45680 Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 

1 15 U.S.C. 1691 et seq., 12 CFR part 1002. 

2 12 CFR 1002.5(b). 

3 12 CFR 1002.5(a)(2). 

4Appendix B to 12 CFR part 1003. 

5Home Mortgage Disclosure (Regulation C), 80 FR 

66128 (Oct. 28, 2015). 

6See Fannie Mae, Guide Forms, available at 

https://www.fanniemae.com/singlefamily/sellingservicing-guide-forms (last visited Sept. 6, 2017) 

(listing all selling and servicing guide forms); 

Freddie Mac, ‘‘Forms and Documents,’’ available at 

http://www.freddiemac.com/singlefamily/guide/ 

(last visited Sept. 6, 2017) (same). 

7Amendments to Equal Credit Opportunity Act 

(Regulation B) Ethnicity and Race Information 

Collection, 82 FR 16307 (Apr. 4, 2017). 

rule published on December 27, 2016, at 

81 FR 94934, as final with the following 

change: 

PART 271—RULES REGARDING 

AVAILABILITY OF INFORMATION 

■ 1. The authority citation for part 271 

continues to read as follows: 

Authority: 5 U.S.C. 552; 12 U.S.C. 263. 

■ 2. In § 271.6, paragraph (h)(3) is 

revised to read as follows: 

§ 271.6 Processing requests. 

* * * * * 

(h) * * * 

(3) The Committee, or such member of 

the Committee as is delegated the 

authority, shall make a determination 

regarding any appeal within 20 working 

days of actual receipt of the appeal by 

the Secretary. If an adverse 

determination is upheld on appeal, in 

whole or in part, the determination 

letter shall notify the appealing party of 

the right to seek judicial review and of 

the availability of dispute resolution 

services from the Office of Government 

Information Services as a nonexclusive 

alternative to litigation. 

By order of the Federal Open Market 

Committee, September 19, 2017. 

Brian F. Madigan, 

Secretary, Federal Open Market Committee. 

[FR Doc. 2017–21071 Filed 9–29–17; 8:45 am] 

BILLING CODE 6210–01–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1002 

[Docket No. CFPB–2017–0009] 

RIN 3170–AA65 

Equal Credit Opportunity Act 

(Regulation B) Ethnicity and Race 

Information Collection 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is issuing 

a final rule that amends Regulation B to 

permit creditors additional flexibility in 

complying with Regulation B in order to 

facilitate compliance with Regulation C, 

adds certain model forms and removes 

others from Regulation B, and makes 

various other amendments to Regulation 

B and its commentary to facilitate the 

collection and retention of information 

about the ethnicity, sex, and race of 

certain mortgage applicants. 

DATES: The rule is effective on January 

1, 2018, except that the amendment to 

Appendix B to Part 1002 revising 

paragraph 1 and removing the existing 

‘‘Uniform Residential Loan 

Application’’ form in amendatory 

instruction 6 is effective January 1, 

2022. 

FOR FURTHER INFORMATION CONTACT: 

Shaakira Gold-Ramirez, Paralegal 

Specialist, Kathryn Lazarev, Counsel, or 

James Wylie, Senior Counsel, Office of 

Regulations, at 202–435–7700 or https:// 

www.consumerfinance.gov/policycompliance/guidance/. 

SUPPLEMENTARY INFORMATION: 

I. Summary of the Final Rule 

Regulation B implements the Equal 

Credit Opportunity Act (ECOA) 1 and, in 

part, prohibits a creditor from inquiring 

about the race, color, religion, national 

origin, or sex of a credit applicant 

except under certain circumstances.2

Two of these circumstances are a 

requirement for creditors to collect and 

retain certain information about 

applicants for certain dwelling-secured 

loans under Regulation B § 1002.13 and 

the similar applicant information that 

financial institutions are required to 

collect and report under Regulation C, 

12 CFR part 1003, which implements 

the Home Mortgage Disclosure Act 

(HMDA).3 Regulation B also includes 

certain optional model forms for use in 

complying with certain Regulation B 

requirements, including a model form 

for complying with § 1002.13 that is a 

2004 version of the Uniform Residential 

Loan Application (URLA) issued by the 

Federal National Mortgage Association 

(Fannie Mae) and the Federal Home 

Loan Mortgage Corporation (Freddie 

Mac) (collectively, the Enterprises).4

The HMDA requirement to collect and 

report applicant information was 

recently updated through a final rule 

amending Regulation C, published in 

October of 2015 (2015 HMDA Final 

Rule).5 In 2016, the Enterprises issued a 

new version of the URLA that complies 

with the 2015 HMDA Final Rule (2016 

URLA).6 These changes to Regulation C 

and the URLA require updates to 

Regulation B to ensure consistency 

among regulations and facilitate 

compliance with Regulation B and 

Regulation C by financial institutions. 

To address these issues, the Bureau 

issued a proposal on March 24, 2017, 

which was published in the Federal 

Register on April 4, 2017 (the 2017 

ECOA Proposal).7

The Bureau is now publishing final 

amendments to Regulation B. The final 

rule will provide creditors flexibility in 

complying with Regulation B in order to 

facilitate compliance with Regulation C 

and transition to the 2016 URLA. The 

changes to Regulation B in this rule are 

summarized briefly in this section and 

discussed in detail below. 

A. Scope 

The final rule amends parts of 

Regulation B, its commentary, and its 

appendices, and affects when and how 

a creditor may collect information 

regarding the applicant’s ethnicity, race, 

and sex. The Regulation B creditors 

affected by this rule are primarily those 

creditors making mortgage loans subject 

to § 1002.13, which applies to purchase 

and refinance transactions involving an 

applicant’s primary residence. Financial 

institutions that report under Regulation 

C, have reported in the prior five years, 

or may report in the near future may 

also be affected by this rule. Creditors 

that utilize model forms from appendix 

B to Regulation B (the Regulation B 

appendix) for mortgage loans are also 

affected by the rule. 

B. Changes to Applicant Information 

Collection for Regulation B Creditors 

For Regulation B creditors making 

mortgage loans subject to § 1002.13, the 

rule will allow creditors to collect the 

applicant’s information using either the 

aggregate ethnicity and race categories 

or disaggregated ethnicity and race 

categories and subcategories, as set forth 

in appendix B to Regulation C (the 

Regulation C appendix) as amended by 

the 2015 HMDA Final Rule. The rule 

change therefore will not require 

Regulation B creditors that are not 

HMDA reporters (Regulation B-only 

creditors) to change their § 1002.13 

compliance practices, but would allow 

them to adopt voluntarily new practices 

for collecting applicant information, 

including practices that would permit 

such creditors to transition to the 2016 

URLA. Regulation B creditors will also 

be able to collect voluntarily certain 

information about applicants for certain 

mortgage loan scenarios as provided for 

in § 1002.5(a)(4). These scenarios 


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Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 45681 

8Status of New Uniform Loan Application and 

Collection of Expanded Home Mortgage Information 

About Ethnicity and Race in 2017, 81 FR 66930 

(Sept. 29, 2016). 

9Revision of the Standards for the Classification 

of Federal Data on Race and Ethnicity, 62 FR 58782, 

5878–90 (Oct. 30, 1997). 

10See U.S. Census Bureau, Overview of Race and 

Hispanic Origin: 2010,’’ at 2 (Mar. 2011), available 

at http://www.census.gov/prod/cen2010/briefs/ 

c2010br-02.pdf. 

11Home Mortgage Disclosure (Regulation C), 79 

FR 51731 (Aug. 29, 2014). 

12 80 FR 66128 (Oct. 28, 2015). 

13 Id. at 66314 (amendments to appendix B to 

Regulation C, effective January 1, 2018). 

14 Id. at 66148. 

15 82 FR 43088, 43093–43096 (Sept. 13, 2017); see 

also id. at 43132, 43145 (§§ 1003.2(g)(1)(v)(B), 

(g)(2)(ii)(B), and 1003.3(c)(12)). This temporary 

increase in the open-end threshold will provide 

time for the Bureau to consider whether to initiate 

another rulemaking to address the appropriate level 

for the open-end threshold for data collected 

beginning January 1, 2020. 

generally involve types of loans subject 

to Regulation C where a creditor 

voluntarily reports information under 

Regulation C, reported such information 

in the past five years, or may report 

such information in the near future. 

C. Changes to Applicant Information 

Collection for HMDA Reporters 

Many HMDA reporters are also 

subject to the collection requirements of 

§ 1002.13. For those HMDA reporters, 

the rule provides clarity that 

compliance with applicant information 

collection under Regulation C generally 

satisfies similar requirements under 

Regulation B. HMDA reporters who at 

some point no longer are required to 

comply with HMDA can continue to 

collect certain applicant information as 

provided for in § 1002.5(a)(4). 

D. Changes to Regulation B Model 

Forms 

The rule makes certain changes to the 

Regulation B appendix. The rule 

amends the Regulation B appendix to 

provide two options: A model form for 

collecting aggregate applicant race and 

ethnicity information and a crossreference to the Regulation C appendix 

model form for collecting disaggregated 

applicant race and ethnicity 

information. The rule also removes as 

outdated the existing version of the 

URLA contained in the Regulation B 

appendix, effective January 1, 2022. The 

rule does not add the 2016 URLA to the 

Regulation B appendix; that form is 

subject to a separate Federal Register 

notice issued by the Bureau 

acknowledging its compliance with 

certain provisions of Regulation B.8

II. Background 

A. Regulation B and Ethnicity and Race 

Information Collection 

With some exceptions, Regulation B 

§ 1002.5(b) prohibits a creditor from 

inquiring about the race, color, religion, 

national origin, or sex of an applicant or 

any other person (protected applicantcharacteristic information) in 

connection with a credit transaction. 

Section 1002.5(a)(2) provides several 

exceptions to that prohibition for 

information that creditors are required 

to request for certain dwelling-secured 

loans under § 1002.13, and for 

information required by a regulation, 

order, or agreement issued by or entered 

into with a court or an enforcement 

agency to monitor or enforce 

compliance with ECOA, Regulation B or 

other Federal or State statutes or 

regulations, including Regulation C. 

Section 1002.13 sets forth rules for 

collecting information about an 

applicant’s ethnicity, race, sex, marital 

status, and age under Regulation B. (In 

this document, ‘‘applicant demographic 

information’’ refers to information about 

an applicant’s ethnicity, race, or sex 

information, while ‘‘certain protected 

applicant-characteristic information’’ 

refers to all information collected under 

§ 1002.13, including age and marital 

status.) Under § 1002.13(a)(1), creditors 

that receive an application for credit 

primarily for the purchase or 

refinancing of a dwelling occupied (or 

to be occupied) by the applicant as a 

principal residence, where the 

extension of credit will be secured by 

the dwelling, must collect certain 

protected applicant-characteristic 

information, including specified race 

and ethnicity categories. These race and 

ethnicity categories correspond to the 

Office of Management and Budget 

(OMB) minimum standards for the 

classification of Federal data on 

ethnicity and race.9 Certain of these 

categories include several more specific 

race, heritage, nationality, or country of 

origin groups. For example, Hispanic or 

Latino as defined by OMB for the 2010 

Census refers to a person of Cuban, 

Mexican, Puerto Rican, South or Central 

American, or other Spanish culture or 

origin.10 Section 1002.13(b) through (c) 

provides instructions on the manner of 

collection. Unlike financial institutions 

covered by Regulation C, creditors 

subject to § 1002.13 but not to 

Regulation C are required only to collect 

and retain, but not to report, the 

required protected applicantcharacteristic information. 

B. 2015 HMDA Final Rule 

Regulation C implements HMDA and 

sets out specific requirements for the 

collection, recording, reporting, and 

disclosure of mortgage lending 

information, including a requirement to 

collect and report applicant 

demographic information. In July 2014, 

the Bureau proposed amendments to 

Regulation C to implement the DoddFrank Act changes to require collection, 

recording, and reporting of additional 

information to further HMDA’s 

purposes, and to modernize the manner 

in which covered institutions report 

HMDA data.11 The Bureau published a 

final rule on October 28, 2015, 

amending Regulation C, with many of 

the amendments taking effect January 1, 

2018.12 (In this document, ‘‘current 

Regulation C’’ refers to Regulation C 

prior to January 1, 2018, and ‘‘revised 

Regulation C’’ refers to Regulation C as 

it will be in effect on or after January 1, 

2018, as amended by the 2015 HMDA 

Final Rule.) For data collected in or after 

2018, the 2015 HMDA Final Rule 

amends the requirement for collection 

and reporting of applicant demographic 

information. Specifically, covered 

institutions must permit applicants to 

self-identify their ethnicity and race 

using certain disaggregated ethnic and 

racial subcategories such as Mexican, 

Puerto Rican, or Cuban under the 

aggregate category Hispanic or Latino. 

Covered institutions will report the 

disaggregated information provided by 

applicants. However, revised Regulation 

C will not require or permit covered 

institutions to use the disaggregated 

subcategories when collecting and 

reporting the applicant’s ethnicity and 

race based on visual observation or 

surname.13

Revised Regulation C § 1003.2(g)(1)(v) 

and 1003.2(g)(2)(ii) also introduces an 

exclusion from the definition of 

financial institution, from which the 

duty to report HMDA data flows, for 

entities that, among other criteria, 

originated fewer than 25 closed-end 

mortgage loans or fewer than 100 openend lines of credit in either of the two 

preceding calendar years.14 The Bureau 

recently adopted amendments to 

Regulation C that will temporarily 

increase the threshold for collecting and 

reporting data on certain loans. 

Financial institutions originating fewer 

than 500 open-end lines of credit in 

either of the preceding two years will 

not be required to begin collecting such 

data until January 1, 2020.15 As a result, 

when revised Regulation C takes effect, 

an institution’s obligation to collect and 

report information under Regulation C 

may change over time based on its prior 

loan volume. 


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45682 Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 

16Fannie Mae, ‘‘Selling Guide: Single Family 

Seller Servicer,’’ at § B1–1–01 (Dec. 16, 2014), 

available at https://www.fanniemae.com/content/ 

guide/selling/b1/1/01.html; Freddie Mac, ‘‘SingleFamily Seller/Servicer Guide’’ (Sep. 21, 2016), 

§ 3401.7, available at http://www.freddiemac.com/ 

singlefamily/guide/bulletins/snapshot.html. 17Comment appendix B–1 provides that a 

previous version of the URLA, dated October 1992, 

may be used by creditors without violating 

Regulation B. In addition, comment appendix B–2 

provides that the home-improvement and energy 

loan application form prepared by the Enterprises, 

dated October 1986, complies with the 

requirements of Regulation B for some creditors but 

not others, depending on whether the creditor is 

governed by § 1002.13(a) or subject to a substitute 

monitoring program under § 1002.13(d). The 

Enterprises no longer offer the home-improvement 

and energy loan application form identified in 

comment app. B–2. See Fannie Mae, ‘‘Guide 

Forms,’’ available at https://www.fanniemae.com/ 

singlefamily/selling-servicing-guide-forms (last 

visited Sept. 6, 2017) (listing all current selling and 

servicing guide forms); see also Freddie Mac, 

‘‘Forms and Documents,’’ available at http://

www.freddiemac.com/singlefamily/guide/ (last 

visited Sept. 6, 2017) (same). 

18See Fannie Mae, ‘‘Uniform Residential Loan 

Application,’’ https://www.fanniemae.com/ 

singlefamily/uniform-residential-loan-application# 

(last visited Sept. 6, 2017); see also Press Release, 

Uniform Mortgage Data Program, Fannie Mae and 

Freddie Mac at the direction of the FHFA, ‘‘The 

Redesigned URLA and ULAD Mapping Document 

Are Here!,’’ (Aug. 23, 2016), available at https://

www.fanniemae.com/content/news/urlaannouncement-august-2016.pdf. 

19Fannie Mae, Form 1003 and Freddie Mac Form 

65, ‘‘Demographic Information Addendum,’’ (Aug. 

2016), available at https://www.fanniemae.com/ 

content/guide_form/urla-demographicaddendum.pdf. 

20Press Release, Uniform Mortgage Data Program, 

Fannie Mae and Freddie Mac at the direction of the 

FHFA, ‘‘URLA Implementation Guidance and 

Update,’’ (Nov. 1, 2016), available at https://

www.fanniemae.com/content/news/urlaannouncement-november-2016.pdf; Uniform 

Mortgage Data Program, Fannie Mae and Freddie 

Mac at the direction of the FHFA, ‘‘Uniform 

Residential Loan Application (URLA)/Uniform 

Loan Application Dataset (ULAD) FAQs,’’ at ¶ 6 

(Nov. 1, 2016), available at https://

www.fanniemae.com/content/faq/urla-uladfaqs.pdf. 

21 81 FR 66930 (Sept. 29, 2016). 

C. Uniform Residential Loan 

Application 

The Enterprises, currently under the 

conservatorship of the Federal Housing 

Finance Agency (FHFA), prepare and 

periodically revise the URLA used by 

many lenders for certain dwellingrelated loans. A mortgage loan 

application must be documented using 

the URLA in the mortgage loan file for 

the loan to be eligible for sale to the 

Enterprises.16 A version of the URLA 

dated January 2004 (2004 URLA) is 

included in the Regulation B appendix 

as a model form for use in complying 

with § 1002.13. The appendix provides 

that the use of its model forms is 

optional under Regulation B but that, if 

a creditor uses an appropriate appendix 

B model form, or modifies a form in 

accordance with instructions provided 

in appendix B, that creditor shall be 

deemed to be acting in compliance with 

§ 1002.5(b) through (d).17 The 

Enterprises, under the conservatorship 

of the FHFA, issued a revised and 

redesigned URLA on August 23, 2016 

(2016 URLA).18 Among other changes, 

the 2016 URLA includes a Demographic 

Information section (section 7) that 

addresses the requirements in revised 

Regulation C for collecting applicant 

demographic information, including the 

requirement that financial institutions 

permit applicants to self-identify using 

disaggregated ethnicity and race 

categories beginning January 1, 2018. 

The Enterprises also made available a 

Demographic Information Addendum, 

which is identical in form to section 7 

of the 2016 URLA.19 The Enterprises 

have advised that the Demographic 

Information Addendum may be used by 

lenders at any time on or after January 

1, 2017, as a replacement for section X 

(Information for Government 

Monitoring Purposes) in the current 

URLA, dated July 2005 (revised June 

2009). The Enterprises have not yet 

provided a date when lenders may begin 

using the 2016 URLA or the date lenders 

are required to use the 2016 URLA (the 

cutover date), but have stated their 

intention to collaborate with industry 

stakeholders to help shape the 

implementation timeline for the 2016 

URLA, with a goal to provide lenders 

with more precise information in 2017 

regarding the cutover date.20

D. Bureau Approval Notice 

On September 23, 2016, the Bureau 

issued a notice concerning the 

collection of expanded information 

about ethnicity and race in 2017 

(Bureau Approval Notice).21 Before the 

January 1, 2018, effective date of most 

provisions of the 2015 HMDA Final 

Rule, inquiries to collect applicant 

demographic information using 

disaggregated ethnic and racial 

categories are not required by current 

Regulation C and would not have been 

allowed under Regulation B 

§ 1002.5(a)(2), and therefore creditors 

would have been prohibited by 

Regulation B § 1002.5(b) from requesting 

applicants to self-identify using 

disaggregated ethnic and racial 

categories before January 1, 2018. The 

Bureau Approval Notice provided that, 

anytime from January 1, 2017 through 

December 31, 2017, a creditor may, at its 

option, permit applicants to self-identify 

using disaggregated ethnic and racial 

categories as instructed in the revised 

Regulation C appendix. During this 

period, a creditor adopting the practice 

of permitting applicants to self-identify 

using disaggregated ethnic and racial 

categories as instructed in the revised 

Regulation C appendix shall be deemed 

to be in compliance with Regulation B 

§ 1002.13(a)(i). In the same notice, the 

Bureau also determined that the 

relevant language in the 2016 URLA is 

in compliance with the regulatory 

provisions of Regulation B § 1002.5(b) 

through (d), regarding requests for 

protected applicant-characteristic 

information and certain other 

information. The notice provides that, 

although the use of the 2016 URLA by 

creditors is not required under 

Regulation B, a creditor that uses the 

2016 URLA without any modification 

that would violate § 1002.5(b) through 

(d) acts in compliance with § 1002.5(b) 

through (d). 

III. Summary of the Rulemaking 

Process 

A. Pre-Proposal Outreach 

As part of the Bureau’s outreach to 

financial institutions, vendors, and 

other mortgage industry participants to 

prepare for the implementation of the 

2015 HMDA Final Rule, the Bureau 

received questions about the 

requirement to permit applicants to selfidentify using disaggregated ethnicity 

and race categories. The Bureau also 

received questions as to how that 

requirement intersected with 

compliance obligations under 

Regulation B. The Bureau further 

received questions related to the Bureau 

Approval Notice about whether the 

approval for collecting disaggregated 

ethnicity and race categories under 

Regulation B in 2017 would be extended 

to 2018. In light of these inquiries, the 

Bureau determined that it would be 

beneficial to establish through 

rulemaking appropriate standards in 

Regulation B concerning the collection 

of an applicant’s ethnicity and race 

information similar to those in revised 

Regulation C. 

Because many of the financial 

institutions most affected by this 

proposed rule are supervised by the 

Federal Deposit Insurance Corporation 

(FDIC), the Office of the Comptroller of 

the Currency (OCC), the Federal Reserve 

Board (Board), and the National Credit 

Union Administration (NCUA), the 

Bureau conducted outreach to these 

agencies. The Bureau specifically sought 

input from these agencies concerning 

their use of applicant ethnicity and race 

information collected under § 1002.13 

but not reported or anticipated to be 

reported under Regulation C and their 

views on appropriate standards for 

collection and retention of this 

information. The Bureau also conducted 


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Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 45683 

22 82 FR 16307 (Apr. 4, 2017). 

23 82 FR 43088, 43093–43096 (Sept. 13, 2017); see 

also id. at 43132, 43145 (§§ 1003.2(g)(1)(v)(B), 

(g)(2)(ii)(B), and 1003.3(c)(12)). 

24 15 U.S.C. 1691b; Public Law 111–203, 124 Stat. 

1376, 2083–84 (2010). 

25 15 U.S.C. 1691b(a). 

26 Id. 

27 12 CFR 1002.1(b). 

28Public Law 111–203, 124 Stat. 1375, 1980 

(2010) (codified at 12 U.S.C. 5512(b)(1)). 

outreach with other Federal agencies, 

including the Securities and Exchange 

Commission, the Department of Justice, 

the Department of Housing and Urban 

Development, the Federal Housing 

Finance Agency, the Federal Trade 

Commission, the Department of 

Veterans Affairs, the Department of 

Agriculture, the Department of the 

Treasury, and the Federal Financial 

Institutions Examination Counsel 

(FFIEC) concerning the proposed rule. 

B. The Bureau’s Proposal 

On March 24, 2017, the Bureau issued 

the 2017 ECOA Proposal on its Web site. 

The proposal was published in the 

Federal Register on April 4, 2017.22

Specifically, the Bureau proposed an 

amendment to § 1002.13 to permit a 

creditor additional flexibility in how it 

collects applicant ethnicity and race 

information by allowing use of either 

aggregate or disaggregate ethnicity and 

race categories on an application-byapplication basis. In addition, the 

Bureau proposed amendments adding 

§ 1002.5(a)(4) to permit creditors to 

collect applicant demographic 

information when they would not 

otherwise be required to do so in certain 

scenarios where creditors may benefit 

from being able to adopt Regulation C 

compliance practices before they 

become required or maintain them 

when they are no longer required. The 

Bureau also proposed to remove the 

outdated 2004 URLA from the 

Regulation B appendix, add generic 

model forms for compliance with 

§ 1002.13, and maintain approval of the 

2016 URLA through a freestanding 

approval notice. 

C. Feedback Provided to the Bureau 

The Bureau received approximately 

36 comments on the 2017 ECOA 

Proposal during the comment period 

from consumer advocacy groups, 

national and State trade associations, 

banks, individuals, and industry service 

providers. Comments are publicly 

available at http://www.regulations.gov. 

This information is discussed below in 

the section-by-section analysis and 

subsequent parts of the notice, as 

applicable. The Bureau considered the 

comments, and adopts a modified final 

rule as described below in the sectionby-section analysis. 

Comments Related to 2015 HMDA Final 

Rule 

The Bureau received several 

comments on the proposal concerning 

the 2015 HMDA Final Rule. These 

comments were primarily from small 

financial institutions. Commenters 

expressed concern that the data points 

added to Regulation C in the 2015 

HMDA Final Rule burdened financial 

institutions and, because of this burden, 

the commenters encouraged the Bureau 

to reduce the HMDA data fields to only 

statutorily required fields. Commenters 

also requested that the Bureau increase 

the thresholds for being a HMDA 

reporter to a higher limit that would 

exempt more creditors from HMDA. The 

Bureau did not propose changes to 

Regulation C in this rulemaking. The 

Bureau considered these comments but 

does not believe that the comments are 

relevant to the 2017 ECOA Proposal and 

do not provide a basis to change the 

approach proposed by the Bureau in the 

2017 ECOA Proposal. The issues raised 

by these comments were considered as 

part of the rulemaking to revise 

Regulation C and addressed in the 2015 

HMDA Final Rule, and the Bureau has 

not reassessed those issues as part of 

this rulemaking, which concerns only 

issues relating to the alignment of 

collection of certain information about 

applicants under Regulation B and 

Regulation C and the status and use of 

the URLA. With respect to the open-end 

line of credit threshold for HMDA 

reporting, the Bureau adopted 

amendments to Regulation C that 

temporarily increases the open-end line 

of credit threshold to 500 until January 

1, 2020.23 This temporary increase in 

the open-end threshold will provide 

time for the Bureau to consider whether 

to initiate another rulemaking to address 

the appropriate level for the open-end 

threshold for data collected beginning 

January 1, 2020. 

Comments Related to Other Changes to 

Regulation B 

Some commenters proposed other 

changes to Regulation B unrelated to 

alignment with Regulation C or 

applicant demographic information 

collection for mortgage applicants. 

These proposed changes included 

establishing applicant demographic 

information collection, reporting, and 

public disclosure requirements for 

automobile creditors similar to HMDA, 

requiring adverse action notices in 

certain situations involving 

counteroffers, and adding recordkeeping and applicant demographic 

information collection requirements for 

brokers and arrangers of credit. The 

Bureau did not propose these changes to 

Regulation B. The Bureau does not 

believe that these comments are relevant 

to the 2017 ECOA Proposal and do not 

provide a basis to change the approach 

proposed by the Bureau in the 2017 

ECOA Proposal. 

IV. Legal Authority 

The Bureau is issuing this final rule 

pursuant to its authority under section 

703 of ECOA, as amended by section 

1085 of the Dodd-Frank Act.24 ECOA 

authorizes the Bureau to issue 

regulations to carry out the purposes of 

ECOA.25 These regulations may contain 

but are not limited to such 

classifications, differentiations, or other 

provisions, and may provide for such 

adjustments and exceptions for any 

class of transactions, as in the judgment 

of the Bureau are necessary or proper to 

effectuate the purposes of ECOA, to 

prevent circumvention or evasion of 

ECOA, or to facilitate or substantiate 

compliance with ECOA.26 A purpose of 

ECOA is to promote the availability of 

credit to all creditworthy applicants 

without regard to race, color, religion, 

national origin, sex, marital status, or 

age (provided the applicant has the 

capacity to contract) or other protected 

characteristics.27 ECOA section 703 

serves as a source of authority to 

establish rules concerning the taking 

and evaluation of credit applications, 

collection and retention of applicant 

demographic information concerning 

the applicant or co-applicant, use of 

designated model forms, and 

substantive requirements to carry out 

the purposes of ECOA. 

The Bureau is also issuing this final 

rule pursuant to its authority under 

sections 1022 and 1061 of the DoddFrank Act. Under Dodd-Frank Act 

section 1022(b)(1), the Bureau has 

authority to prescribe rules as may be 

necessary or appropriate to enable the 

Bureau to administer and carry out the 

purposes and objectives of the Federal 

consumer financial laws and to prevent 

evasions thereof.28 Section 1061 of the 

Dodd-Frank Act transferred to the 

Bureau consumer financial protection 

functions previously vested in certain 

other Federal agencies, including the 

authority to prescribe rules or issue 

orders or guidelines pursuant to any 

Federal consumer financial law and 

perform appropriate functions to 

promulgate and review such rules, 


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45684 Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 

29Public Law 111–203, 124 Stat. 1375, 2035–39 

(2010) (codified at 12 U.S.C. 5581). 

30 12 U.S.C. 5481(12), (14). 

31The Bureau recently amended Regulation C to 

explicitly permit optional reporting of closed-end 

mortgage loans and open-end lines of credit even 

if a financial institution does not meet the 

applicable loan volume threshold. 82 FR 43088, 

43100–43102 (Sept. 13, 2017); see also id. at 43132 

(§ 1003.3(c)(11) and (12)). Regulation B 

§ 1002.5(a)(4)(i) and (ii) as finalized in this rule 

correspond to those provisions in revised 

Regulation C and permit the collection of applicant 

demographic information necessary to facilitate that 

optional reporting. Other circumstances permitting 

voluntary collection of applicant demographic 

information finalized in this rule do not correspond 

to provisions in Regulation C addressing optional 

reporting. 

orders, and guidelines.29 Both ECOA 

and title X of the Dodd-Frank Act are 

consumer financial laws.30 Accordingly, 

the Bureau has authority to issue 

regulations to administer ECOA. 

V. Section-by-Section Analysis 

Section 1002.5 Rules Concerning 

Requests for Information 

5(a) General Rules 

Section 1002.5 provides rules 

concerning requests for information. In 

general, § 1002.5(b) prohibits a creditor 

from inquiring about protected 

applicant-characteristic information in 

connection with a credit transaction, 

except under certain circumstances. The 

Bureau proposed to amend 

§ 1002.5(a)(4) to authorize creditors to 

collect such information under certain 

additional circumstances. In addition, 

the Bureau proposed to add 

commentary for § 1002.5(a)(4) to 

provide guidance and proposed 

amendments to comment 5(a)(2)–2 to 

make conforming changes and further 

align Regulation B and revised 

Regulation C. 

5(a)(4) Other Permissible Collection of 

Information 

Section 1002.5(a)(2) provides that, 

notwithstanding the limitations in 

§ 1002.5(b) through (d) on collecting 

protected applicant-characteristic 

information and other applicant 

information, a creditor shall request 

information for monitoring purposes as 

required by § 1002.13. Section 

1002.5(a)(2) further provides that a 

creditor may obtain information 

required by a regulation, order, or 

agreement issued by, or entered into 

with, a court or an enforcement agency 

to monitor or enforce compliance with 

ECOA, Regulation B, or other Federal or 

State statutes and regulations. However, 

§ 1002.5(a)(2) does not authorize 

collection of information beyond what 

is required by law. The Bureau 

proposed to add § 1002.5(a)(4) to 

authorize a creditor to obtain 

information in certain additional 

specified circumstances other than as 

described in § 1002.5(a)(2). Proposed 

§ 1002.5(a)(4)(i) and (ii) would permit a 

creditor that is a financial institution 

under revised Regulation C § 1003.2(g) 

to collect demographic information of 

an applicant for a closed-end mortgage 

loan or an open-end line of credit that 

is an excluded transaction under revised 

Regulation C § 1003.3(c)(11) or 

§ 1003.3(c)(12) if it submits HMDA data 

concerning those applications and loans 

or if it submitted HMDA data 

concerning closed-end mortgage loans 

or open-end lines of credit in any of the 

preceding five calendar years.31

Proposed § 1002.5(a)(4)(iii) would 

permit a creditor that falls below both 

of the revised Regulation C loan-volume 

thresholds to continue to collect 

applicant demographic information for 

five calendar years after first becoming 

exempt from HMDA reporting. Proposed 

§ 1002.5(a)(4)(iv) would permit a 

creditor that exceeds a revised 

Regulation C loan-volume threshold in 

the first year of a two-year threshold 

period to collect, in the second year, 

applicant demographic information for a 

loan that would otherwise be a covered 

loan under Regulation C. For the 

reasons provided below, the Bureau is 

adopting § 1002.5(a)(4)(i) through (iv) as 

proposed. In addition, the Bureau is 

adopting new § 1002.5(a)(4)(v) and (vi) 

in response to comments, as discussed 

below. 

The Bureau solicited comment on 

permitting the collection of applicant 

demographic information in the 

circumstances described in proposed 

§ 1002.5(a)(4), and, in particular, 

regarding the proposed five-year time 

frame, and whether there are other 

specific, narrowly tailored 

circumstances not described in 

§ 1002.5(a)(2) or proposed § 1002.5(a)(4) 

under which a creditor would benefit 

from being able to collect applicant 

demographic information for mortgage 

loan applicants. A large number of 

industry commenters supported 

proposed § 1002.5(a)(4) and the fiveyear timeframe for § 1002.5(a)(4)(i), (ii), 

and (iii). Commenters noted that being 

able to collect applicant demographic 

data when not required by HMDA 

would facilitate better data collection 

procedures, aid in retaining system and 

organizational knowledge, help prepare 

for reporting data in subsequent years, 

and help creditors transition to the 2016 

URLA. Commenters noted that the fiveyear timeframe for § 1002.5(a)(4)(i), (ii), 

and (iii) was realistic and would 

provide enough time to allow 

institutions to keep their systems 

updated, but not so long that it would 

be unlikely the institution would 

become a HMDA reporter again. 

One commenter requested 

clarification that the voluntary 

collection under proposed § 1002.5(a)(4) 

was truly voluntary and not a new 

compliance requirement. Proposed 

§ 1002.5(a)(4) provides authorization to 

collect applicant demographic 

information, but does not require 

collection in the circumstances 

described. As discussed below, though, 

a creditor must comply with the record 

retention requirements of § 1002.12 if it 

chooses to take advantage of the 

authorization in § 1002.5(a)(4). The 

Bureau also proposed comment 5(a)(4)– 

1 to provide guidance on proposed 

§ 1002.5(a)(4) and to highlight the 

voluntary nature of the rule. The Bureau 

is finalizing this comment as proposed. 

Comment 5(a)(4)–1 provides that 

information regarding ethnicity, race, 

and sex that is not required to be 

collected pursuant to Regulation C may 

nevertheless be collected under the 

circumstances set forth in § 1002.5(a)(4) 

without violating § 1002.5(b). It also 

provides that the information must be 

retained pursuant to the requirements of 

§ 1002.12. 

Two industry commenters proposed 

two alternative voluntary collection 

authorizations that would replace 

proposed § 1002.5(a)(4). One alternative 

would permit collection of applicant 

demographic information for any loan 

secured by an applicant’s dwelling with 

no timeframe restriction. The other 

alternative would permit collection of 

applicant demographic information for 

any covered loan under Regulation C 

with no timeframe restriction, even if 

the creditor was not a financial 

institution under Regulation C. The 

Bureau is not adopting these proposed 

alternatives. The primary difference 

between these proposals and the 

collection permitted by final 

§ 1002.5(a)(4)(i), (ii), and (iii) would be 

the removal of the five-year timeframe. 

As the Bureau noted in the 2017 ECOA 

Proposal, without a time limit such 

voluntary collection would permit a 

creditor to collect protected applicantcharacteristic information for a period of 

time that is too attenuated from any past 

Regulation C legal requirement and 

associated compliance process. While 

final § 1002.5(a)(4) provides a narrow 

exception to the general limitations in 

§ 1002.5(b) through (d), these alternative 

proposals would create a much broader 

exception to the general limitations on 

collecting such information in 

Regulation B. The Bureau believes that 

such a broad exception could 


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Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 45685 

32See revised Regulation C § 1003.3(c)(10). 80 FR 

66128, 66139, and 66169 (Oct. 28, 2015). 

33See revised Regulation C § 1003.2(e). 80 FR 

66128, 80 FR 66140, and 66144 (Oct. 28, 2015). 

34Fannie Mae, ‘‘Uniform Residential Loan 

Application,’’ https://www.fanniemae.com/ 

singlefamily/uniform-residential-loan-application# 

(last visited Sept. 6, 2017). 

35Section 1002.12(b)(1) provides that creditors 

must retain records for 12 months for business 

credit, except as provided in § 1002.12(b)(5). 

significantly alter the limitations and 

would not be appropriate without 

further rulemaking and consideration. 

Industry commenters proposed two 

additional, narrowly tailored exceptions 

that the Bureau is substantially 

adopting. One industry commenter 

proposed permitting collection for 

dwelling-secured loans made primarily 

for a business or commercial purpose 

that might be covered loans, regardless 

of whether or not they are for the 

purpose of home purchase, refinancing, 

or home improvement and therefore 

reportable under revised Regulation C. 

Under revised Regulation C, dwellingsecured loans made primarily for a 

business or commercial purpose are 

only required to be reported if they meet 

the definition of a home purchase, 

refinancing, or home improvement 

loan.32 In contrast, dwelling-secured 

loans that are not made primarily for a 

business or commercial purpose are 

generally required to be reported even if 

they do not meet the definition of a 

home purchase, refinancing, or home 

improvement loan.33 The Bureau 

believes that permitting collection of 

applicant demographic information in 

this narrowly tailored circumstance may 

be beneficial for some financial 

institutions because it would allow 

them to collect applicant demographic 

information early in the collection 

process, when they have determined 

that the loan would be dwelling secured 

and primarily for a business or 

commercial purpose but may not yet 

have determined whether it meets the 

definition of a home purchase loan, 

refinancing, or home improvement loan 

under revised Regulation C. Collection 

of applicant demographic information at 

that point in the application process 

may allow for more consistent 

collection and may be easier to integrate 

into the application process when 

compared with collection after HMDA 

coverage has been determined. The 

permitted collection may also alleviate 

concerns about violating § 1002.5(b) if a 

financial institution collects applicant 

demographic information for a 

particular dwelling-secured loan made 

primarily for a business or commercial 

purpose, based on the financial 

institution’s belief that it is a home 

purchase loan, a refinancing, or a home 

improvement loan, but the financial 

institution later discovers that this belief 

was mistaken, and therefore collection 

of applicant demographic information 

was not required under Regulation C. 

The Bureau is adopting § 1002.5(a)(4)(v) 

to address the commenter’s suggestion. 

Section 1002.5(a)(4)(v) permits a 

creditor that is a financial institution 

under revised Regulation C § 1003.2(g) 

or that submitted HMDA data for any of 

the preceding five calendar years but is 

not currently a financial institution 

under revised Regulation C § 1003.2(g) 

to collect information regarding the 

ethnicity, race, and sex of an applicant 

for a loan that would otherwise be a 

covered loan under revised Regulation C 

§ 1003.2(e) if not excluded by revised 

Regulation C § 1003.3(c)(10). 

One industry commenter also noted 

that the 2016 URLA includes a form for 

the collection of applicant demographic 

information for additional borrowers 

and does not necessarily limit the 

collection to the applicant and the first 

co-applicant, even though Regulation C 

requires financial institutions to provide 

the ethnicity, race and sex information 

only for the applicant and first coapplicant.34 The commenter suggested 

that the Bureau revise § 1002.5(b) to 

permit collection of demographic 

information for any additional coapplicants using the 2016 URLA. As 

discussed below in the section-bysection analysis for § 1002.13, the 

Bureau is amending § 1002.13(b) to 

permit, but not require, creditors to 

collect the information set forth in 

§ 1002.13(a) from a second or additional 

co-applicant. With the introduction of 

the 2016 URLA the Bureau believes that 

permitting collection of applicant 

demographic information in this 

narrowly tailored circumstance may be 

beneficial for some financial institutions 

because it would allow them to use 

more easily standard forms for 

collection of applicant demographic 

information without identifying at the 

time of collection which applicants are 

the primary and first co-applicant. The 

Bureau is adopting § 1002.5(a)(4)(vi) to 

address the commenter’s suggestion by 

clarifying that the collection of 

applicant demographic information for 

additional borrowers is permitted. 

Accordingly, § 1002.5(a)(4)(vi) permits a 

creditor that is collecting information 

regarding the ethnicity, race, and sex of 

an applicant or first co-applicant to 

collect information regarding the 

ethnicity, race, and sex of a second or 

additional co-applicant for a covered 

loan under Regulation C § 1003.2(e), or 

for a loan described in paragraphs 

(a)(4)(i) through (v). Authorization for 

this collection, consistent with the other 

provisions of § 1002.5(a)(4), is not 

limited to collection using the 2016 

URLA. 

Having considered the comments 

received and for the reasons discussed 

above, the Bureau is finalizing 

§ 1002.5(a)(4)(i) through (iv) generally as 

proposed with minor wording changes 

for clarity, finalizing new 

§ 1002.5(a)(4)(v) and (vi), and finalizing 

the conforming amendments to 

comment 5(a)(2)–2 and new comment 

5(a)(4)–1 as proposed. The Bureau 

believes that these provisions further 

the purposes of ECOA by easing overall 

burden on creditors and improving the 

quality of the data that is used to 

promote the availability of credit to all 

creditworthy applicants. The Bureau 

also believes that permitting creditors to 

collect certain protected applicantcharacteristic information in these 

circumstances provides a narrow 

exception to the general limitations in 

§ 1002.5(b) through (d) respects the 

purposes of those prohibitions. 

Section 1002.12 Record Retention 

Section 1002.12 provides rules 

concerning permissible and required 

record retention. In light of proposed 

§ 1002.5(a)(4), the Bureau also proposed 

to amend § 1002.12(b)(1)(i) to require 

retention of certain protected applicantcharacteristic information obtained 

pursuant to proposed § 1002.5(a)(4). 

12(b) Preservation of Records 

12(b)(1) Applications 

12(b)(1)(i) 

Section 1002.12(b)(1) provides that a 

creditor must retain certain records for 

25 months, or 12 months for business 

credit.35 Regulation B § 1002.2(g) 

defines business credit to mean, with 

certain exceptions, extensions of credit 

primarily for business or commercial 

purposes. Under § 1002.12(b)(1)(i), these 

records include any information 

required to be obtained concerning 

characteristics of credit applicants to 

monitor compliance with ECOA and 

Regulation B or other similar law. The 

Bureau proposed to amend 

§ 1002.12(b)(1)(i) to include within its 

preservation requirements any 

information obtained pursuant to 

§ 1002.5(a)(4). The Bureau also 

proposed to amend comment 12(b)–2 to 

require retention of applicant 

demographic information obtained 

pursuant to § 1002.5(a)(4). 

Two commenters supported the 

proposal regarding record retention, 

noting that it would facilitate 


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45686 Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 

36 82 FR 16307, 16313, and 16317–18 (Apr. 4, 

2017). 

monitoring of fair lending laws and 

serve ECOA’s purposes and that it 

seemed appropriate given the proposed 

amendments to § 1002.5(a)(4). One 

commenter noted that Regulation B 

§ 1002.12(b)(1) provides a 25-month 

record retention period for most 

transactions, but a 12-month period for 

business credit transactions, and that 

the Bureau’s proposal would create a 

longer retention period for business 

credit for which a creditor voluntarily 

collected applicant demographic 

information under proposed 

§ 1002.5(a)(4). The Bureau 

acknowledges that the preamble to the 

proposed rule stated that § 1002.12(b)(1) 

required retention of certain records for 

25 months and did not acknowledge the 

different 12 month period for business 

credit provided for in § 1002.12(b)(1). 

The Bureau did not intend to extend the 

record retention period under 

Regulation B for business credit 

transactions through the proposal and 

this final rule does not do so. The 

Bureau is finalizing the amendments to 

§ 1002.12(b)(1)(i) and comment 12(b)–2 

as proposed. 

The Bureau believes that, if a creditor 

voluntarily collects applicant 

demographic information pursuant to 

§ 1002.5(a)(4), the creditor should be 

required to maintain those records in 

the same manner as it does for protected 

applicant-characteristic information it is 

required to collect. This will allow the 

information to be available for 

monitoring and enforcing compliance 

with ECOA, Regulation B, and other 

Federal or State statutes or regulations. 

Without a corresponding record 

retention requirement, a creditor might 

collect but not retain the information, 

thus preventing the use of the 

information for these purposes. 

Section 1002.13 Information for 

Monitoring Purposes 

Section 1002.13 sets forth the scope, 

required information, and manner for 

the mandatory collection of certain 

protected applicant-characteristic 

information under Regulation B. The 

Bureau proposed to amend 

§ 1002.13(a)(1)(i) to provide a creditor 

flexibility to collect applicant ethnicity 

and race information using either 

aggregate or disaggregated categories, 

thereby furthering the purposes of 

ECOA, reducing compliance burden, 

and facilitating use of the 2016 URLA. 

In addition, the Bureau proposed 

several revisions to § 1002.13(b) and (c) 

and its commentary to align further the 

collection requirements of Regulation B 

with revised Regulation C. 

13(a) Information To Be Requested 

13(a)(1) 

13(a)(1)(i) 

Section 1002.13(a) sets forth certain 

protected applicant-characteristic 

information a creditor must collect for 

applications on certain dwellingsecured loans. Current § 1002.13(a)(1) 

requires that creditors collect 

information regarding the applicant’s 

ethnicity and race using two aggregate 

ethnicity categories (Hispanic or Latino 

and Not Hispanic or Latino) and five 

aggregate race categories (American 

Indian or Alaska Native, Asian, Black or 

African American, Native Hawaiian or 

Other Pacific Islander, and White). 

Proposed § 1002.13(a)(1)(i) provided 

that a creditor must collect the 

applicant’s information using either the 

aggregate ethnicity and race categories 

currently required or the ethnicity and 

race categories and subcategories set 

forth in the revised Regulation C 

appendix, which provide disaggregated 

ethnicity and race categories. Through 

this proposed change, creditors taking 

applications for loans subject to 

§ 1002.13(a)(1) but not required to 

submit HMDA data under Regulation C 

would have the option of either 

maintaining their current collection 

practices or transitioning to the revised 

Regulation C collection practices and 

the 2016 URLA. The Bureau also 

proposed comments 13(a)–7 and 13(a)– 

8 to provide that a creditor that collects 

applicant information in compliance 

with the revised Regulation C appendix 

will be acting in compliance with 

§ 1002.13 concerning the collection of 

an applicant’s ethnicity, race, and sex 

information and to clarify that a creditor 

may choose on an application-byapplication basis whether to collect 

aggregate or disaggregated information. 

For the reasons provided below, the 

Bureau is adopting § 1002.13(a) and 

comments 13(a)–7 and 13(a)–8 as 

proposed. 

The Bureau solicited comment on its 

proposal to allow creditors to collect 

applicant race and ethnicity information 

using, at the creditor’s option, either 

aggregate or disaggregated categories. A 

large number of industry commenters 

supported the proposed amendments to 

§ 1002.13(a)(1)(i). Many of these 

commenters stated that the proposal 

would simplify the collection process 

and reduce regulatory burden by 

ensuring that creditors are not subject to 

differing collection requirements under 

Regulation B and Regulation C. 

Commenters also expressed the view 

that the proposal would ease 

compliance burden because it would 

provide creditors the flexibility to use 

the method most suitable for them. 

Commenters also noted that it would 

facilitate use of the 2016 URLA. One 

industry commenter supporting the 

proposal stated that mandating 

disaggregated collection for all creditors 

would be unduly burdensome. 

A number of commenters 

recommended alternative approaches to 

proposed § 1002.13(a)(1)(i). Two 

industry groups suggested that the 

Bureau remove § 1002.13 altogether. 

One of these commenters stated that the 

collection of applicant demographic 

information is duplicative of Regulation 

C and that removing this requirement in 

Regulation B would reduce burden. The 

other commenter asserted that 

collection of applicant demographic 

information requires significant time 

and resources for Regulation B-only 

creditors and that the information is 

virtually never used. 

On the other hand, consumer 

advocacy groups and an industry 

service provider suggested that creditors 

be required to collect disaggregated 

ethnicity and race information after a 

multi-year phase in period. The 

consumer advocacy groups stated that 

mandatory disaggregated collection 

would ensure uniform data collection 

practices and facilitate fair lending 

analysis, including identifying potential 

discrimination against racial and ethnic 

subgroups. The consumer advocacy 

groups further expressed the view that 

mandatory disaggregated collection 

would prepare lenders to submit HMDA 

data in the future should they cross a 

reporting threshold and that the burden 

of mandatory disaggregated collection 

would not be significant because the 

2016 URLA makes it easy to record 

these categories. An industry service 

provider also supported a uniform 

standard based on the requirements in 

revised Regulation C in order to reduce 

the costs of supporting dual collection 

methods. Similarly, an industry 

commenter stated that the collection 

methods used in Regulation B and 

Regulation C should match. 

The Bureau is not adopting any of the 

alternatives suggested by commenters. 

Although the information collected 

under § 1002.13 and Regulation C 

overlap, in part, as discussed in the 

2017 ECOA Proposal, regulators will 

rely on applicant demographic 

information collected under § 1002.13 to 

supervise and enforce fair lending laws, 

including for a substantial number of 

creditors that will not be required to 

report under revised Regulation C.36


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Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 45687 

Thus, the Bureau concludes that 

retaining § 1002.13 serves the purposes 

of ECOA to promote the availability of 

credit to all creditworthy applicants 

without regard to protected 

characteristics. 

On the other hand, the Bureau 

believes that requiring disaggregated 

collection for Regulation B-only 

creditors would impose additional 

burden on creditors without significant 

benefits. Requiring disaggregated 

collection, even after a multi-year phase 

in period, would add complexity and 

burden to an already complex timeline 

that includes implementation of the 

2015 HMDA Final Rule and transition to 

the 2016 URLA. As further discussed in 

the Section 1022(b) analysis below, the 

Bureau believes that the additional 

burden would have few benefits. The 

incremental benefits of this alternative 

are also likely to be low because many 

creditors will collect disaggregated 

categories under Regulation B in any 

case, either because they are required to 

do so under revised Regulation C or as 

part of the transition to the 2016 URLA. 

The Bureau is therefore not requiring 

the collection of disaggregated 

categories for Regulation B-only 

creditors. The Bureau may reevaluate 

the need for mandatory disaggregated 

collection under § 1002.13 after 

implementation of the 2015 HMDA 

Final Rule and transition to the 2016 

URLA, when more information is 

available on creditor collection 

practices. If it appears that action is 

warranted, the Bureau will engage in 

further rulemaking as appropriate. 

Two industry commenters, while 

supportive of the flexibility provided in 

the 2017 ECOA Proposal, sought 

clarification on how aggregate and 

disaggregated data will be evaluated 

against one another, including how 

aggregate information collected under 

Regulation B would be compared to 

disaggregated information collected 

under revised Regulation C. The 

commenters expressed concern that the 

optionality could result in dissimilar 

demographic reporting and potentially 

greater compliance burden for creditors 

who choose to continue to collect 

aggregate information. The Bureau does 

not believe that flexibility will result in 

additional burden and reiterates that 

§ 1002.13(a)(1)(i) would permit a 

Regulation B-only creditor to maintain 

its existing practices and collect 

aggregate race and ethnicity categories. 

Moreover, because both methods use the 

same aggregate categories, a creditor can 

compare information collected under 

either method by rolling up the 

disaggregated subcategories into their 

corresponding aggregate categories. The 

Bureau, however, declines to set forth 

specific instructions on how a data user 

should evaluate the information 

collected pursuant to § 1002.13 or 

Regulation C as the Bureau only sought 

comment on data collection practices 

under § 1002.13. Having considered the 

comments received and for the reasons 

discussed above, the Bureau is 

finalizing § 1002.13(a)(1)(i) as proposed. 

An industry service provider asked 

the Bureau to provide guidance 

regarding whether the term ‘‘natural 

person’’ as used in Regulation B and 

Regulation C includes living trusts or 

sole proprietorships. Because 

Regulation B and Regulation C do not 

provide inconsistent instructions on the 

scope of the term ‘‘natural person,’’ the 

Bureau declines to provide additional 

guidance on this issue within this final 

rule, which, as related to § 1002.13, is 

limited to modifications that harmonize 

the collection requirements of 

Regulation B and Regulation C. 

The Bureau proposed revised 

comment 13(a)–7 to provide that, for 

applications subject to § 1002.13(a)(1), a 

creditor that collects information about 

the ethnicity, race, and sex of an 

applicant in compliance with the 

requirements of the revised Regulation 

C appendix will be acting in compliance 

§ 1002.13 concerning the collection of 

an applicant’s ethnicity, race, and sex 

information. The Bureau received one 

industry comment supporting alignment 

of the instructions in § 1002.13 with the 

revised Regulation C appendix. The 

commenter noted that differing 

instructions may lead to uncertainty and 

that Regulation B-only creditors would 

benefit from the additional instructions 

provided in revised Regulation C. No 

commenters opposed the proposed 

comment, and so the Bureau is 

finalizing comment 13(a)–7 as proposed. 

As proposed, comment 13(a)–8 

permitted a creditor to choose on an 

application-by-application basis 

whether to collect aggregate information 

pursuant to § 1002.13(a)(1)(i)(A) or 

disaggregated information pursuant to 

§ 1002.13(a)(1)(i)(B). One industry 

commenter generally supported the 

proposal, noting the flexibility would 

reduce compliance burden. Another 

industry commenter was concerned 

about how a creditor would decide 

which collection method to use and 

whether the instruction could have a 

discriminatory impact. Various 

consumer advocacy groups also 

opposed proposed comment 13(a)–8, 

arguing that the instruction could 

encourage creditors to develop and 

maintain haphazard, inaccurate, and 

inconsistent data collection methods. 

The Bureau is adopting comment 

13(a)–8 as proposed. The Bureau 

believes that most creditors will 

voluntarily adopt a consistent collection 

method because uniform practices are 

generally easier and less costly for 

creditors to implement. If the Bureau 

were to require creditors to adopt a 

consistent collection method across 

applications, the Bureau would also 

need to issue additional guidance in the 

official commentary concerning how 

often and under what circumstances a 

creditor may change its collection 

method, among other implementation 

issues. The Bureau believes that such 

guidance would add complexity and 

compliance burden on creditors without 

furthering the purposes of ECOA, and so 

declines to do so as part of this 

rulemaking. 

The Bureau received several 

additional comments about topics other 

than those raised by the Bureau in the 

2017 ECOA Proposal. These included, 

for example, a comment supporting the 

collection of loan officers’ demographic 

information, a request to collect 

information on whether the applicant is 

divorced, a request for guidance on 

when previously gathered applicant 

demographic information can be used 

for new applications, and a request that 

the Bureau provide a safe harbor for 

information collected in 2017. The 

Bureau did not propose these changes in 

the 2017 ECOA Proposal. The Bureau 

does not believe that these comments 

are relevant to the 2017 ECOA Proposal 

and do not provide a basis to change the 

approach proposed by the Bureau in the 

2017 ECOA Proposal, which, as related 

to § 1002.13, is limited to modifications 

that harmonize the collection 

requirements of Regulation B and 

Regulation C. 

For the reasons discussed above, the 

Bureau is adopting § 1002.13(a)(1)(i) and 

comments 13(a)–7 and 13(a)–8 as 

proposed. The Bureau believes that 

creditors should not be subject to 

differing collection requirements, and 

that aligning the requirements of 

§ 1002.13 and revised Regulation C 

furthers the purposes of ECOA by 

facilitating practices that promote the 

availability of credit to all creditworthy 

applicants. 

13(b) Obtaining Information 

Section 1002.13(b) discusses how 

creditors may obtain applicant 

information required under § 1002.13(a). 

Among other instructions, current 

§ 1002.13(b) provides that, if an 

applicant chooses not to provide some 

or all of the requested applicant 

demographic information, the creditor 

must, in certain circumstances, collect 


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45688 Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 

37 80 FR 66128, 66187–88 (Oct. 28, 2015). 

the information on the basis of visual 

observation or surname. If a creditor 

collects disaggregated race and ethnicity 

information pursuant to 

§ 1002.13(a)(1)(i)(B), proposed 

§ 1002.13(b) provided that a creditor 

must comply with the restrictions on 

the collection of an applicant’s ethnicity 

and race on the basis of visual 

observation or surname set forth in the 

revised Regulation C appendix, which 

limits such collection to the aggregate 

race and ethnicity categories. For the 

reasons provided below, the Bureau is 

adopting the revisions to § 1002.13(b) 

concerning the collection of ethnicity 

and race information on the basis of 

visual observation or surname as 

proposed. To further align the collection 

requirements of Regulation B and 

Regulation C, the Bureau is further 

amending § 1002.13(b) to permit, but 

not require, creditors to collect the 

information set forth in § 1002.13(a) 

from a second or additional coapplicant. 

The few commenters who specifically 

addressed the Bureau’s proposed 

amendment to § 1002.13(b) generally 

supported the modification, noting that 

it aligned with revised Regulation C and 

would facilitate consistent data 

collection. One commenter argued that 

the proposed rule would add 

complexity, however, as creditors 

would be required to report 

disaggregated information under revised 

Regulation C, permitted to collect such 

information under revised § 1002.13, 

but prohibited from collecting 

disaggregated information if the 

applicant does not provide it. 

Two commenters opposed the 

collection of applicant demographic 

information on the basis of visual 

observation or surname under any 

circumstances. One commenter stated 

that extending the requirement to 

collect applicant demographic 

information on the basis of visual 

observation or surname to Regulation 

B-only creditors is outside the scope of 

ECOA. The commenters also argued that 

such collection is often inaccurate, 

cannot be relied upon for fair lending 

analysis, and is contrary to the purposes 

of ECOA. In support, one of the 

commenters cited a report finding that 

10 million Americans change their 

racial and ethnic identifications 

between U.S. Census surveys. The same 

commenter also cited a report by health 

researchers discussing, among other 

topics, that observer-selected race, often 

used for death certificates, may not 

match self-selected race. The 

commenters proposed that the 

requirement to collect applicant 

demographic information on the basis of 

visual observation or surname should be 

eliminated or that the Bureau provide 

additional instructions to aid creditors 

to identify an applicant’s ethnicity and 

race based on visual observation or 

surname. 

The Bureau will finalize as proposed 

the revisions to § 1002.13(b) concerning 

the collection of an applicant’s ethnicity 

and race information on the basis of 

visual observation or surname. The 

requirement to collect, in certain 

circumstances, applicant demographic 

information on the basis of visual 

observation or surname where the 

applicant does not provide this 

information has been a longstanding 

requirement of § 1002.13(b). The 

amendment to § 1002.13(b) in the 2017 

ECOA Proposal would not impose any 

new obligation on creditors to collect an 

applicant’s ethnicity and race on the 

basis of visual observation or surname 

but, rather, would limit such collection 

to the aggregate ethnicity and race 

categories, even if the creditor permits 

an applicant to self-identify using the 

disaggregated categories. The proposed 

amendment would align § 1002.13 

collection of disaggregated information 

with the collection requirements of 

Regulation C. While the Bureau 

acknowledges that this limitation on the 

collection of applicant demographic 

information involves some complexity, 

the Bureau believes that, on balance, 

aligning § 1002.13 collection methods 

with Regulation C will be less complex 

than introducing different rules for 

§ 1002.13(b) alone. 

The Bureau declines to consider the 

proposals to eliminate altogether the 

requirement to collect applicant 

demographic information on the basis of 

visual observation or surname in 

§ 1002.13 or to provide further 

instructions on how to collect such 

information as both proposals go 

beyond the issues on which the Bureau 

solicited comment. Indeed, given that 

Regulation C requires collection of 

certain applicant demographic 

information on the basis of visual 

observation or surname, adopting either 

proposal would undermine the purpose 

of this rulemaking by imposing different 

requirements in Regulation B and 

Regulation C.37 Moreover, the cited 

studies conclude only that some 

applicants may self-identify as different 

races over time and that visual 

observation of race is not always 

accurate. Thus, even if the Bureau were 

reconsidering its approach to visual 

observation or surname collection, 

which it is not, the Bureau does not 

believe the evidence submitted by the 

commenters demonstrate that collection 

based on visual observation or surname 

do not serve the purposes of ECOA. 

An industry service provider 

suggested the Bureau standardize the 

treatment of co-applicants between 

§ 1002.13 and Regulation C. The 

commenter noted that the two rules 

imposed different requirements where 

there are multiple ‘‘applicants,’’ stating 

that while § 1002.13 requires a financial 

institution to collect information from 

any applicant who is a natural person, 

the revised Regulation C appendix 

instructs a financial institution to 

provide applicant demographic 

information for only the applicant and 

the first co-applicant listed on the 

collection form. The industry service 

provider commented that this 

distinction makes data collection more 

complex and burdensome, and 

requested that the Bureau clarify the 

collection requirements for coapplicants under Regulation B. 

The Bureau acknowledges that the 

requirement to collect or provide 

applicant demographic information 

from co-applicants differs between 

§ 1002.13 and revised Regulation C. The 

Bureau concludes that these differences 

may create additional burden and 

complexity for creditors, who may need 

to modify their practices concerning coapplicant collection depending on 

whether collection is required under 

both Regulation B and revised 

Regulation C or only under revised 

Regulation C. The Bureau is therefore 

revising § 1002.13(b) to clarify that a 

creditor is permitted, but is not 

required, to collect the information set 

forth in § 1002.13(a) from a second or 

additional co-applicant. The Bureau 

believes this clarification will simplify 

collection practices and reduce 

compliance burden by aligning 

Regulation B and Regulation C. The 

clarification will also allow Regulation 

B-only creditors to maintain their 

existing practices under § 1002.13 if so 

desired. By providing flexibility and 

reducing burden, the Bureau believes 

this modification will further the 

purposes of ECOA by facilitating 

practices that promote the availability of 

credit to all creditworthy applicants. As 

discussed above in the section-bysection analysis for § 1002.5(a)(4), the 

Bureau is also adopting new 

§ 1002.5(a)(4)(vi) to permit collection of 

applicant demographic information for 

second or additional co-applicants in 

certain circumstances, thereby 

providing additional optionality for 

creditors to maintain consistent 

collection practices under Regulation B 

and Regulation C. 


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38Appendix B to part 1002, at paragraphs 1, 3. 

39 81 FR 66930 (Sept. 23, 2016). 

40 Id. 

41 82 FR 16307, 16315 (Apr. 4, 2017). 

42 81 FR 66930 (Sept. 23, 2016). 

For the reasons discussed above, the 

Bureau is finalizing as proposed the 

revisions to § 1002.13(b) concerning the 

collection of ethnicity and race 

information on the basis of visual 

observation or surname. To facilitate 

compliance with Regulation B and 

further align the collection requirements 

of Regulations B and Regulation C, the 

Bureau is also amending § 1002.13(b) to 

permit, but not require, creditors to 

collect the information set forth in 

§ 1002.13(a) from a second or additional 

co-applicant. 

Current comment 13(b)–1 provides 

guidance on the forms and collection 

methods a creditor may use to collect 

applicant information under 

§ 1002.13(a). In the 2017 ECOA 

Proposal, the Bureau proposed to amend 

comment 13(b)–1 to reference the data 

collection model forms the Bureau 

proposed to provide in the Regulation B 

appendix. The Bureau also proposed to 

revise comment 13(b)–1 to reiterate that 

when a creditor collects only aggregate 

ethnicity and race information pursuant 

to § 1002.13(a)(1)(i)(A), the applicant 

must be offered the option to select 

more than one racial designation. If a 

creditor collects applicant information 

pursuant to § 1002.13(a)(1)(i)(B), the 

applicant must be offered the option to 

select more than one ethnicity and more 

than one racial designation. The Bureau 

received no comments specifically 

addressing the revisions to proposed 

comment 13(b)–1, and so is finalizing it 

as proposed. Comments related to the 

data collection model forms are 

addressed in the section-by-section 

analysis of the Regulation B appendix. 

13(c) Disclosure to Applicant(s) 

Section 1002.13(c) sets forth 

disclosures a creditor must provide to 

an applicant when collecting the 

information set forth in § 1002.13(a). 

Current comment 13(c)–1 provides, 

among other information, that the 

Regulation B appendix contains a 

sample disclosure. The Bureau 

proposed to amend comment 13(c)–1 to 

reference two data collection model 

forms the Bureau proposed to provide in 

the Regulation B appendix. The Bureau 

received no comments on proposed 

comment 13(c)–1, and so is finalizing 

comment 13(c)–1 as proposed. 

Comments related to the data collection 

model forms and the 2016 URLA are 

addressed in the section-by-section 

analysis of the Regulation B appendix. 

Appendix B to Part 1002—Model 

Application Forms 

Regulations B and C both contain an 

appendix B that provides model forms 

for use when collecting applicant 

demographic information required 

under the regulations. The current 

Regulation B appendix includes the 

2004 URLA as a model form. The 

current and revised Regulation C 

appendix include instructions and a 

data collection model form for 

collecting applicant demographic 

information. 

The current Regulation B appendix 

includes five model forms, each 

designated for use in a particular type 

of consumer credit transaction. The fifth 

model form, the 2004 URLA, is 

described in the Regulation B appendix 

as appropriate for residential mortgage 

transactions and contains a model 

disclosure for use in complying with 

current § 1002.13. While use of the 

model forms is optional, if a creditor 

uses the appropriate model form, or 

modifies a form in accordance with the 

instructions provided in the Regulation 

B appendix, that creditor is deemed to 

be acting in compliance with § 1002.5(b) 

through (d).38

As discussed above, on September 23, 

2016, the Bureau issued the Bureau 

Approval Notice, pursuant to section 

706(e) of ECOA.39 In the Bureau 

Approval Notice, the Bureau 

determined that, while a creditor is not 

required to use the 2016 URLA, a 

creditor that uses the form without any 

modification that would violate 

§ 1002.5(b) through (d) would act in 

compliance with § 1002.5(b) through 

(d).40 Unlike prior versions of the 

URLA, the 2016 URLA permits an 

applicant to select disaggregated 

ethnicity and race categories, as 

required under revised Regulation C. 

Given the issuance of the Bureau 

Approval Notice and the modifications 

to § 1002.13, the Bureau proposed 

several revisions to the Regulation B 

appendix as discussed below. 

Model Forms for Complying With 

Section 1002.13(a)(1)(i) 

The Bureau proposed to revise the 

Regulation B appendix to provide two 

additional model forms for use in 

complying with § 1002.13. First, for 

creditors collecting disaggregated 

applicant demographic information 

pursuant to § 1002.13(a)(1)(i)(B) and (ii), 

the Bureau proposed to amend the 

Regulation B appendix to crossreference the data collection model form 

included in the revised Regulation C 

appendix. Second, for creditors 

collecting aggregate applicant 

demographic information pursuant to 

§ 1002.13(a)(1)(i)(A) and (ii), the Bureau 

proposed to amend the Regulation B 

appendix to add a model form. The 

proposed model form substantially 

mirrors section X in the 2004 URLA and 

the data collection model form 

contained in the current Regulation C 

appendix. The Bureau received no 

comments opposing and one comment 

supporting the proposed amendments 

and so is finalizing the Regulation B 

appendix to provide alternative model 

forms as proposed. 

In the 2017 ECOA Proposal, the 

Bureau also considered but did not 

propose the alternative of including the 

2016 URLA as a model form in the 

Regulation B appendix.41 No 

commenters opposed the decision not to 

include the 2016 URLA as a model form 

in the Regulation B appendix, and 

several commenters noted that the 

proposed rule would encourage use and 

transition to the 2016 URLA. 

Accordingly, the Bureau is finalizing the 

Regulation B appendix as proposed, 

without including the 2016 URLA. 

One industry commenter requested 

clarification that use of the 2016 URLA 

complies with Regulation B. The Bureau 

believes that no additional approval is 

necessary: The Bureau Approval Notice 

provides that a creditor that uses the 

2016 URLA without any modification 

that would violate § 1002.5(b) through 

(d) acts in compliance with § 1002.5(b) 

through (d).42 Similarly, because the 

substance and form of section 7 of the 

2016 URLA is substantially similar to 

the form the Bureau provides as a model 

form in Regulation C, the 2016 URLA 

may be used in complying with 

§ 1002.13. 

Removal of the 2004 URLA as a Model 

Form 

The current Regulation B appendix 

includes the 2004 URLA as a model 

form for use in complying with 

§ 1002.13. In light of the revisions to 

§ 1002.13(a)(1)(i), the amendment to the 

Regulation B appendix to provide two 

additional model forms, and the fact 

that the Bureau separately approved use 

of the 2016 URLA in the Bureau 

Approval Notice, the Bureau proposed 

to remove the 2004 URLA as a model 

form in Regulation B. The Bureau 

proposed that the 2004 URLA be 

removed on the cutover date the 

Enterprises designate for use of the 2016 

URLA or January 1, 2022, whichever 

comes first. The Bureau received no 

comments on the proposal to remove 

the 2004 URLA or the timing of the 

removal and so is finalizing removal of 

the 2004 URLA as proposed. The date 


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43Specifically, section 1022(b)(2)(A) of the DoddFrank Act calls for the Bureau to consider the 

potential costs of a regulation to consumers and 

covered persons, including the potential reduction 

of access by consumers to consumer financial 

products or services; the impact on depository 

institutions and credit unions with $10 billion or 

less in total assets as described in section 1026 of 

the Dodd-Frank Act; and the impact on consumers 

in rural areas. 

for removal of the 2004 URLA from the 

Regulation B appendix is discussed 

further in the Effective Date section 

below. 

Removal of the Official Commentary to 

Appendix B 

Commentary to the Regulation B 

appendix includes a discussion of two 

forms created by the Enterprises that are 

no longer in use: A 1992 version of the 

URLA and a 1986 home-improvement 

and energy loan application form. Given 

that neither of these forms is currently 

used by the Enterprises, the Bureau 

proposed to remove in its entirety the 

commentary to the Regulation B 

appendix. The Bureau received no 

comments on its proposal and so is 

removing the commentary to the 

Regulation B appendix in this final rule. 

VI. Effective Date 

The Bureau proposed an effective date 

of January 1, 2018, which aligns with 

the effective date for the bulk of the 

revisions to Regulation C in the 2015 

HMDA Final Rule. The effective date of 

the 2015 HMDA Final Rule applies to 

covered loans and applications with 

respect to which final action is taken 

beginning on January 1, 2018, even if 

the application is received in 2017. One 

commenter indicated that the Bureau’s 

proposed effective date for this rule 

creates concerns that it does not 

indicate that the collection of 

disaggregated applicant demographic 

information is permitted for 

applications received in 2017 for which 

final action is taken in 2018. The 

commenter noted that the Bureau 

Approval Notice applied to all 

applications taken in 2017 and 

suggested that the proposed effective 

date for this rule sends a mixed 

message. The Bureau Approval Notice 

provides that, at any time from January 

1, 2017, through December 31, 2017, a 

creditor may, at its option, permit 

applicants to self-identify using 

disaggregated ethnic and racial 

categories as instructed in revised 

Regulation C. During this period, a 

creditor adopting the practice of 

permitting applicants to self-identify 

using disaggregated ethnic and racial 

categories as instructed in the 

Regulation C appendix is not deemed to 

violate Regulation B § 1002.5(b). During 

this period, a creditor adopting the 

practice of permitting applicants to selfidentify using disaggregated ethnic and 

racial categories as instructed in the 

Regulation C appendix is also deemed 

to be in compliance with Regulation B 

§ 1002.13(a)(1)(i) even though 

applicants are asked to self-identify 

using categories other than those 

explicitly provided in that section. 

Because the Bureau Approval Notice 

remains in effect for all of 2017, the 

amendments in this rule are not 

necessary to permit Regulation B-only 

creditors or HMDA reporters to collect 

disaggregated applicant demographic 

information for applications taken in 

2017; they are already permitted to do 

so by the Bureau Approval Notice for 

any application for a covered loan under 

revised Regulation C § 1003.2(g) or any 

application subject to § 1002.13 for all of 

2017. 

The Bureau proposed as an effective 

date for the removal of the 2004 URLA 

from Regulation B appendix either the 

cutover date designated by the 

Enterprises for the mandatory use of the 

2016 URLA or January 1, 2022. The 

Bureau did not receive any comments 

on the proposed effective date for this 

provision. Because the Enterprises have 

not announced a cutover date for the 

mandatory use of the 2016 URLA, the 

Bureau is finalizing January 1, 2022, as 

the effective date for the removal of the 

2004 URLA from the Regulation B 

appendix. 

The rule is effective on January 1, 

2018, except that the amendment to the 

Regulation B appendix removing the 

existing ‘‘Uniform Residential Loan 

Application’’ form is effective January 1, 

2022. 

VII. Dodd-Frank Act Section 1022(b) 

Analysis 

A. Overview 

In developing the final rule, the 

Bureau has considered the potential 

benefits, costs, and impacts.43 In the 

2017 ECOA Proposal, the Bureau set 

forth a preliminary analysis of these 

effects, and the Bureau requested 

comment and submissions of additional 

data that could inform the Bureau’s 

analysis of the benefits, costs, and 

impacts of the proposal. The Bureau 

received some comments on the topic. 

Comments on the benefits and costs of 

the rule are also discussed above in the 

section-by-section analysis of the 

preamble. The Bureau has consulted, or 

offered to consult with, the prudential 

regulators (the Board of Governors of the 

Federal Reserve System, the Federal 

Deposit Insurance Corporation, the 

National Credit Union Administration, 

and the Office of the Comptroller of the 

Currency), the Securities and Exchange 

Commission, the Department of Justice, 

the Department of Housing and Urban 

Development, the Federal Housing 

Finance Agency, the Federal Trade 

Commission, the Department of 

Veterans Affairs, the Department of 

Agriculture, and the Department of the 

Treasury, including regarding 

consistency with any prudential, market 

or systematic objectives administered by 

such agencies. 

A purpose of ECOA, as implemented 

by Regulation B, is to promote the 

availability of credit to all creditworthy 

applicants without regard to protected 

characteristics. The final rule will make 

three substantive changes to Regulation 

B, along with other clarifications, minor 

changes, and technical corrections to 

align the language of Regulation B with 

Regulation C as amended by the 2015 

HMDA Final Rule. The first will give 

persons who collect and retain race and 

ethnicity information in compliance 

with Regulation B the option of 

permitting applicants to self-identify 

using the disaggregated race and 

ethnicity categories required by revised 

Regulation C. In practice, this will allow 

entities that report race and ethnicity in 

accordance with revised Regulation C to 

comply with Regulation B without 

further action, while entities that do not 

report under Regulation C but record 

and retain race and ethnicity data under 

Regulation B will have the option of 

recording data either using the existing 

aggregated categories or the new 

disaggregated categories. 

The Bureau believes that, absent this 

change, entities that currently report 

race and ethnicity data under 

Regulation C could conclude that they 

have different obligations under 

Regulation B and Regulation C once the 

2015 HMDA Final Rule goes into effect 

on January 1, 2018. This would lead to 

unnecessary burden from collecting 

both aggregate and disaggregated data. 

Industry commenters noted this 

potential conflict and expressed their 

support for the proposal. By making 

disaggregated collection an option 

under Regulation B, entities who will 

report race and ethnicity information 

under revised Regulation C will also be 

in compliance with Regulation B with 

certainty. The Bureau believes that 

making collection of disaggregated race 

and ethnicity an option for all entities 

covered by Regulation B will pose little 

or no additional burden on those 

entities who are not HMDA reporters. 

The final rule may have some benefits 

to Regulation B-only creditors, as the 

current language of Regulation B would 

not allow these entities to use the 2016 


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Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 45691 

URLA for the purpose of collecting race 

and ethnicity data, as the 2016 URLA 

uses the disaggregated race and 

ethnicity categories set forth in revised 

Regulation C and not the specific 

categories required by current 

Regulation B. Thus, the final rule has 

the added benefit that it will allow 

Regulation B-only creditors to use the 

2016 URLA as an instrument to collect 

race and ethnicity information. 

The second substantive change will 

remove the outdated 2004 URLA as a 

model form. The Bureau issued the 

Bureau Approval Notice under its 

authority in section 706(e) of ECOA on 

September 23, 2016, which provides 

that a creditor that uses the 2016 URLA 

without any modification that would 

violate § 1002.5(b) through (d) would act 

in compliance with § 1002.5(b) through 

(d). The Bureau is not adding the 2016 

URLA as a model form in place of the 

2004 version. Instead, the Bureau is 

providing for two alternative data 

collection model forms for the purpose 

of collecting ethnicity and race 

information. The Bureau believes this 

practice of acknowledging future 

versions of the URLA via a Bureau 

Approval Notice rather than a revision 

to Regulation B will reduce the risk that 

the model form included in Regulation 

B will become outdated in the future. 

Finally, the Bureau is amending 

Regulation B and the associated 

commentary to allow creditors to collect 

ethnicity, race, and sex from mortgage 

applicants in certain cases where the 

creditor is not required to report under 

HMDA and Regulation C. These 

circumstances include when: (1) A 

creditor that is a financial institution 

under revised Regulation C § 1003.2(g), 

originates a closed-end mortgage loan or 

an open-end line of credit that is an 

excluded transaction under revised 

Regulation C § 1003.3(c)(11) or 

§ 1003.3(c)(12), if it submits HMDA data 

concerning those applications and loans 

or if it submitted HMDA data 

concerning closed-end mortgage loans 

or open-end lines of credit in any of the 

preceding five calendar years; (2) a 

creditor that submitted HMDA data in 

any of the preceding five calendar years 

but is not currently a financial 

institution under Regulation C 

§ 1003.2(g), collects demographic 

information of an applicant for a loan 

that would otherwise be a covered loan 

under Regulation C § 1003.2(e), if not 

excluded by Regulation C 

§ 1003.3(c)(11) or § 1003.3(c)(12); (3) a 

creditor that exceeded an applicable 

loan volume threshold in the first year 

of the two-year threshold period 

provided in Regulation C § 1003.2(g), 

§ 1003.3(c)(11), or § 1003.3(c)(12), 

collects, in the second year, 

demographic information of an 

applicant for a loan that would 

otherwise be a covered loan under 

Regulation C § 12 CFR 1003.2(e), if the 

loan were not excluded by Regulation C 

§ 1003.3(c)(11) or § 1003.3(c)(12); (4) a 

creditor that is a financial institution 

under Regulation C § 1003.2(g), or that 

submitted HMDA data for any of the 

preceding five calendar years but is not 

currently a financial institution under 

Regulation C § 1003.2(g), collects 

demographic information of an 

applicant for a loan that would 

otherwise be a covered loan under 

Regulation C § 1003.2(e) if the loan were 

not excluded by Regulation C 

§ 1003.3(c)(10); and (5) a creditor that 

collects demographic information of a 

second or additional co-applicant for a 

covered loan under Regulation C 

§ 1003.2(e), or for a second or additional 

co-applicant for a loan described in 

amended § 1002.5(a)(4)(i) through (v). 

These changes will primarily benefit 

institutions that may be near the loan 

volume reporting threshold, such that 

they may be required to report under 

HMDA and Regulation C in some years 

and not others, or may be uncertain 

about their reporting status. The Bureau 

believes that allowing voluntary 

collection will reduce the burden of 

compliance with Regulation C on some 

entities and provide certainty regarding 

Regulation B compliance over time. 

B. Potential Benefits and Costs to 

Consumers and Covered Persons 

Providing an Option To Collect 

Disaggregated Race and Ethnicity for 

Regulation B 

Relative to current Regulation B 

following the effective date of the 2015 

HMDA Final Rule, the final rule 

provides clear benefits to entities that 

will be required to collect and report 

race and ethnicity data under HMDA. 

Currently the disaggregated race and 

ethnicity categories required by the 

amendments to Regulation C in the 2015 

HMDA Final Rule, effective January 1, 

2018, do not match the categories 

specified in current Regulation B. 

Because of the differences between the 

categories, some creditors required to 

collect and report race and ethnicity 

using the disaggregated categories set 

forth in revised Regulation C may be 

uncertain whether additional collection 

using aggregated categories would also 

be required to satisfy current Regulation 

B. Complying with both Regulations B 

and C would require burdensome and 

duplicative collection of race and 

ethnicity data at both the aggregated and 

disaggregated level. In practice, the final 

rule simply makes clear that the existing 

collection required under revised 

Regulation C is sufficient for 

compliance with Regulation B. 

The final rule may have benefits to 

consumers, to the extent that lending 

entities voluntarily choose to collect 

disaggregated race and ethnicity 

information. As discussed in the Section 

1022(b) analysis for the 2015 HMDA 

Final Rule, collection of disaggregated 

race and ethnicity data can enhance the 

ability of regulators, researchers and 

community groups to conduct fair 

lending analysis. There are three 

reasons, however, that this rule will 

likely have a limited effect on fair 

lending analysis. First, Regulation Bonly creditors will not be required to 

permit applicants to self-identify using 

disaggregated ethnicity and race 

categories, likely resulting in few 

creditors adopting disaggregated 

ethnicity and race categories. Second, 

many Regulation B-only creditors will 

be exempt from reporting under revised 

Regulation C because they originate 

fewer than 25 closed-end mortgage 

loans in each of the two preceding 

calendar years, which means both that 

few consumers would be affected and 

any disaggregated data would likely be 

too sparse for statistical analysis. 

Finally, demographic data retained by 

Regulation B-only creditors is not 

reported under Regulation C. 

Consequently, most oversight and 

analysis of demographic data retained 

by Regulation B-only creditors will be 

done only by regulators, whereas 

researchers and community groups also 

conduct analysis of HMDA data 

reported under Regulation C. The 

Bureau believes the final rule will not 

impose any costs on consumers. 

The final rule may have benefits to 

some Regulation B-only creditors. 

Although these entities need not make 

any changes to their race and ethnicity 

collection procedures, they may desire 

to do so in the future by adopting the 

2016 URLA. The Enterprises have 

announced that they will cease 

accepting older versions of the URLA at 

a date to be determined and require 

firms that sell to the Enterprises to use 

the 2016 URLA form. Some Regulation 

B-only creditors sell mortgages to the 

Enterprises, and would benefit from 

being able to use the 2016 URLA. The 

Enterprises, not the Bureau, mandate 

the adoption of the 2016 URLA. 

Therefore, the Bureau believes any 

operational costs from adopting the 

2016 URLA are part of the normal 

course of business and are not a cost of 

the final rule. 

In addition to the amendment to 

Regulation B in the proposal, the Bureau 


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45692 Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 

44The criteria for being a financial institution and 

reporting transactions under HMDA are different in 

some ways from the criteria for reporting under the 

NMLS Mortgage Call Report and reporting 

transactions under it. It is possible that the NMLS 

omits some non-depository institutions that 

originated at least 25 closed-end mortgages, did not 

report HMDA data, and are subject to Regulation B. 

Some or all of these institutions may also not have 

been required to report HMDA data. 

45The Bureau does not have an estimate of the 

number of rural community banks that are currently 

exempt from HMDA reporting and originate at least 

25 loans per year. The FFIEC call report for banks 

does not report originations for depository 

institutions that do not report to HMDA. 

considered two alternatives to address 

the differing race and ethnicity 

requirements of Regulation B and 

revised Regulation C. The Bureau 

considered requiring all creditors 

subject to the collection and retention 

requirement of Regulation B to permit 

applicants to self-identify using 

disaggregated race and ethnicity 

categories. To the extent that consumers 

would benefit from disaggregated race 

and ethnicity collection, this alternative 

would provide greater benefits than the 

Bureau’s proposal. However, of the 

three limitations to consumer benefits 

listed above, only the first (that 

disaggregated categories would be 

optional) is alleviated by requiring the 

use of disaggregated race and ethnicity 

categories under Regulation B. It is still 

the case that due to the low volume of 

mortgages by many affected entities and 

the lack of reporting, disaggregated race 

and ethnicity data may have limited 

benefits. Finally, the Bureau believes 

many entities will adopt the 2016 URLA 

as part of the course of business and 

thus permit applicants to self-identify 

using disaggregated race and ethnicity 

categories. 

At the same time, mandatory use of 

disaggregated collection of race and 

ethnicity categories would impose 

greater costs on creditors than the 

Bureau’s proposal, particularly on 

smaller entities. These costs include 

greater operational costs and one-time 

database upgrades. Unlike the costs 

associated with the adoption of the 2016 

URLA, these costs would not otherwise 

be incurred in the normal course of 

business. The Bureau requested 

comments on both the costs and benefits 

associated with this alternative 

approach. 

A consumer advocacy group 

commenter argued that the Bureau 

should adopt the alternative of requiring 

all persons subject to the collection and 

retention requirement of Regulation B to 

permit applicants to self-identify using 

disaggregated race and ethnicity 

categories. The commenter disputed the 

Bureau’s assessment that the potential 

alternative would impose substantial 

costs on Regulation B-only creditors. 

The commenter argued that the 

availability of the 2016 URLA would 

reduce the cost of collecting 

disaggregated race and ethnicity 

information, and advocated for a twoyear implementation period for 

mandatory disaggregated collection to 

further reduce the costs. However, the 

commenter did not address the Bureau’s 

conclusion, mentioned in the proposal 

and again above, that the benefits of 

mandatory disaggregated collection are 

quite limited. A credit union trade 

association explicitly opposed the 

alternative, asserting that its members 

would be unduly burdened by 

mandatory collection of disaggregated 

race and ethnicity information. Other 

commenters did not directly address 

this alternative, but several industry 

commenters supported the flexibility of 

the proposal with respect to collection 

of disaggregated race and ethnicity 

information, implicitly opposing 

making this collection mandatory. 

As discussed above in Part V, the 

Bureau disagrees with the consumer 

advocacy group commenter that there 

would be little burden to Regulation Bonly creditors from making the 

collection of disaggregated race and 

ethnicity categories mandatory. Even 

accepting the commenter’s premise, 

however, the Bureau notes again that it 

believes the additional benefits of this 

alternative to be quite limited because, 

among other reasons, many Regulation 

B-only creditors are likely to eventually 

collect disaggregated race and ethnicity 

data through adoption of the 2016 

URLA. Moreover, the commenter did 

not address the limited usefulness of 

disaggregated race and ethnicity data 

from lenders with a very low volume of 

loan originations. The Bureau continues 

to believe that the benefits of this 

alternative are very low. Accordingly, 

the Bureau is not making disaggregated 

race and ethnicity categories mandatory 

for compliance with Regulation B at this 

time. 

The Bureau also considered 

eliminating entirely the requirement in 

Regulation B to collect and retain 

certain applicant information. This 

alternative would reduce burden to 

firms that do not report under HMDA. 

However, the Bureau believes it may 

impose costs on consumers. The 

prudential regulators confirm that data 

collected and retained by entities 

subject to Regulation B but not 

Regulation C may be used for fair 

lending supervision and enforcement. 

Institutions subject to Regulation B but 

not Regulation C include, for example, 

institutions that do not have a branch or 

home office in a Metropolitan Statistical 

Area (MSA), do not meet an applicable 

asset threshold, or do not meet an 

applicable loan volume threshold. 

For instance, the 2015 NCUA Call 

Report and the 2015 Nationwide 

Mortgage Licensing System & Registry 

(NMLS) Mortgage Call Report data 

include 489 credit unions and 161 nondepository institutions that originated at 

least 25 closed-end mortgages that are 

not found in the 2015 HMDA data.44 In 

addition, many community banks in 

rural areas are already exempt from 

HMDA reporting because they do not 

have a branch or home office in an 

MSA.45 Demographic information 

collected under Regulation B by those 

institutions with larger loan volumes 

may be used in statistical analysis that 

supports fair lending supervision and 

enforcement. Removing the Regulation 

B requirement altogether would make 

detection of any discrimination by these 

entities more difficult, with potentially 

large costs to consumers where such 

discrimination exists. Even for 

institutions with very small volumes of 

originations that may not be subject to 

HMDA reporting because they do not 

meet an applicable loan volume 

threshold, the retained information may 

be useful for comparative file reviews. 

In 2015, there were 1,178 institutions 

that reported HMDA data but had fewer 

than 25 originations and therefore 

would likely be exempt under the 2015 

HMDA Final Rule if they continue to 

originate loans at a similar volume. 

Although the loan volumes of most of 

these institutions would be too sparse 

for statistical analysis, the ability to 

conduct comparative file reviews using 

data retained under Regulation B has 

some benefit. 

A small financial institution 

commenter advocated for eliminating 

the Regulation B requirement to collect 

and retain race and ethnicity 

information. The commenter asserted 

the resulting data are never used by 

regulators, while the collection and 

retention imposes a substantial burden. 

A credit union trade association 

commenter also argued that the Bureau 

should remove the requirement, 

asserting that removing it would reduce 

the regulatory burden on its members. 

The Bureau acknowledges that the 

collection and retention requirement of 

Regulation B imposes some burden on 

financial institutions. As noted above, 

the Bureau believes that consumers 

could suffer substantial harm if the 

requirement were removed. Although it 

may be true in the particular case of the 

community bank commenter, the 

Bureau believes it is not the case that 


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these data are never used by regulators. 

Both the Bureau’s consultations with 

the prudential regulators and its own 

experience in fair lending enforcement 

indicate that these data are used. 

Accordingly, the Bureau is not removing 

the Regulation B requirement to collect 

and retain race and ethnicity 

information. 

Model Forms for Collecting Race and 

Ethnicity Data 

The Bureau believes that the 

provision to change the model forms for 

collecting race and ethnicity data will 

have modest benefits to firms collecting 

these data, by providing updated model 

forms, and reducing confusion regarding 

the outdated 2004 URLA. The final rule 

does not impose any new costs on firms, 

nor does the Bureau believe that 

consumers will experience any cost or 

benefit from the provision. The Bureau 

requested comment regarding the costs 

and benefits associated with this 

provision. Industry commenters 

supported the change, with several 

confirming the potential benefits noted 

above. 

Allowing Voluntary Collection of 

Applicant Information 

Regarding the provision to allow 

certain creditors to voluntarily collect 

demographic information, the Bureau 

believes the financial institutions that 

will most likely exercise such options 

will be low-volume, low-complexity 

institutions that have made a one-time 

investment in HMDA collection and 

reporting and would like to utilize that 

collection process already in place. The 

Bureau believes the final rule will 

provide modest benefits to such 

institutions, by saving on one-time 

adjustment costs required to shift in and 

out of collection. The Bureau expects 

that institutions will only exercise this 

option if voluntary collection provides a 

net benefit. The Bureau does not believe 

that consumers will experience any 

costs or benefits from this provision 

except to the extent that financial 

institutions achieve cost savings and 

pass any such cost savings on to their 

customers. 

The Bureau requested comment 

regarding the costs and benefits 

associated with this provision. The 

Bureau also requested data on the 

number of firms that might be interested 

in voluntary collection under this 

provision. No commenters provided 

such data. 

C. Impact on Depository Institutions and 

Credit Unions With $10 Billion or Less 

in Assets, as Described in Dodd-Frank 

Section 1026 

The Bureau believes that depository 

institutions and credit unions with $10 

billion or less in assets will not be 

differentially affected by the substantive 

amendments. The primary benefit to 

lenders from the final rule is the 

reduced uncertainty and compliance 

burden from allowing the disaggregated 

race and ethnicity information collected 

under Regulation C to be used to 

comply with Regulation B. Both certain 

depository institutions and credit 

unions with less than $10 billion in 

assets and covered persons with more 

than $10 billion in assets currently 

report data under HMDA and thus will 

receive these benefits. The benefits may 

be somewhat larger for depository 

institutions and credit unions with less 

than $10 billion in assets because the 

relative costs of duplicative collection 

will be greater for these entities. 

D. Impact on Access to Credit 

The Bureau does not believe that 

there will be an adverse impact on 

access to credit resulting from any of the 

provisions of the final rule. 

E. Impact on Consumers in Rural Areas 

The Bureau believes that rural areas 

might benefit from the provision to 

allow collection of disaggregated race 

and ethnicity information more than 

urban areas. One of the exceptions to 

the reporting requirements under 

HMDA is for entities that do not have 

a branch or home office located in an 

MSA. Such entities likely serve 

primarily customers in rural areas. To 

the extent that the provision benefits 

firms and consumers, consumers in 

rural areas will see the largest benefits. 

VIII. Regulatory Flexibility Act 

Analysis 

The Regulatory Flexibility Act (RFA), 

as amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996, requires each agency to consider 

the potential impact of its regulations on 

small entities, including small business, 

small governmental units, and small 

nonprofit organizations. The RFA 

defines a ‘‘small business’’ as a business 

that meets the size standard developed 

by the Small Business Administration 

pursuant to the Small Business Act. 

The RFA generally requires an agency 

to conduct an initial regulatory 

flexibility analysis (IRFA) and a final 

regulatory flexibility analysis (FRFA) of 

any rule subject to notice-and-comment 

rulemaking requirements, unless the 

agency certifies that the rule will not 

have a significant economic impact on 

a substantial number of small entities. 

The Bureau also is subject to certain 

additional procedures under RFA 

involving the convening of a panel to 

consult with small business 

representatives prior to proposing a rule 

for which an IRFA is required. 

On March 24, 2017, the Bureau issued 

the 2017 ECOA Proposal on its Web site. 

The Bureau concluded that the 

proposal, if adopted, would not have a 

significant economic impact on any 

small entities and that an IRFA was 

therefore not required. The Bureau 

requested comment on the analysis 

under the RFA and any relevant data. 

The Bureau did not receive any 

comments on the analysis or data. 

This final rule adopts the proposed 

rule without making changes that would 

affect the Bureau’s conclusion that the 

rule will not have a significant 

economic impact on any small entities. 

All methods of compliance under 

current law will remain available to 

covered persons, including small 

entities, when these provisions become 

effective. Thus, a small entity that is in 

compliance with current law need not 

take any additional action, save those 

already required by the 2015 HMDA 

Final Rule. 

Accordingly, the undersigned certifies 

that this final rule will not have a 

significant economic impact on a 

substantial number of small entities. 

IX. Paperwork Reduction Act 

Under the Paperwork Reduction Act 

of 1995 (PRA) (44 U.S.C. 3501 et seq.), 

Federal agencies are generally required 

to seek the Office of Management and 

Budget (OMB)’s approval for 

information collection requirements 

prior to implementation. The collections 

of information related to Regulation B 

and Regulation C have been previously 

reviewed and approved by OMB and 

assigned OMB Control Number 3170– 

0013 (Regulation B) and 3170–0008 

(Regulation C). Under the PRA, the 

Bureau may not conduct or sponsor and, 

notwithstanding any other provision of 

law, a person is not required to respond 

to an information collection unless the 

information collection displays a valid 

control number assigned by OMB. 

The Bureau has determined that this 

final rule would not impose any new or 

revised information collection 

requirements (recordkeeping, reporting 

or disclosure requirements) on covered 

entities or members of the public that 

would constitute collections of 

information requiring OMB approval 

under the PRA. Although some entities 

subject to Regulation B but not 

Regulation C may choose to voluntarily 


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begin collecting disaggregated race and 

ethnicity information, the Bureau 

believes the most likely reason for this 

to occur is through adoption of the 2016 

URLA, which is not part of the final 

rule. 

List of Subjects in 12 CFR Part 1002 

Aged, Banks, Banking, Civil rights, 

Consumer protection, Credit, Credit 

unions, Discrimination, Fair lending, 

Marital status discrimination, National 

banks, National origin discrimination, 

Penalties, Race discrimination, 

Religious discrimination, Reporting and 

recordkeeping requirements, Savings 

associations, Sex discrimination. 

Authority and Issuance 

For the reasons set forth above, the 

Bureau amends Regulation B, 12 CFR 

part 1002, as set forth below: 

PART 1002—EQUAL CREDIT 

OPPORTUNITY ACT (REGULATION B) 

■ 1. The authority citation for part 1002 

continues to read as follows: 

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 

1691b. 

■ 2. Amend § 1002.5 by adding 

paragraph (a)(4) to read as follows: 

§ 1002.5 Rules concerning requests for 

information. 

(a) * * * 

(4) Other permissible collection of 

information. Notwithstanding paragraph 

(b) of this section, a creditor may collect 

information under the following 

circumstances provided that the creditor 

collects the information in compliance 

with appendix B to 12 CFR part 1003: 

(i) A creditor that is a financial 

institution under 12 CFR 1003.2(g) may 

collect information regarding the 

ethnicity, race, and sex of an applicant 

for a closed-end mortgage loan that is an 

excluded transaction under 12 CFR 

1003.3(c)(11) if it submits HMDA data 

concerning such closed-end mortgage 

loans and applications or if it submitted 

HMDA data concerning closed-end 

mortgage loans for any of the preceding 

five calendar years; 

(ii) A creditor that is a financial 

institution under 12 CFR 1003.2(g) may 

collect information regarding the 

ethnicity, race, and sex of an applicant 

for an open-end line of credit that is an 

excluded transaction under 12 CFR 

1003.3(c)(12) if it submits HMDA data 

concerning such open-end lines of 

credit and applications or if it submitted 

HMDA data concerning open-end lines 

of credit for any of the preceding five 

calendar years; 

(iii) A creditor that submitted HMDA 

data for any of the preceding five 

calendar years but is not currently a 

financial institution under 12 CFR 

1003.2(g) may collect information 

regarding the ethnicity, race, and sex of 

an applicant for a loan that would 

otherwise be a covered loan under 12 

CFR 1003.2(e) if not excluded by 12 CFR 

1003.3(c)(11) or (12); 

(iv) A creditor that exceeded an 

applicable loan volume threshold in the 

first year of the two-year threshold 

period provided in 12 CFR 1003.2(g), 

1003.3(c)(11), or 1003.3(c)(12) may, in 

the second year, collect information 

regarding the ethnicity, race, and sex of 

an applicant for a loan that would 

otherwise be a covered loan under 12 

CFR 1003.2(e) if the loan were not 

excluded by 12 CFR 1003.3(c)(11) or 

(12); 

(v) A creditor that is a financial 

institution under 12 CFR 1003.2(g), or 

that submitted HMDA data for any of 

the preceding five calendar years but is 

not currently a financial institution 

under 12 CFR 1003.2(g), may collect 

information regarding the ethnicity, 

race, and sex of an applicant for a loan 

that would otherwise be a covered loan 

under 12 CFR 1003.2(e) if the loan were 

not excluded by 12 CFR 1003.3(c)(10). 

(vi) A creditor that is collecting 

information regarding the ethnicity, 

race, and sex of an applicant or first coapplicant may collect information 

regarding the ethnicity, race, and sex of 

a second or additional co-applicant for 

a covered loan under 12 CFR 1003.2(e) 

or for a second or additional coapplicant for a loan described in 

paragraphs (a)(4)(i) through (v) of this 

section. 

* * * * * 

■ 3. Amend § 1002.12 by revising 

paragraph (b)(1)(i) to read as follows: 

§ 1002.12 Record retention. 

* * * * * 

(b) * * * 

(1) * * * 

(i) Any application that it receives, 

any information required to be obtained 

concerning characteristics of the 

applicant to monitor compliance with 

the Act and this part or other similar 

law, any information obtained pursuant 

to § 1002.5(a)(4), and any other written 

or recorded information used in 

evaluating the application and not 

returned to the applicant at the 

applicant’s request. 

* * * * * 

■ 4. Amend § 1002.13 by revising 

paragraph (a)(1)(i) and paragraph (b) to 

read as follows: 

§ 1002.13 Information for monitoring 

purposes. 

(a) * * * 

(1) * * * 

(i) Ethnicity and race using either: 

(A) For ethnicity, the aggregate 

categories Hispanic or Latino and not 

Hispanic or Latino; and, for race, the 

aggregate categories American Indian or 

Alaska Native, Asian, Black or African 

American, Native Hawaiian or Other 

Pacific Islander, and White; or 

(B) The categories and subcategories 

for the collection of ethnicity and race 

set forth in appendix B to 12 CFR part 

1003. 

* * * * * 

(b) Obtaining information. Questions 

regarding ethnicity, race, sex, marital 

status, and age may be listed, at the 

creditor’s option, on the application 

form or on a separate form that refers to 

the application. The applicant(s) shall 

be asked but not required to supply the 

requested information. If the 

applicant(s) chooses not to provide the 

information or any part of it, that fact 

shall be noted on the form. The creditor 

shall then also note on the form, to the 

extent possible, the ethnicity, race, and 

sex of the applicant(s) on the basis of 

visual observation or surname. When a 

creditor collects ethnicity and race 

information pursuant to 

§ 1002.13(a)(1)(i)(B), the creditor must 

comply with any restrictions on the 

collection of an applicant’s ethnicity or 

race on the basis of visual observation 

or surname set forth in appendix B to 12 

CFR part 1003. If there is more than one 

co-applicant, a creditor is permitted, but 

is not required, to collect the 

information set forth in paragraph (a) of 

this section from a second or additional 

co-applicant. 

* * * * * 

■ 5. Effective January 1, 2018, amend 

Appendix B to Part 1002 by revising 

paragraph 1 and adding a Data 

Collection Model Form to the end of the 

Appendix to read as follows: 

Appendix B to Part 1002—Model 

Application Forms 

1. This appendix contains five model 

credit application forms, each designated for 

use in a particular type of consumer credit 

transaction as indicated by the bracketed 

caption on each form. The first sample form 

is intended for use in open-end, unsecured 

transactions; the second for closed-end, 

secured transactions; the third for closed-end 

transactions, whether unsecured or secured; 

the fourth in transactions involving 

community property or occurring in 

community property States; and the fifth in 

residential mortgage transactions which 

contains a model disclosure for use in 

complying with § 1002.13 for certain 

dwelling-related loans. This appendix also 

contains a data collection model form for 

collecting information concerning an 

applicant’s ethnicity, race, and sex that 


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complies with the requirements of 

§ 1002.13(a)(1)(i)(A) and (ii). Appendix B to 

12 CFR part 1003 provides a data collection 

model form for collecting information 

concerning an applicant’s ethnicity, race, and 

sex that complies with the requirements of 

§ 1002.13(a)(1)(i)(B) and (ii). All forms 

contained in this appendix are models; their 

use by creditors is optional. 

* * * * * 

■ 6. Effective January 1, 2022, amend 

Appendix B to Part 1002 by revising 

paragraph 1 and under paragraph 3 

removing the form ‘‘Uniform Residential 

Loan Application’’. 

The revision reads as follows: 

Appendix B to Part 1002—Model 

Application Forms 

1. This appendix contains four model 

credit application forms, each designated for 

use in a particular type of consumer credit 

transaction as indicated by the bracketed 

caption on each form. The first sample form 

is intended for use in open-end, unsecured 

transactions; the second for closed-end, 

secured transactions; the third for closed-end 

transactions, whether unsecured or secured; 

and the fourth in transactions involving 

community property or occurring in 

community property States. This appendix 

also contains a data collection model form for 

collecting information concerning an 

applicant’s ethnicity, race, and sex that 

complies with the requirements of 

§ 1002.13(a)(1)(i)(A) and (ii). Appendix B to 

12 CFR part 1003 provides a data collection 

model form for collecting information 

concerning an applicant’s ethnicity, race, and 

sex that complies with the requirements of 

§ 1002.13(a)(1)(i)(B) and (ii). All forms 

contained in this appendix are models; their 

use by creditors is optional. 

* * * * * 

■ 7. Amend Supplement I to Part 1002: 

■ a. Under Section 1002.5—Rules 

concerning requests for information: 

■ i. Paragraph 5(a)(2) is revised. 

■ ii. Paragraph 5(a)(4) is added. 

■ b. Under Section 1002.12—Record 

retention, Paragraph 12(b) is revised. 

■ c. Under Section 1002.13— 

Information for monitoring purposes: 

■ i. Paragraph 13(a)—Information to be 

requested is revised. 

■ ii. Paragraph 13(b)—Obtaining of 

information is revised. 

■ iii. Paragraph 13(c)—Disclosure to 

applicants is revised. 

■ d. Appendix B—Model Application 

Forms is removed. 

The revisions and additions read as 

follows: 

Supplement I to Part 1002—Official 

Interpretations 

* * * * * 

Section 1002.5—Rules Concerning 

Requests for Information 

5(a) General rules. 

* * * * * 

Paragraph 5(a)(2). 

1. Local laws. Information that a 

creditor is allowed to collect pursuant to 

a ‘‘state’’ statute or regulation includes 

information required by a local statute, 

regulation, or ordinance. 

2. Information required by Regulation 

C. Regulation C, 12 CFR part 1003, 

generally requires creditors covered by 

the Home Mortgage Disclosure Act 

(HMDA) to collect and report 

information about the race, ethnicity, 

and sex of applicants for certain 

dwelling-secured loans, including some 

types of loans not covered by § 1002.13. 

3. Collecting information on behalf of 

creditors. Persons such as loan brokers 

and correspondents do not violate the 

ECOA or Regulation B if they collect 

information that they are otherwise 

prohibited from collecting, where the 

purpose of collecting the information is 

to provide it to a creditor that is subject 

to the Home Mortgage Disclosure Act or 

another Federal or state statute or 

regulation requiring data collection. 

Paragraph 5(a)(4). 

1. Other permissible collection of 

information. Information regarding 

ethnicity, race, and sex that is not 

required to be collected pursuant to 

Regulation C, 12 CFR part 1003, may 

nevertheless be collected under the 

circumstances set forth in § 1002.5(a)(4) 

without violating § 1002.5(b). The 

information must be retained pursuant 

to the requirements of § 1002.12. 

* * * * * 

Section 1002.12—Record Retention 

* * * * * 

12(b) Preservation of records. 

1. Copies. Copies of the original 

record include carbon copies, 

photocopies, microfilm or microfiche 

copies, or copies produced by any other 

accurate retrieval system, such as 

documents stored and reproduced by 

computer. A creditor that uses a 

computerized or mechanized system 


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need not keep a paper copy of a 

document (for example, of an adverse 

action notice) if it can regenerate all 

pertinent information in a timely 

manner for examination or other 

purposes. 

2. Computerized decisions. A creditor 

that enters information items from a 

written application into a computerized 

or mechanized system and makes the 

credit decision mechanically, based 

only on the items of information entered 

into the system, may comply with 

§ 1002.12(b) by retaining the 

information actually entered. It is not 

required to store the complete written 

application, nor is it required to enter 

the remaining items of information into 

the system. If the transaction is subject 

to § 1002.13 or the creditor is collecting 

information pursuant to § 1002.5(a)(4), 

however, the creditor is required to 

enter and retain the data on personal 

characteristics in order to comply with 

the requirements of that section. 

* * * * * 

Section 1002.13—Information for 

Monitoring Purposes 

13(a) Information to be requested. 

1. Natural person. Section 1002.13 

applies only to applications from 

natural persons. 

2. Principal residence. The 

requirements of § 1002.13 apply only if 

an application relates to a dwelling that 

is or will be occupied by the applicant 

as the principal residence. A credit 

application related to a vacation home 

or a rental unit is not covered. In the 

case of a two-to four-unit dwelling, the 

application is covered if the applicant 

intends to occupy one of the units as a 

principal residence. 

3. Temporary financing. An 

application for temporary financing to 

construct a dwelling is not subject to 

§ 1002.13. But an application for both a 

temporary loan to finance construction 

of a dwelling and a permanent mortgage 

loan to take effect upon the completion 

of construction is subject to § 1002.13. 

4. New principal residence. A person 

can have only one principal residence at 

a time. However, if a person buys or 

builds a new dwelling that will become 

that person’s principal residence within 

a year or upon completion of 

construction, the new dwelling is 

considered the principal residence for 

purposes of § 1002.13. 

5. Transactions not covered. The 

information-collection requirements of 

this section apply to applications for 

credit primarily for the purchase or 

refinancing of a dwelling that is or will 

become the applicant’s principal 

residence. Therefore, applications for 

credit secured by the applicant’s 

principal residence but made primarily 

for a purpose other than the purchase or 

refinancing of the principal residence 

(such as loans for home improvement 

and debt consolidation) are not subject 

to the information-collection 

requirements. An application for an 

open-end home equity line of credit is 

not subject to this section unless it is 

readily apparent to the creditor when 

the application is taken that the primary 

purpose of the line is for the purchase 

or refinancing of a principal dwelling. 

6. Refinancings. A refinancing occurs 

when an existing obligation is satisfied 

and replaced by a new obligation 

undertaken by the same borrower. A 

creditor that receives an application to 

refinance an existing extension of credit 

made by that creditor for the purchase 

of the applicant’s dwelling may request 

the monitoring information again but is 

not required to do so if it was obtained 

in the earlier transaction. 

7. Data collection under Regulation C. 

For applications subject to 

§ 1002.13(a)(1), a creditor that collects 

information about the ethnicity, race, 

and sex of an applicant in compliance 

with the requirements of appendix B to 

12 CFR part 1003 is acting in 

compliance with § 1002.13 concerning 

the collection of an applicant’s 

ethnicity, race, and sex information. See 

also comment 5(a)(2)–2. 

8. Application-by-application basis. 

For applications subject to 

§ 1002.13(a)(1), a creditor may choose 

on an application-by-application basis 

whether to collect aggregate information 

pursuant to § 1002.13(a)(1)(i)(A) or 

disaggregated information pursuant to 

§ 1002.13(a)(1)(i)(B) about the ethnicity 

and race of the applicant. 

13(b) Obtaining of information. 

1. Forms for collecting data. A 

creditor may collect the information 

specified in § 1002.13(a) either on an 

application form or on a separate form 

referring to the application. Appendix B 

to this part provides for two alternative 

data collection model forms for use in 

complying with the requirements of 

§ 1002.13(a)(1)(i) and (ii) to collect 

information concerning an applicant’s 

ethnicity, race, and sex. When a creditor 

collects ethnicity and race information 

pursuant to § 1002.13(a)(1)(i)(A), the 

applicant must be offered the option to 

select more than one racial designation. 

When a creditor collects ethnicity and 

race information pursuant to 

§ 1002.13(a)(1)(i)(B), the applicant must 

be offered the option to select more than 

one ethnicity designation and more than 

one racial designation. 

2. Written applications. The 

regulation requires written applications 

for the types of credit covered by 

§ 1002.13. A creditor can satisfy this 

requirement by recording on paper or by 

means of computer the information that 

the applicant provides orally and that 

the creditor normally considers in a 

credit decision. 

3. Telephone, mail applications. 

i. A creditor that accepts an 

application by telephone or mail must 

request the monitoring information. 

ii. A creditor that accepts an 

application by mail need not make a 

special request for the monitoring 

information if the applicant has failed to 

provide it on the application form 

returned to the creditor. 

iii. If it is not evident on the face of 

an application that it was received by 

mail, telephone, or via an electronic 

medium, the creditor should indicate on 

the form or other application record 

how the application was received. 

4. Video and other electronicapplication processes. 

i. If a creditor takes an application 

through an electronic medium that 

allows the creditor to see the applicant, 

the creditor must treat the application as 

taken in person. The creditor must note 

the monitoring information on the basis 

of visual observation or surname, if the 

applicant chooses not to provide the 

information. 

ii. If an applicant applies through an 

electronic medium without video 

capability, the creditor treats the 

application as if it were received by 

mail. 

5. Applications through loanshopping services. When a creditor 

receives an application through an 

unaffiliated loan-shopping service, it 

does not have to request the monitoring 

information for purposes of the ECOA or 

Regulation B. Creditors subject to the 

Home Mortgage Disclosure Act should 

be aware, however, that data collection 

may be called for under Regulation C 

(12 CFR part 1003), which generally 

requires creditors to report, among other 

things, the sex and race of an applicant 

on brokered applications or applications 

received through a correspondent. 

6. Inadvertent notation. If a creditor 

inadvertently obtains the monitoring 

information in a dwelling-related 

transaction not covered by § 1002.13, 

the creditor may process and retain the 

application without violating the 

regulation. 

13(c) Disclosure to applicants. 

1. Procedures for providing 

disclosures. The disclosure to an 

applicant regarding the monitoring 

information may be provided in writing. 

Appendix B provides data collection 

model forms for use in complying with 

§ 1002.13 and that comply with 

§ 1002.13(c). A creditor may devise its 


jstallworth on DSKBBY8HB2PROD with RULES
Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Rules and Regulations 45697 

1The members of the Council are the Board of 

Governors of the Federal Reserve System, the 

Consumer Financial Protection Bureau, the Federal 

Deposit Insurance Corporation, the National Credit 

Union Administration, the Office of the Comptroller 

of the Currency, and the State Liaison Committee. 2 5 U.S.C. 552. 

3Public Law 114–185, 130 Stat. 538 (June 30, 

2016). 

own disclosure so long as it is 

substantially similar. The creditor need 

not orally request the monitoring 

information if it is requested in writing. 

* * * * * 

Dated: September 8, 2017. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2017–20417 Filed 9–29–17; 8:45 am] 

BILLING CODE 4810–AM–P 

FEDERAL FINANCIAL INSTITUTIONS 

EXAMINATION COUNCIL 

12 CFR Part 1101 

[Docket No. FFIEC–2017–0003] 

Description of Office, Procedures, and 

Public Information 

AGENCY: Federal Financial Institutions 

Examination Council (FFIEC). 

ACTION: Final rule. 

SUMMARY: The Federal Financial 

Institutions Examination Council 

(FFIEC or Council) is adopting as a final 

rule the interim final rule published 

July 3, 2017. The interim final rule 

announced revisions and additions to 

the Council’s information disclosure 

regulations under the Freedom of 

Information Act (FOIA Regulations). 

The interim final rule also replaced the 

interim final rule published on 

December 27, 2016. The revisions in the 

interim final rule implement recent 

statutory amendments to the FOIA that 

are mandated by the FOIA Improvement 

Act of 2016, as well as update the 

language of the Council’s regulations to 

more closely mirror the language of the 

FOIA and to reflect the Council’s 

current FOIA procedures. 

DATES: Effective October 2, 2017. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Judith Dupre, Executive Secretary, 

Federal Financial Institutions 

Examination Council, via telephone: 

(703) 516–5590, or via email: JDupre@

FDIC.gov. 

SUPPLEMENTARY INFORMATION: The 

Council 1 is finalizing its interim rule 

(82 FR 30724 (July 3, 2017)), which 

revised its information disclosure 

regulations under the Freedom of 

Information Act 2 (FOIA Regulations). 

On June 30, 2016, the Freedom of 

Information Act (FOIA) was amended 

by the FOIA Improvement Act of 2016 3

(FOIA Improvement Act). Among other 

things, section 3 of the FOIA 

Improvement Act required each Federal 

agency to revise its disclosure 

regulations and procedures for 

processing FOIA requests in order to 

conform to the substantive amendments 

made by section 2 of the FOIA 

Improvement Act by December 27, 

2016. Accordingly, the Council 

implemented the required substantive 

and procedural changes necessary to 

comply with the FOIA Improvement 

Act’s amendments through issuance of 

the interim final rule (81 FR 94937 

(December 27, 2016)). In addition, the 

Council made certain changes to its 

FOIA Regulations to reflect revisions 

brought about by prior amendments to 

the FOIA that were incorporated into 

the Council’s procedures and to make 

the FOIA process easier for the public 

to navigate. In drafting these 

amendments to the FOIA Regulations, 

the Council consulted the ‘‘Guidance for 

Agency FOIA Regulations’’ issued by 

the U.S. Department of Justice’s Office 

for Information Policy. No comments 

were received in response to the interim 

final rule and it is being finalized 

without change. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Federal Financial 

Institutions Examination Council adopts 

as a final rule, without changes, the 

interim final rule amending 12 CFR 

1101.4, which was published at 82 FR 

30724 on July 3, 2017. 

Dated: September 27, 2017. 

Federal Financial Institutions Examinations 

Council. 

Judith E. Dupre, 

Executive Secretary. 

[FR Doc. 2017–21050 Filed 9–29–17; 8:45 am] 

BILLING CODE 7535–01–P; 6714–01–P; 6210–01–P; 

4810–33–P; 4810–AM–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2016–3697; Product 

Identifier 2015–NM–143–AD; Amendment 

39–19062; AD 2017–20–05] 

RIN 2120–AA64 

Airworthiness Directives; The Boeing 

Company Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: We are superseding 

Airworthiness Directive (AD) 2011–01– 

15, which applied to certain The Boeing 

Company Model 757–200, –200CB, and 

–300 series airplanes. AD 2011–01–15 

required repetitive inspections for 

cracking of the fuselage skin of the 

crown skin panel along the chem-milled 

step at certain stringers, and repair if 

necessary. This AD adds repetitive 

inspections for cracking in additional 

areas, and repair if necessary; removes 

airplanes from the applicability; adds an 

optional skin panel replacement, which 

terminates all inspections; adds an 

optional preventive modification, which 

terminates certain inspections; and 

reduces the compliance time for certain 

inspections. This AD was prompted by 

reports of the initiation of new fatigue 

cracking in the fuselage skin of the 

crown skin panel along locally thinned 

channels adjacent to the chem-milled 

steps. We are issuing this AD to address 

the unsafe condition on these products. 

DATES: This AD is effective November 6, 

2017. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in this AD 

as of November 6, 2017. 

ADDRESSES: For service information 

identified in this final rule, contact 

Boeing Commercial Airplanes, 

Attention: Contractual & Data Services 

(C&DS), 2600 Westminster Blvd., MC 

110–SK57, Seal Beach, CA 90740; 

telephone 562–797–1717; Internet 

https://www.myboeingfleet.com. You 

may view this service information at the 

FAA, Transport Standards Branch, 1601 

Lind Avenue SW., Renton, WA. For 

information on the availability of this 

material at the FAA, call 425–227–1221. 

It is also available on the Internet at 

http://www.regulations.gov by searching 

for and locating Docket No. FAA–2016– 

3697. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http://

www.regulations.gov by searching for 

and locating Docket No. FAA–2016– 

3697; or in person at the Docket 

Management Facility between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. The AD docket 

contains this final rule, the regulatory 

evaluation, any comments received, and 

other information. The address for the 

Docket Office (phone: 800–647–5527) is 

Docket Management Facility, U.S. 

Department of Transportation, Docket 

Operations, M–30, West Building 

Ground Floor, Room W12–140, 1200 


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