Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 83311 

associated with this final rule will be 

limited to administrative costs to 

analyze applicability of the rule and 

compliance and validation testing to 

determine the presence of detectable 

modified genetic material in affected 

products. As with beet sugar, it is 

unlikely that refined sugarcane would 

contain detectable levels of modified 

genetic material. As a result, regulated 

entities may not have additional 

labeling costs due to the addition of 

‘‘sugarcane (Bt insect-resistant 

varieties)’’ to the List. 

Food manufacturers whose products 

contain summer squash and retailers 

that sell uncooked summer squash will 

see no change in costs as the 

amendment to the List would reduce the 

varieties of squash that are presumed to 

be a BE food. Food manufacturers 

whose products contain summer squash 

and retailers that sell uncooked summer 

squash are already maintaining records 

or labeling relevant products in 

accordance with the Standard. 

Food manufacturers that use summer 

squash are likely concentrated in Fruit 

and Vegetable Preserving and Specialty 

Food Manufacturing (The North 

American Industry Classification 

System (NAICS) 3114). This industry 

sector had 1,540 firms listed in the 2017 

Statistics of US Businesses. Of these, 

approximately 1,475 would be classified 

as small. Additionally, 904 firms would 

be classified as very small food 

manufacturers by the Standard and are 

therefore exempt. Food manufacturers 

already face the administrative costs 

associated with using a product on the 

List. The final rule would make it easier 

for regulated entities, who are already 

maintaining records in compliance with 

the Standard, to demonstrate that 

labeling is not required if they know 

they are not receiving BE varieties. Costs 

to small food manufacturers using 

summer squash therefore will remain 

unchanged by this proposal. 

Retailers will not see a change in the 

number of labels required as a result of 

the change in the modifier of summer 

squash or by the addition of sugarcane. 

Summer squash that meets the 

requirement for disclosure under the 

2018 BE final rule will also meet the 

requirement for disclosure under this 

amendment. The same number of labels 

are required under the two rules. 

Therefore, the cost to retailers will 

remain unchanged. Therefore, the costs 

to each of the three affected industry 

sectors would not be significant. For 

these reasons, AMS is certifying that 

this rule to add ‘‘sugarcane (Bt insectresistant varieties)’’ to the List and 

limiting the varieties of squash listed as 

BE foods to ‘‘summer, coat proteinmediated virus-resistant varieties’’ will 

not have a significant economic impact 

on a substantial number of small 

entities. 

F. Executive Order 12988 

This final rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. The final rule is not 

intended to have retroactive effect. All 

labeling claims made in conjunction 

with this regulation must be consistent 

with other applicable Federal 

requirements. There are no 

administrative procedures that must be 

exhausted prior to any judicial 

challenge to the provisions of this rule. 

G. Congressional Review Act 

Pursuant to Subtitle E of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (the Congressional 

Review Act), the Office of Information 

and Regulatory Affairs has determined 

that this action does not meet the 

criteria set forth in 5 U.S.C. 804(2). 

List of Subjects in 7 CFR Part 66 

Agricultural commodities, Food 

labeling, Reporting and recordkeeping 

requirements. 

For the reasons stated in the 

preamble, the Agricultural Marketing 

Service amends 7 CFR part 66 as set 

forth below: 

PART 66—NATIONAL 

BIOENGINEERED FOOD DISCLOSURE 

STANDARD 

■ 1. The authority citation for part 66 

continues to read as follows: 

Authority: 7 U.S.C. 1621 et seq. 

■ 2. Revise § 66.6 to read as follows: 

§ 66.6 List of bioengineered foods. 

The List of Bioengineered Foods 

consists of the following: Alfalfa, apple 

(ArcticTM varieties), canola, corn, 

cotton, eggplant (BARI Bt Begun 

varieties), papaya (ringspot virusresistant varieties), pineapple (pink 

flesh varieties), potato, salmon 

(AquAdvantage®), soybean, squash 

(summer, coat protein-mediated virusresistant varieties), sugarbeet, and 

sugarcane (Bt insect-resistant varieties). 

Erin Morris, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2023–26059 Filed 11–28–23; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Part 34 

[Docket No. OCC–2023–0012] 

RIN 1557–AF23 

FEDERAL RESERVE SYSTEM 

12 CFR Part 226 

[Docket No. R–1819] 

RIN 7100–AG19 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1026 

Appraisals for Higher-Priced Mortgage 

Loans Exemption Threshold 

AGENCY: Office of the Comptroller of the 

Currency, Treasury (OCC); Board of 

Governors of the Federal Reserve 

System (Board); and Consumer 

Financial Protection Bureau (Bureau). 

ACTION: Final rules, official 

interpretations, and commentary. 

SUMMARY: The OCC, the Board, and the 

Bureau are finalizing amendments to the 

official interpretations for their 

regulations that implement section 

129H of the Truth in Lending Act 

(TILA). Section 129H of TILA 

establishes special appraisal 

requirements for ‘‘higher-risk 

mortgages,’’ termed ‘‘higher-priced 

mortgage loans’’ or ‘‘HPMLs’’ in the 

agencies’ regulations. The OCC, the 

Board, the Bureau, the Federal Deposit 

Insurance Corporation (FDIC), the 

National Credit Union Administration 

(NCUA), and the Federal Housing 

Finance Agency (FHFA) (collectively, 

the Agencies) jointly issued final rules 

implementing these requirements, 

effective January 18, 2014. The 

Agencies’ rules exempted, among other 

loan types, transactions of $25,000 or 

less, and required that this loan amount 

be adjusted annually based on any 

annual percentage increase in the 

Consumer Price Index for Urban Wage 

Earners and Clerical Workers (CPI–W). 

If there is no annual percentage increase 

in the CPI–W, the OCC, the Board, and 

the Bureau will not adjust this 

exemption threshold from the prior 

year. Additionally, in years following a 

year in which the exemption threshold 

was not adjusted because the CPI–W 

decreased, the threshold is calculated by 

applying the annual percentage increase 

in the CPI–W to the dollar amount that 


ddrumheller on DSK120RN23PROD with RULES1
83312 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 

1Public Law 111–203, section 1471, 124 Stat. 

1376, 2185–87 (2010), codified at TILA section 

129H, 15 U.S.C. 1639h. 

2 78 FR 10368 (Feb. 13, 2013). 

3 78 FR 48548 (Aug. 8, 2013). 

4 78 FR 78520 (Dec. 26, 2013). 

5See NCUA: 12 CFR 722.3; FHFA: 12 CFR part 

1222. Although the FDIC adopted the Bureau’s 

version of the regulation, the FDIC did not issue its 

own regulation containing a cross-reference to the 

Bureau’s version. See 78 FR 10368, 10370 (Feb. 13, 

2013). 

6 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2) 

(Board); and 12 CFR 1026.35(c)(2)(ii) (Bureau). 

7 12 CFR part 34, appendix C to subpart G, 

comment 203(b)(2)–1 (OCC); 12 CFR part 226, 

Supplement I, comment 43(b)(2)–1 (Board); and 12 

CFR part 1026, Supplement I, comment 35(c)(2)(ii)– 

1 (Bureau). 

8See 12 CFR part 34, appendix C to subpart G, 

comment 203(b)(2)–1 and –2 (OCC); 12 CFR part 

226, Supplement I, comment 43(b)(2)–1 and –2 

(Board); and 12 CFR part 1026, Supplement I, 

comment 35(c)(2)(ii)–1 and –2 (Bureau). 

9See 81 FR 86250 (Nov. 30, 2016). 

10The Bureau of Labor Statistics calculates 

consumer-based indices for each month but does 

not report those indices until the middle of the 

following month. As such, the most recently 

reported indices as of June 1, 2023, were reported 

on May 10, 2023, and reflect economic conditions 

in April 2023. 

would have resulted, after rounding, if 

the decreases and any subsequent 

increases in the CPI–W had been taken 

into account. Based on the CPI–W in 

effect as of June 1, 2023, the exemption 

threshold will increase from $31,000 to 

$32,400, effective January 1, 2024. 

DATES: This final rule is effective 

January 1, 2024. 

FOR FURTHER INFORMATION CONTACT: 

OCC: MaryAnn Nash, Counsel, Chief 

Counsel’s Office, Office of the 

Comptroller of the Currency, at (202) 

649–6287. If you are deaf, hard of 

hearing, or have a speech disability, 

please dial 7–1–1 to access 

telecommunications relay services. 

Board: Lorna M. Neill, Senior 

Counsel, Division of Consumer and 

Community Affairs, Board of Governors 

of the Federal Reserve System, at (202) 

452–3667. For users of TTY–TRS, please 

call 711 from any telephone, anywhere 

in the United States. 

Bureau: Anna Boadwee and Adrien 

Fernandez, Attorney-Advisors, Office of 

Regulations, Consumer Financial 

Protection Bureau, at (202) 435–7700. If 

you require this document in an 

alternative electronic format, please 

contact CFPB_Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 

(Dodd-Frank Act) amended TILA to add 

special appraisal requirements for 

‘‘higher-risk mortgages.’’ 1 In January 

2013, the Agencies jointly issued a final 

rule implementing these requirements 

and adopted the term ‘‘higher-priced 

mortgage loan’’ (HPML) instead of 

‘‘higher-risk mortgage’’ (the January 

2013 Final Rule).2 In July 2013, the 

Agencies proposed additional 

exemptions from the January 2013 Final 

Rule.3 In December 2013, the Agencies 

issued a supplemental final rule with 

additional exemptions from the January 

2013 Final Rule (the December 2013 

Supplemental Final Rule).4 Among 

other exemptions, the Agencies adopted 

an exemption from the new HPML 

appraisal rules for transactions of 

$25,000 or less, to be adjusted annually 

for inflation. 

The OCC’s, the Board’s, and the 

Bureau’s versions of the January 2013 

Final Rule and December 2013 

Supplemental Final Rule and 

corresponding official interpretations 

are substantively identical. The FDIC, 

NCUA, and FHFA adopted the Bureau’s 

version of the regulations under the 

January 2013 Final Rule and December 

2013 Supplemental Final Rule.5

The OCC’s, the Board’s, and the 

Bureau’s regulations,6 and their 

accompanying interpretations,7 provide 

that the exemption threshold for smaller 

loans will be adjusted effective January 

1 of each year based on any annual 

percentage increase in the CPI–W that 

was in effect on the preceding June 1. 

Any increase in the threshold amount 

will be rounded to the nearest $100 

increment. For example, if the annual 

percentage increase in the CPI–W would 

result in a $950 increase in the 

threshold amount, the threshold amount 

will be increased by $1,000. However, if 

the annual percentage increase in the 

CPI–W would result in a $949 increase 

in the threshold amount, the threshold 

amount will be increased by $900. If 

there is no annual percentage increase 

in the CPI–W, the OCC, the Board, and 

the Bureau will not adjust the threshold 

amounts from the prior year.8

On November 30, 2016, the OCC, the 

Board, and the Bureau published a final 

rule in the Federal Register to 

memorialize the calculation method 

used by the OCC, the Board, and the 

Bureau each year to adjust the 

exemption threshold to ensure that the 

values for the exemption threshold keep 

pace with the CPI–W (HPML Small 

Dollar Adjustment Calculation Rule).9

The HPML Small Dollar Adjustment 

Calculation Rule memorialized the 

policy that, if there is no annual 

percentage increase in the CPI–W, the 

OCC, the Board, and the Bureau will not 

adjust the exemption threshold from the 

prior year. The HPML Small Dollar 

Adjustment Calculation Rule also 

provided that, in years following a year 

in which the exemption threshold was 

not adjusted because there was a 

decrease in the CPI–W from the 

previous year, the threshold is 

calculated by applying the annual 

percentage change in the CPI–W to the 

dollar amount that would have resulted, 

after rounding, if the decreases and any 

subsequent increases in the CPI–W had 

been taken into account. If the resulting 

amount calculated, after rounding, is 

greater than the current threshold, then 

the threshold effective January 1 the 

following year will increase 

accordingly; if the resulting amount 

calculated, after rounding, is equal to or 

less than the current threshold, then the 

threshold effective January 1 the 

following year will not change, but 

future increases will be calculated based 

on the amount that would have resulted, 

after rounding. 

II. 2024 Adjustment and Commentary 

Revision 

Effective January 1, 2024, the 

exemption threshold amount will 

increase from $31,000 to $32,400. This 

amount is based on the CPI–W in effect 

on June 1, 2023, which was reported on 

May 10, 2023 (based on April 2023 

data).10 The CPI–W is a subset of the 

CPI–U index (based on all urban 

consumers) and represents 

approximately 30 percent of the U.S. 

population. The CPI–W reported on 

May 10, 2023, reflects a 4.6 percent 

increase in the CPI–W from April 2022 

to April 2023. Accordingly, the 4.6 

percent increase in the CPI–W from 

April 2022 to April 2023 results in an 

exemption threshold amount of $32,400, 

after rounding. The OCC, the Board, and 

the Bureau are revising the 

commentaries to their respective 

regulations to add new comments as 

follows: 

• Comment 203(b)(2)–3.xi to 12 CFR 

part 34, Appendix C to Subpart G 

(OCC); 

• Comment 43(b)(2)–3.xi to 

Supplement I of 12 CFR part 226 

(Board); and 

• Comment 35(c)(2)(ii)–3.xi to 

Supplement I of 12 CFR part 1026 

(Bureau). 

These new comments state that, from 

January 1, 2024, through December 31, 

2024, the threshold amount is $32,400. 

These revisions are effective January 1, 

2024. 

III. Regulatory Analysis 

Administrative Procedure Act 

Under the Administrative Procedure 

Act, notice and opportunity for public 

comment are not required if the agency 


ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 83313 

11 5 U.S.C. 553(b)(B). 

12 5 U.S.C. 603(a), 604(a). 

13 44 U.S.C. 3506; 5 CFR part 1320. 

14 5 U.S.C. 801 et seq. 

15 5 U.S.C. 801(a)(3). 

16 5 U.S.C. 804(2). 

17Based on data as of February 28, 2023. 18 5 U.S.C. 808(2). 

finds that notice and public comment 

are impracticable, unnecessary, or 

contrary to the public interest.11 The 

amendments in this rule are technical 

and apply the method previously 

memorialized in the December 2013 

Supplemental Final Rule and the HPML 

Small Dollar Adjustment Calculation 

Rule. For these reasons, the OCC, the 

Board, and the Bureau have determined 

that publishing a notice of proposed 

rulemaking and providing opportunity 

for public comment are unnecessary. 

Therefore, the amendments are adopted 

in final form. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

does not apply to a rulemaking where a 

general notice of proposed rulemaking 

is not required.12 As noted previously, 

the OCC, the Board, and the Bureau 

have determined that it is unnecessary 

to publish a general notice of proposed 

rulemaking for this final rule. 

Accordingly, the RFA’s requirements 

relating to an initial and final regulatory 

flexibility analysis do not apply. 

Paperwork Reduction Act 

The information collections contained 

in Regulation Z which implements TILA 

are approved by OMB under Control 

number 3170–0015. The current 

approval for this control number expires 

on May 31, 2026. In accordance with the 

Paperwork Reduction Act of 1995,13 the 

OCC, the Board, and the Bureau 

reviewed this final rule. The OCC, the 

Board, and the Bureau have determined 

that this rule does not create any new 

information collections or substantially 

revise any existing collections. 

Unfunded Mandates Reform Act 

As a general matter, the Unfunded 

Mandates Reform Act of 1995 (UMRA), 

2 U.S.C. 1531 et seq., requires the 

preparation of a budgetary impact 

statement before promulgating a rule 

that includes a Federal mandate that 

may result in the expenditure by State, 

local, and tribal governments, in the 

aggregate, or by the private sector, of 

$100 million or more in any one year. 

However, the UMRA does not apply to 

final rules for which a general notice of 

proposed rulemaking was not 

published. See 2 U.S.C. 1532(a). 

Therefore, because the OCC has found 

good cause to dispense with notice and 

comment for this final rule, the OCC has 

not prepared a budgetary impact 

statement for the final rule under the 

UMRA. 

Bureau Congressional Review Act 

Statement 

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 

U.S. Senate, the U.S. House of 

Representatives, and the Comptroller 

General of the United States prior to the 

rule taking effect. The Office of 

Information and Regulatory Affairs has 

designated this rule as not a ‘‘major 

rule’’ as defined by 5 U.S.C. 804(2). 

OCC Congressional Review Act 

Statement 

For purposes of the Congressional 

Review Act, OMB makes a 

determination as to whether a final rule 

constitutes a ‘‘major’’ rule.14 If a rule is 

deemed a ‘‘major rule’’ by OMB, the 

Congressional Review Act generally 

provides that the rule may not take 

effect until at least 60 days following its 

publication.15

The Congressional Review Act defines 

a ‘‘major rule’’ as any rule that the 

Administrator of the Office of 

Information and Regulatory Affairs of 

the OMB finds has resulted in or is 

likely to result in (A) an annual effect 

on the economy of $100,000,000 or 

more; (B) a major increase in costs or 

prices for consumers, individual 

industries, Federal, State, or local 

government agencies or geographic 

regions, or (C) significant adverse effects 

on competition, employment, 

investment, productivity, innovation, or 

on the ability of United States-based 

enterprises to compete with foreignbased enterprises in domestic and 

export markets.16 The OCC currently 

supervises approximately 1,060 national 

banks, federal savings associations, trust 

companies and federal branches and 

agencies of foreign banks (collectively, 

banks).17 Based on the CPI–W in effect 

as of June 1, 2023, this final rule will 

increase the exemption threshold from 

$31,000 to $32,400, effective January 1, 

2024. The Office of Information and 

Regulatory Affairs has designated this 

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

5 U.S.C. 804(2). 

For the same reasons set forth above, 

the OCC is adopting this final rule 

without the delayed effective date 

generally prescribed under the 

Congressional Review Act. The delayed 

effective date required by the 

Congressional Review Act does not 

apply to ‘‘any rule which an agency for 

good cause finds (and incorporates the 

finding and a brief statement of reasons 

therefor in the rule issued) that notice 

and public procedure thereon are 

impracticable, unnecessary, or contrary 

to the public interest.’’ 18 In light of the 

fact that the final rule will have a de 

minimis impact, delaying the effective 

date of the final rule is unnecessary. 

As required by the Congressional 

Review Act, the OCC will submit the 

final rule and other appropriate reports 

to Congress and the Government 

Accountability Office for review. 

List of Subjects 

12 CFR Part 34 

Accounting, Banks, Banking, 

Consumer protection, Credit, Mortgages, 

National banks, Reporting and 

recordkeeping requirements, Savings 

associations, Truth-in-lending. 

12 CFR Part 226 

Advertising, Appraisal, Appraiser, 

Consumer protection, Credit, Federal 

Reserve System, Reporting and 

recordkeeping requirements, Truth in 

lending. 

12 CFR Part 1026 

Advertising, Banks, banking, 

Consumer protection, Credit, Credit 

unions, Mortgages, National banks, 

Reporting and recordkeeping 

requirements, Savings associations, 

Truth-in-lending. 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

Authority and Issuance 

For the reasons set forth in the 

preamble, the OCC amends 12 CFR part 

34 as set forth below: 

PART 34—REAL ESTATE LENDING 

AND APPRAISALS 

■ 1. The authority citation for part 34 

continues to read as follows: 

Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 

371, 1462a, 1463, 1464, 1465, 1701j–3, 

1828(o), 3331 et seq., 5101 et seq., 

5412(b)(2)(B) and 15 U.S.C. 1639h. 

■ 2. In Appendix C to Subpart G, under 

Section 34.203—Appraisals for HigherPriced Mortgage Loans, paragraph 

34.203(b)(2) is revised to read as 

follows: 

Appendix C to Subpart G—OCC 

Interpretations 

* * * * * 

Section 34.203—Appraisals for Higher-Priced 

Mortgage Loans 

* * * * * 


ddrumheller on DSK120RN23PROD with RULES1
83314 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 

Paragraph 34.203(b)(2) 

1. Threshold amount. For purposes of 

§ 34.203(b)(2), the threshold amount in effect 

during a particular period is the amount 

stated in comment 203(b)(2)–3 for that 

period. The threshold amount is adjusted 

effective January 1 of each year by any 

annual percentage increase in the Consumer 

Price Index for Urban Wage Earners and 

Clerical Workers (CPI–W) that was in effect 

on the preceding June 1. Comment 203(b)(2)– 

3 will be amended to provide the threshold 

amount for the upcoming year after the 

annual percentage change in the CPI–W that 

was in effect on June 1 becomes available. 

Any increase in the threshold amount will be 

rounded to the nearest $100 increment. For 

example, if the annual percentage increase in 

the CPI–W would result in a $950 increase 

in the threshold amount, the threshold 

amount will be increased by $1,000. 

However, if the annual percentage increase in 

the CPI–W would result in a $949 increase 

in the threshold amount, the threshold 

amount will be increased by $900. 

2. No increase in the CPI–W. If the CPI–W 

in effect on June 1 does not increase from the 

CPI–W in effect on June 1 of the previous 

year, the threshold amount effective the 

following January 1 through December 31 

will not change from the previous year. 

When this occurs, for the years that follow, 

the threshold is calculated based on the 

annual percentage change in the CPI–W 

applied to the dollar amount that would have 

resulted, after rounding, if decreases and any 

subsequent increases in the CPI–W had been 

taken into account. 

i. Net increases. If the resulting amount 

calculated, after rounding, is greater than the 

current threshold, then the threshold 

effective January 1 the following year will 

increase accordingly. 

ii. Net decreases. If the resulting amount 

calculated, after rounding, is equal to or less 

than the current threshold, then the 

threshold effective January 1 the following 

year will not change, but future increases 

will be calculated based on the amount that 

would have resulted. 

3. Threshold. For purposes of 

§ 34.203(b)(2), the threshold amount in effect 

during a particular period is the amount 

stated below for that period. 

i. From January 18, 2014, through 

December 31, 2014, the threshold amount is 

$25,000. 

ii. From January 1, 2015, through 

December 31, 2015, the threshold amount is 

$25,500. 

iii. From January 1, 2016, through 

December 31, 2016, the threshold amount is 

$25,500. 

iv. From January 1, 2017, through 

December 31, 2017, the threshold amount is 

$25,500. 

v. From January 1, 2018, through December 

31, 2018, the threshold amount is $26,000. 

vi. From January 1, 2019, through 

December 31, 2019, the threshold amount is 

$26,700. 

vii. From January 1, 2020, through 

December 31, 2020, the threshold amount is 

$27,200. 

viii. From January 1, 2021, through 

December 31, 2021, the threshold amount is 

$27,200. 

ix. From January 1, 2022, through 

December 31, 2022, the threshold amount is 

$28,500. 

x. From January 1, 2023, through December 

31, 2023, the threshold amount is $31,000. 

xi. From January 1, 2024, through 

December 31, 2024, the threshold amount is 

$32,400. 

4. Qualifying for exemption—in general. A 

transaction is exempt under § 34.203(b)(2) if 

the creditor makes an extension of credit at 

consummation that is equal to or below the 

threshold amount in effect at the time of 

consummation. 

5. Qualifying for exemption—subsequent 

changes. A transaction does not meet the 

condition for an exemption under 

§ 34.203(b)(2) merely because it is used to 

satisfy and replace an existing exempt loan 

unless the amount of the new extension of 

credit is equal to or less than the applicable 

threshold amount. For example, assume a 

closed-end loan that qualified for a 

§ 34.203(b)(2) exemption at consummation in 

year one is refinanced in year ten and that 

the new loan amount is greater than the 

threshold amount in effect in year ten. In 

these circumstances, the creditor must 

comply with all of the applicable 

requirements of § 34.203 with respect to the 

year ten transaction if the original loan is 

satisfied and replaced by the new loan unless 

another exemption from the requirements of 

§ 34.203 applies. See § 34.203(b) and (d)(7). 

* * * * * 

BOARD OF GOVERNORS OF THE 

FEDERAL RESERVE SYSTEM 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Board amends Regulation 

Z, 12 CFR part 226, as set forth below: 

PART 226—TRUTH IN LENDING 

(REGULATION Z) 

■ 3. The authority citation for part 226 

continues to read as follows: 

Authority: 12 U.S.C. 3806; 15 U.S.C. 1604, 

1637(c)(5), 1639(l), and 1639h; Pub. L. 111– 

24, section 2, 123 Stat. 1734; Pub. L. 111– 

203, 124 Stat. 1376. 

■ 4. In Supplement I to part 226, under 

Section 226.43—Appraisals for HigherRisk Mortgage Loans, paragraph 43(b)(2) 

is revised to read as follows: 

Supplement I to Part 226—Official Staff 

Interpretations 

* * * * * 

Section 226.43—Appraisals for HigherRisk Mortgage Loans 

* * * * * 

Paragraph 43(b)(2) 

1. Threshold amount. For purposes of 

§ 226.43(b)(2), the threshold amount in 

effect during a particular period is the 

amount stated in comment 43(b)(2)–3 

for that period. The threshold amount is 

adjusted effective January 1 of each year 

by any annual percentage increase in 

the Consumer Price Index for Urban 

Wage Earners and Clerical Workers 

(CPI–W) that was in effect on the 

preceding June 1. Comment 43(b)(2)–3 

will be amended to provide the 

threshold amount for the upcoming year 

after the annual percentage change in 

the CPI–W that was in effect on June 1 

becomes available. Any increase in the 

threshold amount will be rounded to the 

nearest $100 increment. For example, if 

the annual percentage increase in the 

CPI–W would result in a $950 increase 

in the threshold amount, the threshold 

amount will be increased by $1,000. 

However, if the annual percentage 

increase in the CPI–W would result in 

a $949 increase in the threshold 

amount, the threshold amount will be 

increased by $900. 

2. No increase in the CPI–W. If the 

CPI–W in effect on June 1 does not 

increase from the CPI–W in effect on 

June 1 of the previous year, the 

threshold amount effective the 

following January 1 through December 

31 will not change from the previous 

year. When this occurs, for the years 

that follow, the threshold is calculated 

based on the annual percentage change 

in the CPI–W applied to the dollar 

amount that would have resulted, after 

rounding, if decreases and any 

subsequent increases in the CPI–W had 

been taken into account. 

i. Net increases. If the resulting 

amount calculated, after rounding, is 

greater than the current threshold, then 

the threshold effective January 1 the 

following year will increase 

accordingly. 

ii. Net decreases. If the resulting 

amount calculated, after rounding, is 

equal to or less than the current 

threshold, then the threshold effective 

January 1 the following year will not 

change, but future increases will be 

calculated based on the amount that 

would have resulted. 

3. Threshold. For purposes of 

§ 226.43(b)(2), the threshold amount in 

effect during a particular period is the 

amount stated below for that period. 

i. From January 18, 2014, through 

December 31, 2014, the threshold 

amount is $25,000. 

ii. From January 1, 2015, through 

December 31, 2015, the threshold 

amount is $25,500. 

iii. From January 1, 2016, through 

December 31, 2016, the threshold 

amount is $25,500. 

iv. From January 1, 2017, through 

December 31, 2017, the threshold 

amount is $25,500. 

v. From January 1, 2018, through 

December 31, 2018, the threshold 

amount is $26,000. 


ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 83315 

vi. From January 1, 2019, through 

December 31, 2019, the threshold 

amount is $26,700. 

vii. From January 1, 2020, through 

December 31, 2020, the threshold 

amount is $27,200. 

viii. From January 1, 2021, through 

December 31, 2021, the threshold 

amount is $27,200. 

ix. From January 1, 2022, through 

December 31, 2022, the threshold 

amount is $28,500. 

x. From January 1, 2023, through 

December 31, 2023, the threshold 

amount is $31,000. 

xi. From January 1, 2024, through 

December 31, 2024, the threshold 

amount is $32,400. 

4. Qualifying for exemption—in 

general. A transaction is exempt under 

§ 226.43(b)(2) if the creditor makes an 

extension of credit at consummation 

that is equal to or below the threshold 

amount in effect at the time of 

consummation. 

5. Qualifying for exemption— 

subsequent changes. A transaction does 

not meet the condition for an exemption 

under § 226.43(b)(2) merely because it is 

used to satisfy and replace an existing 

exempt loan unless the amount of the 

new extension of credit is equal to or 

less than the applicable threshold 

amount. For example, assume a closedend loan that qualified for a 

§ 226.43(b)(2) exemption at 

consummation in year one is refinanced 

in year ten and that the new loan 

amount is greater than the threshold 

amount in effect in year ten. In these 

circumstances, the creditor must 

comply with all of the applicable 

requirements of § 226.43 with respect to 

the year ten transaction if the original 

loan is satisfied and replaced by the 

new loan unless another exemption 

from the requirements of § 226.43 

applies. See § 226.43(b) and (d)(7). 

* * * * * 

CONSUMER FINANCIAL 

PROTECTION BUREAU 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau amends 

Regulation Z, 12 CFR part 1026, as set 

forth below: 

PART 1026—TRUTH IN LENDING 

(REGULATION Z) 

■ 5. The authority citation for part 1026 

continues to read as follows: 

Authority: 12 U.S.C. 2601, 2603–2605, 

2607, 2609, 2617, 3353, 5511, 5512, 5532, 

5581; 15 U.S.C. 1601 et seq. 

■ 6. In Supplement I to part 1026, under 

Section 1026.35—Requirements for 

Higher-Priced Mortgage Loans, 

paragraph 35(c)(2)(ii) is revised to read 

as follows: 

Supplement I to Part 1026—Official 

Interpretations 

* * * * * 

Section 1026.35—Requirements for 

Higher-Priced Mortgage Loans 

* * * * * 

Paragraph 35(c)(2)(ii) 

1. Threshold amount. For purposes of 

§ 1026.35(c)(2)(ii), the threshold amount 

in effect during a particular period is the 

amount stated in comment 35(c)(2)(ii)– 

3 for that period. The threshold amount 

is adjusted effective January 1 of each 

year by any annual percentage increase 

in the Consumer Price Index for Urban 

Wage Earners and Clerical Workers 

(CPI–W) that was in effect on the 

preceding June 1. Comment 35(c)(2)(ii)– 

3 will be amended to provide the 

threshold amount for the upcoming year 

after the annual percentage change in 

the CPI–W that was in effect on June 1 

becomes available. Any increase in the 

threshold amount will be rounded to the 

nearest $100 increment. For example, if 

the annual percentage increase in the 

CPI–W would result in a $950 increase 

in the threshold amount, the threshold 

amount will be increased by $1,000. 

However, if the annual percentage 

increase in the CPI–W would result in 

a $949 increase in the threshold 

amount, the threshold amount will be 

increased by $900. 

2. No increase in the CPI–W. If the 

CPI–W in effect on June 1 does not 

increase from the CPI–W in effect on 

June 1 of the previous year, the 

threshold amount effective the 

following January 1 through December 

31 will not change from the previous 

year. When this occurs, for the years 

that follow, the threshold is calculated 

based on the annual percentage change 

in the CPI–W applied to the dollar 

amount that would have resulted, after 

rounding, if decreases and any 

subsequent increases in the CPI–W had 

been taken into account. 

i. Net increases. If the resulting 

amount calculated, after rounding, is 

greater than the current threshold, then 

the threshold effective January 1 the 

following year will increase 

accordingly. 

ii. Net decreases. If the resulting 

amount calculated, after rounding, is 

equal to or less than the current 

threshold, then the threshold effective 

January 1 the following year will not 

change, but future increases will be 

calculated based on the amount that 

would have resulted. 

3. Threshold. For purposes of 

§ 1026.35(c)(2)(ii), the threshold amount 

in effect during a particular period is the 

amount stated below for that period. 

i. From January 18, 2014, through 

December 31, 2014, the threshold 

amount is $25,000. 

ii. From January 1, 2015, through 

December 31, 2015, the threshold 

amount is $25,500. 

iii. From January 1, 2016, through 

December 31, 2016, the threshold 

amount is $25,500. 

iv. From January 1, 2017, through 

December 31, 2017, the threshold 

amount is $25,500. 

v. From January 1, 2018, through 

December 31, 2018, the threshold 

amount is $26,000. 

vi. From January 1, 2019, through 

December 31, 2019, the threshold 

amount is $26,700. 

vii. From January 1, 2020, through 

December 31, 2020, the threshold 

amount is $27,200. 

viii. From January 1, 2021, through 

December 31, 2021, the threshold 

amount is $27,200. 

ix. From January 1, 2022, through 

December 31, 2022, the threshold 

amount is $28,500. 

x. From January 1, 2023, through 

December 31, 2023, the threshold 

amount is $31,000. 

xi. From January 1, 2024, through 

December 31, 2024, the threshold 

amount is $32,400. 

4. Qualifying for exemption—in 

general. A transaction is exempt under 

§ 1026.35(c)(2)(ii) if the creditor makes 

an extension of credit at consummation 

that is equal to or below the threshold 

amount in effect at the time of 

consummation. 

5. Qualifying for exemption— 

subsequent changes. A transaction does 

not meet the condition for an exemption 

under § 1026.35(c)(2)(ii) merely because 

it is used to satisfy and replace an 

existing exempt loan unless the amount 

of the new extension of credit is equal 

to or less than the applicable threshold 

amount. For example, assume a closedend loan that qualified for a 

§ 1026.35(c)(2)(ii) exemption at 

consummation in year one is refinanced 

in year ten and that the new loan 

amount is greater than the threshold 

amount in effect in year ten. In these 

circumstances, the creditor must 

comply with all of the applicable 

requirements of § 1026.35(c) with 

respect to the year ten transaction if the 

original loan is satisfied and replaced by 

the new loan unless another exemption 

from the requirements of § 1026.35(c) 


ddrumheller on DSK120RN23PROD with RULES1
83316 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 

1The June 30th value for 2022 may differ from 

the value used in the previous year’s calculation 

because depository institutions may revise their 

deposit data to correct for inaccuracies. 

2Consistent with Board practice, the low reserve 

tranche and reserve requirement exemption 

amounts have been rounded to the nearest $0.1 

million. 

3The June 30th value for 2022 may differ from 

the value used in the previous year’s calculation 

because depository institutions may revise their 

deposit data to correct for inaccuracies. 

applies. See § 1026.35(c)(2) and 

(c)(4)(vii). 

* * * * * 

Michael J. Hsu, 

Acting Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

Secretary of the Board under delegated 

authority. 

Michele Taylor Fennell, 

Deputy Associate Secretary of the Board. 

Brian Shearer, 

Senior Advisor, Consumer Financial 

Protection Bureau. 

[FR Doc. 2023–25047 Filed 11–28–23; 8:45 am] 

BILLING CODE 4810–33–P; 6210–01–P; 4810–AM–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 204 

[Regulation D; Docket No. R–1823] 

RIN 7100–AG71 

Reserve Requirements of Depository 

Institutions 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Final rule. 

SUMMARY: The Board is amending 

Regulation D, Reserve Requirements of 

Depository Institutions, to reflect the 

annual indexing of the reserve 

requirement exemption amount and the 

low reserve tranche for 2024. The 

annual indexation of these amounts is 

required notwithstanding the Board’s 

action in March 2020 of setting all 

reserve requirement ratios to zero. The 

reserve requirement exemption amount 

for 2023 will remain $36.1 million, 

unchanged for 2024, consistent with the 

Federal Reserve Act (the ‘‘Act’’). The 

Board is amending Regulation D to set 

the amount of the low reserve tranche 

at $644.0 million (decreased from 

$691.7 million in 2023). The adjustment 

to the low reserve tranche is derived 

using a statutory formula specified in 

the Act. The annual indexation of the 

reserve requirement exemption amount 

and low reserve tranche is required by 

statute but will not affect depository 

institutions’ reserve requirements, 

which will remain zero. 

DATES: 

Effective date: December 29, 2023. 

Compliance date: The new low 

reserve tranche will apply beginning 

January 1, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Benjamin Snodgrass, Senior Counsel 

(202/263–4877), Legal Division; Kristen 

Payne, Lead Financial Institution and 

Policy Analyst (202/452–2872), Division 

of Monetary Affairs; for users of TTY/ 

TRS, please call 711 from any 

telephone, anywhere in the United 

States, or (202) 263–4869; Board of 

Governors of the Federal Reserve 

System, 20th and C Streets NW, 

Washington, DC 20551. 

SUPPLEMENTARY INFORMATION: Section 

19(b)(2) of the Act (12 U.S.C. 461(b)(2)) 

requires each depository institution to 

maintain reserves against its transaction 

accounts and nonpersonal time 

deposits, as prescribed by Board 

regulations, for the purpose of 

implementing monetary policy. The 

Board’s actions with respect to this 

provision are discussed below. 

I. Reserve Requirements 

Section 19(b) of the Act authorizes 

different ranges of reserve requirement 

ratios depending on the amount of 

transaction account balances at a 

depository institution. Section 

19(b)(11)(A) of the Act (12 U.S.C. 

461(b)(11)(A)) provides that a zero 

percent reserve requirement ratio shall 

apply at each depository institution to 

total reservable liabilities that do not 

exceed a certain amount, known as the 

reserve requirement exemption amount. 

Section 19(b)(11)(B) provides that, 

before December 31 of each year, the 

Board shall issue a regulation adjusting 

the reserve requirement exemption 

amount for the next calendar year if 

total reservable liabilities held at all 

depository institutions increase from 

one year to the next. The Act requires 

the percentage increase in the reserve 

requirement exemption amount to be 80 

percent of the percentage increase in 

total reservable liabilities of all 

depository institutions over the one-year 

period that ends on the June 30 prior to 

the adjustment. No adjustment is made 

to the reserve requirement exemption 

amount if total reservable liabilities held 

at all depository institutions should 

decrease during the applicable time 

period. 

Total reservable liabilities of all 

depository institutions decreased by 8.6 

percent, from $20,841 billion to $19,057 

billion, between June 30, 2022, and June 

30, 2023.1 Accordingly, the reserve 

requirement exemption amount for 2024 

will remain at $36.1 million, unchanged 

from its level in 2023.2

Pursuant to Section 19(b)(2) of the Act 

(12 U.S.C. 461(b)(2)), transaction 

account balances maintained at each 

depository institution over the reserve 

requirement exemption amount and up 

to a certain amount, known as the low 

reserve tranche, may be subject to a 

reserve requirement ratio of not more 

than 3 percent (and which may be zero). 

Transaction account balances over the 

low reserve tranche may be subject to a 

reserve requirement ratio of not more 

than 14 percent (and which may be 

zero). Section 19(b)(2) also provides 

that, before December 31 of each year, 

the Board shall issue a regulation 

adjusting the low reserve tranche for the 

next calendar year. The Act requires the 

adjustment in the low reserve tranche to 

be 80 percent of the percentage increase 

or decrease in total transaction accounts 

of all depository institutions over the 

one-year period that ends on the June 30 

prior to the adjustment. 

Net transaction accounts of all 

depository institutions decreased 8.6 

percent, from $17,549 billion to $16,037 

billion, between June 30, 2022, and June 

30, 2023.3 Accordingly, the Board is 

amending Regulation D to set the low 

reserve tranche for net transaction 

accounts for 2024 at $644.0 million, a 

decrease of $47.7 million from 2023. 

The new low reserve tranche will be 

effective for all depository institutions 

beginning January 1, 2024. 

Effective March 26, 2020, the Board 

reduced reserve requirement ratios on 

all net transaction accounts to zero 

percent, eliminating reserve 

requirements for all depository 

institutions. The annual indexation of 

the reserve requirement exemption 

amount and the low reserve tranche for 

2024 is required by statute but will not 

affect depository institutions’ reserve 

requirements, which will remain zero. 

II. Regulatory Analysis 

Administrative Procedure Act 

The provisions of 5 U.S.C. 553(b) 

relating to notice of proposed 

rulemaking have not been followed in 

connection with the adoption of these 

amendments. The amendments involve 

expected, ministerial adjustments 

prescribed by statute and by the Board’s 

policy concerning reporting practices. 

The adjustments in the reserve 

requirement exemption amount and the 

low reserve tranche serve to reduce 

regulatory burdens on depository 

institutions. Accordingly, the Board 

finds good cause for determining, and so 


ddrumheller on DSK120RN23PROD with RULES1