6326 Federal Register / Vol. 70, No. 24 / Monday, February 7, 2005 / Rules and Regulations 

Also, a 60-day comment period was 

provided for in the proposed rule, and 

no comments were received from the 

California olive industry.

List of Subjects in 7 CFR Part 932 

Marketing agreements, Olives, 

Reporting and recordkeeping 

requirements.

■ For the reasons set forth in the 

preamble, 7 CFR part 932 is amended as 

follows:

PART 932—OLIVES GROWN IN 

CALIFORNIA

■ 1. The authority citation for 7 CFR part 

932 continues to read as follows:

Authority: 7 U.S.C. 601–674.

■ 2. Section 932.121 is revised to read as 

follows:

§ 932.121 Producer districts. 

Pursuant to the authority in 

§ 932.35(k), commencing with the term 

of office beginning June 1, 2005, district 

means any of the following geographical 

areas of the State of California: 

(a) District 1 shall include the 

counties of Alpine, Tuolumne, 

Stanislaus, Santa Clara, Santa Cruz, and 

all counties north thereof. 

(b) District 2 shall include the 

counties of Mono, Mariposa, Merced, 

San Benito, Monterey and all counties 

south thereof.

■ 3. Section 932.125 is revised to read as 

follows:

§ 932.125 Producer representation on the 

committee. 

Pursuant to the authority in §§ 932.25 

and 932.35(k), commencing with the 

term of office beginning June 1, 2005, 

representation shall be apportioned as 

follows: 

(a) District 1 shall be represented by 

three producer members and alternates. 

(b) District 2 shall be represented by 

five producer members and alternates.

Dated: February 1, 2005. 

Kenneth C. Clayton, 

Acting Administrator, Agricultural Marketing 

Service.

[FR Doc. 05–2216 Filed 2–4–05; 8:45 am] 

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service 

7 CFR Part 989 

[Docket No. FV05–989–1 FR] 

Raisins Produced From Grapes Grown 

in California; Increased Assessment 

Rate

AGENCY: Agricultural Marketing Service, 

USDA.

ACTION: Final rule.

SUMMARY: This rule increases the 

assessment rate established for the 

Raisin Administrative Committee 

(Committee) for the 2004–05 and 

subsequent crop years from $8.00 to 

$11.00 per ton of free tonnage raisins 

acquired by handlers, and reserve 

tonnage raisins released or sold to 

handlers for use in free tonnage outlets. 

The Committee locally administers the 

Federal marketing order which regulates 

the handling of raisins produced from 

grapes grown in California (order). 

Authorization to assess raisin handlers 

enables the Committee to incur 

expenses that are reasonable and 

necessary to administer the program. 

The crop year runs from August 1 

through July 31. The 2004–05 crop is 

smaller than normal, and no volume 

regulation will be implemented this 

year. As a result, some expenses funded 

by handler assessments will increase. 

The $8.00 per ton assessment rate will 

not generate enough revenue to cover 

expenses. The $11.00 per ton 

assessment will remain in effect 

indefinitely unless modified, 

suspended, or terminated.

EFFECTIVE DATE: February 8, 2005.

FOR FURTHER INFORMATION CONTACT:

Martin Engeler, Assistant Regional 

Manager, California Marketing Field 

Office, Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 2202 Monterey Street, 

Suite 102B, Fresno, California 93721; 

Telephone: (559) 487–5901; Fax: (559) 

487–5906; or George Kelhart, Technical 

Advisor, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., STOP 

0237, Washington, DC 20250–0237; 

Telephone: (202) 720–2491; Fax: (202) 

720–8938. 

Small businesses may request 

information on complying with this 

regulation by contacting Jay Guerber, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue, SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720–

2491, Fax: (202) 720–8938, or E-mail: 

Jay.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION: This final 

rule is issued under Marketing 

Agreement and Order No. 989 (7 CFR 

part 989), both as amended, regulating 

the handling of raisins produced from 

grapes grown in California, hereinafter 

referred to as the ‘‘order.’’ The order is 

effective under the Agricultural 

Marketing Agreement Act of 1937, as 

amended (7 U.S.C. 601–674), hereinafter 

referred to as the ‘‘Act.’’

The Department of Agriculture 

(USDA) is issuing this rule in 

conformance with Executive Order 

12866. 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. Under the marketing order now 

in effect, California raisin handlers are 

subject to assessments. Funds to 

administer the order are derived from 

such assessments. It is intended that the 

assessment rate increased herein will be 

applicable to all assessable raisins 

beginning on August 1, 2004, and 

continue until amended, suspended, or 

terminated. This rule will not preempt 

any State or local laws, regulations, or 

policies, unless they present an 

irreconcilable conflict with this rule. 

The Act provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

section 608c(15)(A) of the Act, any 

handler subject to an order may file 

with USDA a petition stating that the 

order, any provision of the order, or any 

obligation imposed in connection with 

the order is not in accordance with law 

and request a modification of the order 

or to be exempted therefrom. Such 

handler is afforded the opportunity for 

a hearing on the petition. After the 

hearing USDA would rule on the 

petition. The Act provides that the 

district court of the United States in any 

district in which the handler is an 

inhabitant, or has his or her principal 

place of business, has jurisdiction to 

review USDA’s ruling on the petition, 

provided an action is filed not later than 

20 days after the date of the entry of the 

ruling. 

This final rule increases the 

assessment rate established under the 

order for the 2004–05 and subsequent 

crop years from $8.00 to $11.00 per ton 

of free tonnage raisins acquired by 

handlers, and reserve tonnage raisins 

released or sold to handlers for use in 

free tonnage outlets. Authorization to 

assess raisin handlers enables the 

Committee to incur expenses that are 

reasonable and necessary to administer 

the program. The 2004–05 crop is 

Federal Register / Vol. 70, No. 24 / Monday, February 7, 2005 / Rules and Regulations 6327

smaller than normal, and no volume 

regulation will be implemented this 

year. As a result, some expenses funded 

by handler assessments will increase. 

The $8.00 per ton assessment rate will 

not generate enough revenue to cover 

expenses. This action was 

recommended by the Committee at a 

meeting on October 5, 2004.

Sections 989.79 and 989.80, 

respectively, of the order provide 

authority for the Committee, with the 

approval of USDA, to formulate an 

annual budget of expenses and collect 

assessments from handlers to administer 

the program. The members of the 

Committee are producers and handlers 

of California raisins. They are familiar 

with the Committee’s needs and with 

the costs of goods and services in their 

local area and are thus in a position to 

formulate an appropriate budget and 

assessment rate. The assessment rate is 

formulated and discussed in a public 

meeting. Thus, all directly affected 

persons have an opportunity to 

participate and provide input. 

Section 989.79 also provides authority 

for the Committee to formulate an 

annual budget of expenses likely to be 

incurred during the crop year in 

connection with reserve raisins held for 

the account of the Committee. A certain 

percentage of each year’s raisin crop 

may be held in a reserve pool during 

years when volume regulation is 

implemented to help stabilize raisin 

supplies and prices. The remaining 

‘‘free’’ percentage may be sold by 

handlers to any market. Reserve raisins 

are disposed of through various 

programs authorized under the order. 

Reserve pool expenses are deducted 

from proceeds obtained from the sale of 

reserve raisins. Net proceeds are 

returned to the pool’s equity holders, 

primarily producers. 

When volume regulation is in effect, 

an administrative budget funded by 

handler assessments is developed, and a 

reserve pool budget funded by the 

current year’s reserve pool is developed. 

Committee costs are apportioned 

between the two revenue sources. When 

volume regulation is not implemented, 

the Committee develops an 

administrative budget funded solely 

from handler assessments. 

When the Committee met on August 

12, 2004, it recommended two budget 

scenarios for the 2004–2005 crop year to 

accommodate both situations, because it 

was not known at that time if volume 

regulation would be implemented. At 

that time, it appeared the crop may be 

short, but the initial crop estimate 

would not be available until a later date. 

The first budget scenario 

recommended was premised on the 

assumption that volume regulation 

would be implemented. Under this 

scenario, the Committee recommended 

an administrative budget of expenses 

totaling $2,200,000 and a reserve pool 

budget of $2,839,225. The assessment 

rate would remain unchanged at $8.00 

per ton. This assessment rate applied to 

estimated acquisitions of raisins by 

handlers of 275,000 tons would provide 

adequate revenue to fund the 

administrative budget. 

The second budget scenario 

recommended was based on the premise 

that volume regulation would not be 

implemented for the 2004–05 season. 

Under this scenario, various expenses 

typically split between the reserve pool 

budget and the administrative budget 

would be funded by the administrative 

budget. In addition, some expense 

categories would be eliminated, some 

reduced, and another would be 

allocated to the existing 2003–04 reserve 

pool budget. The administrative budget 

would increase to $3,025,000, thus 

necessitating an increase in the 

assessment rate to $11.00 per ton. 

The Committee met on October 5, 

2004, and determined that no volume 

regulation for the 2004–05 crop year 

was warranted because of a short crop. 

The crop estimate for Natural (sundried) Seedless raisins, the major raisin 

variety produced, was 199,344 tons. If 

realized, this would be the smallest crop 

in over 20 years. Production of other 

varietal types was also estimated to be 

relatively low. The lack of volume 

regulation triggered implementation of 

the Committee’s recommendation for an 

administrative budget of $3,025,000 and 

an increased assessment rate from $8.00 

per ton to $11.00 per ton. 

In developing this budget, the 

Committee reviewed and identified 

those expenses that were considered 

reasonable and necessary to continue 

operation of the raisin marketing order 

program. Several costs normally 

associated with administering a reserve 

pool were eliminated, such as insurance 

coverage ($400,000), costs for repairing 

reserve storage bins ($300,000), raisin 

hauling costs ($65,000), auditing fees 

($20,000), and bank charges ($20,000). 

Other costs usually split between the 

administrative and reserve pool budgets 

were also to be eliminated, such as 

production of industry brochures 

($20,000) and research and 

communication activities ($70,000). It 

was determined that these activities, 

while desirable, could be eliminated 

without adversely impacting Committee 

operations. 

Other expenses traditionally split 

between the reserve and administrative 

budgets were reduced. For example, 

total compliance activity costs budgeted 

at $500,000 ($250,000 allocated to the 

reserve budget and $250,000 allocated 

to the administrative budget) were 

reduced to $320,000, to be funded from 

the administrative budget. Purchase of 

equipment was also reduced, from a 

combined amount of $50,000, to 

$25,000 funded from the administrative 

budget.

Other costs usually split between the 

reserve pool and administrative budgets 

that will be funded by the 

administrative budget include general 

overhead costs such as salaries, taxes, 

retirement and other benefits, insurance, 

rent, office supplies, and Committee 

travel. These costs remain the same 

regardless of whether there is a reserve 

pool, as they are necessary to continue 

administration of the program. Finally, 

$836,000 in costs associated with 

administering export programs will be 

funded by the existing 2003–04 reserve 

pool budget, and $536,000 will be 

funded under the administrative budget 

for 2004–05. 

A direct comparison of expenses 

between the recommended 2004–05 

budget and the 2003–04 budget is 

difficult because the 2004–05 budget is 

only administrative, whereas in 2003–

04 there was an administrative and a 

reserve pool budget. In total, the 2004–

05 recommended administrative budget 

of $3,025,000 compares to the 2003–04 

administrative budget of $2,000,000. 

However, the $3,025,000 administrative 

budget is $1,609,800 less than the 

combined 2003–04 administrative and 

reserve pool budgets of $4,634,800. 

Major expense categories include 

$1,000,000 for salaries, $536,000 for 

export program activities 

(administrative budget only), $320,000 

for compliance activities, $150,000 for 

group health insurance, $110,000 for 

rent, $120,000 for Committee member 

and staff travel, and $110,000 for 

computer software and programming. 

A continuous assessment rate of $8.00 

per ton has been in effect since the 

2002–03 crop year. For the 2004–05 

crop year, the Committee recommended 

increasing the assessment rate to $11.00 

per ton of assessable raisins to cover 

recommended administrative 

expenditures of $3,025,000. The 

recommended $11.00 per ton 

assessment rate was derived by dividing 

the $3,025,000 in anticipated expenses 

by an estimated 275,000 tons of 

assessable raisins. Sufficient income 

should be generated at the higher 

assessment rate for the Committee to 

meet its anticipated expenses. Pursuant 

to § 989.81(a) of the order, any 

unexpended assessment funds from the 

6328 Federal Register / Vol. 70, No. 24 / Monday, February 7, 2005 / Rules and Regulations 

crop year must be credited or refunded 

to the handlers from whom collected. 

The assessment rate established in 

this rule will continue in effect 

indefinitely unless modified, 

suspended, or terminated by USDA 

upon recommendation and other 

information submitted by the 

Committee or other available 

information. 

Although this assessment rate will be 

in effect for an indefinite period, the 

Committee will continue to meet prior 

to or during each crop year to 

recommend a budget of expenses and 

consider recommendations for 

modification of the assessment rate. The 

dates and times of Committee meetings 

are available from the Committee or 

USDA. Committee meetings are open to 

the public and interested persons may 

express their views at these meetings. 

USDA will evaluate Committee 

recommendations and other available 

information to determine whether 

modification of the assessment rate is 

needed. Further rulemaking will be 

undertaken as necessary. The 

Committee’s 2004–05 budget and those 

for subsequent crop years will be 

reviewed and, as appropriate, approved 

by USDA. 

Final Regulatory Flexibility Analysis 

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (RFA), the 

Agricultural Marketing Service (AMS) 

has considered the economic impact of 

this action on small entities. 

Accordingly, AMS has prepared this 

final regulatory flexibility analysis. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

business subject to such actions in order 

that small businesses will not be unduly 

or disproportionately burdened. 

Marketing orders issued pursuant to the 

Act, and rules issued thereunder, are 

unique in that they are brought about 

through group action of essentially 

small entities acting on their own 

behalf. Thus, both statutes have small 

entity orientation and compatibility. 

There are approximately 20 handlers 

of California raisins who are subject to 

regulation under the order and 

approximately 4,500 raisin producers in 

the regulated area. Small agricultural 

firms are defined by the Small Business 

Administration (13 CFR 121.201) as 

those having annual receipts of less that 

$5,000,000, and small agricultural 

producers are defined as those having 

annual receipts of less than $750,000. 

Thirteen of the 20 handlers subject to 

regulation have annual sales estimated 

to be at least $5,000,000, and the 

remaining 7 handlers have sales less 

than $5,000,000. No more than 7 

handlers, and a majority of producers, of 

California raisins may be classified as 

small entities. 

This rule increases the assessment 

rate established for the Committee and 

collected from handlers for the 2004–05 

and subsequent crop years from $8.00 to 

$11.00 per ton of assessable raisins 

acquired by handlers. The 2004–05 crop 

is estimated to be smaller than normal, 

and as a result, the Committee 

determined that volume regulation for 

the season was not warranted.

When volume regulation is in effect, 

the Committee establishes two budgets; 

one for administrative expenses funded 

by handler assessments, and one for 

expenses incurred in connection with a 

reserve pool. Many of the Committee 

costs are split between the reserve pool 

budget and the administrative budget. 

When no volume regulation is in 

effect during a crop year, there is no 

reserve pool budget for that crop year. 

However, the Committee continues to 

incur fixed costs associated with 

administering the marketing order 

program. Therefore, the Committee 

reviewed and identified the expenses 

that would be reasonable and necessary 

to continue program operations without 

a reserve pool in effect during the 2004–

05 crop year. Operating expenses 

typically split between the 

administrative and reserve pool budgets 

were allocated to the administrative 

budget, some expenses were reduced, 

some expenses were eliminated, and 

some export program activity expenses 

were allocated to the existing 2003–04 

reserve pool budget. 

The resulting administrative budget 

recommended includes expenses 

totaling $3,025,000 for the 2004–05 crop 

year. While this is an increase from the 

2003–04 administrative budget of 

$2,000,000, it represents a decrease in 

the 2003–04 combined administrative 

and reserve pool budgets which totaled 

$4,634,800. 

Because the 2004–05 administrative 

budget funded some of the costs 

typically allocated to a reserve budget, 

a direct comparison to 2003–04 

administrative costs would be difficult. 

A comparison of 2004–05 recommended 

administrative expenditures to 

combined 2003–04 administrative and 

reserve pool budget expenditures 

therefore follows: 2004–05 salaries, 

$1,000,000 (2003–04 combined 

budgeted expenditures for salaries was 

$1,000,000); $456,000 for export 

program activities, ($1,246,000); 

$320,000 for compliance activities, 

($320,000); $150,000 for group health 

insurance, ($165,000); $110,000 for rent, 

($106,000); $120,000 for Committee 

member and staff travel, ($120,000); and 

$110,000 for computer software and 

programming, ($107,800). 

With anticipated assessable tonnage at 

275,000 tons, sufficient income should 

be generated at the $11.00 per ton 

assessment rate to meet expenses. 

Pursuant to § 989.81(a) of the order, any 

unexpended assessment funds from the 

crop year must be credited or refunded 

to the handlers from whom collected. 

The industry considered an 

alternative assessment rate and budget 

prior to arriving at the $11.00 per ton 

and $3,025,000 administrative budget 

recommendation. The Committee’s 

Audit Subcommittee met on July 1, 

2004, to review preliminary budget 

information. The subcommittee was 

aware that the 2004–05 crop may be 

short and no volume regulation may be 

implemented. The subcommittee thus 

developed two budgets and assessment 

rates to accommodate a scenario with 

volume regulation and another scenario 

with no volume regulation. If volume 

regulation was to be implemented, the 

assessment rate would remain at $8.00 

per ton. If volume regulation was not 

implemented, costs typically allocated 

to a reserve pool budget would be 

absorbed by the administrative budget, 

thus necessitating an increased 

assessment rate to $11.00 per ton. The 

Committee approved these budget and 

assessment recommendations on August 

12, 2004. 

The Committee met again on October 

5, 2004, and determined that volume 

regulation was not warranted for the 

season. This triggered implementation 

of the Committee’s recommendation for 

an administrative budget of $3,025,000 

and assessment rate of $11.00 per ton. 

A review of statistical data on the 

California raisin industry indicates that 

assessment revenue has consistently 

been less than one percent of grower 

revenue in recent years. A grower price 

of a minimum of $1,210 per ton for the 

2004–05 crop raisins has been 

announced by the Raisin Bargaining 

Association. If this price is realized, 

assessment revenue will continue to be 

less than one percent of grower revenue 

in the 2004–05 crop year, even with the 

increased assessment rate.

Regarding the impact of this action on 

affected entities, this action will 

increase the assessment obligation 

imposed on handlers. While 

assessments impose some additional 

costs on handlers, the costs are minimal 

and uniform on all handlers. Some of 

the additional costs may be passed on 

to producers. However, these costs will 

be offset by the benefits derived by the 

operation of the marketing order. 

Additionally, the Audit 

Subcommittee and full Committee 

Federal Register / Vol. 70, No. 24 / Monday, February 7, 2005 / Rules and Regulations 6329

1 12 U.S.C. 371(a); and see 12 CFR part 34 (OCC 

rules governing real estate lending and appraisals 

implementing 12 U.S.C. 1828(o)). 2Federal consumer protection laws and 

regulations that apply with respect to the 

residential real estate lending activities of national 

banks and their operating subsidiaries include: the 

Federal Trade Commission Act, 15 U.S.C. 41 et seq.; 

the Truth in Lending Act, 15 U.S.C. 1601 et seq.; 

the Home Ownership and Equity Protection Act, 15 

U.S.C. 1639 et seq.; the Fair Housing Act, 42 U.S.C. 

3601 et seq.; the Equal Credit Opportunity Act, 15 

U.S.C. 1691 et seq.; the Real Estate Settlement 

Procedures Act, 12 U.S.C. 1261 et seq.; the Flood 

Disaster Protection Act, 42 U.S.C. 4001 et seq.; the 

Home Mortgage Disclosure Act, 12 U.S.C. 2801 et 

seq.; the Fair Credit Reporting Act, 15 U.S.C. 1681 

et seq., as recently amended by the Fair and 

Accurate Credit Transactions Act of 2003, Pub. L. 

108–159, 111 Stat. 1952; the Fair Debt Collection 

Practices Act, 15 U.S.C. 1692 et seq.; and the 

privacy provisions of Title V of the Gramm-LeachBliley Act, 15 U.S.C. 6801 et seq.

meetings held on July 1, 2004, and 

August 12, 2004, respectively, where 

this action was deliberated were public 

meetings widely publicized throughout 

the California raisin industry. All 

interested persons were invited to 

attend the meetings and participate in 

the industry’s deliberations. 

This final rule imposes no additional 

reporting or recordkeeping requirements 

on either small or large raisin handlers. 

As with all Federal marketing order 

programs, reports and forms are 

periodically reviewed to reduce 

information requirements and 

duplication by industry and public 

sector agencies. Finally, USDA has not 

identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this rule. 

A proposed rule concerning this 

action was published in the Federal 

Register on December 10, 2004 (69 FR 

71753). Copies of the proposed rule 

were also mailed or sent via facsimile to 

all raisin handlers. Finally, the 

proposed rule was made available 

through the Internet by USDA and the 

Office of the Federal Register. A 10-day 

comment period ending December 20, 

2004, was provided to allow interested 

persons to respond to the proposal. 

One comment was received in 

reference to the proposal. The comment 

did not address anything specific to the 

proposed rule. No changes are made to 

the final rule in response to the 

comment. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

be viewed at: http://www.ams.usda.gov/

fv/moab.html. Any questions about the 

compliance guide should be sent to Jay 

Guerber at the previously mentioned 

address in the FOR FURTHER INFORMATION

CONTACT section. 

After consideration of all relevant 

material presented, including the 

recommendation and information 

submitted by the Committee and other 

available information, the comment 

received, it is hereby found that this 

rule, as hereinafter set forth, will tend 

to effectuate the declared policy of the 

Act. 

It is further found that good cause 

exists for not postponing the effective 

date of this rule until 30 days after 

publication in the Federal Register (5 

U.S.C. 553) because the marketing order 

requires that the rate of assessment for 

each crop year apply to assessable 

raisins handled during such period. The 

crop year began on August 1, 2004, and 

the harvest is completed. The 

Committee needs additional revenues to 

meet its ongoing expenses. Further, 

handlers are aware of this rule, which 

was recommended at a public meeting. 

Also, a 10-day comment period was 

provided for in the proposed rule, and 

no comments from the California raisin 

industry were received.

List of Subjects in 7 CFR Part 989 

Grapes, Marketing agreements, 

Raisins, Reporting and recordkeeping 

requirements.

■ For the reasons set forth in the 

preamble, 7 CFR part 989 is amended as 

follows:

PART 989—RAISINS PRODUCED 

FROM GRAPES GROWN IN 

CALIFORNIA

■ 1. The authority citation for 7 CFR part 

989 continues to read as follows:

Authority: 7 U.S.C. 601–674.

■ 2. Section 989.347 is revised to read as 

follows:

§ 989.347 Assessment rate. 

On and after August 1, 2004, an 

assessment rate of $11.00 per ton is 

established for assessable raisins 

produced from grapes grown in 

California.

Dated: February 1, 2005. 

Kenneth C. Clayton, 

Acting Administrator, Agricultural Marketing 

Service.

[FR Doc. 05–2217 Filed 2–4–05; 8:45 am] 

BILLING CODE 3410–02–P

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the 

Currency 

12 CFR Part 30 

[Docket No. 05–02] 

RIN 1557–AC93 

OCC Guidelines Establishing 

Standards for Residential Mortgage 

Lending Practices

AGENCY: Office of the Comptroller of the 

Currency, Treasury.

ACTION: Appendix to regulations; final 

guidelines. 

SUMMARY: The Office of the Comptroller 

of the Currency (OCC) is issuing, as an 

appendix to part 30 of its regulations, 

guidelines concerning the residential 

mortgage lending practices of national 

banks and their operating subsidiaries 

(Guidelines) as a further step to protect 

against national bank involvement in 

predatory, abusive, unfair, or deceptive 

residential mortgage lending practices. 

The Guidelines describe particular 

practices inconsistent with sound 

residential mortgage lending practices. 

They also describe other terms and 

practices that may be conducive to 

predatory, abusive, unfair, or deceptive 

lending practices, depending on the 

circumstances, and which, accordingly, 

warrant a heightened degree of care by 

lenders. In addition, the Guidelines 

address the steps that banks should take 

to mitigate risks associated with their 

purchase of residential mortgage loans 

and use of mortgage brokers to originate 

loans. The Guidelines focus on the 

substance of activities and practices, not 

on the creation of policies. The 

standards contained in the Guidelines 

are enforceable pursuant to section 39 of 

the Federal Deposit Insurance Act and 

the implementing process set forth in 

part 30 of the OCC’s regulations.

EFFECTIVE DATE: April 8, 2005.

FOR FURTHER INFORMATION CONTACT: For 

questions concerning the Guidelines, 

contact Michael Bylsma, Director, 

Community and Consumer Law 

Division, (202) 874–5750, Michele 

Meyer, Special Counsel, Legislative & 

Regulatory Activities Division, (202) 

874–5090, or Rick Freer, National Bank 

Examiner, Compliance, (202) 874–4428, 

250 E Street, SW., Washington, DC 

20219.

SUPPLEMENTARY INFORMATION: 

Background 

National banks are authorized by 

statute to engage in real estate lending 

activities, subject to the requirements of 

Federal law,1 and national banks’ real 

estate lending is closely supervised and 

comprehensively regulated under a 

regulatory framework that includes a 

wide variety of Federal laws and 

regulations designed to ensure the 

protection of consumers of banks’

residential mortgage products and 

services.2

Fair treatment of customers is 

fundamental to sound banking practices