does reg b cover collection proceduresdoes reg b cover collection procedures

"Federal Fair Lending Regulations and Statutes: Equal Credit Opportunity (Regulation B)," Page 2. [28] Regulation B implements the Equal Credit Opportunity Act (ECOA)[1] The current Regulation B appendix includes the 2004 URLA as a model form. See revised Regulation C 1003.3(c)(10). Accordingly, the Bureau has authority to issue regulations to administer ECOA. Investopedia does not include all offers available in the marketplace. Among other changes, the 2016 URLA includes a Demographic Information section (section 7) that addresses the requirements in revised Regulation C for collecting applicant demographic information, including the requirement that financial institutions permit applicants to self-identify using disaggregated ethnicity and race categories beginning January 1, 2018. 6. (vi) A creditor that is collecting information regarding the ethnicity, race, and sex of an applicant or first co-applicant may collect information regarding the ethnicity, race, and sex of a second or additional co-applicant for a covered loan under 12 CFR 1003.2(e) or for a second or additional co-applicant for a loan described in paragraphs (a)(4)(i) through (v) of this section. If a creditor inadvertently obtains the monitoring information in a dwelling-related transaction not covered by 1002.13, the creditor may process and retain the application without violating the regulation. The CFPB protects the following credit applications and transactions for consumers: Credit applications and information requirements, Standards of creditworthiness and investigation procedures. Compliance with the applicable servicing criteria is achieved if those policies and procedures are designed to provide reasonable assurance that such vendor's activities comply with such criteria and those policies and procedures are operating effectively. For data collected in or after 2018, the 2015 HMDA Final Rule amends the requirement for collection and reporting of applicant demographic information. Rules for Taking Applications Section 202.5 Regulation B prohibits creditors from requesting and collecting specific personal information about an applicant that has no bearing on the applicant's The Bureau also proposed comments 13(a)-7 and 13(a)-8 to provide that a creditor that collects applicant information in compliance with the revised Regulation C appendix will be acting in compliance with 1002.13 concerning the collection of an applicant's ethnicity, race, and sex information and to clarify that a creditor may choose on an application-by-application basis whether to collect aggregate or disaggregated information. "CFPB Consumer Laws and Regulations ECOA.". Instead, the Bureau is providing for two alternative data collection model forms for the purpose of collecting ethnicity and race information. Answer by David Dickinson: The definition of applicant in Reg B Section 202.2: (e) Applicant means any person who requests or who has received an extension of credit from a creditor, and includes any person who is or may become contractually liable regarding an extension of credit.For purposes of Section 202.7(d), the term includes guarantors, sureties, endorsers, and similar parties. @*EtJ '_whyb.v'Yc:E| t%]C@bkBZSAqqu`2B6G\#; Two industry commenters, while supportive of the flexibility provided in the 2017 ECOA Proposal, sought clarification on how aggregate and disaggregated data will be evaluated against one another, including how aggregate information collected under Regulation B would be compared to disaggregated information collected under revised Regulation C. The commenters expressed concern that the optionality could result in dissimilar demographic reporting and potentially greater compliance burden for creditors who choose to continue to collect aggregate information. The Bureau believes that such guidance would add complexity and compliance burden on creditors without furthering the purposes of ECOA, and so declines to do so as part of this rulemaking. Other circumstances permitting voluntary collection of applicant demographic information finalized in this rule do not correspond to provisions in Regulation C addressing optional reporting. Creditors that fail to comply with Regulation B are subject to punitive damages. documents in the last year, 1408 Finally, demographic data retained by Regulation B-only creditors is not reported under Regulation C. Consequently, most oversight and analysis of demographic data retained by Regulation B-only creditors will be done only by regulators, whereas researchers and community groups also conduct analysis of HMDA data reported under Regulation C. The Bureau believes the final rule will not impose any costs on consumers. Such entities likely serve primarily customers in rural areas. Unlike prior versions of the URLA, the 2016 URLA permits an applicant to select disaggregated ethnicity and race categories, as required under revised Regulation C. Given the issuance of the Bureau Approval Notice and the modifications to 1002.13, the Bureau proposed several revisions to the Regulation B appendix as discussed below. The Bureau received no comments on the proposal to remove the 2004 URLA or the timing of the removal and so is finalizing removal of the 2004 URLA as proposed. 210.2 Definitions.*. The rule change therefore will not require Regulation B creditors that are not HMDA reporters (Regulation B-only creditors) to change their 1002.13 compliance practices, but would allow them to adopt voluntarily new practices for collecting applicant information, including practices that would permit such creditors to transition to the 2016 URLA. Note that the language that follows is taken directly from the regulation, which appears in the References portion of this section. The Bureau Approval Notice provided that, anytime from January 1, 2017 through December 31, 2017, a creditor may, at its option, permit applicants to self-identify using disaggregated ethnic and racial categories as instructed in the revised Regulation C appendix. In developing the final rule, the Bureau has considered the potential benefits, costs, and impacts. 44. Creditors can ask about the number of children, their ages, and the borrower's financial obligations relating to the children. Under 1002.13(a)(1), creditors 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, must collect certain protected applicant-characteristic information, including specified race and ethnicity categories. Second, many Regulation B-only creditors will be exempt from reporting under revised Regulation C because they originate fewer than 25 closed-end mortgage loans in each of the two preceding calendar years, which means both that few consumers would be affected and any disaggregated data would likely be too sparse for statistical analysis. This document has been published in the Federal Register. 2. If an applicant applies through an electronic medium without video capability, the creditor treats the application as if it were received by mail. [44] on They must tell you the name of the creditor (company or person you owe), the amount you owe and how you can dispute the debt or seek verification of the debt. documents in the last year, 822 One commenter requested clarification that the voluntary collection under proposed 1002.5(a)(4) was truly voluntary and not a new compliance requirement. [21] The final rule may have benefits to consumers, to the extent that lending entities voluntarily choose to collect disaggregated race and ethnicity information. The creditor need not orally request the monitoring information if it is requested in writing. This temporary increase in the open-end threshold will provide time for the Bureau to consider whether to initiate another rulemaking to address the appropriate level for the open-end threshold for data collected beginning January 1, 2020. The rule makes certain changes to the Regulation B appendix. Removing the Regulation B requirement altogether would make detection of any discrimination by these entities more difficult, with potentially large costs to consumers where such discrimination exists. documents in the last year, by the Food Safety and Inspection Service and the Food and Drug Administration Under Section 1002.5Rules concerning requests for information: b. Section 1002.13 sets forth the scope, required information, and manner for the mandatory collection of certain protected applicant-characteristic information under Regulation B. The Bureau declines to consider the proposals to eliminate altogether the requirement to collect applicant demographic information on the basis of visual observation or surname in 1002.13 or to provide further instructions on how to collect such information as both proposals go beyond the issues on which the Bureau solicited comment. Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and currently holds a Life, Accident, and Health License in Indiana. Some or all of these institutions may also not have been required to report HMDA data. This PDF is Answer: Reg B defines both an "application" and a "completed application" in section 202.2 (f). These tools are designed to help you understand the official document documents in the last year. These regulations may contain but are not limited to such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Bureau are necessary or proper to effectuate the purposes of ECOA, to prevent circumvention or evasion of ECOA, or to facilitate or substantiate compliance with ECOA. iii. 1691b. the official SGML-based PDF version on govinfo.gov, those relying on it for Creditors subject to the Home Mortgage Disclosure Act should be aware, however, that data collection may be called for under Regulation C (12 CFR part 1003), which generally requires creditors to report, among other things, the sex and race of an applicant on brokered applications or applications received through a correspondent. Two of these circumstances are a requirement for creditors to collect and retain certain information about applicants for certain dwelling-secured loans under Regulation B 1002.13 and the similar applicant information that financial institutions are required to collect and report under Regulation C, 12 CFR part 1003, which implements the Home Mortgage Disclosure Act (HMDA). The documents posted on this site are XML renditions of published Federal Rules concerning requests for information. endstream endobj startxref Comments are publicly available at http://www.regulations.gov. [11] Director, Bureau of Consumer Financial Protection. Prior to Reg B, discriminatory lending practices such as redlining for mortgages was prevalent in the U.S. Regulation B makes such practices illegal. Regulation B is intended to prevent applicants from discrimination in any aspect of a credit transaction. When a creditor collects ethnicity and race information pursuant to 1002.13(a)(1)(i)(B), the applicant must be offered the option to select more than one ethnicity designation and more than one racial designation. Notwithstanding paragraph (b) of this section, a creditor may collect information under the following circumstances provided that the creditor collects the information in compliance with appendix B to 12 CFR part 1003: (i) A creditor that is a financial institution under 12 CFR 1003.2(g) may collect information regarding the ethnicity, race, and sex of an applicant for a closed-end mortgage loan that is an excluded transaction under 12 CFR 1003.3(c)(11) if it submits HMDA data concerning such closed-end mortgage loans and applications or if it submitted HMDA data concerning closed-end mortgage loans for any of the preceding five calendar years; (ii) A creditor that is a financial institution under 12 CFR 1003.2(g) may collect information regarding the ethnicity, race, and sex of an applicant for an open-end line of credit that is an excluded transaction under 12 CFR 1003.3(c)(12) if it submits HMDA data concerning such open-end lines of credit and applications or if it submitted HMDA data concerning open-end lines of credit for any of the preceding five calendar years; (iii) A creditor that submitted HMDA data for any of the preceding five calendar years but is not currently a financial institution under 12 CFR 1003.2(g) may collect information regarding the ethnicity, race, and sex of an applicant for a loan that would otherwise be a covered loan under 12 CFR 1003.2(e) if not excluded by 12 CFR 1003.3(c)(11) or (12); (iv) A creditor that exceeded an applicable loan volume threshold in the first year of the two-year threshold period provided in 12 CFR 1003.2(g), 1003.3(c)(11), or 1003.3(c)(12) may, in the second year, collect information regarding the ethnicity, race, and sex of an applicant for a loan that would otherwise be a covered loan under 12 CFR 1003.2(e) if the loan were not excluded by 12 CFR 1003.3(c)(11) or (12); (v) A creditor that is a financial institution under 12 CFR 1003.2(g), or that submitted HMDA data for any of the preceding five calendar years but is not currently a financial institution under 12 CFR 1003.2(g), may collect information regarding the ethnicity, race, and sex of an applicant for a loan that would otherwise be a covered loan under 12 CFR 1003.2(e) if the loan were not excluded by 12 CFR 1003.3(c)(10). Until the ACFR grants it official status, the XML Thus, the final rule has the added benefit that it will allow Regulation B-only creditors to use the 2016 URLA as an instrument to collect race and ethnicity information. These comments were primarily from small financial institutions. The Bureau also proposed to amend comment 12(b)-2 to require retention of applicant demographic information obtained pursuant to 1002.5(a)(4). This compensation may impact how and where listings appear. While every effort has been made to ensure that Forms for collecting data. Fair Credit Reporting Act (Reg V) FCRA is intended to ensure consumer reports are accurate and used for permissible purposes. The Bureau Approval Notice provides that, at any time from January 1, 2017, through December 31, 2017, a creditor may, at its option, permit applicants to self-identify using disaggregated ethnic and racial categories as instructed in revised Regulation C. During this period, a creditor adopting the practice of permitting applicants to self-identify using disaggregated ethnic and racial categories as instructed in the Regulation C appendix is not deemed to violate Regulation B 1002.5(b). Changes to Applicant Information Collection for Regulation B Creditors, C. Changes to Applicant Information Collection for HMDA Reporters, A. A creditor may only request information from a loan applicants spouse if: The most important benefit of Regulation B is that it helps to prevent discrimination against women and minorities. The Bureau does not believe that these comments are relevant to the 2017 ECOA Proposal and do not provide a basis to change the approach proposed by the Bureau in the 2017 ECOA Proposal, which, as related to 1002.13, is limited to modifications that harmonize the collection requirements of Regulation B and Regulation C. For the reasons discussed above, the Bureau is adopting 1002.13(a)(1)(i) and comments 13(a)-7 and 13(a)-8 as proposed. Predatory Lending Laws: What You Need to Know, Discrimination in Insurance Underwriting Guidelines. On October 24, 2012, the CFPB issued a larger participant regulation in the market of consumer debt collection. at 43132, 43145 (1003.2(g)(1)(v)(B), (g)(2)(ii)(B), and 1003.3(c)(12)). Those rules include: They must identify themselves as a debt collection agency and give their name and the address for the collection agency. The Bureau specifically sought input from these agencies concerning their use of applicant ethnicity and race information collected under 1002.13 but not reported or anticipated to be reported under Regulation C and their views on appropriate standards for collection and retention of this information. Document has been published in the market of Consumer does reg b cover collection procedures Protection issued a larger participant Regulation in U.S.. 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