2018-18542. Proposed Agency Information Collection Activities; Comment Request

AGENCY:

Board of Governors of the Federal Reserve System.

ACTION:

Notice, request for comment.

SUMMARY:

The Board of Governors of the Federal Reserve System (Board) invites comment on a proposal to extend for three years, with revision, the Reporting, Recordkeeping, and Disclosure Requirements Associated with the Home Mortgage Disclosure Act (HMDA) and Loan/Application Register (LAR) required by Regulation C (FR HMDA LAR, OMB No. 7100-0247).

DATES:

Comments must be submitted on or before October 29, 2018.

ADDRESSES:

You may submit comments, identified by FR HMDA LAR, by any of the following methods:

• Agency website: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/​apps/​foia/​proposedregs.aspx.
• Email: [e-mail]. Include OMB number in the subject line of the message.
• Fax: [phone] or [phone].
• Mail: Ann E. Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 20551.

All public comments are available from the Board's website at http://www.federalreserve.gov/​apps/​foia/​proposedregs.aspx as submitted, unless modified for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper form in Room 3515, 1801 K Street NW (between 18th and 19th Streets NW), Washington, DC 20006 between 9:00 a.m. and 5:00 p.m. on weekdays. For security reasons, the Board requires that visitors make an appointment to inspect comments. You may do so by calling [phone]. Upon arrival, visitors will be required to present valid government-issued photo identification and to submit to security screening in order to inspect and photocopy comments.

Additionally, commenters may send a copy of their comments to the OMB Desk Officer—Shagufta Ahmed—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to [phone].

FOR FURTHER INFORMATION CONTACT:

A copy of the PRA OMB submission, including the proposed reporting form and instructions, supporting statement, and other documentation will be placed into OMB's public docket files, once approved. These documents will also be made available on the Board's public website at: http://www.federalreserve.gov/​apps/​reportforms/​review.aspx or may be requested from the agency clearance officer, whose name appears below.

Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551 [phone]. Telecommunications Device for the Deaf (TDD) users may contact [phone], Board of Governors of the Federal Reserve System, Washington, DC 20551.

SUPPLEMENTARY INFORMATION:

On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collection of information requests and requirements conducted or sponsored by the Board. In exercising this delegated authority, the Board is directed to take every reasonable step to solicit comment. In determining whether to approve a collection of information, the Board will consider all comments received from the public and other agencies.

Request for Comment on Information Collection Proposal

The Board invites public comment on the following information collection, which is being reviewed under authority delegated by the OMB under the PRA. Comments are invited on the following:

a. Whether the proposed collection of information is necessary for the proper performance of the Board's functions, including whether the information has practical utility;

b. The accuracy of the Board's estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;

c. Ways to enhance the quality, utility, and clarity of the information to be collected;

d. Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and

e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.

At the end of the comment period, the comments and recommendations received will be analyzed to determine the extent to which the Board should modify the proposal prior to giving final approval.

Proposal To Approve Under OMB Delegated Authority the Extension for Three Years, With Revision, of the Following Report

Report title: Reporting, Recordkeeping, and Disclosure Requirements Associated with the Home Mortgage Disclosure Act (HMDA) and Loan/Application Register (LAR) required by Regulation C.

Agency form number: FR HMDA LAR.

OMB control number: 7100-0247.

Frequency: Annually and quarterly.

Respondents: State member banks (SMBs), their subsidiaries, subsidiaries of bank holding companies, U.S. branches and agencies of foreign banks (other than federal branches, federal agencies, and insured state branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act.

Estimated number of respondents: Update policies, procedures, and systems (one-time), 505 respondents; Reporting—Tier 1 (annual reporter), 2 respondents; Tier 1 (quarterly reporter), 1 respondent; Tier 2, 148 respondents; Tier 2 (Crapo), 300 respondents; and Tier 3 (Crapo), 54 respondents; Recordkeeping—Tier 1 (annual reporter), 2 respondents; Tier 1 (quarterly reporter), 1 respondent; Tier 2, 448 respondents; and Tier 3, 54 respondents; and Disclosure—Tier 1 (annual reporter), 2 respondents; and Tier 1 (quarterly reporter), 1 respondent.

Estimated average hours per response: Update policies, procedures, and systems (one-time), 176 hours; Reporting—Tier 1 (annual reporter), 5,969 hours; Tier 1 (quarterly reporter), 6,903 hours; Tier 2, 1,232 hours; Tier 2 (Crapo), 986 hours; and Tier 3 (Crapo), 64 hours; Recordkeeping—Tier 1 (annual reporter), 4,130 hours; Tier 1 (quarterly reporter), 4,130 hours; Tier 2, 83 hours; and Tier 3, 27 hours; and Disclosure—Tier 1 (annual reporter), 5 hours; and Tier 1 (quarterly reporter), 5 hours.

Estimated annual burden hours: Update policies, procedures, and systems (one-time), 88,880 hours; Reporting—Tier 1 (annual reporter), 11,938 hours; Tier 1 (quarterly reporter), 27,612 hours; Tier 2, 182,336 hours; Tier 2: Crapo, 295,800 hours; and Tier 3: Crapo, 3,456 hours; Recordkeeping—Tier 1 (annual reporter), 8,260 hours; Tier 1 (quarterly reporter), 16,520 hours; Tier 2, 37,184 hours; and Tier 3, 1,458 hours; and Disclosure—Tier 1 (annual reporter), 10 hours; and Tier 1 (quarterly reporter), 20 hours.

General description of report: HMDA was enacted in 1975 and is implemented by Regulation C. Generally, HMDA requires certain depository and non-depository institutions that make certain mortgage loans to collect, report, and disclose data about originations and purchases of mortgage loans, as well as loan applications that do not result in originations (for example, applications that are denied or withdrawn). HMDA was enacted to provide regulators and the public with loan data that can be used to: (1) Help determine whether financial institutions are serving the housing needs of their communities, (2) assist public officials in distributing public-sector investments so as to attract private investment to areas where it is needed, and (3) assist in identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes.^[1] Supervisory agencies, state and local public officials, and members of the public use the data to aid in the enforcement of the Community Reinvestment Act, the Equal Credit Opportunity Act, and the Fair Housing Act and to aid in identifying areas for residential redevelopment and rehabilitation.

Proposed revisions: Consistent with the Bureau of Consumer Financial Protection's (Bureau) final rules amending Regulation C, effective January 1, 2018, as well as recent statutory amendments to HMDA that were enacted on May 24, 2018,^[2] the Board proposes to revise the FR HMDA-LAR by expanding the data reported and by modifying the types of institutions required to report and the types of loans required to be reported. Beginning January 1, 2018, an institution that is otherwise not eligible for a partial exemption under section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), as discussed further below, is required to collect and report all required data points required under HMDA if it either originates 25 or more ^[3] closed-end mortgage loans or 500 or more open-end lines of credit ^[4] secured by a dwelling in each of the two preceding years, in addition to meeting other applicable coverage criteria.^[5] For these institutions, the final rules standardize the loan volume threshold used to determine coverage of both depository and non-depository institutions. An institution will only report a covered loan if it has met the loan origination threshold for that loan category (open-end or closed-end).

The final rules generally will require covered institutions to collect and report any mortgage loan secured by a dwelling, including open-end lines of credit, regardless of the loan's purpose. However, the final rules exclude unsecured home-improvement loans (which historically were required to be reported), dwelling-secured loans that are made principally for a commercial or business purpose, agricultural-purpose loans, and other specifically excluded loans.^[6]

The final rules also will require collection of additional data points. For covered institutions that are otherwise not eligible for the partial exemption under section 104(a) of EGRRCPA, as discussed further below, these additional data points will be reported in 2019.

These new fields include

• additional information about the applicant or borrower, such as age and credit score
• information about the loan pricing, such as the borrower's total cost to obtain a mortgage, temporary introductory rates, and borrower-paid origination charges
• information about loan features, such as the loan term, prepayment penalties, or non-amortizing features (such as interest only or balloon payments)
• additional information about property securing the loan, such as property value and property type

In addition, the Bureau's final rules amend several existing requirements, including the requirements for collection and reporting of information regarding an applicant's or borrower's ethnicity, race and sex.^[7]

Effective May 24, 2018, an institution that is eligible for the partial exemption under section 104(a) of EGRRCPA will only need to report a subset of the data points required under HMDA if it originates fewer than 500 closed-end mortgage loans in each of the two preceding calendar years.^[8] Consistent with section 104(a) of EGRRCPA and the Bureau's recent statement addressing the applicability of this statutory amendment to HMDA,^[9] the Board estimates that institutions eligible for the partial exemption will report approximately half the data points currently required by the Bureau's final rules on the loans described above.^[10]

The Bureau will collect the HMDA/LAR data on behalf of the applicable Federal supervisory agency, and the data will be combined and aggregated for each Metropolitan Statistical Area (MSA). Certain aggregated data will continue to be publicly available, though the Bureau has yet to determine what the information collected in the new data fields will be disclosed once the final rules are fully effective.

Legal authorization and confidentiality: The FR HMDA-LAR is authorized pursuant to section 304(j) of HMDA (12 U.S.C. 2803(j)), which requires that the Bureau prescribe by regulation the form of loan application register information that must be reported by covered financial institutions. Section 1003.5 of Regulation C implements this statutory provision, and requires covered financial institutions to submit reports to their appropriate federal agency. Section 304(h)(2)(A) of HMDA (12 U.S.C. 2803(h)(2)(A)) designates the Board as the appropriate agency with respect to the entities described above. The FR HMDA-LAR is mandatory. HMDA requires the information collected on the FR HMDA-LAR to be made available to the general public in the form proscribed by the Bureau. The Bureau is authorized to redact or modify the scope of the information before it is publicly disclosed to protect the privacy of loan applicants and to protect depository institutions from liability under any federal or state privacy law (12 U.S.C. 2803(j)(2)(B)). The redacted information may be kept confidential under exemption 6 of the Freedom and Information Act, which protects from release information that, if disclosed, would “constitute a clearly unwarranted invasion of personal privacy” (5 U.S.C. 552(b)(6)).

Consultation outside the agency: The Board consulted with Bureau staff regarding the estimated burden of this information collection.

Board of Governors of the Federal Reserve System, August 22, 2018.

Ann Misback,

Secretary of the Board.

Footnotes

1.  12 CFR 1003.1(b).

2.  On May 24, 2018, the President signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). In relevant part, section 104(a) of EGRRCPA amends HMDA to exempt certain insured depository institutions and insured credit unions from collecting and reporting those data fields that were required by HMDA sections 304(b)(5) and (6), as implemented by the Bureau's final rules.

3.  Small depository institutions that originated fewer than 25 closed-end mortgage loans in either 2015 or 2016 ceased HMDA data collection on January 1, 2017.

4.  Under the 2015 final rules, financial institutions would have been required to report home-equity lines of credit if they made 100 or more such loans in each of the last two years. On August 24, 2017, the Bureau amended the final rules to increase the institutional coverage and loan threshold from 100 to 500 or more loans through calendar years 2018 and 2019. See 82 FR 43088 (Sept. 13, 2017). This temporary increase in the threshold will provide time for the Bureau to consider whether to initiate another rulemaking to address the appropriate level for the threshold for data collected beginning January 1, 2020.

5.  Asset size and geographic location coverage tests also apply. See 12 CFR FR 1003.2(g).

6.  12 CFR 1003.2(e).

7.  For the complete list of data points, see 12 CFR 1003.4.

8.  Section 104(a) of EGRRCPA also provides a partial exemption to the data collection and reporting requirements under HMDA for institutions that originate fewer than 500 open-end lines of credit in each of the two preceding calendar years and otherwise meet the applicable performance evaluation rating standards under CRA. However, institutions eligible for this partial exemption are already completely exempt from all data collection and reporting requirements under the temporary exemption provided by the Bureau's final rules until January 1, 2020.

9.  See Bureau Statement, which provides that for loans subject to the partial exemption, “the requirements of [HMDA section 304(b)(5) and (6)] shall not apply . . . [therefore,] institutions are exempt from the collection, recording, and reporting requirements for some, but not all, of the data points specified in current Regulation C.”

10.  Section 104(a) of EGRRCPA does not define the terms “closed-end loan” or “open-end line of credit.” However, for purposes of estimating burden, the Board is making the assumption that these terms will be used consistent with how they are currently defined in Regulation C. See 12 CFR 1002.2(d) and (o), which defines the term “closed-end loan” and “open-end line of credit,” respectively. Further, for purposes of estimating burden, the Board is making the assumption that the loan volume thresholds for closed-end loans will be determined consistent with how such loan thresholds are currently used under Regulation C to determine if a transaction must be reported. See 12 CFR 1003.3(c)(11) and (12), which provides how to determine the loan threshold volume for closed-end loan reporters and open-end line of credit reporters, respectively.