STATUS OF OTHER PENDING RULES

We received a lot of positive feedback about yesterday’s blog entry on the status of changes to Regulation Z. Several of you inquired about the status of other pending rules, particularly those involving Regulations B and C. Well here you go…

Regulation B – The Dodd-Frank Act amended the Equal Credit Opportunity Act (ECOA) to require financial institutions to report information concerning credit applications made by women- or minority-owned businesses and small businesses. The amendments require that certain data be collected and maintained under ECOA, including the number and date the application was received, the type and purpose of loan applied for, the amount of credit applied for and approved, the type of action taken with regard to each application and the date of such action, the census tract of the principal place of business, the gross annual revenue, and the race, sex, and ethnicity of the principal owners of the business.

The CFPB expects to begin developing proposed regulations concerning the data to be collected and appropriate procedures, information safeguards, and privacy protections for information-gathering under this section by October 2012. A proposed rule will likely be published in 2013, with a final rule by early 2014.

Regulation C – The Dodd-Frank Act amended the Home Mortgage Disclosure Act (HMDA), which requires certain lenders to report information in connection with applications they receive for mortgage and other housing-related loans. The amendments expand the scope of information relating to mortgage loans that must be collected and maintained under HMDA, including information about the points and fees payable at origination, the difference between the annual percentage rate associated with the loan and the benchmark rate(s) for all loans, the term of any prepayment penalty, the value of any real property pledged or proposed to be pledged as collateral, the actual or proposed term in months of the mortgage loan, and the age of applicant(s).

The CFPB expects to begin developing proposed regulations concerning the data to be collected and appropriate procedures, information safeguards, and privacy protections for information-gathering under this section by October 2012. A proposed rule will likely be published in 2013, with a final rule by early 2014.

Comment – The revisions to Regulations B and C seem to be running on parallel tracks. We hope they stagger the final rules. If both of these major data collection rules are effective at the same time resources will be drained. It would be much more efficient to allow banks to implement the revisions to Regulation C before embarking on the development of a new data collection system for business loan data.

It appears that we will be consumer with Regulation Z revisions between now and January 2014, then our focus will shift to data collection under Regulations B and C.

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