Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Rules and Regulations 83409 

28Executive Order 13132 on Federalism, was 

signed by former President Clinton on August 4, 

1999, and subsequently published in the Federal 

Register on August 10, 1999 (64 FR 43255). 

29Public Law 105–277, 112 Stat. 2681 (1998). 1 12 U.S.C. 2801–2810. 

temporary final rule would be contrary 

to the public interest for the same 

reasons discussed above. 

As required by the Congressional 

Review Act, the Board will submit the 

final rule and other appropriate reports 

to Congress and the Government 

Accountability Office for review. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) (44 U.S.C. 3501 et seq.) requires 

that the Office of Management and 

Budget (OMB) approve all collections of 

information by a Federal agency from 

the public before they can be 

implemented. Respondents are not 

required to respond to any collection of 

information unless it displays a valid 

OMB control number. 

In accordance with the PRA, the 

information collection requirements 

included in this temporary final rule 

extension have been submitted to OMB 

for approval under control numbers 

3133–0141, 3133–0127 and 3133–0040. 

D. Executive Order 13132, on 

Federalism 

Executive Order 13132 28 encourages 

independent regulatory agencies to 

consider the impact of their actions on 

state and local interests. The NCUA, an 

independent regulatory agency, as 

defined in 44 U.S.C. 3502(5), voluntarily 

complies with the Executive order to 

adhere to fundamental federalism 

principles. The extension of the 

temporary final rule will not have 

substantial direct effects on the states, 

on the relationship between the 

National Government and the states, or 

on the distribution of power and 

responsibilities among the various 

levels of government. The Board has 

therefore determined that this rule does 

not constitute a policy that has 

federalism implications for purposes of 

the Executive order. 

E. Assessment of Federal Regulations 

and Policies on Families 

The NCUA has determined that the 

extension of the temporary final rule 

will not affect family well-being within 

the meaning of Section 654 of the 

Treasury and General Government 

Appropriations Act, 1999.29

F. Regulatory Flexibility Act (RFA) 

The Regulatory Flexibility Act (RFA) 

generally requires that when an agency 

issues a proposed rule or a final rule 

pursuant to the APA or another law, the 

agency must prepare a regulatory 

flexibility analysis that meets the 

requirements of the RFA and publish 

such analysis in the Federal Register. 

Specifically, the RFA normally requires 

agencies to describe the impact of a 

rulemaking on small entities by 

providing a regulatory impact analysis. 

For purposes of the RFA, the Board 

considers credit unions with assets less 

than $100 million to be small entities. 

As discussed previously, consistent 

with the APA, the Board has determined 

for good cause that general notice and 

opportunity for public comment is 

unnecessary, and therefore the Board is 

not issuing a notice of proposed 

rulemaking. Rules that are exempt from 

notice and comment procedures are also 

exempt from the RFA requirements, 

including conducting a regulatory 

flexibility analysis, when among other 

things the agency for good cause finds 

that notice and public procedure are 

impracticable, unnecessary, or contrary 

to the public interest. Accordingly, the 

Board has concluded that the RFA’s 

requirements relating to initial and final 

regulatory flexibility analysis do not 

apply. 

List of Subjects in 12 CFR Part 701 

Aged, Civil rights, Credit, Credit 

unions, Fair housing, Individuals with 

disabilities, Insurance, Mortgages, 

Reporting and recordkeeping 

requirements. 

By the NCUA Board, this 17th day of 

December 2020. 

Melane Conyers-Ausbrooks, 

Secretary of the Board. 

For the reasons discussed in the 

preamble, the Board amends 12 CFR 

part 701 as follows: 

PART 701—ORGANIZATION AND 

OPERATION OF CREDIT UNIONS 

■ 1. The authority citation for part 701 

continues to read as follows: 

Authority: 12 U.S.C. 1752(5), 1755, 1756, 

1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 

1782, 1784, 1785, 1786, 1787, 1788, 1789. 

Section 701.6 is also authorized by 15 U.S.C. 

3717. Section 701.31 is also authorized by 15 

U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601– 

3610. Section 701.35 is also authorized by 42 

U.S.C. 4311–4312. 

§ 701.22 [Amended] 

■ 2. In § 701.22(e), remove the date 

‘‘December 31, 2020’’ and add in its 

place the date ‘‘December 31, 2021’’. 

§ 701.23 [Amended] 

■ 3. In § 701.23(i) introductory text, 

remove the date ‘‘December 31, 2020’’ 

and add in its place the date ‘‘December 

31, 2021’’. 

§ 701.36 [Amended] 

■ 4. In § 701.36(c)(3), remove the date 

‘‘December 31, 2020’’ and add in its 

place the date ‘‘December 31, 2021’’. 

[FR Doc. 2020–28279 Filed 12–21–20; 8:45 am] 

BILLING CODE 7535–01–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1003 

Home Mortgage Disclosure 

(Regulation C) Adjustment to AssetSize Exemption Threshold 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is 

amending the official commentary that 

interprets the requirements of the 

Bureau’s Regulation C (Home Mortgage 

Disclosure) to reflect the asset-size 

exemption threshold for banks, savings 

associations, and credit unions based on 

the annual percentage change in the 

average of the Consumer Price Index for 

Urban Wage Earners and Clerical 

Workers (CPI–W). Based on the 1.3 

percent increase in the average of the 

CPI–W for the 12-month period ending 

in November 2020, the exemption 

threshold is adjusted to $48 million 

from $47 million. Therefore, banks, 

savings associations, and credit unions 

with assets of $48 million or less as of 

December 31, 2020, are exempt from 

collecting data in 2021. 

DATES: This rule is effective on January 

1, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Willie Williams, Paralegal Specialist; 

Rachel Ross, Attorney-Advisor; Office of 

Regulations, at (202) 435–7700. If you 

require this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: The 

Bureau is amending Regulation C, 

which implements the HMDA asset 

thresholds, to establish the asset-sized 

exemption threshold for depository 

financial institution for 2021. The asset 

threshold will be $48 million for 2021. 

I. Background 

The Home Mortgage Disclosure Act of 

1975 (HMDA) 1 requires most mortgage 

lenders located in metropolitan areas to 

collect data about their housing related 

lending activity. Annually, lenders must 


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83410 Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Rules and Regulations 

2 12 CFR part 1003. 

3 12 U.S.C. 2808(b). 

4 5 U.S.C. 553(b)(B). 

5 5 U.S.C. 553(d). 

6 5 U.S.C. 603(a), 604(a). 

7 44 U.S.C. 3501–3521. 

report their data to the appropriate 

Federal agencies and make the data 

available to the public. The Bureau’s 

Regulation C2 implements HMDA. 

Prior to 1997, HMDA exempted 

certain depository institutions as 

defined in HMDA (i.e., banks, savings 

associations, and credit unions) with 

assets totaling $10 million or less as of 

the preceding year-end. In 1996, HMDA 

was amended to expand the asset-size 

exemption for these depository 

institutions.3 The amendment increased 

the dollar amount of the asset-size 

exemption threshold by requiring a onetime adjustment of the $10 million 

figure based on the percentage by which 

the CPI–W for 1996 exceeded the CPI– 

W for 1975, and it provided for annual 

adjustments thereafter based on the 

annual percentage increase in the CPI– 

W, rounded to the nearest multiple of $1 

million. 

The definition of ‘‘financial 

institution’’ in § 1003.2(g) provides that 

the Bureau will adjust the asset 

threshold based on the year-to-year 

change in the average of the CPI–W, not 

seasonally adjusted, for each 12-month 

period ending in November, rounded to 

the nearest $1 million. For 2020, the 

threshold was $47 million. During the 

12-month period ending in November 

2020, the average of the CPI–W 

increased by 1.3 percent. As a result, the 

exemption threshold is increased to $48 

million for 2021. Thus, banks, savings 

associations, and credit unions with 

assets of $48 million or less as of 

December 31, 2020, are exempt from 

collecting data in 2021. An institution’s 

exemption from collecting data in 2021 

does not affect its responsibility to 

report data it was required to collect in 

2020. 

II. Procedural Requirements 

A. Administrative Procedure Act 

Under the Administrative Procedure 

Act (APA), notice and opportunity for 

public comment are not required if the 

Bureau finds that notice and public 

comment are impracticable, 

unnecessary, or contrary to the public 

interest.4 Pursuant to this final rule, 

comment 2(g)–2 in Regulation C, 

supplement I, is amended to update the 

exemption threshold. The amendment 

in this final rule is technical and nondiscretionary, and it merely applies the 

formula established by Regulation C for 

determining any adjustments to the 

exemption threshold. For these reasons, 

the Bureau has determined that 

publishing a notice of proposed 

rulemaking and providing opportunity 

for public comment are unnecessary. 

Therefore, the amendment is adopted in 

final form. 

Section 553(d) of the APA generally 

requires publication of a final rule not 

less than 30 days before its effective 

date, except (1) a substantive rule which 

grants or recognizes an exemption or 

relieves a restriction; (2) interpretive 

rules and statements of policy; or (3) as 

otherwise provided by the agency for 

good cause found and published with 

the rule.5 At a minimum, the Bureau 

believes the amendments fall under the 

third exception to section 553(d). The 

Bureau finds that there is good cause to 

make the amendments effective on 

January 1, 2021. The amendment in this 

final rule is technical and nondiscretionary, and it applies the method 

previously established in the agency’s 

regulations for determining adjustments 

to the threshold. 

B. Regulatory Flexibility Act 

Because no notice of proposed 

rulemaking is required, the Regulatory 

Flexibility Act does not require an 

initial or final regulatory flexibility 

analysis.6

C. Paperwork Reduction Act 

The Bureau has determined that this 

final rule does not impose any new or 

revise any existing recordkeeping, 

reporting, or disclosure requirements on 

covered entities or members of the 

public that would be collections of 

information requiring approval by the 

Office of Management and Budget under 

the Paperwork Reduction Act.7

D. Congressional Review Act 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), the Bureau 

will submit a report containing this rule 

and other required information to the 

United States Senate, the United States 

House of Representatives, and the 

Comptroller General of the United 

States prior to the rule taking effect. The 

Office of Information and Regulatory 

Affairs (OIRA) has designated this rule 

as not a ‘‘major rule’’ as defined by 5 

U.S.C. 804(2). 

III. Signing Authority 

The Acting Associate Director for 

Research, Markets and Regulations, Dan 

S. Sokolov, having reviewed and 

approved this document, is delegating 

the authority to electronically sign this 

document to Grace Feola, a Bureau 

Federal Register Liaison, for purposes of 

publication in the Federal Register. 

List of Subjects in 12 CFR Part 1003 

Banks, banking, Credit unions, 

Mortgages, National banks, Reporting 

and recordkeeping requirements, 

Savings associations. 

Authority and Issuance 

For the reasons set forth above, the 

Bureau amends Regulation C, 12 CFR 

part 1003, as set forth below: 

PART 1003—HOME MORTGAGE 

DISCLOSURE (REGULATION C) 

■ 1. The authority citation for part 1003 

continues to read as follows: 

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

5512, 5581. 

■ 2. In supplement I to part 1003, under 

Section 1003.2—Definitions, 2(g) 

Financial Institution is revised to read 

as follows: 

Supplement I to Part 1003—Official 

Interpretations 

* * * * * 

Section 1003.2—Definitions 

* * * * * 

2(g) Financial Institution 

1. Preceding calendar year and 

preceding December 31. The definition 

of financial institution refers both to the 

preceding calendar year and the 

preceding December 31. These terms 

refer to the calendar year and the 

December 31 preceding the current 

calendar year. For example, in 2021, the 

preceding calendar year is 2020, and the 

preceding December 31 is December 31, 

2020. Accordingly, in 2021, Financial 

Institution A satisfies the asset-size 

threshold described in § 1003.2(g)(1)(i) 

if its assets exceeded the threshold 

specified in comment 2(g)–2 on 

December 31, 2020. Likewise, in 2021, 

Financial Institution A does not meet 

the loan-volume test described in 

§ 1003.2(g)(1)(v)(A) if it originated fewer 

than 100 closed-end mortgage loans 

during either 2019 or 2020. 

2. Adjustment of exemption threshold 

for banks, savings associations, and 

credit unions. For data collection in 

2021, the asset-size exemption threshold 

is $48 million. Banks, savings 

associations, and credit unions with 

assets at or below $48 million as of 

December 31, 2020, are exempt from 

collecting data for 2021. 

3. Merger or acquisition—coverage of 

surviving or newly formed institution. 

After a merger or acquisition, the 

surviving or newly formed institution is 

a financial institution under § 1003.2(g) 


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Federal Register / Vol. 85, No. 246 / Tuesday, December 22, 2020 / Rules and Regulations 83411 

if it, considering the combined assets, 

location, and lending activity of the 

surviving or newly formed institution 

and the merged or acquired institutions 

or acquired branches, satisfies the 

criteria included in § 1003.2(g). For 

example, A and B merge. The surviving 

or newly formed institution meets the 

loan threshold described in 

§ 1003.2(g)(1)(v)(B) if the surviving or 

newly formed institution, A, and B 

originated a combined total of at least 

500 open-end lines of credit in each of 

the two preceding calendar years. 

Likewise, the surviving or newly formed 

institution meets the asset-size 

threshold in § 1003.2(g)(1)(i) if its assets 

and the combined assets of A and B on 

December 31 of the preceding calendar 

year exceeded the threshold described 

in § 1003.2(g)(1)(i). Comment 2(g)–4 

discusses a financial institution’s 

responsibilities during the calendar year 

of a merger. 

4. Merger or acquisition—coverage for 

calendar year of merger or acquisition. 

The scenarios described below illustrate 

a financial institution’s responsibilities 

for the calendar year of a merger or 

acquisition. For purposes of these 

illustrations, a ‘‘covered institution’’ 

means a financial institution, as defined 

in § 1003.2(g), that is not exempt from 

reporting under § 1003.3(a), and ‘‘an 

institution that is not covered’’ means 

either an institution that is not a 

financial institution, as defined in 

§ 1003.2(g), or an institution that is 

exempt from reporting under 

§ 1003.3(a). 

i. Two institutions that are not 

covered merge. The surviving or newly 

formed institution meets all of the 

requirements necessary to be a covered 

institution. No data collection is 

required for the calendar year of the 

merger (even though the merger creates 

an institution that meets all of the 

requirements necessary to be a covered 

institution). When a branch office of an 

institution that is not covered is 

acquired by another institution that is 

not covered, and the acquisition results 

in a covered institution, no data 

collection is required for the calendar 

year of the acquisition. 

ii. A covered institution and an 

institution that is not covered merge. 

The covered institution is the surviving 

institution, or a new covered institution 

is formed. For the calendar year of the 

merger, data collection is required for 

covered loans and applications handled 

in the offices of the merged institution 

that was previously covered and is 

optional for covered loans and 

applications handled in offices of the 

merged institution that was previously 

not covered. When a covered institution 

acquires a branch office of an institution 

that is not covered, data collection is 

optional for covered loans and 

applications handled by the acquired 

branch office for the calendar year of the 

acquisition. 

iii. A covered institution and an 

institution that is not covered merge. 

The institution that is not covered is the 

surviving institution, or a new 

institution that is not covered is formed. 

For the calendar year of the merger, data 

collection is required for covered loans 

and applications handled in offices of 

the previously covered institution that 

took place prior to the merger. After the 

merger date, data collection is optional 

for covered loans and applications 

handled in the offices of the institution 

that was previously covered. When an 

institution remains not covered after 

acquiring a branch office of a covered 

institution, data collection is required 

for transactions of the acquired branch 

office that take place prior to the 

acquisition. Data collection by the 

acquired branch office is optional for 

transactions taking place in the 

remainder of the calendar year after the 

acquisition. 

iv. Two covered institutions merge. 

The surviving or newly formed 

institution is a covered institution. Data 

collection is required for the entire 

calendar year of the merger. The 

surviving or newly formed institution 

files either a consolidated submission or 

separate submissions for that calendar 

year. When a covered institution 

acquires a branch office of a covered 

institution, data collection is required 

for the entire calendar year of the 

merger. Data for the acquired branch 

office may be submitted by either 

institution. 

5. Originations. Whether an 

institution is a financial institution 

depends in part on whether the 

institution originated at least 100 

closed-end mortgage loans in each of the 

two preceding calendar years or at least 

500 open-end lines of credit in each of 

the two preceding calendar years. 

Comments 4(a)–2 through –4 discuss 

whether activities with respect to a 

particular closed-end mortgage loan or 

open-end line of credit constitute an 

origination for purposes of § 1003.2(g). 

6. Branches of foreign banks—treated 

as banks. A Federal branch or a Statelicensed or insured branch of a foreign 

bank that meets the definition of a 

‘‘bank’’ under section 3(a)(1) of the 

Federal Deposit Insurance Act (12 

U.S.C. 1813(a)) is a bank for the 

purposes of § 1003.2(g). 

7. Branches and offices of foreign 

banks and other entities—treated as 

nondepository financial institutions. A 

Federal agency, State-licensed agency, 

State-licensed uninsured branch of a 

foreign bank, commercial lending 

company owned or controlled by a 

foreign bank, or entity operating under 

section 25 or 25A of the Federal Reserve 

Act, 12 U.S.C. 601 and 611 (Edge Act 

and agreement corporations) may not 

meet the definition of ‘‘bank’’ under the 

Federal Deposit Insurance Act and may 

thereby fail to satisfy the definition of a 

depository financial institution under 

§ 1003.2(g)(1). An entity is nonetheless 

a financial institution if it meets the 

definition of nondepository financial 

institution under § 1003.2(g)(2). 

* * * * * 

Dated: December 17, 2020. 

Grace Feola, 

Federal Register Liaison, Bureau of Consumer 

Financial Protection. 

[FR Doc. 2020–28230 Filed 12–21–20; 8:45 am] 

BILLING CODE 4810–AM–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1026 

Truth in Lending Act (Regulation Z) 

Adjustment to Asset-Size Exemption 

Threshold 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is 

amending the official commentary that 

interprets the requirements of the 

Bureau’s Regulation Z (Truth in 

Lending) to reflect a change in the assetsize threshold for certain creditors to 

qualify for an exemption to the 

requirement to establish an escrow 

account for a higher-priced mortgage 

loan. This amendment is based on the 

annual percentage change in the average 

of the Consumer Price Index for Urban 

Wage Earners and Clerical Workers 

(CPI–W). Based on the 1.3 percent 

increase in the average of the CPI–W for 

the 12-month period ending in 

November 2020, the exemption 

threshold is adjusted to $2.230 billion 

from $2.202 billion. Therefore, creditors 

with assets of less than $2.230 billion 

(including assets of certain affiliates) as 

of December 31, 2020, are exempt, if 

other requirements of Regulation Z also 

are met, from establishing escrow 

accounts for higher-priced mortgage 

loans in 2021. 

DATES: This rule is effective on January 

1, 2021. 


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