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contains regulatory documents having general

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are keyed to and codified in the Code of

Federal Regulations, which is published under

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Rules and Regulations Federal Register

63293 

Vol. 79, No. 205 

Thursday, October 23, 2014 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 51 

[Doc. Number AMS–FV–12–0013] 

Onions Other Than Bermuda-GranexGrano/Creole; Bermuda-Granex-Grano 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule revises the U.S. 

Standards for Grades of Onions (Other 

Than Bermuda-Granex-Grano (BGG) and 

Creole Type) and the U.S. Standards for 

Grades of BGG Type Onions which were 

issued under the Agricultural Marketing 

Act of 1946. The Agricultural Marketing 

Service (AMS) is amending the ‘‘similar 

varietal characteristic’’ and ‘‘one type’’ 

requirements to allow mixed colors of 

onions when designated as a mixed or 

specialty pack. This revision will 

update the standards to more accurately 

represent today’s marketing practices 

and to provide the industry with greater 

flexibility. 

DATES: Effective November 24, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Dave Horner, Standardization Branch, 

Specialty Crops Inspection (SCI) 

Division, (540) 361–1128 or 1150. The 

current U.S. Standards for Grades of 

Onions (Other Than BGG and Creole 

Type) and the U.S. Standards for Grades 

of BGG Type Onions are available on 

the SCI Division Web site at 

www.ams.usda.gov/scihome. 

SUPPLEMENTARY INFORMATION: The 

changes in these two sets of standards 

will permit specified packs of mixed 

colors of onions to be certified to a U.S. 

grade. The revisions apply to the U.S. 

standards for grades for two categories 

of onions: (1) Other Than BGG and 

Creole Type and (2) BGG Type. Also, 

these revisions affect the grade 

requirements under two marketing 

orders, 7 CFR parts 958 and 959, issued 

under the Agricultural Marketing 

Agreement Act of 1937 (7 U.S.C. 601– 

674) and applicable imports. 

Executive Order 12866 and Executive 

Order 13563 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts and equity). 

Executive Order 13563 emphasizes the 

importance of quantifying both costs 

and benefits, reducing costs, 

harmonizing rules and promoting 

flexibility. This rule has been 

determined not significant for purposes 

of Executive Order 12866 and, therefore, 

has not been reviewed by the Office of 

Management and Budget. 

Executive Order 13175 

This action has been reviewed in 

accordance with the requirements of 

Executive Order 13175, Consultation 

and Coordination with Indian Tribal 

Governments. The review reveals that 

this regulation would not have 

substantial and direct effects on Tribal 

governments and would not have 

significant Tribal implications. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. It is not intended to have 

retroactive effect. There are no 

administrative procedures which must 

be exhausted prior to any judicial 

challenge to the provisions of this rule. 

Regulatory Flexibility Act and 

Paperwork Reduction Act 

Pursuant to the requirements set forth 

in the Regulatory Flexibility Act (RFA) 

(5 U.S.C. 601–612), AMS has considered 

the economic impact of these revisions 

on small entities. The purpose of the 

RFA is to fit regulatory actions to the 

scale of businesses subject to such 

actions so that small businesses will not 

be unduly or disproportionately 

burdened. Accordingly, AMS has 

prepared this final regulatory flexibility 

analysis. 

Each of the standards, except the 

section in the Other Than BGG and 

Creole Type Standards that affects the 

U.S. No. 2 grade, currently states that 

one of the requirements to be certified 

in a grade is that the onion pack 

contains ‘‘similar varietal 

characteristics.’’ The wording will be 

changed to: ‘‘Similar varietal 

characteristics, except color when 

designated as a specialty or mixed 

pack.’’ In the U.S. No. 2 grade for the 

Other Than BGG and Creole Type 

Standards, the wording will be changed 

to ‘‘One type, except when designated 

as a specialty or mixed pack.’’ The 

additional wording will permit onions 

of different colors in the same pack as 

long as the pack is appropriately 

designated as a ‘‘specialty or mixed 

pack.’’ Allowing the commingling of 

mixed colors in an onion pack, when 

designated, will facilitate the marketing 

of onions by providing the industry 

with more flexibility that reflects 

current industry practices, thereby 

encouraging additional commerce. 

A farm-level estimate of the size of the 

U.S. onion industry can be obtained 

from National Agricultural Statistics 

Service (NASS) data. Averaging NASS 

onion production for the most recent 

three years of data available (2010– 

2012) yields a U.S. production estimate 

of 73.3 million hundredweight (cwt), of 

which about 9.6 million cwt (13 

percent) are onions for processing. 

Subtracting 9.6 million for processing 

from the total 73.3 million cwt yields an 

estimate of 63.7 million cwt sold for the 

fresh market. The total 3-year average 

onion crop value is $912 million, and 

the value of onions for processing is 

$81.5 million. The difference is a 

computed estimate of $830.5 million for 

the crop value sold into the fresh 

market. Average onion acreage for the 

period 2010–2012 is 143,383. Dividing 

total crop value by acreage yields a 3- 

year average grower revenue per acre 

estimate of about $5,800. 

An estimate of the total number of 

onion farms from the 2007 Agricultural 

Census (the most recent data available 

on farm numbers) is 4,074. An onion 

farm is defined by the Census as a farm 

from which 50 percent or more of the 

value of agricultural sales are from 

onions. The Small Business 

Administration (SBA) threshold for a 

large business in farming is $750,000 in 

annual sales. With average revenue per 

acre of $5,800, 129 acres of onions 

would generate approximately $750,000 


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63294 Federal Register / Vol. 79, No. 205 / Thursday, October 23, 2014 / Rules and Regulations 

in crop value. Census data shows that 

3,679 out of a total of 4,074 farms (90 

percent) are less than 100 acres. Most 

onion farms would therefore be 

considered small businesses under the 

SBA definition, in terms of onion sales 

only (not including sales of other crops). 

There is no published data with which 

to make comparable estimates of the 

number of packers or shippers of 

onions. However, we estimate that at 

least some would be considered small 

entities under applicable SBA criteria. 

With regard to the marketing orders, 

there are approximately 30 Idaho and 

Eastern Oregon onion handlers and 

approximately 30 South Texas onion 

handlers subject to regulation under 

marketing orders 958 and 959, 

respectively. Under both marketing 

orders, the majority of these handlers 

would be considered small businesses 

under the SBA criteria. In addition to 

these domestic handlers, in 2013, there 

were approximately 460 onion 

importers subject to import regulations. 

About 80 percent of the value of 

production for U.S. onions comes from 

seven states. In declining order of 

magnitude, with three year average 

market shares ranging from 19 to 7 

percent, those states are: California, 

Washington, Oregon, Georgia, Texas, 

Nevada, and New Mexico. The 

remaining five states for which NASS 

reports annual onion production are 

Idaho, New York, Colorado, Michigan, 

and Wisconsin, whose combined crop 

value is 20 percent of total U.S. onion 

crop value. 

In considering alternatives to this 

rule, benefits of the changes 

substantially outweigh the costs. The 

only additional cost borne by packers/ 

shippers, which is expected to be 

minimal, is when ‘‘specialty or mixed 

packs’’ are designated by means of 

labeling. There are no other additional 

costs to packers/shippers or growers 

from this change, and smaller entities 

would not bear a disproportionate cost. 

The change in the standards reflects a 

shift in onion packing/shipping 

practices that is already underway. The 

additional flexibility in the revised 

standards will facilitate additional 

onion sales, to the benefit of growers, 

packers, and consumers. 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

Chapter 35), this rule would not result 

in a change to the information collection 

and recordkeeping requirements 

previously approved and would impose 

no additional reporting and 

recordkeeping burden on domestic 

producers, first handlers, and importers 

of onions. 

USDA has not identified any relevant 

Federal rules that duplicate, overlap, or 

conflict with this rule. However, there 

are marketing programs that regulate the 

handling of onions under 7 CFR parts 

958 and 959. Onions under a marketing 

order have to meet certain requirements 

set forth in the grade standards. In 

addition, onions are subject to section 

8e import requirements under the 

Agricultural Marketing Act of 1937, as 

amended (7 U.S.C. 601–674) which 

requires imported onions to meet grade, 

size and quality under the applicable 

marketing order (7 CFR part 980). 

Background 

The industry is packing mixed colors 

of onions, primarily in Idaho, Oregon, 

Washington, and Texas. In addition, 

marketing order 958 for Idaho and 

Oregon Onions, administered by the 

Idaho-Eastern Oregon Onion Committee, 

was amended November, 2011, to allow 

pearl onion packs and experimental 

shipments of mixed colors. 

Furthermore, in a May 2012 meeting 

with the USDA Marketing Order 

Administration Division, AMS was 

informed that Washington State, which 

is outside of marketing order 958, has 

packed mixed colors of larger Walla 

Walla type onions for Canada. However, 

the U.S. Onion Standards do not permit 

certifying a U.S. grade to mixed color 

packs. 

To address this issue, a rule proposing 

revisions to U.S. Standards for Grades of 

Onions (Other Than BGG and Creole 

Type) and the U.S. Standards for Grades 

of BGG Type Onions was published in 

the Federal Register on August 22, 2013 

(78 FR 52099). The public comment 

period closed on October 21, 2013. The 

one response, which came from a large 

industry trade association, showed full 

support for the revisions. 

Based on the information gathered, 

the revisions will bring the U.S. 

Standards for Grades of Onions (Other 

Than BGG and Creole Type) and the 

U.S. Standards for Grades of BGG Type 

Onions in line with current marketing 

practices and provide shippers and 

packers with more flexibility. Therefore, 

AMS will amend the similar varietal 

characteristic and one type 

requirements for: 

• Onions Other Than BGG and Creole 

Type in Sections 51.2830, 51.2831, and 

51.2832, which affects the U.S. No. 1, 

U.S. Export No. 1, and U.S. Commercial 

grades, by adding ‘‘except color when 

designated as a specialty or mixed 

pack.’’ Likewise, AMS will amend the 

one type requirement in Section 

51.2835, which affects the U.S. No. 2 

grade, by adding ‘‘except when 

designated as a specialty or mixed 

pack.’’ 

• BGG Type Onions in Sections 

51.3195 and 51.3197, which affects the 

U.S. No. 1, U.S. Combination, and U.S. 

No. 2 grades, by adding ‘‘except color 

when designated as a specialty or mixed 

pack.’’ 

In addition, AMS will correct an 

administrative error from the rule that 

inadvertently recorded ‘‘of’’ instead of 

‘‘or’’ in Section 51.2831. 

List of Subjects in 7 CFR Part 51 

Agricultural commodities, Food 

grades and standards, Fruits, Nuts, 

Reporting and recordkeeping 

requirements, Trees, Vegetables. 

For reasons set forth in the preamble, 

7 CFR part 51 is to be amended as 

follows: 

PART 51—[AMENDED] 

■ 1. The authority citation for part 51 

continues to read as follows: 

Authority: 7 U.S.C. 1621–1627. 

■ 2. In § 51.2830, paragraph (a)(1) is 

revised to read as follows: 

§ 51.2830 U.S. No. 1. 

* * * * * 

(a) * * * 

(1) Similar varietal characteristics, 

except color when designated as a 

specialty or mixed pack; 

* * * * * 

■ 3. In § 51.2831, paragraph (a)(1) is 

revised to read as follows: 

§ 51.2831 U.S. Export No. 1. 

* * * * * 

(a) * * * 

(1) Similar varietal characteristics, 

except color when designated as a 

specialty or mixed pack; 

* * * * * 

■ 4. In § 51.2832, paragraph (a)(1) is 

revised to read as follows: 

§ 51.2832 U.S. Commercial. 

* * * * * 

(a) * * * 

(1) Similar varietal characteristics, 

except color when designated as a 

specialty or mixed pack; 

* * * * * 

■ 5. In § 51.2835, paragraph (a)(1) is 

revised to read as follows: 

§ 51.2835 U.S. No. 2. 

* * * * * 

(a) * * * 

(1) One type, except when designated 

as a specialty or mixed pack; 

* * * * * 

■ 6. In § 51.3195, paragraph (a)(1) is 

revised to read as follows: 


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Federal Register / Vol. 79, No. 205 / Thursday, October 23, 2014 / Rules and Regulations 63295 

1 12 CFR 1024.38(a), (b)(4). 

2 12 CFR 1024.30 defines the scope of application 

of these provisions. Note that small servicers, as 

defined in 12 CFR 1026.41(e)(4), are exempt from 

certain provisions. 

§ 51.3195 U.S. No. 1. 

* * * * * 

(a) * * * 

(1) Similar varietal characteristics, 

except color when designated as a 

specialty or mixed pack; 

* * * * * 

■ 7. In § 51.3197, paragraph (a)(1) is 

revised to read as follows: 

§ 51.3197 U.S. No. 2. 

* * * * * 

(a) * * * 

(1) Similar varietal characteristics, 

except color when designated as a 

specialty or mixed pack; 

* * * * * 

Dated: October 17, 2014. 

Rex A. Barnes, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2014–25193 Filed 10–22–14; 8:45 am] 

BILLING CODE 3410–02–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1024 

Compliance Bulletin and Policy 

Guidance—Mortgage Servicing 

Transfers 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Compliance Bulletin and Policy 

Guidance. 

SUMMARY: The Bureau of Consumer 

Financial Protection (CFPB) is issuing a 

compliance bulletin and policy 

guidance entitled ‘‘Compliance Bulletin 

and Policy Guidance—Mortgage 

Servicing Transfers’’ in light of potential 

risks to consumers that may arise in 

connection with transfers of residential 

mortgage servicing rights. 

DATES: This bulletin is effective October 

23, 2014 and applicable beginning 

August 19, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Allison Brown, Program Manager (202) 

435–7107; Yevgeny Shrago, Attorney, 

(202) 435–7098; or Whitney Patross, 

Attorney (202) 435–7057, Office of 

Supervision Policy. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The CFPB is issuing this compliance 

bulletin and policy guidance to 

residential mortgage servicers and 

subservicers (collectively, servicers), in 

light of potential risks to consumers that 

may arise in connection with transfers 

of residential mortgage servicing rights. 

The CFPB’s concern in this area remains 

heightened due to the continuing high 

volume of servicing transfers. 

Servicers engaged in significant 

servicing transfers should expect that 

the CFPB will, in appropriate cases, 

require them to prepare and submit 

informational plans describing how they 

will be managing the related risks to 

consumers. 

The CFPB is continuing to monitor 

the mortgage servicing market and may 

engage in further rulemaking in this 

area. 

II. Description of Compliance Bulletin 

and Policy Guidance 

This document replaces CFPB 

Bulletin 2013–01 (Mortgage Servicing 

Transfers), released in February 2013, 

which also addressed servicing 

transfers. This document advises 

mortgage servicers that the CFPB will be 

carefully reviewing servicers’ 

compliance with Federal consumer 

financial laws applicable to servicing 

transfers. The revised Regulation X, 

implementing the Real Estate Settlement 

Procedures Act (RESPA) (new servicing 

rule), took effect on January 10, 2014. It 

requires servicers to, among other 

things, maintain policies and 

procedures that are reasonably designed 

to achieve the objectives of facilitating 

the transfer of information during 

mortgage servicing transfers and of 

properly evaluating loss mitigation 

applications.1 Section A of this 

document, ‘‘General Transfer-Related 

Policies and Procedures’’, provides 

examples of general transfer-related 

policies and procedures that CFPB 

examiners may consider in evaluating 

whether servicers have satisfied these 

requirements successfully. The 

examples listed in this section are not 

exhaustive and in future examinations 

CFPB examiners will consider a 

servicer’s transfer-related policies and 

procedures as a whole in determining 

whether they are reasonably designed to 

achieve these objectives. 

Section B, ‘‘Applicability of the New 

Servicing Rules to Transfers’’, answers 

certain frequently asked questions about 

how the revised Regulation X applies in 

the area of servicing transfers. This 

section also describes certain focus 

areas for CFPB examiners and explains 

how entities can minimize compliance 

risk. Section C, ‘‘Protections under 

Federal Consumer Financial Law’’, 

describes other Federal consumer 

financial laws applicable to servicing 

transfers and explains potential 

consequences if servicers are not 

fulfilling their obligations under the 

law. Section D, ‘‘Plans for Handling 

Servicing Transfers’’, informs servicers 

engaged in significant servicing 

transfers that the CFPB will, in 

appropriate cases, require them to 

prepare and submit informational plans 

describing how they will be managing 

the related risks to consumers. 

III. Compliance Bulletin and Policy 

Guidance 

A mortgage servicer, among other 

things, collects and processes loan 

payments on behalf of the owner of the 

mortgage note. Servicing transfers are 

common and may occur in several ways. 

The mortgage owner may sell the rights 

to service the loan, called the Mortgage 

Servicing Rights (MSR), separately from 

the note ownership. The owner of the 

loan or MSR may, rather than servicing 

the loan itself, hire a vendor—typically 

called a subservicer—to take on the 

servicing duties. MSR owners frequently 

sell MSR outright as an asset. Servicing 

transfers may also occur through whole 

loan servicing transfers or whole loan 

portfolio transfers, rather than through 

sales of MSR. In this document, we are 

using the term ‘‘transfer’’ broadly to 

cover transfers of servicing rights as 

well as transfers of servicing 

responsibilities through subservicing or 

whole loan servicing arrangements. 

The CFPB advises mortgage servicers 

that its examiners will be carefully 

reviewing servicers’ compliance with 

Federal consumer financial laws 

applicable to servicing transfers. These 

may include, among others, the RESPA 

and its implementing regulation, 

Regulation X, the Truth in Lending Act 

(TILA) and its implementing regulation, 

Regulation Z, the Fair Credit Reporting 

Act (FCRA) and its implementing 

regulation, Regulation V, the Fair Debt 

Collection Practices Act (FDCPA), and 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act’s prohibitions 

on unfair, deceptive, or abusive acts or 

practices (UDAAPs). 

The provisions of the new servicing 

rule and related commentary that relate 

to transfers can be found at 12 CFR 

1024.33, 12 CFR 1024.38, and 12 CFR 

1024.41.2

A. General Transfer-Related Policies 

and Procedures 

CFPB mortgage servicing 

examinations now include reviews for 

compliance with the new servicing rule. 

Among other things, the rule requires 

servicers to maintain policies and 

procedures that are reasonably designed 

to achieve the objective of facilitating 


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