3605(a).
---------------------------------------------------------------------------

    Section 390.148(e) cross-references the EEOA. The cross-reference 
to the statute would be obsolete if Sec.  390.148 is rescinded as 
proposed. Section 390.148(f) cross-references multiple employment laws, 
including the EEOA. The FDIC believes such cross-references are 
unnecessary and therefore proposes to rescind Sec. Sec.  390.148(e) and 
(f).
J. Section 390.149--Complaints
    Section 390.149 provides that complaints about discrimination in 
lending by a State savings association ``shall be referred'' to the 
Secretary of HUD for processing under the FHA and the Director of the 
Division of Depositor and Consumer Protection at the FDIC for 
processing under FDIC regulations. In addition, Sec.  390.149 provides 
that complaints about discrimination in employment by a State savings 
association ``shall be referred'' to the EEOC (with a copy to the FDIC) 
if they relate to employment. Similar, although more detailed, 
discrimination complaint processing provisions can be found in other 
federal laws, and their implementing regulations.\46\ Moreover, as a 
matter of practice, consistent with the 1991 Memorandum of 
Understanding Between the U.S. Department of Housing and Urban 
Development and the Federal Financial Institutions Examination Council 
(FFIEC) Member Agencies, the FDIC has long had procedures for referring 
complaints to HUD regarding lending discrimination by financial 
institutions. These procedures apply to complaints involving lending by 
State savings associations. Therefore, the FDIC

[[Page 60395]]

believes the provisions in Sec.  390.149 regarding routing complaints 
about discrimination in lending are duplicative and unnecessary.
---------------------------------------------------------------------------

    \46\ See 24 CFR part 103 ((Fair Housing--Complaint Processing) 
(FHA)) and 29 CFR part 1601 ((Procedural Regulations) (EEOA)).
---------------------------------------------------------------------------

    However, there appears to be no equivalent requirement to the 
provisions in Sec.  390.149 regarding referring complaints to EEOC 
regarding employment discrimination by FDIC-supervised institutions. 
The FDIC believes it would be burdensome and unnecessary to require 
State savings associations to comply with this additional requirement 
to which insured State nonmember banks are not subject. For the 
foregoing reasons, the FDIC proposes to rescind Sec.  390.149 in its 
entirety.
K. Section 390.150--Guidelines Relating to Nondiscrimination in Lending
    Section 390.150 ``provides supplementary guidelines to aid savings 
associations in developing and implementing nondiscriminatory lending 
policies.'' In general, Sec.  390.150 states actions that State savings 
associations ``should'' take or actions that ``can'' or ``may'' 
constitute illegal discrimination.\47\ The requirements in the 
guidelines generally have analogous requirements in the general federal 
fair lending laws; for example, with respect to discrimination on the 
basis of marital status,\48\ discounting or excluding spousal income or 
supplementary income,\49\ and inquiring about child bearing or 
childrearing.\50\ Therefore, the FDIC proposes to rescind this section 
as duplicative or unnecessary.
---------------------------------------------------------------------------

    \47\ See, e.g., Sec.  390.150(a) (stating that ``[e]ach State 
savings association should reexamine its underwriting standards at 
least annually in order to ensure equal opportunity''); Sec.  
390.150(c)(2) (stating that ``[r]equiring fluency in the English 
language as a prerequisite for obtaining a loan may be a 
discriminatory practice based on national origin''); Sec.  
390.150(c)(6) (stating that ``[r]efusing to lend, or offering less 
favorable terms (such as interest rate, down payment, or maturity) 
to applicants because of the income level in an area can 
discriminate against minority group persons'').
    \48\ Compare Sec.  390.150(c)(1) (``Loan underwriting decisions 
must be based on an applicant's credit history and present and 
reasonably foreseeable economic prospects, rather than on the basis 
of assumptions regarding comparative differences in creditworthiness 
between married and unmarried individuals, or between men and 
women.'') with 12 CFR 1002.6(b)(8) (stating that, except as 
otherwise permitted or required by law, a creditor must evaluate 
married and unmarried applicants by the same standards and must not 
treat applicants differently based on the existence, absence, or 
likelihood of a marital relationship between the parties) and 12 CFR 
1002.7(a) (stating that a creditor must not refuse to grant an 
individual account to a creditworthy applicant on the basis of sex, 
marital status, or any other prohibited basis).
    \49\ Compare Sec.  390.150(c)(3) (stating that, when spouses 
apply jointly for a loan, discounting spousal income violates the 
FHA and that the determination whether a spouse's income qualifies 
for credit purposes should depend upon a reasonable evaluation of 
his or her past, present, and reasonably foreseeable economic 
circumstances) and Sec.  390.150(c)(4) (``Lending standards which 
consider as effective only the non-overtime income of the primary 
wage-earner may result in discrimination because they do not take 
account of variations in employment patterns among individuals and 
families.'') with Sec.  1002.6(b)(5) (prohibiting discounting or 
excluding income of an applicant or an applicant's spouse because of 
a prohibited basis or because the income is derived from part-time 
employment or is an annuity, pension, or other retirement benefit).
    \50\ Compare Sec.  390.150(c)(3) (``Information relating to 
child-bearing intentions of a couple or an individual may not be 
requested.'') with Sec.  1002.6(b)(3) (stating that a creditor must 
not make assumptions or use aggregate statistics about the 
likelihood ``that any category of persons will bear or rear children 
or will, for that reason, receive diminished or interrupted income 
in the future'') and Sec.  1002.5(d)(3) (providing that a creditor 
must not ``inquire about birth control practices, intentions 
regarding the bearing or rearing of children, or capability to bear 
children'').
---------------------------------------------------------------------------

Part 338--Fair Housing

    The FDIC's part 338, Fair Housing, applies to insured State 
nonmember banks and addresses discrimination in advertising and 
recordkeeping requirements under ECOA and HMDA. The FDIC proposes to 
make technical amendments to part 338 to reflect the applicability of 
its provisions to State savings associations, as discussed below.
A. Section 338.1--Purpose
    Section 338.1 states that its purposes are to prohibit insured 
State nonmember banks from engaging in discriminatory advertising with 
regard to residential real estate-related transactions and require them 
to publicly display either the Equal Housing Lender poster set forth in 
Sec.  338.4(b) of the FDIC's regulations or the Equal Housing 
Opportunity poster prescribed in 24 CFR part 110 in HUD's regulations. 
To reflect that Sec.  338.1 applies to all institutions for which the 
FDIC is the appropriate Federal banking agency, the FDIC proposes to 
amend Sec.  338.1 to change references to ``insured State nonmember 
banks'' to refer to ``FDIC-supervised institutions.''
B. Section 338.2--Definitions Applicable to Subpart A of This Part
    Section 338.2 defines terms used in subpart A of part 338, 
including the term ``bank'' defined in Sec.  338.2(a) to mean ``an 
insured state nonmember bank as defined in section 3 of the Federal 
Deposit Insurance Act.'' The FDIC proposes to add to Sec.  338.2(c) a 
new defined term ``FDIC-supervised institution'' meaning a bank or a 
State savings association and to add Sec.  338.2(f), a new defined term 
``State savings association'' having ``the same meaning as in section 
(3)(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(b)(3)''. 
Also, the FDIC proposes to make conforming technical edits to other 
subsections in Sec.  338.2 to reflect the re-ordering of definitions.
C. Section 338.3--Nondiscriminatory Advertising
    Section 338.3 provides certain requirements with respect to 
dwelling-related advertisements to reflect the bank's nondiscrimination 
lending practice and prohibits such advertisements from including 
``words, symbols, models, or other forms of communication which 
express, imply, or suggest a discriminatory preference or policy of 
exclusion in violation of the provisions of the FHA or ECOA. To reflect 
that Sec.  338.3 applies to all institutions for which the FDIC is the 
appropriate Federal banking agency, the FDIC proposes to amend Sec.  
338.3 to change references to ``bank'' to refer to ``FDIC-supervised 
institution.''
D. Section 338.4--Fair Housing Poster
    Section 338.4(a) requires insured State nonmember banks engaged in 
extending dwelling-related loans to conspicuously display either an 
Equal Housing Lender poster or an Equal Housing Opportunity poster ``in 
a central location within the bank where deposits are received or where 
such loans are made in a manner clearly visible to the general public 
entering the area, where the poster is displayed.'' This requirement is 
substantially similar to the requirement in Sec.  390.146 for State 
savings associations to display an Equal Housing Lender poster, which 
the FDIC herein proposes to rescind and remove. To reflect that Sec.  
338.4(a) applies to all institutions for which the FDIC is the 
appropriate Federal banking agency, the FDIC proposes to amend Sec.  
338.4(a) to change references to ``insured State nonmember banks'' to 
refer to ``FDIC-supervised institutions.''
    Section 338.4(b) sets forth the required text of the FDIC's Equal 
Housing Lender poster, including the former mailing address of the 
FDIC's CRC, formatted as a Portable Document Format (PDF) image. Since 
the CRC mailing address changed in 2011, the FDIC has made available to 
FDIC-supervised institutions an Equal Housing Lender poster with the 
correct address of the CRC, both in English and in Spanish.\51\ Because 
the CRC mailing address may change in the future, the FDIC proposes to 
amend Sec.  338.4(b) to

[[Page 60396]]

reflect that the mailing address stated on the Equal Housing Lender 
poster should be the address for the Consumer Response Center stated on 
the FDIC's website at www.fdic.gov.\52\ Furthermore, the FDIC proposes 
to set forth the required text of the Equal Housing Lender poster in 
Sec.  338.4(b) as a text statement rather than as a PDF image.
---------------------------------------------------------------------------

    \51\ The poster is available to both insured State nonmember 
banks and State savings associations. Moreover, the current CRC 
mailing address is correctly stated in FDIC regulations applicable 
to State savings associations. 12 CFR 390.146.
    \52\ Currently, the mailing address for the Consumer Response 
Center (1100 Walnut St., Box #11 Kansas City, MO 64106) is provided 
at https://www.fdic.gov/consumers/assistance/filecomplaint.html. 
Since May 31, 2012, Regulation B has required the use of that 
address in adverse action notices, as applicable. See Board of 
Governors of the Federal Reserve System, Final Rule, Equal Credit 
Opportunity, 76 FR 31451 (Jun. 1, 2011).
---------------------------------------------------------------------------

    To assist FDIC-supervised institutions, the FDIC expects to 
continue to provide them with access to a poster stating the required 
text, including the accurate CRC mailing address. If this rule is 
finalized as proposed, no change to posters would be required of FDIC-
supervised institutions that use an Equal Housing Lender poster 
obtained from the FDIC since the CRC mailing address was updated in 
2011. The FDIC believes that few insured State nonmember banks make 
their own Equal Housing Lender poster based on the text of Sec.  
338.4(b). Nonetheless, to facilitate the transition to the updated 
poster, the FDIC proposes to provide a transition period of one year 
for FDIC-supervised institutions to change their posters to reflect the 
current CRC mailing address, if needed. That is, the effective date of 
Sec.  338.4(b), as amended, would be the date that is one year after a 
final rule amending the provision is published in the Federal Register.
E. Section 338.5--Purpose
    Section 338.5 states that its purpose is to notify insured State 
nonmember banks of their duty both to collect and retain certain 
information about a home loan applicant's personal characteristics in 
accordance with Regulation B and to maintain, update and report a 
register of home loan applications in accordance with Regulation C. To 
reflect that Sec.  338.5 applies to all institutions for which the FDIC 
is the appropriate Federal banking agency, the FDIC proposes to amend 
Sec.  338.5 to change references to ``insured State nonmember banks'' 
to refer to ``FDIC-supervised institutions.'' The FDIC also proposes to 
make technical amendments to Sec.  338.5 to reflect that Regulation B 
and Regulation C have been re-designated as 12 CFR part 1002 and 12 CFR 
part 1003, respectively, and are implemented by the CFPB.
F. Section 338.6--Definitions Applicable to This Subpart B
    Section 338.6 defines terms used in subpart B of part 338, 
including the term ``bank'' defined in Sec.  338.6(a) to mean ``an 
insured State nonmember bank as defined in section 3 of the Federal 
Deposit Insurance Act.'' The FDIC proposes to add as Sec.  338.2(c) a 
new defined term ``FDIC-supervised institution'' meaning a bank or a 
State savings association and to add as Sec.  338.6(d) a new defined 
term ``State savings association'' having ``the same meaning as in 
section (3)(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 
1813(b)(3).''
G. Section 338.7--Recordkeeping Requirements
    Section 338.7 requires banks that receive an application for credit 
primarily for the purchase or refinancing of a dwelling occupied or to 
be occupied by the applicant as a principal residence where the 
extension of credit will be secured by the dwelling to request and 
retain the monitoring information required by Regulation B.\53\ To 
reflect that Sec.  338.7 applies to all institutions for which the FDIC 
is the appropriate Federal banking agency, the FDIC proposes to amend 
Sec.  338.7 to change references to ``bank'' to refer to ``FDIC-
supervised institution.'' The FDIC also proposes to make technical 
amendments to Sec.  338.7 to reflect that Regulation B has been re-
designated as 12 CFR part 1002 and is implemented by the CFPB.
---------------------------------------------------------------------------

    \53\ This requirement relates to the collection of information 
for monitoring purposes required by 12 CFR 1002.13.
---------------------------------------------------------------------------

H. Section 338.8--Compilation of Loan Data in Register Format
    Section 338.8 requires banks and other lenders required to file a 
HMDA LAR with the FDIC to maintain, update and report such LAR in 
accordance with Regulation C. To reflect that Sec.  338.8 applies to 
all institutions for which the FDIC is the appropriate Federal banking 
agency, the FDIC proposes to amend Sec.  338.8 to change references to 
``bank'' to refer to ``FDIC-supervised institution.'' Additionally, to 
reflect amendments made to Regulation C regarding the responsibilities 
of a financial institution with respect to HMDA LAR data, the FDIC 
proposes to amend Sec.  338.8 require banks and other lenders required 
to file a HMDA LAR with the FDIC to collect, record, and report such 
LAR in accordance with Regulation C. The FDIC also proposes to make 
technical amendments to Sec.  338.8 to reflect that Regulation C has 
been re-designated as 12 CFR part 1003 and is implemented by the CFPB.
I. Section 338.9--Mortgage Lending of a Controlled Entity
    Section 338.9 establishes requirements that apply if a bank refers 
applicants to a ``controlled entity,'' as defined in Sec.  338.6, and 
purchases any home purchase loans or home improvement loans (as defined 
in Regulation C) that are originated by the controlled entity, as a 
condition to transacting any business with the controlled entity.\54\ 
In such cases, Sec.  338.9 provides that the bank must require the 
controlled entity to enter into a written agreement with the bank that 
states that the controlled entity must comply with the requirements of 
Sec. Sec.  338.3, 338.4 and 338.7 and, if the controlled entity is 
subject to Regulation C, Sec.  338.8. Further, the written agreement 
must provide that the controlled entity must open its books and records 
to FDIC examination and comply with all FDIC instructions and orders 
with respect to its home loan practices.
---------------------------------------------------------------------------

    \54\ Pursuant to Sec.  338.9, ``controlled entity'' means ``a 
corporation, partnership, association, or other business entity with 
respect to which a bank possesses, directly or indirectly, the power 
to direct or cause the direction of management and policies, whether 
through the ownership of voting securities, by contract, or 
otherwise.''
---------------------------------------------------------------------------

    Because this notice of proposed rulemaking is intended to rescind 
and remove former OTS regulations that are duplicative of regulations 
under ECOA, FHA, or EEOA, the FDIC does not propose in this rulemaking 
to impose substantive requirements regarding the business transactions 
between a State savings association and any entity it controls. That 
is, the FDIC does not propose to replace the term ``bank'' with the 
term ``FDIC-supervised institution'' in Sec.  338.9. However, the FDIC 
proposes to make technical amendments to Sec.  338.9 to reflect that 
Regulation C has been re-designated as 12 CFR part 1003 and is 
implemented by the CFPB.

III. Expected Effects

    As of March 31, 2020, the FDIC-supervised 3,309 depository 
institutions,\55\ of which 35 are State savings associations.\56\
---------------------------------------------------------------------------

    \55\ FDIC-supervised institutions are set forth in 12 U.S.C. 
1813(q)(2).
    \56\ FDIC Call Report data, March 31, 2020.
---------------------------------------------------------------------------

    If the proposed rule were adopted by the FDIC, Sec. Sec.  390.140 
and 390.141 would be rescinded. As discussed previously, these sections 
include definitions and cross-references to other parts of section 390, 
so their rescission has no independent significance for institutions or 
applicants, but rather is

[[Page 60397]]

a technical amendment associated with the proposal to rescind subpart G 
of part 390 in its entirety.
    As previously discussed, if the proposed rule were adopted by the 
FDIC, Sec.  390.142 would be rescinded. This section has substantial 
overlap with the requirements of ECOA and Regulation B and the FHA and 
HUD's FHA regulations. Additionally, although some aspects of Sec.  
390.142 have no counterpart in existing regulations for insured State 
nonmember banks, as indicated earlier, the FDIC's authority to amend 
those elements is uncertain. Therefore, the FDIC believes that these 
aspects of the proposed rule are unlikely to significantly affect FDIC-
supervised institutions or applicants.
    If the proposed rule were adopted, the FDIC would rescind Sec.  
390.143. As discussed previously, aspects of Sec.  390.143 are either 
duplicative of prohibitions under the general fair lending laws or the 
authority of the FDIC to amend them is uncertain. With regard to Sec.  
390.143(b), the proposed rule would reduce compliance requirements 
associated with maintaining and distributing relevant paperwork. The 
FDIC believes that this is likely to pose a relatively small benefit to 
the 35 institutions to which it applies. Further, the FDIC believes 
that it is unlikely that the rescission of the requirement to 
establish, maintain, and distribute upon request nondiscriminatory loan 
underwriting standards for these 35 State savings associations would 
lead to an increase in discriminatory lending behavior because these 
institutions are still subject to the general fair lending laws. 
Therefore, the FDIC does not believe that this aspect of the proposed 
rule, if adopted, is likely to have substantive effects on FDIC-
supervised institutions or applicants.
    As discussed previously, if the proposed rule were adopted by the 
FDIC, Sec.  390.144 would be rescinded. Section 390.144(a) is 
substantially similar to, and duplicative of, prohibitions under the 
general federal fair lending laws.\57\ Additionally, the authority of 
the FDIC to amend it is unclear. The FDIC also believes that the 
requirement to post an Equal Housing Lender poster, discussed above in 
connection with Sec.  338.4, serves a substantially similar purpose as 
the requirement to ``inform each inquirer of his or her right to file a 
written loan application'' in Sec.  390.144(b). Therefore, the FDIC 
believes that the rescission of Sec.  390.144 is unlikely to have any 
substantive effect on FDIC-supervised institutions or applicants.
---------------------------------------------------------------------------

    \57\ See, e.g., 15 U.S.C. 1691(a); 12 CFR 1002.4; 24 CFR 
100.120.
---------------------------------------------------------------------------

    As discussed previously, if the proposed rule were adopted by the 
FDIC, Sec.  390.145 would be rescinded. Section 390.145 is 
substantially similar to Sec.  338.4 and the proposed rule would amend 
Sec.  338.4 to cover State savings associations in addition to insured 
State nonmember banks. Therefore, the FDIC believes that this aspect of 
the proposed rule is unlikely to have any substantive effect on FDIC-
supervised institutions or applicants.
    As discussed previously, if the proposed rule were adopted by the 
FDIC, Sec.  390.146 would be rescinded. The requirements of Sec.  
390.146 are substantially similar to the requirements applicable to 
insured State nonmember banks under Sec.  338.4. Section 338.4, 
however, unlike Sec.  390.146, does not include a ``recommendation'' 
that a Spanish-language version of the Equal Housing Lender poster be 
posted in offices serving areas with a substantial Spanish-speaking 
population. The FDIC does, however, make a Spanish-language poster 
available to the institutions it supervises. Given the substantive 
similarity of much of Sec.  390.146 to Sec.  338.4, the FDIC believes 
that rescinding it is unlikely to have substantial effects on covered 
institutions or applicants.
    If the proposed rule were adopted, the FDIC would rescind Sec.  
390.147. As previously discussed, the FDIC believes that Sec.  390.147 
is duplicative now that reporting reason for denial is required rather 
than optional under Regulation C. Further, since Regulation C provides 
a partial exemption from reporting reason for denial and certain other 
data points for financial institutions that meet specified conditions, 
but no such exemption exists for State savings associations, the 
proposed rule would establish parity with respect to the reporting 
requirements for HMDA LARs for State savings associations and other 
FDIC-supervised institutions. The FDIC believes that this aspect of the 
proposed rule is unlikely to significantly affect FDIC-supervised 
institutions or applicants.
    As previously discussed, the proposed rule would rescind Sec.  
390.148 if it were adopted. The FDIC believes that there is significant 
overlap between the requirements of Sec.  390.148(a) through (d) and 
various aspects of the EEOA. Further, Sec.  390.148(e) and (f) 
references multiple employment laws, including the EEOA, which if the 
rest of Sec.  390.148 were rescinded as proposed, would be unnecessary. 
Therefore, the FDIC believes that this aspect of the proposed rule is 
unlikely to substantively affect FDIC-supervised institutions or 
applicants.
    As previously discussed, the proposed rule would rescind Sec.  
390.149 if it were adopted. The FDIC has procedures for referring 
complaints to HUD regarding lending discrimination by financial 
institutions and these procedures apply to complaints involving lending 
by State savings associations. However, there appears to be no 
equivalent requirement to the provisions in Sec.  390.149 regarding 
referring complaints to EEOC regarding employment discrimination by 
FDIC-supervised institutions. This aspect of the proposed rule would 
thus create parity between insured State nonmember banks and State 
savings associations with respect to complaints about discriminatory 
lending. Given that FDIC-supervised institutions are still subject to 
applicable elements of the EEOA and FDIC regulations and procedures, 
the FDIC does not believe that this aspect of the proposed rule is 
likely to have a substantive effect on covered institutions or their 
employees.
    As previously discussed, the proposed rule would rescind Sec.  
390.150 if adopted. This section contains guidelines intended to serve 
as a resource for State savings associations when developing and 
implementing nondiscriminatory lending policies. State savings 
associations, like other FDIC-supervised banks, remain subject to 
federal fair lending laws and regulations and the FDIC does not believe 
removal of these guidelines will have any meaningful effect on these 
institutions or their applicants.
    Finally, the proposed rule, if adopted, would make some technical 
changes to FDIC's part 338 in order to make it applicable to State 
savings associations and provide for Equal Housing Lender posters to 
state the accurate CRC mailing address. As previously discussed, these 
proposed changes are unlikely to have significant effects on State 
savings associations because they are already subject to substantively 
similar regulations.
    Rescinding part 390, subpart G also will serve to streamline the 
FDIC's rules and eliminate unnecessary, inconsistent, and duplicative 
regulations. If the proposal is adopted in its final form, insured 
State nonmember banks and State savings associations will be subject to 
the same anti-discrimination requirements.

V. Alternatives

    Several alternatives to the proposed rulemaking were available to 
the FDIC. The FDIC could have retained the current regulations in part 
390, subpart

[[Page 60398]]

G, but chose not to do so since most of the requirements in subpart G 
are duplicative of or substantively similar to existing requirements 
under federal law or under the FDIC's current fair housing requirements 
in part 338. As previously discussed, the FDIC also could have retained 
certain requirements in subpart G that the OTS issued pursuant to the 
HOLA, but chose not to do so because the FDIC's legal authority to 
amend requirements that the OTS issued pursuant to HOLA is not clear.
    In the instances where the regulations in part 390, subpart G were 
more stringent than similar requirements for insured State nonmember 
banks, the FDIC could have applied those requirements to insured State 
nonmember banks. However, the FDIC chose not to adopt this alternative 
because it believes the fair lending laws and regulations that already 
apply to insured State nonmember banks provide an appropriate and 
sufficient framework to prohibit discrimination.
    The FDIC believes that this proposed rule, which would remove and 
rescind part 390, subpart G, and make the FDIC's existing 
nondiscrimination regulations applicable to State savings associations, 
is less burdensome to State savings associations and the public than 
the alternatives discussed above since it would promote consistency 
among the regulatory requirements for all FDIC-supervised institutions 
and improve the public's understanding and ease of reference. 
Additionally, the FDIC believes that the proposed rule does not 
materially change the nondiscrimination requirements to which insured 
State nonmember banks and State savings associations are required to 
adhere, relative to the alternatives discussed.

IV. Request for Comments

    The FDIC invites comments on all aspects of this proposed 
rulemaking, and specifically requests comments on the following:
    What impacts, positive or negative, can you foresee in the FDIC's 
proposal to rescind and remove part 390, subpart G?

V. Regulatory Analysis and Procedure

A. The Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (PRA),\58\ the FDIC may not conduct or sponsor, and the 
respondent is not required to respond to, an information collection 
unless it displays a currently valid Office of Management and Budget 
(OMB) control number.
---------------------------------------------------------------------------

    \58\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------

    The Proposed Rule would rescind and remove from FDIC regulations 
part 390, subpart G because it is duplicative and unnecessary. This 
rule was transferred with only nominal changes to the FDIC from the OTS 
when the OTS was abolished by title III of the Dodd-Frank Act. Although 
few provisions of part 390, subpart G have a direct counterpart within 
the FDIC's existing nondiscrimination requirements for insured State 
nonmember banks in part 338, it is largely duplicative of federal laws 
(ECOA, FHA, EEOA, and other laws concerning nondiscrimination in 
lending, employment, and services) and implementing regulations of the 
CFPB or the Department of Labor. Where provisions of part 390, subpart 
G had no such counterparts, the FDIC concluded no reasonable basis 
exists for applying these requirements to State savings associations 
but not to insured State nonmember banks or that the requirements are 
inconsistent with current agency policy.
    In addition, the proposed rule would: (1) Amend part 338 to include 
State savings associations and their subsidiaries within its scope; (2) 
define the new terms ``FDIC-supervised institution'' and ``State 
savings association;'' and (3) make conforming technical edits 
throughout to update the regulation. These revisions would clarify that 
State savings associations, as well as insured State nonmember banks, 
are subject to part 338 with the exception of Sec.  338.9.
    Therefore, the Proposed Rule does not revise any existing, or 
create any new information collection pursuant to the PRA. 
Consequently, no submission will be made to the OMB for review.

B. The Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires that, in 
connection with a proposed rulemaking, an agency prepare and make 
available for public comment an initial regulatory flexibility analysis 
describing the impact of the proposed rule on small entities.\59\ 
However, a regulatory flexibility analysis is not required if the 
agency certifies that the proposed rule will not have a significant 
economic impact on a substantial number of small entities. The Small 
Business Administration (SBA) has defined ``small entities'' to include 
banking organizations with total assets of less than or equal to $600 
million that are independently owned and operated or owned by a holding 
company with less than or equal to $600 million in total assets.\60\ 
Generally, the FDIC considers a significant effect to be a quantified 
effect in excess of 5 percent of total annual salaries and benefits per 
institution, or 2.5 percent of total noninterest expenses. The FDIC 
believes that effects in excess of these thresholds typically represent 
significant effects for FDIC-supervised institutions. For the reasons 
described below and under section 605(b) of the RFA, the FDIC certifies 
that this proposed rule will not have a significant economic impact on 
a substantial number of small entities.
---------------------------------------------------------------------------

    \59\ 5 U.S.C. 601 et seq.
    \60\ The SBA defines a small banking organization as having $600 
million or less in assets, where an organization's ``assets are 
determined by averaging the assets reported on its four quarterly 
financial statements for the preceding year.'' See 13 CFR 121.201 
(as amended by 84 FR 34261, effective August 19, 2019). In its 
determination, the ``SBA counts the receipts, employees, or other 
measure of size of the concern whose size is at issue and all of its 
domestic and foreign affiliates.'' See 13 CFR 121.103. Following 
these regulations, the FDIC uses a covered entity's affiliated and 
acquired assets, averaged over the preceding four quarters, to 
determine whether the covered entity is ``small'' for the purposes 
of RFA.
---------------------------------------------------------------------------

    As of March 31, 2020, the FDIC-supervised 3,309 depository 
institutions,\61\ of which 2,548 were considered small entities for the 
purposes of RFA.\62\ There are 33 State savings associations that are 
small entities for the purposes of RFA.\63\ If the proposed rule were 
adopted by the FDIC, Sec. Sec.  390.140 and 390.141 would be rescinded. 
As discussed previously, these sections include definitions and cross-
references to other parts of Sec.  390, so their rescission has no 
independent significance for institutions or borrowers, but rather is a 
technical amendment associated with the proposal to rescind subpart G 
of part 390 in its entirety.
---------------------------------------------------------------------------

    \61\ FDIC-supervised institutions are set forth in 12 U.S.C. 
1813(q)(2).
    \62\ FDIC Call Report data, March 31, 2020.
    \63\ Id.
---------------------------------------------------------------------------

    As previously discussed, if the proposed rule were adopted by the 
FDIC Sec.  390.142 would be rescinded. This section has substantial 
overlap with the requirements of ECOA and Regulation B and the FHA and 
HUD's FHA regulations. Additionally, although some aspects of Sec.  
390.142 have no counterpart in existing regulations for State nonmember 
banks, as indicated earlier the FDIC is uncertain if it has the 
authority to amend those elements. Therefore, the FDIC believes that 
these aspects of the proposed rule are unlikely to significantly affect 
small FDIC-supervised institutions or borrowers.
    If the proposed rule were adopted, the FDIC would rescind Sec.  
390.143. As discussed previously, aspects of 390.143 are either 
duplicative of prohibitions

[[Page 60399]]

under the general fair lending laws or the authority of the FDIC to 
amend them is uncertain. With regard to Sec.  390.143(b), the proposed 
rule would reduce compliance requirements associated with maintaining 
and distributing relevant paperwork. The FDIC believes that this is 
likely to pose a relatively small benefit to the 33 small institutions 
to which it applies. Further, the FDIC believes that it is unlikely 
that the rescission of the requirement to establish, maintain, and 
distribute upon request nondiscriminatory loan underwriting standards 
for these 33 small State savings associations would lead to an increase 
in discriminatory lending behavior because these institutions are still 
subject to the general fair lending laws. Therefore, the FDIC does not 
believe that this aspect of the proposed rule, if adopted, is likely to 
have substantive effects on small FDIC-supervised institutions or 
borrowers.
    As discussed previously, if the proposed rule were adopted by the 
FDIC Sec.  390.144 would be rescinded. Section 390.144(a) is 
substantially similar to, and duplicative of, prohibitions under the 
general federal fair lending laws.\64\ Additionally, the authority of 
the FDIC to amend them is uncertain. The FDIC also believes that the 
requirement to post an Equal Housing Lender poster, discussed above in 
connection with 12 CFR 338.4, serves a substantially similar purpose as 
the requirement to ``inform each inquirer of his or her right to file a 
written loan application'' in 12 CFR 390.144(b). Therefore, the FDIC 
believes that the rescission of Sec.  390.144 is unlikely to have any 
substantive effect on small FDIC-supervised institutions or borrowers.
    As discussed previously, if the proposed rule were adopted by the 
FDIC Sec.  390.145 would be rescinded. Section 390.145 is substantially 
similar to Sec.  338.4 and the proposed rule would amend Sec.  338.4 to 
cover State savings associations in addition to insured State nonmember 
banks. Therefore, the FDIC believes that this aspect of the proposed 
rule is unlikely to have any substantive effect on small FDIC-
supervised institutions or borrowers.
    As discussed previously, if the proposed rule were adopted by the 
FDIC, Sec.  390.146 would be rescinded. The requirements of Sec.  
390.146 are substantially similar to the requirements applicable to 
insured State nonmember banks under Sec.  338.4. However, Sec.  338.4, 
unlike Sec.  390.146, does not include a ``recommendation'' that a 
Spanish-language version of the Equal Housing Lender poster be posted 
in offices serving areas with a substantial Spanish-speaking 
population. As indicated earlier, the FDIC is taking the approach of 
not including non-binding recommendations in the proposed rule. The 
FDIC does, however, make a Spanish-language poster available to the 
institutions it supervises. Given the substantive similarity of much of 
Sec. Sec.  390.146 to 338.4, the FDIC believes that rescinding it is 
unlikely to have substantial effects on small covered institutions or 
borrowers.
    If the proposed rule were adopted, the FDIC would rescind Sec.  
390.147. As previously discussed, the FDIC believes that Sec.  390.147 
is duplicative now that reporting reason for denial is required rather 
than optional under Regulation C. Further, since Regulation C provides 
a partial exemption from reporting reason for denial and certain other 
data points for financial institutions that meet specified conditions, 
but no such exemption exists for State savings associations, the 
proposed rule would establish parity with respect to the reporting 
requirements for HMDA LARs for State savings associations and other 
FDIC-supervised institutions. The FDIC believes that this aspect of the 
proposed rule is unlikely to substantively affect small FDIC-supervised 
institutions or borrowers.
    As previously discussed, the proposed rule would rescind Sec.  
390.148 if it were adopted. The FDIC believes that there is significant 
overlap between the requirements of Sec.  390.148(a) through (d) and 
various aspect of the EEOA. Further, Sec.  390.148(e) and (f) 
references multiple employment laws, including the EEOA, which if the 
rest of Sec.  390.148 were rescinded as proposed, would be unnecessary. 
Therefore, the FDIC believes that this aspect of the proposed rule is 
unlikely to substantively affect small FDIC-supervised institutions or 
borrowers.
    As previously discussed, the proposed rule would rescind Sec.  
390.149 if it were adopted. The FDIC has procedures for referring 
complaints to HUD regarding lending discrimination by financial 
institutions and these procedures apply to complaints involving lending 
by State savings associations. However, there appears to be no 
equivalent requirement to the provisions in Sec.  390.149 regarding 
referring complaints to EEOC regarding employment discrimination by 
FDIC-supervised institutions. This aspect of the proposed rule would 
thus create parity between State nonmember banks and State savings 
associations with respect to discriminatory complaints. Given that 
FDIC-supervised institutions are still subject to applicable elements 
of the EEOA and FDIC regulations and procedures, the FDIC does not 
believe that this aspect of the proposed rule is likely to have a 
substantive effect on covered institutions or their employees.
    As previously discussed, the proposed rule would rescind Sec.  
390.150 if adopted. This section contains guidelines intended to serve 
as a resource for State savings associations when developing and 
implementing nondiscriminatory lending policies. Small State savings 
associations, like other FDIC-supervised banks, remain subject to 
federal fair lending laws and regulations and the FDIC does not believe 
removal of these guidelines will have any meaningful effect on these 
institutions or their borrowers.
    Finally, the proposed rule if adopted would make some technical 
changes to FDIC's part 338 in order to make it applicable to State 
savings associations and provide for Equal Housing Lender posters to 
state the accurate CRC mailing address. As previously discussed, these 
proposed changes are unlikely to pose significant effects for small 
State savings associations because they are already subject to 
substantively similar regulations.
    Rescinding part 390, subpart G also will serve to streamline the 
FDIC's rules and eliminate unnecessary, inconsistent, and duplicative 
regulations. If the proposal is adopted in its final form, all small 
insured State nonmember banks and State savings associations--will be 
subject to the same anti-discrimination requirements.
    The FDIC does not have data with which to estimate the costs that 
State savings associations currently incur to comply with subpart G or 
how those costs will change if this proposal were adopted in its 
current form. However, since this proposal would only affect 33 small 
entities, and since the differences between subpart G and existing 
regulation and law are modest, the FDIC certifies that this proposal 
would not have a significant economic effect on a substantial number of 
small entities.
    The FDIC invites comments on all aspects of the supporting 
information provided in this section, and in particular, whether the 
proposed rule would have any significant effects on small entities that 
the FDIC has not identified.

C. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \65\ requires each 
Federal banking agency to use plain language in all of its proposed and 
final rules published after January 1, 2000. The FDIC has sought to 
present the Proposed

[[Page 60400]]

Rule in a simple and straightforward manner. The FDIC invites comments 
on whether the Proposed Rule is clearly stated and effectively 
organized, and how the FDIC might make it easier to understand. For 
example:
---------------------------------------------------------------------------

    \65\ 12 U.S.C. 4809.
---------------------------------------------------------------------------

     Has the FDIC organized the material to suit your needs? If 
not, how could it present the rule more clearly?
     Have we clearly stated the requirements of the rule? If 
not, how could the rule be more clearly stated?
     Does the rule contain technical jargon that is not clear? 
If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulation easier to 
understand? If so, what changes would make the regulation easier to 
understand?
     What else could we do to make the regulation easier to 
understand?

D. The Economic Growth and Regulatory Paperwork Reduction Act

    Under section 2222 of the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996 (EGRPRA), the FDIC is required to review all of 
its regulations, at least once every 10 years, in order to identify any 
outdated or otherwise unnecessary regulations imposed on insured 
institutions.\66\ The FDIC, along with the other Federal banking 
agencies, submitted a Joint Report to Congress on March 21, 2017 
(EGRPRA Report) discussing how the review was conducted, what has been 
done to date to address regulatory burden, and further measures the 
FDIC will take to address issues that were identified.\67\ As noted in 
the EGRPRA Report, the FDIC is continuing to streamline and clarify its 
regulations through the OTS rule integration process. By removing 
outdated or unnecessary regulations, such as part 390, subpart G, this 
Proposed Rule complements other actions that the FDIC has taken, 
separately and with the other Federal banking agencies, to further the 
EGRPRA mandate.
---------------------------------------------------------------------------

    \66\ Public Law 104-208, 110 Stat. 3009 (1996).
    \67\ 82 FR 15900 (March 31, 2017).
---------------------------------------------------------------------------

E. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\68\ in determining the effective 
date and administrative compliance requirements for new regulations 
that impose additional reporting, disclosure, or other requirements on 
insured depository institutions (IDIs), each Federal banking agency 
must consider, consistent with principles of safety and soundness and 
the public interest, any administrative burdens that such regulations 
would place on depository institutions, including small depository 
institutions, and customers of depository institutions, as well as the 
benefits of such regulations. In addition, section 302(b) of RCDRIA 
requires new regulations and amendments to regulations that impose 
additional reporting, disclosures, or other new requirements on IDIs 
generally to take effect on the first day of a calendar quarter that 
begins on or after the date on which the regulations are published in 
final form.\69\ The FDIC invites comments that further will inform its 
consideration of RCDRIA.
---------------------------------------------------------------------------

    \68\ 12 U.S.C. 4802(a).
    \69\ Id.
---------------------------------------------------------------------------

List of Subjects

12 CFR Part 338

    Aged, Banks, Banking, Civil rights, Credit, Fair housing, 
Individuals with disabilities, Marital status discrimination, 
Mortgages, Religious discrimination, Reporting and recordkeeping 
requirements, Savings associations, Sex discrimination, Signs and 
symbols.

12 CFR Part 390

    Administrative practice and procedure, Advertising, Aged, Civil 
rights, Conflict of interests, Credit, Crime, Equal employment 
opportunity, Fair housing, Government employees, Individuals with 
disabilities, Nondiscrimination requirements, Reporting and 
recordkeeping requirements, Savings associations.

Authority and Issuance

    For the reasons stated in the preamble, the FDIC proposes to amend 
12 CFR parts 338 and 390 as follows:

0
1. Revise part 338 to read as follows:

PART 338--FAIR HOUSING

Subpart A--Advertising
Sec.
Sec.  338.1 Purpose.
Sec.  338.2 Definitions applicable to subpart A of this part.
Sec.  338.3 Nondiscriminatory advertising.
Sec.  338.4 Fair housing poster.
Subpart B--Recordkeeping
Sec.  338.5 Purpose.
Sec.  338.6 Definitions applicable to this subpart B.
Sec.  338.7 Recordkeeping requirements.
Sec.  338.8 Compilation of loan data in register format.
Sec.  338.9 Mortgage lending of a controlled entity.
    The authority citation for part 338 is revised to read as follows:

    Authority:  12 U.S.C. 1817, 1818, 1819, 1820(b), 2801 et seq.; 
15 U.S.C. 1691 et seq.; 42 U.S.C. 3605, 3608; 12 CFR parts 1002, 
1003; 24 CFR part 110.

Subpart A--Advertising


Sec.  338.1   Purpose.

    The purpose of this subpart A is to prohibit FDIC-supervised 
institutions from engaging in discriminatory advertising with regard to 
residential real estate-related transactions. This subpart A also 
requires FDIC-supervised institutions to publicly display either the 
Equal Housing Lender poster set forth in Sec.  338.4(b) of the FDIC's 
regulations or the Equal Housing Opportunity poster prescribed by part 
110 of the regulations of the United States Department of Housing and 
Urban Development (24 CFR part 110). This subpart A enforces section 
805 of title VIII of the Civil Rights Act of 1968, 42 U.S.C. 3601-3619 
(Fair Housing Act), as amended by the Fair Housing Amendments Act of 
1988.


Sec.  338.2  Definitions applicable to subpart A of this part.

    For purposes of subpart A of this part:
    (a) Bank means an insured state nonmember bank as defined in 
section 3 of the Federal Deposit Insurance Act.
    (b) Dwelling means any building, structure, or portion thereof 
which is occupied as, or designed or intended for occupancy as, a 
residence by one or more families, and any vacant land which is offered 
for sale or lease for the construction or location thereon of any such 
building, structure, or portion thereof.
    (c) FDIC-supervised institution means either a bank or a State 
savings association.
    (d) Handicap means, with respect to a person:
    (1) A physical or mental impairment which substantially limits one 
or more of such person's major life activities;
    (2) A record of having such an impairment; or
    (3) Being regarded as having such an impairment, but such term does 
not include current, illegal use of or addiction to a controlled 
substance (as defined in section 102 of the Controlled Substances Act 
(21 U.S.C. 802)).
    (e) Familial status means one or more individuals (who have not 
attained the age of 18 years) being domiciled with:
    (1) A parent or another person having legal custody of such 
individual or individuals; or
    (2) The designee of such parent or other person having such 
custody, with

[[Page 60401]]

the written permission of such parent or other person.
    The protections afforded against discrimination on the basis of 
familial status shall apply to any person who is pregnant or is in the 
process of securing legal custody of any individual who has not 
attained the age of 18 years.
    (f) State savings association has the same meaning as in section 
(3)(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(b)(3).


Sec.  338.3  Nondiscriminatory advertising.

    (a) Any FDIC-supervised institution which directly or through third 
parties engages in any form of advertising of any loan for the purpose 
of purchasing, constructing, improving, repairing, or maintaining a 
dwelling or any loan secured by a dwelling shall prominently indicate 
in such advertisement, in a manner appropriate to the advertising 
medium and format utilized, that the FDIC-supervised institutions makes 
such loans without regard to race, color, religion, national origin, 
sex, handicap, or familial status.
    (1) With respect to written and visual advertisements, this 
requirement may be satisfied by including in the advertisement a copy 
of the logotype with the Equal Housing Lender legend contained in the 
Equal Housing Lender poster prescribed in Sec.  338.4(b) of the FDIC's 
regulations or a copy of the logotype with the Equal Housing 
Opportunity legend contained in the Equal Housing Opportunity poster 
prescribed in Sec.  110.25(a) of the United States Department of 
Housing and Urban Development's regulations (24 CFR 110.25(a)).
    (2) With respect to oral advertisements, this requirement may be 
satisfied by a statement, in the spoken text of the advertisement, that 
the FDIC-supervised institution is an ``Equal Housing Lender'' or an 
``Equal Opportunity Lender.''
    (3) When an oral advertisement is used in conjunction with a 
written or visual advertisement, the use of either of the methods 
specified in paragraphs (a)(1) and (2) of this section will satisfy the 
requirements of this paragraph (a).
    (b) No advertisement shall contain any words, symbols, models or 
other forms of communication which express, imply, or suggest a 
discriminatory preference or policy of exclusion in violation of the 
provisions of the Fair Housing Act or the Equal Credit Opportunity Act.


Sec.  338.4  Fair housing poster.

    (a) Each FDIC-supervised institution engaged in extending loans for 
the purpose of purchasing, constructing, improving, repairing, or 
maintaining a dwelling or any loan secured by a dwelling shall 
conspicuously display either the Equal Housing Lender poster set forth 
in paragraph (b) of this section or the Equal Housing Opportunity 
poster prescribed by Sec.  110.25(a) of the United States Department of 
Housing and Urban Development's regulations (24 CFR 110.25(a)), in a 
central location within the FDIC-supervised institution where deposits 
are received or where such loans are made, in a manner clearly visible 
to the general public entering the area, where the poster is displayed.
    (b) The Equal Housing Lender Poster shall be at least 11 by 14 
inches in size and have the following text:
    We Do Business in Accordance with Federal Fair Lending Laws.
    UNDER THE FEDERAL FAIR HOUSING ACT, IT IS ILLEGAL, ON THE BASIS OF 
RACE, COLOR, NATIONAL ORIGIN, RELIGION, SEX, HANDICAP, OR FAMILIAL 
STATUS (HAVING CHILDREN UNDER THE AGE OF 18) TO:
     Deny a loan for the purpose of purchasing, constructing, 
improving, repairing or maintaining a dwelling or to deny any loan 
secured by a dwelling; or
     Discriminate in fixing the amount, interest rate, 
duration, application procedures, or other terms or conditions of such 
a loan or in appraising property.
    IF YOU BELIEVE YOU HAVE BEEN DISCRIMINATED AGAINST, YOU SHOULD SEND 
A COMPLAINT TO:
    Assistant Secretary for Fair Housing and Equal Opportunity, 
Department of Housing and Urban Development, Washington, DC 20410.
    For processing under the Federal Fair Housing Act
    AND TO:
    Federal Deposit Insurance Corporation, Consumer Response Center, 
[Insert address for the Consumer Response Center stated on the FDIC's 
website at www.fdic.gov]
    For processing under the FDIC Regulations.
    UNDER THE EQUAL CREDIT OPPORTUNITY ACT, IT IS ILLEGAL TO 
DISCRIMINATE IN ANY CREDIT TRANSACTION:
     On the basis of race, color, national origin, religion, 
sex, marital status, or age;
     Because income is from public assistance; or
     Because a right has been exercised under the Consumer 
Credit Protection Act.
    IF YOU BELIEVE YOU HAVE BEEN DISCRIMINATED AGAINST, YOU SHOULD SEND 
A COMPLAINT TO:
    Federal Deposit Insurance Corporation, Consumer Response Center, 
[Insert address for the Consumer Response Center stated on the FDIC's 
website at www.fdic.gov]
    (c) The Equal Housing Lender Poster specified in this section was 
adopted under Sec.  110.25(b) of the United States Department of 
Housing and Urban Development's rules and regulations as an authorized 
substitution for the poster required in Sec.  110.25(a) of those rules 
and regulations.

Subpart B--Recordkeeping


Sec.  338.5  Purpose.

    The purpose of this subpart B is two-fold. First, this subpart B 
notifies all FDIC-supervised institutions of their duty to collect and 
retain certain information about a home loan applicant's personal 
characteristics in accordance with Regulation B of the Bureau of 
Consumer Financial Protection (12 CFR part 1002) in order to monitor an 
institution's compliance with the Equal Credit Opportunity Act of 1974 
(15 U.S.C. 1691 et seq.). Second, this subpart B notifies certain FDIC-
supervised institutions of their duty to maintain, update and report a 
register of home loan applications in accordance with Regulation C of 
the Bureau of Consumer Financial Protection (12 CFR part 1003), which 
implements the Home Mortgage Disclosure Act (12 U.S.C. 2801 et seq.).


Sec.  338.6  Definitions applicable to this subpart B.

    For purposes of this subpart B--
    (a) Bank means an insured State nonmember bank as defined in 
section 3 of the Federal Deposit Insurance Act.
    (b) Controlled entity means a corporation, partnership, 
association, or other business entity with respect to which a bank 
possesses, directly or indirectly, the power to direct or cause the 
direction of management and policies, whether through the ownership of 
voting securities, by contract, or otherwise.
    (c) FDIC-supervised institution means either a bank or a State 
savings association.
    (d) State savings association has the same meaning as in section 
3(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(b)(3).


Sec.  338.7   Recordkeeping requirements.

    All FDIC-supervised institutions that receive an application for 
credit primarily for the purchase or refinancing of a dwelling occupied 
or to be occupied by the applicant as a principal residence where the 
extension of credit will be secured by the dwelling

[[Page 60402]]

shall request and retain the monitoring information required by 
Regulation B of the Bureau of Consumer Financial Protection (12 CFR 
part 1002).


Sec.  338.8   Compilation of loan data in register format.

    FDIC-supervised institutions and other lenders required to file a 
Home Mortgage Disclosure Act loan application register (LAR) with the 
Federal Deposit Insurance Corporation shall collect, record and report 
such LAR in accordance with Regulation C of the Bureau of Consumer 
Financial Protection (12 CFR part 1003).


Sec.  338.9   Mortgage lending of a controlled entity.

    Any bank which refers any applicants to a controlled entity and 
which purchases any covered loan as defined in Regulation C of the 
Bureau of Consumer Financial Protection (12 CFR part 1003) originated 
by the controlled entity, as a condition to transacting any business 
with the controlled entity, shall require the controlled entity to 
enter into a written agreement with the bank. The written agreement 
shall provide that the entity shall:
    (a) Comply with the requirements of Sec. Sec.  338.3, 338.4, and 
338.7, and, if otherwise subject to Regulation C of the Bureau of 
Consumer Financial Protection (12 CFR part 1003), Sec.  338.8;
    (b) Open its books and records to examination by the Federal 
Deposit Insurance Corporation; and
    (c) Comply with all instructions and orders issued by the Federal 
Deposit Insurance Corporation with respect to its home loan practices.

PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT 
SUPERVISION

0
2. The authority citation for part 390 is revised to read as follows:

    Authority: 12 U.S.C. 1819.
    Subpart F also issued under 5 U.S.C. 552; 559; 12 U.S.C. 2901 et 
seq.
    Subpart O also issued under 12 U.S.C. 1828.
    Subpart Q also issued under 12 U.S.C. 1462; 1462a; 1463; 1464.
    Subpart W also issued under 12 U.S.C. 1462a; 1463; 1464; 15 
U.S.C. 78c; 78l; 78m; 78n; 78p; 78w.
    Subpart Y also issued under 12 U.S.C. 1831o.

Subpart G--[Removed and Reserved]

0
3. Remove and reserve subpart G, consisting of Sec. Sec.  390.140 
through 390.150.

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.
    Dated at Washington, DC, on August 21, 2020.
James P. Sheesley,
Acting Assistant Executive Secretary.
[FR Doc. 2020-18813 Filed 9-24-20; 8:45 am]
BILLING CODE 6714-01-P