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[Federal Register Volume 60, Number 86 (Thursday, May 4, 1995)]
[Rules and Regulations]
[Pages 22223-22225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10475]

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FEDERAL RESERVE SYSTEM

12 CFR Part 203

[Regulation C; Docket No. R-0848]

Home Mortgage Disclosure

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board is publishing a final rule to amend Regulation C 
(Home Mortgage Disclosure) and the instructions that financial 
institutions [[Page 22224]] must use to comply with the annual 
reporting requirements under the regulation. The amendments conform 
Regulation C to reflect revisions adopted by the Board, the Office of 
the Comptroller of the Currency, the Federal Deposit Insurance 
Corporation, and the Office of Thrift Supervision to their regulations 
implementing the Community Reinvestment Act (CRA). Under the joint CRA 
rule (published elsewhere in today's Federal Register), banks or 
savings associations that report data about their home mortgage lending 
pursuant to the Home Mortgage Disclosure Act (HMDA)--and that have 
assets of $250 million or more, or that are subsidiaries of a holding 
company with total banking and thrift assets of $1 billion or more--
will collect and report geographic information on loans and loan 
applications relating to property located outside the Metropolitan 
Statistical Areas (MSAs) in which the institution has a home or branch 
office, or outside any MSA. Currently, geographic identification is 
required only within MSAs where these lenders have a home or branch 
office. Data will be collected and reported in accordance with the 
instructions in Regulation C. The agencies believe that these data will 
provide geographic detail on home mortgage lending that will facilitate 
more complete CRA assessments for institutions that do not qualify as 
small banks or thrifts.

DATES: This final rule is effective May 1, 1995. Compliance is 
mandatory for loan and application data collected beginning January 1, 
1996.

FOR FURTHER INFORMATION CONTACT: Jane Jensen Gell or W. Kurt 
Schumacher, Staff Attorneys, Division of Consumer and Community 
Affairs, Board of Governors of the Federal Reserve System, Washington, 
DC 20551, at (202) 452-2412 or (202) 452-3667. For the hearing impaired 
only, contact Dorothea Thompson, Telecommunications Device for the Deaf 
(TDD), at (202) 452-3544.

SUPPLEMENTARY INFORMATION:

I. Background

    The Board's Regulation C (12 CFR Part 203) implements the Home 
Mortgage Disclosure Act of 1975 (HMDA) (12 U.S.C. 2801 et seq). HMDA 
requires most mortgage lenders located in metropolitan areas to collect 
data about their housing-related lending activity. Annually, lenders 
must report that data to their federal supervisory agencies and 
disclose the data to the public. The reports and disclosures cover loan 
originations, applications that do not result in originations (for 
example, applications that are denied or withdrawn), and loan 
purchases. Information reported includes the location of the property 
to which the loan or application relates; the race or national origin, 
gender, and gross annual income of the borrower or applicant; and the 
type of purchaser for loans sold in the secondary market.

II. Summary of Amendment

    In October 1994 (59 FR 51232, October 7, 1994), the federal 
financial regulatory agencies proposed amendments to their CRA 
regulations requiring banks or savings associations that report data 
about their home mortgage lending pursuant to HMDA--and that have 
assets of $250 million or more, or that are subsidiaries of a holding 
company with total banking and thrift assets of $250 million or more--
to collect and report geographic information on loans and applications 
relating to property located in metropolitan areas whether or not the 
institution has a home or branch office there. They also would report 
geographic information for property located outside any MSA. (This 
proposal did not affect the current exemption in Sec. 203.3 of 
Regulation C for banks and savings associations; institutions whose 
assets are $10 million or less remain exempt.) Currently, lenders have 
the option of collecting this information but are not required to do 
so. The agencies believed that these data would provide geographic 
detail on home mortgage lending that would facilitate more complete CRA 
assessments for institutions that do not qualify as small banks or 
thrifts.
    Commenters were divided on the proposal. Several commenters 
expressed concern about the administrative burden and costs of 
complying with the expanded reporting requirements. Many of those 
commenters asserted that comprehensive, accurate geographic information 
often is difficult to obtain. Other commenters indicated that the 
regulatory burden of the expanded reporting requirements would not be 
significant and noted that the additional data would facilitate a more 
precise and quantifiable CRA assessment process. Several commenters 
believed that it would be difficult to comply with the proposed 
amendment by July 1995 and that half-year data would be of limited 
usefulness. These commenters suggested that expanded data collection 
requirements should go into effect on January 1, 1996. A number of 
commenters addressed the reporting exemption for small banks, with some 
suggesting that assets should be measured at the level of the financial 
institution, not the bank holding company.
    The Board believes that the expanded reporting requirements will 
provide information about lenders' overall mortgage lending activity 
that will assist in developing a more accurate CRA assessment. The 
final amendments address concerns expressed by commenters. As required 
by agency regulations implementing CRA, bank and savings associations 
that are subsidiaries of a holding company with total banking and 
thrift assets of $1 billion or more are covered by the reporting rules; 
the proposal would have covered such subsidiaries of a holding company 
with total assets of $250 million or more. Institutions must collect 
these data if the bank or savings association had assets of $250 
million or more (or are subsidiaries of a holding company with total 
banking and thrift assets of $1 billion or more) for the prior two 
consecutive years (as of December 31). The data collection requirements 
go into effect for calendar year 1996, with institutions required to 
report the data in 1997.
    The Board believes that the benefits of this additional information 
outweigh any additional compliance burdens. Based on the comments 
received and further analysis, the Board is adopting final amendments 
to Regulation C. Set forth below is a discussion of the final rule.
Section 203.4--Compilation of Loan Data

Paragraph (e)--Data Reporting Under CRA
    The final rule adds a new paragraph to implement revisions to the 
agencies' CRA regulations. Under the joint CRA rule, banks or savings 
associations that report data about their home mortgage lending 
pursuant to HMDA--and have assets of $250 million or more, or are 
subsidiaries of a holding company with total banking and thrift assets 
of $1 billion or more--will collect and report geographic information 
for all loans and applications, not just for loans and applications 
relating to property in MSAs where the institution has a home or branch 
office. The requirement also applies to property located outside any 
MSA. The agencies believe that incorporating these reporting 
requirements in Regulation C will facilitate compliance for lenders. 
[[Page 22225]] 

Appendix A--Form and Instructions for Completion of HMDA Loan/
Application Register

V. Instructions for Completion of Loan/Application Register
C. Property Location
    The Board is adding a new paragraph to conform Regulation C to the 
CRA reporting requirements for banks and savings associations with 
assets of $250 million or more and banks and savings associations that 
are subsidiaries of a holding company with total banking and thrift 
assets of $1 billion or more.

III. Regulatory Flexibility Analysis

    The Board's Office of the Secretary has prepared an economic impact 
analysis of the amendments to Regulation C. A copy of the analysis may 
be obtained from Publications Services, Board of Governors of the 
Federal Reserve System, Washington, D.C. 20551, or by telephone at 
(202) 452-3245.

IV. Paperwork Reduction Act

    In accordance with section 3507 of the Paperwork Reduction Act of 
1980 (44 U.S.C. Ch. 35; 5 CFR 1320.13), the amended information 
collection has been reviewed by the Board under the authority delegated 
to the Board by the Office of Management and Budget after consideration 
of comments received during the public comment period.
    The collection of information in this rule is in 12 CFR 203.4. This 
additional information will provide geographic detail on home mortgage 
lending that will facilitate more complete CRA assessments for 
institutions that do not qualify as small banks or thrifts.
    The estimated annual burden per respondent varies from 10 to 10,000 
hours, depending on individual circumstances, with an estimated average 
of 200 hours. The revision is expected to affect about 5 percent of the 
loans reported by large state members banks, adding approximately 5 
minutes, on average, to the time required to complete the report. There 
will be an estimated 507 state member bank reporters, averaging 202 
hours and an estimated 84 mortgage banking subsidiaries, averaging 160 
hours.

List of Subjects in 12 CFR Part 203

    Banks, banking, Consumer protection, Federal Reserve System, 
Mortgages, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Board amends 12 CFR 
part 203 to read as set forth below:

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. Section 203.4 is amended by adding a new paragraph (e) to read 
as follows:

Sec. 203.4  Compilation of loan data.

* * * * *
    (e) Data reporting under CRA for banks and savings associations 
with total assets of $250 million or more and banks and savings 
associations that are subsidiaries of a holding company whose total 
banking and thrift assets are $1 billion or more. As required by agency 
regulations that implement the Community Reinvestment Act, banks and 
savings associations that had total assets of $250 million or more (or 
are subsidiaries of a holding company with total banking and thrift 
assets of $1 billion or more) as of December 31 for each of the 
immediately preceding two years, shall also collect the location of 
property located outside the MSAs in which the institution has a home 
or branch office, or outside any MSAs.
    3. Appendix A to Part 203 is amended by revising the introductory 
text of paragraph V.C. and by adding a new paragraph V.C.7. to read as 
follows:

Appendix A to Part 203--Form and Instructions for Completion of HMDA 
Loan/Application Register

* * * * *

V. * * *

C. Property Location
    In these columns enter the applicable codes for the MSA, state, 
county, and census tract for the property to which a loan relates. 
For home purchase loans secured by one dwelling, but made for the 
purpose of purchasing another dwelling, report the property location 
for the property in which the security interest is to be taken. If 
the home purchase loan is secured by more than one property, report 
the location data for the property being purchased. (See paragraphs 
5., 6., and 7. of paragraph V.C. of this appendix for treatment of 
loans on property outside the MSAs in which you have offices.)
* * * * *

7. Data Reporting Under CRA for Banks and Savings Associations With 
Total Assets of $250 Million or More and Banks and Savings 
Associations That Are Subsidiaries of a Holding Company Whose Total 
Banking and Thrift Assets Are $1 Billion or More

    If you are a bank or savings association with total assets of 
$250 million or more as of December 31 for each of the immediately 
preceding two years, you must also enter the location of property 
located outside the MSAs in which you have a home or branch office, 
or outside any MSA. You must also enter this information if you are 
a bank or savings association that is a subsidiary of a holding 
company with total banking and thrift assets of $1 billion or more 
as of December 31 for each of the immediately preceding two years.
* * * * *
    By order of the Board of Governors of the Federal Reserve 
System, April 24, 1995.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 95-10475 Filed 5-3-95; 8:45 am]
BILLING CODE 6210-01-P
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