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[Federal Register Volume 78, Number 220 (Thursday, November 14, 2013)]
[Rules and Regulations]
[Pages 68343-68345]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-27300]

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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1024

RIN 3170-AA37

Homeownership Counseling Organizations Lists Interpretive Rule

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule.

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SUMMARY: This rule describes data instructions for lenders to use in 
complying with the requirement under the High-Cost Mortgage and 
Homeownership Counseling Amendments to the Truth in Lending Act 
(Regulation Z) and Homeownership Counseling Amendments to the Real 
Estate Settlement Procedures Act (RESPA Homeownership Counseling 
Amendments) Final Rule to provide a homeownership counseling list using 
data made available by the Bureau or Department of Housing and Urban 
Development (HUD).

DATES: This rule is effective January 10, 2014.

FOR FURTHER INFORMATION CONTACT: Rachel Ross, Special Assistant; Joseph 
Devlin, Counsel; Office of Regulations, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    In January 2013, pursuant to the Dodd-Frank Act, Public Law 111-
203, 124 Stat. 1375 (2010), the Bureau issued the High-Cost Mortgage 
and Homeownership Counseling Amendments to the Truth in Lending Act 
(Regulation Z) and Homeownership Counseling Amendments to the Real 
Estate Settlement Procedures Act (RESPA Homeownership Counseling 
Amendments) Final Rule (2013 HOEPA Final Rule).\1\ The 2013 HOEPA Final 
Rule implemented numerous Dodd-Frank Act requirements. Section 1450 of 
the Dodd-Frank Act amended section 5(c) of the Real Estate Settlement 
Procedures Act (RESPA) to require lenders to provide federally related 
mortgage loan applicants with a ``reasonably complete or updated list 
of homeownership counselors who are certified pursuant to section 
106(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 
1701x(e)) and located in the area of the lender.'' \2\ The RESPA 
Homeownership Counseling Amendments implements this section 1450 
amendment in Regulation X Sec.  1024.20(a).
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    \1\ 78 FR 6855 (Jan. 31, 2013).
    \2\ Section 106(e) of the Housing and Urban Development Act of 
1968, 12 U.S.C. 1701x(e), requires that homeownership counseling 
provided under programs administered by HUD can be provided only by 
organizations or individuals certified by HUD as competent to 
provide homeownership counseling. Section 106(e) also requires HUD 
to establish standards and procedures for testing and certifying 
counselors.
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    In implementing this Dodd-Frank Act requirement, Sec.  
1024.20(a)(1) requires lenders to provide the loan applicant with a 
written list of homeownership counseling organizations that provide 
relevant services in the loan applicant's location. The Bureau 
specified two compliance methods for obtaining this list: (1) using a 
tool developed and maintained by the Bureau on its Web site, and (2) 
using data made available by the Bureau or HUD, provided that the data 
is used in accordance with instructions provided with the data.\3\ The 
Bureau noted the use of the data in accordance with these instructions 
would produce a list consistent with what would have been generated if 
the tool had been used.\4\ This rule interprets Sec.  1024.20(a)(1) of 
the RESPA Homeownership Counseling Amendments, including describing 
those data instructions.
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    \3\ These two pathways are specified in Sec.  1024.20(a)(1)(i) 
and (ii), respectively.
    \4\ 78 FR 6865 (Jan. 31, 2013).
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    The Bureau's tool, as discussed in Sec.  1024.20(a)(1)(i), follows 
these data instructions.

II. List and Data Instructions

    This rule interprets the Sec.  1024.20(a)(1) requirement for 
lenders to provide a list of homeownership organizations and to obtain 
the list from data made available by the Bureau or HUD, provided the 
data is used in accordance with instructions provided with the data.\5\ 
This rule describes instructions for lenders to use in complying with 
the Sec.  1024.20(a)(1)(ii) requirement to generate a list of 
homeownership counseling organizations by using data provided by the 
Bureau or HUD.
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    \5\ RESPA and Sec.  1024.20(a)(1) refer to counseling entities 
as Homeownership Counseling Organizations. HUD refers to them as 
HUD-approved Housing Counseling Agencies. Homeownership Counseling 
Organizations as referred to in Sec.  1024.20(a)(1) and this rule 
are considered HUD-approved Housing Counseling Agencies.
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    HUD currently provides this data. HUD maintains a free and publicly 
available application programming interface (API) containing data on 
HUD-approved housing counseling agencies (HUD API). Although it appears 
on this site that a token is required to utilize this data, credentials 
are not required to access and use the data. These data instructions 
are designed to be applied with publicly available homeownership 
counselor agency data from HUD,\6\ as referenced in Sec.  
1024.20(a)(1)(ii). The Bureau will make a summary of the data 
instructions available on the Bureau's Web site, along with a link to 
the publicly available housing counseling agency data.
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    \6\ Available at: http://data.hud.gov/housing_counseling.html.
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A. Number of Homeownership Counselors To Appear on List

    Section 1024.20(a)(1) requires lenders to provide a written list of 
homeownership counseling organizations. Consistent with Sec.  
1024.20(a)(1), lenders comply with this requirement when they provide a 
list of ten HUD-approved housing counseling agencies. The tool 
maintained by the Bureau will generate a list of ten HUD-approved 
housing counseling agencies. A list generated by the lender under Sec.  
1024.20(a)(1)(ii) complies with Sec.  1024.20(a)(1) when the same 
number of counseling agencies (ten) are provided. Listing ten housing 
counseling agencies ensures fairness and equity among housing 
counseling agencies, by offering borrowers a thorough and diverse list 
of counseling options.

B. Location by Zip Code

    Section 1024.20(a)(1) requires lenders to provide a written list of 
homeownership counseling organizations in the loan applicant's 
location. As the Bureau discussed in the RESPA Homeownership Counseling 
Amendments, lenders comply with Sec.  1024.20(a)(1), when they use the

[[Page 68344]]

borrower's five-digit zip code to generate a list of the ten closest 
HUD-approved housing counseling agencies to the centroid of the zip 
code of the borrower's current address, in descending order of 
proximity to the centroid. The borrower's current zip code satisfies 
the requirement that the homeownership counseling organizations be in 
the loan applicant's location. The zip code of the borrower's current 
address is the default to be entered for list generation. Lenders, 
should they choose, may offer borrowers the option of generating the 
list from a zip code different than their home address, or from a more 
precise geographic marker such as a street address, but lenders are not 
required to offer such an option. The Bureau's tool will permit 
generating the list of HUD-approved housing counseling agencies through 
entry of zip code. A list generated by the lender pursuant to Sec.  
1024.20(a)(1)(ii) complies with Sec.  1024.20(a)(1) when the lender 
generates the list through entry of zip code or from a more precise 
geographic marker such as a street address. Lenders generating a list 
pursuant to Sec.  1024.20(a)(1)(ii) through zip code or from a more 
precise geographic marker such as a street address, will ensure that 
lists generated under this provision are obtained through similar means 
as those generated through the Bureau's tool, thus ensuring 
consistency.

C. Homeownership Counselor Contact Information

    Section 1024.20(a)(1) requires lenders to provide a written list of 
homeownership counseling organizations that provide relevant services 
in the loan applicant's location. Consistent with Sec.  1024.20(a)(1), 
lenders comply when they provide the following data fields for each 
housing counseling agency on the list to the extent that they are 
available through the HUD API: Agency name, phone number, street 
address, street address continued, city, state, zip code, Web site URL, 
email address, counseling services provided, and languages spoken. 
Providing a street address is preferable to providing a mailing 
address, as available. The tool maintained by the Bureau will provide 
these data fields to the extent that they are available through the HUD 
API. A list generated by the lender under Sec.  1024.20(a)(1)(ii) 
complies with Sec.  1024.20(a)(1) when these data fields are provided 
to the extent that they are available through the HUD API. The table 
below describes how the HUD API data fields relate to the above 
required data fields:

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  Data element required for list for
             each agency                  HUD API Field name      HUD Field definition           Example
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Agency name..........................  nme....................  Agency name............  ``Local Counseling
                                                                                          Agency''.
Phone number.........................  phone1.................  Phone number...........  ``555-555-5555''.
Street address.......................  adr1...................  Street Address.........  ``1234 Main Street''.
Street address continued.............  adr2...................  Street Address
                                                                 continued.
City.................................  city...................  City...................  ``Anytown''.
State................................  statecd................  Code for state in which  ``PA''.
                                                                 agency is located.
Zip code.............................  zipcd..................  Zip Code...............  ``12345''.
Website URL..........................  weburl.................  Agency Web Site address  ``http://www.counselor.org''.
Email address........................  email..................  Email address..........  ``counselor@counselor.org''.
Counseling services provided.........  Services...............  Types of Counseling      ``DFC,FBC,FHW,HIC,HMC,N
                                                                 Services available.      DW,PLW,PPC,PPW,RHC''
                                                                                          \7\.
Languages spoken.....................  languages..............  The languages in which   ``ENG''.
                                                                 agency provides
                                                                 services.
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    Data fields which are populated with codes that are not commonly 
understood by borrowers should be translated into their definitional 
meanings, according to the Data Dictionary,\7\ to ensure clarity. This 
will be relevant for the data fields entitled ``Counseling services 
provided'' and ``Languages spoken.''
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    \7\ A data dictionary for the Field ``Services'' can be found at 
http://data.hud.gov/Housing_Counselor/getServices, and a data 
dictionary for ``Languages'' can be found at http://data.hud.gov/Housing_Counselor/getLanguages.
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D. Accompanying Information

    Lenders comply with Sec.  1024.20(a)(1) when the following language 
is included: ``The counseling agencies on this list are approved by the 
U.S. Department of Housing and Urban Development (HUD), and they can 
offer independent advice about whether a particular set of mortgage 
loan terms is a good fit based on your objectives and circumstances, 
often at little or no cost to you. This list shows you several approved 
agencies in your area. You can find other approved counseling agencies 
at the Consumer Financial Protection Bureau's (CFPB) Web site: 
consumerfinance.gov/mortgagehelp or by calling 1-855-411-CFPB (2372). 
You can also access a list of nationwide HUD-approved counseling 
intermediaries at http://portal.hud.gov/hudportal/HUD?src=/ohc_nint.''
    Including information about where borrowers can gain additional 
information is consistent with the Bureau's preamble discussion of how 
it envisioned implementing the Sec.  1024.20(a)(1) list requirement in 
the RESPA Homeownership Counseling Amendments.\8\ Giving borrowers the 
link to HUD-approved national counseling intermediaries offers 
borrowers additional housing counseling options, as national 
intermediaries offer phone counseling and online counseling services, 
which are particularly useful to borrowers in remote areas or areas 
less-dense with counseling agencies. The Bureau's tool will generate 
lists under Sec.  1024.20(a)(1)(i) that include this text above. By 
including this information, lenders generating lists under Sec.  
1024.20(a)(1)(ii) will comply with Sec.  1024.20(a)(1). This will 
ensure that information provided under this provision is consistent 
with information accompanying lists generated by the Bureau's Web site, 
thus ensuring consistency.
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    \8\ See 78 FR 6855 (Jan. 31, 2013) (``The Bureau anticipates the 
lists generated through its tool will also include information 
enabling the consumer to access the Bureau or HUD list of 
homeownership counseling organizations, so that an applicant who 
receives the list can obtain information about additional counseling 
organizations if desired.'').
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III. Regulatory Requirements

    This rule articulates the Bureau's interpretations of the RESPA 
Homeownership Counseling Amendments. It is therefore exempt from the 
APA's notice and comment rulemaking requirements pursuant to 5 U.S.C. 
553(b).

[[Page 68345]]

    Because no notice of proposed rulemaking is required, the 
Regulatory Flexibility Act does not require an initial or final 
regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a).
    The Bureau has determined that the 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 OMB approval under the Paperwork 
Reduction Act, 44 U.S.C. 3501, et seq. The requirement for lenders to 
provide the loan applicant with a written list of homeownership 
counseling organizations in the loan applicant's location is currently 
approved by OMB and assigned the OMB control number 3170-0025. 
Generally, the collections of information contained in Regulation X are 
assigned the OMB control number 3170-0016, and the collections of 
information contained in Regulation Z are assigned the OMB control 
number 3170-0015.

    Dated: November 7, 2013.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2013-27300 Filed 11-13-13; 8:45 am]
BILLING CODE 4810-AM-P
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