This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

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new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

80675 

Vol. 75, No. 246 

Thursday, December 23, 2010 

FEDERAL RESERVE SYSTEM 

12 CFR Part 203 

[Regulation C; Docket No. 1398] 

Home Mortgage Disclosure 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Final rule; staff commentary. 

SUMMARY: The Board is publishing a 

final rule amending the staff 

commentary that interprets the 

requirements of Regulation C (Home 

Mortgage Disclosure). The staff 

commentary is amended to increase the 

asset-size exemption threshold for 

depository institutions based on the 

annual percentage change in the 

Consumer Price Index for Urban Wage 

Earners and Clerical Workers (CPIW). 

The adjustment from $39 million to $40 

million reflects the increase of that 

index by 2.21 percent during the twelvemonth period ending in November 

2010. Thus, depository institutions with 

assets of $40 million or less as of 

December 31, 2010 are exempt from 

collecting data in 2011. 

DATES: Effective January 1, 2011. 

FOR FURTHER INFORMATION CONTACT: John 

C. Wood, Counsel, Division of 

Consumer and Community Affairs, at 

(202) 452–3667; for users of 

Telecommunications Device for the Deaf 

(TDD) only, contact (202) 263–4869. 

SUPPLEMENTARY INFORMATION: The Home 

Mortgage Disclosure Act (HMDA; 12 

U.S.C. 2801 et seq.) requires most 

mortgage lenders located in 

metropolitan areas to collect data about 

their housing-related lending activity. 

Annually, lenders must report those 

data to their federal supervisory 

agencies and make the data available to 

the public. The Board’s Regulation C (12 

CFR part 203) implements HMDA. 

Prior to 1997, HMDA exempted 

depository institutions with assets 

totaling $10 million or less, as of the 

preceding year-end. Provisions of the 

Economic Growth and Regulatory 

Paperwork Reduction Act of 1996 

(codified at 12 U.S.C. 2808(b)) amended 

HMDA to expand the exemption for 

small depository institutions. The 

statutory amendment increased the 

asset-size exemption threshold by 

requiring a one-time adjustment of the 

$10 million figure based on the 

percentage by which the CPIW for 1996 

exceeded the CPIW for 1975, and it 

provided for annual adjustments 

thereafter based on the annual 

percentage change in the CPIW. The 

one-time adjustment increased the 

exemption threshold to $28 million for 

1997 data collection. 

Section 203.2(e)(1)(i) of Regulation C 

provides that the Board will adjust the 

threshold based on the year-to-year 

change in the average of the CPIW, not 

seasonally adjusted, for each twelvemonth period ending in November, 

rounded to the nearest million dollars. 

Pursuant to this section, the Board has 

adjusted the threshold annually, as 

appropriate. 

For 2010, the threshold was $39 

million. During the twelve-month 

period ending in November 2010, the 

CPIW increased by 2.21 percent; as a 

result, the exemption threshold will 

increase to $40 million. Thus, 

depository institutions with assets of 

$40 million or less as of December 31, 

2010 are exempt from collecting data in 

2011. An institution’s exemption from 

collecting data in 2011 does not affect 

its responsibility to report data it was 

required to collect in 2010. 

Final Rule 

Under the Administrative Procedures 

Act, notice and opportunity for public 

comment are not required if the Board 

finds that notice and public comment 

are unnecessary. 5 U.S.C. 553(b)(B). The 

amendment in this notice is technical. 

Comment 2(e)–2 is amended to update 

the exemption threshold. This 

amendment merely applies the formula 

established by Regulation C for 

determining any adjustments to the 

exemption threshold. For these reasons, 

the Board 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. 

List of Subjects in 12 CFR Part 203 

Banks, Banking, Federal Reserve 

System, Mortgages, Reporting and 

recordkeeping requirements. 

■ For the reasons set forth in the 

preamble, the Board amends 12 CFR 

part 203 as follows: 

PART 203—HOME MORTGAGE 

DISCLOSURE (REGULATION C) 

■ 1. The authority citation for part 203 

continues to read as follows: 

Authority: 12 U.S.C. 2801–2810. 

■ 2. In Supplement I to part 203, under 

Section 203.2 Definitions, 2(e) Financial 

Institution, paragraph 2(e)–2 is revised 

to read as follows: 

Supplement I to Part 203—Staff 

Commentary 

* * * * * 

Section 203.2 Definitions 

* * * * * 

2(e) Financial Institution. 

* * * * * 

2. Adjustment of exemption threshold for 

depository institutions. For data collection in 

2011, the asset-size exemption threshold is 

$40 million. Depository institutions with 

assets at or below $40 million as of December 

31, 2010 are exempt from collecting data for 

2011. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

Director of the Division of Consumer and 

Community Affairs under delegated 

authority, December 17, 2010. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. 2010–32210 Filed 12–22–10; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 226 

[Regulation Z; Docket No. R–1394] 

Truth in Lending 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Interim final rule, correction. 

SUMMARY: This document corrects 

certain cross-references and 

typographical errors in the regulation, 

staff commentary to the regulation, and 

the supplementary information of the 

interim final rule published in the 

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80676 Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations 

Federal Register of October 28, 2010 (75 

FR 66554) (Docket No. R–1394). A 

paragraph describing revisions to staff 

comment 1(d)(5)–1 is also added to the 

section-by-section analysis of the 

supplementary information. The interim 

final rule amends Regulation Z, which 

implements the Truth in Lending Act, 

in order to implement provisions of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act of 2010. 

DATES: This correction is effective 

December 27, 2010. 

Compliance Date: To allow time for 

any necessary operational changes, 

compliance with the interim final rule 

as corrected is optional until April 1, 

2011. 

Comments: Comments must be 

received on or before December 27, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Jamie Z. Goodson, Attorney, or Lorna M. 

Neill, Senior Attorney, Division of 

Consumer and Community Affairs, 

Board of Governors of the Federal 

Reserve System, at (202) 452–3667 or 

452–2412; for users of 

Telecommunications Device for the Deaf 

(TDD) only, contact (202) 263–4869. 

SUPPLEMENTARY INFORMATION: The Board 

published an interim final rule in the 

Federal Register on October 28, 2010 

(75 FR 66554) (Docket No. R–1394), 

amending Regulation Z (Truth in 

Lending) to implement provisions of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act of 2010, 

Public Law 111–208, 124 Stat. 1376 (Jul. 

21, 2010). 

In the interim final rule, Docket No. 

R–1394, published on October 28, 2010, 

(75 FR 66554) make the following 

corrections: 

1. On page 66555, in the first column, 

line 24, correct ‘‘April 1, 2010’’ to read 

‘‘April 1, 2011’’. 

2. On page 66556, in the third 

column, immediately under the heading 

‘‘IV. Section-by-Section Analysis,’’ add 

the following: 

‘‘Section 226.1 Authority, Purpose, 

Coverage, Organization, Enforcement 

and Liability 

Section 226.1(d) Organization 

Section 226.1(d) describes how 

Regulation Z is organized. Section 

226.1(d)(5) describes Subpart E of 

Regulation Z, which this interim final 

rule amends by adding new § 226.42, 

‘‘Valuation Independence.’’ The interim 

final rule also revises comment 1(d)(5)– 

1 to add a new subpart 1(d)(5)–1.ii, 

stating that compliance with the interim 

final rule is mandatory on April 1, 2011, 

for open- and closed-end extensions of 

consumer credit secured by the 

consumer’s principal dwelling. The 

revised comment also states that 

§ 226.36(b), which is substantially 

similar to § 226.42(c) and (e), is removed 

effective April 1, 2011. The comment 

explains that applications for closedend extensions of credit secured by the 

consumer’s principal dwelling that are 

received by creditors before April 1, 

2011, are subject to § 226.36(b) 

regardless of the date on which the 

transaction is consummated. However, 

parties subject to § 226.36(b) may, at 

their option, choose to comply with 

§ 226.42 instead of § 226.36(b), for 

applications received before April 1, 

2011. To illustrate, the comment 

explains that an application for a 

closed-end extension of credit secured 

by the consumer’s principal dwelling 

received by a creditor on March 20, 

2011, and consummated on May 1, 

2011, is subject to § 226.36(b), but the 

creditor may choose to comply with 

§ 226.42 instead. The comment further 

explains that, for an application for 

open- or closed-end credit secured by 

the consumer’s principal dwelling that 

is received on or after April 1, 2011, the 

creditor must comply with § 226.42.’’ 

3. On page 66558, in the first column, 

line 50, correct ‘‘Section 226.42(b)(5)’’ to 

read ‘‘Section 226.42(b)(3)’’. 

3a. On page 66558, in the second 

column, line 4, correct ‘‘§ 226.42(b)(5)’’ 

to read ‘‘§ 226.42(b)(3)’’. 

4. On page 66559, in the third 

column, line 41, correct ‘‘comment 

42(c)(1)(1)–3’’ to read ‘‘comment 

42(c)(1)–3’’. 

5. On page 66570, in the first column, 

lines 1–3, remove ‘‘companies that 

publicly hold themselves out as’’. 

6. On page 66574, in the second 

column, lines 1–2, correct ‘‘on rates’’ to 

read ‘‘on information about rates’’. 

7. On page 66575, in the third 

column, line 39, correct ‘‘comment 

42(g)–6’’ to read ‘‘comment 42(g)(1)–6.’’ 

8. On page 66576, in the second 

column, line 34, correct ‘‘§ 226.42(b)(2)’’ 

to read ‘‘§ 226.42(b)(1)’’. 

9. On page 66578, in the second 

column, line 23, correct ‘‘18,749,687’’ to 

read ‘‘75,894’’. 

10. On page 66580, in the second 

column, revise the List of Subjects 

under 12 CFR Part 226 to read as 

follows: ‘‘Advertising, Consumer 

protection, Federal Reserve System, 

Mortgages, Reporting and 

recordkeeping, Truth in Lending’’. 

Authority Citation for Part 226 

[Corrected] 

11. On page 66580, in the second 

column, under the authority citation, 

correct the reference to ‘‘124 Stat. 1376, 

2188’’ to read ‘‘124 Stat. 1376, 2187’’. 

§ 226.42 [Corrected] 

12. On page 66581, in the third 

column, line 1, in § 226.42(d)(3)(i), 

correct ‘‘based the value’’ to read ‘‘based 

on the value’’. 

13. On page 66582, in the first 

column, line 29, in § 226.42(f)(2)(i) 

introductory text, correct ‘‘a creditor 

shall’’ to read ‘‘a creditor or its agents 

shall’’. 

Supplement I to Part 226 [Corrected] 

14. On page 66583, in the first 

column, line 57, in paragraph 1(d)(5)– 

1.ii, correct ‘‘(ii)’’ to read ‘‘ii.’’. 

15. On page 66583, in the first 

column, line 63, in paragraph 1(d)(5)– 

1.ii, correct ‘‘§ 226.42(b) and (e)’’ to read 

‘‘§ 226.42(c) and (e).’’ 

16. On page 66583, in the third 

column, lines 50–51, in paragraph 

42(c)(1)–3, correct ‘‘See comment 

42(b)(5)–1.’’ to read ‘‘See comment 

42(b)(3)–1.’’ 

17. On page 66584, in the first 

column, line 7, in paragraph 42(c)(1)–4, 

correct ‘‘exceed’’ to read ‘‘exceeds’’. 

18. On page 66584, in the third 

column, lines 13–14, in paragraph 

42(d)(2)(ii)–1, correct ‘‘(as defined in 

paragraph (d)(4)(ii) and comment 

42(d)(4)(ii)–1)’’ to read ‘‘(as defined in 

paragraph (d)(5)(i) and comment 

42(d)(5)(i)–1)’’. 

19. On page 66585, in the first 

column, lines 1 and 3, in paragraph 

42(d)(3)–1 (continued from previous 

page), correct ‘‘paragraph (d)(2)’’ to read 

‘‘paragraph (d)(3)’’. 

20. On page 66585, in the second 

column, lines 35–36 and line 37, in 

paragraph 42(d)(4)(ii)–1, correct 

‘‘paragraph (d)(4)(i)’’ to read ‘‘paragraph 

(d)(4)(ii)’’. 

21. On page 66585, in the second 

column, line 46, in paragraph 

42(d)(5)(i)–1, correct ‘‘paragraphs (d)(3) 

and (d)(4)(ii)’’ to read ‘‘paragraphs (d)(2) 

and (d)(4)(i)’’. 

22. On page 66587, in the first 

column, lines 22–26, in paragraph 

42(g)(1)–1, correct ‘‘Uniform Standards 

of Professional Appraisal Practice 

established by the Appraisal Standards 

Board of the Appraisal Foundation (as 

defined in 12 U.S.C. 3350(9) (USPAP)’’ 

to read ‘‘Uniform Standards of 

Professional Appraisal Practice (USPAP) 

established by the Appraisal Standards 

Board of the Appraisal Foundation (as 

defined in 12 U.S.C. 3350(9))’’. 

23. On page 66587, in the second 

column, line 31, in paragraph 42(g)(1)– 

4, add ‘‘and’’ before ‘‘other persons that 

provide ‘settlement services’ ’’. 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

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Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations 80677 

1NCUA’s geo-coding software, known within the 

agency as the ‘‘Low-Income Designation Assessment 

Tool,’’ is currently a stand-alone software program 

developed by NCUA’s Office of the Chief 

Information Officer with guidance from regional 

staff experienced in low-income designation. 

Regional staff as well as Economic Development 

Specialists currently use the tool as needed based 

on requests from credit unions. Eventually, the 

same software rules will be embedded into the 

NCUA AIRES examination software. The current 

version performs 30 different ratio calculations for 

each member based on a variety of factors and data 

to determine whether the member meets the lowincome definition. The variety of ratios is expansive 

in order to provide all of the possible options for 

members to meet the definition. Factors recognize 

the following: (1) Data sources include both 

decennial income data as well as American 

Community Survey income data; (2) different data 

is incorporated for metro vs. non-metro geographic 

areas; and (3) ratio options include comparisons of 

census tract and block group income data, to zip 

code, county, MSA, state, and national data, plus 

comparisons of county income data to CBSA, state, 

and national income data. 

Secretary under delegated authority, 

December 14, 2010. 

Robert deV. Frierson, 

Deputy Secretary of the Board. 

[FR Doc. 2010–31824 Filed 12–22–10; 8:45 am] 

BILLING CODE P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 701 

RIN 3133–AD75 

The Low-Income Definition 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule. 

SUMMARY: NCUA is amending the 

definition of ‘‘low-income members’’ to 

clarify that, in determining if a credit 

union qualifies for a low-income 

designation, the comparison of credit 

union data, whether individual or 

family income data, must be with 

statistical data for the same category. 

The amendment will clarify the 

intention of the original regulatory text 

so it is consistent with the geo-coding 

software the agency uses to make the 

low-income credit union (LICU) 

designation. 

DATES: Effective December 23, 2010 this 

rule finalizes without change, the 

interim final rule published on August 

5, 2010, 75 FR 47171 (Aug. 5, 2010). 

That interim rule was effective upon 

publication on August 5, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Regina Metz, Staff Attorney, Office of 

General Counsel, National Credit Union 

Administration, 1775 Duke Street, 

Alexandria, Virginia 22314–3428, or 

telephone: (703) 518–6540. 

SUPPLEMENTARY INFORMATION: 

Background 

The Federal Credit Union Act (Act) 

authorizes the NCUA Board (Board) to 

define ‘‘low-income members’’ so that 

credit unions with a membership 

consisting of predominantly low-income 

members can benefit from certain 

statutory relief and receive assistance 

from the Community Development 

Revolving Loan Fund. 12 U.S.C. 

1752(5), 1757a(b)(2)(A), 1757a(c)(2)(B), 

1772c–1. This authority has been 

implemented in § 701.34 of NCUA 

regulations, known as the low-income 

rule. 12 CFR 701.34. In April 2008, the 

Board proposed substantial changes to 

the rule, which had previously been 

based on measuring median household 

income, with geographic differentials 

for certain areas with higher costs of 

living. 73 FR 22836 (April 28, 2008). In 

brief, the Board proposed to, and as 

adopted in the final rule, did replace 

median household income with median 

family income or median earnings for 

individuals as better measures, more 

flexible, and in line with standards used 

by other Federal agencies. 73 FR 71909 

(Nov. 26, 2008). 

As discussed in the preamble to the 

final rule, NCUA also undertook as part 

of the regulatory changes to facilitate the 

low-income designation process by 

eliminating the requirement for credit 

unions to apply for the designation. 

NCUA is in the process of implementing 

geo-coding software to make the 

calculation automatically for credit 

unions during the examination process. 

NCUA will make the determination of 

whether a majority of an FCU’s members are 

low-income based on data it obtains during 

the examination process. This will involve 

linking member address information to 

publicly available information from the U.S. 

Census Bureau to estimate member earnings. 

Using automated, geo-coding software, 

NCUA will use member street addresses 

collected during FCU examinations to 

determine the geographic area and 

metropolitan area for each member account. 

NCUA will then use income information for 

the geographic area from the Census Bureau 

and assign estimated earnings to each 

member. 

73 FR at 71910–11. NCUA’s software 

ensures that the same categories of data 

available for member income at a 

particular credit union are compared 

with like categories of statistical data on 

income from the Census Bureau. In 

particular, individual member earnings 

information is compared to median 

individual earnings data and family 

income information is compared to 

median family income data.1

The final rule in November 2008 also 

provided credit unions, as an alternative 

to relying on NCUA’s geo-coding 

software, the option of providing actual 

income information about their 

members as a basis for qualifying as a 

LICU. Confusion has arisen regarding 

the appropriate comparison of actual 

member information and statistical data 

from the Census Bureau, prompting the 

need for this clarifying amendment. The 

confusion arises from a discussion in 

the preamble to the final rule, where the 

Board stated: 

The rule also provides an alternative basis 

for an FCU to qualify for a LICU designation. 

An FCU may be able to demonstrate the 

actual income of its members based on data 

it has, for example, from loan applications or 

surveys of its members. An FCU may qualify 

as a LICU if it can establish a majority of its 

members meet the low-income formula. For 

example, an FCU with 1,000 members may 

be able to show the actual income of 501 or 

more of its members is equal to or less than 

80% of the MFI for the metropolitan area(s) 

where they live. As a practical matter, the 

Board thinks few FCUs will need this option 

because NCUA’s approach of matching 

member residential information with Census 

Bureau income information will provide an 

estimate very close to members’ actual 

income. 

73 FR at 71911. The rule provides 

median family income or median 

individual earnings as alternatives and, 

as noted above, NCUA’s geo-coding 

software compares like categories of 

data. Unfortunately, the above-quoted 

statement in the preamble indicated 

that, as an alternative to relying on the 

NCUA’s geo-coding, a credit union 

could apply for a low-income 

designation relying on a comparison of 

actual income data for individual 

members to statistical data on median 

family income as the basis for the 

designation. This would not be a valid 

or meaningful comparison. The Board 

believes that, as a matter of logic and 

statistical reasoning, only like categories 

of data may be compared in making the 

determination that a credit union’s 

membership meets the low-income 

definition. Actual individual member 

income information should not be 

measured against median family 

income, but rather, against individual 

median earnings. 

Interim Final Rule and Comments 

In July 2010, the Board issued an 

interim final rule amending 

§ 701.34(a)(1) by clarifying that median 

family income and median earnings for 

individuals are alternative bases on 

which credit union members may 

qualify as low income. 75 FR 47171 

(Aug. 5, 2010). In addition, the interim 

final rule amended the subsection of the 

rule regarding the option for credit 

unions to submit their own information 

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