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80675

Rules and Regulations

Federal Register
Vol. 75, No. 246
Thursday, December 23, 2010

This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.

FEDERAL RESERVE SYSTEM
12 CFR Part 203
[Regulation C; Docket No. 1398]

Home Mortgage Disclosure
Board of Governors of the
Federal Reserve System.
ACTION: Final rule; staff commentary.
AGENCY:

The Board is publishing a
final rule amending the staff
commentary that interprets the
requirements of Regulation C (Home
Mortgage Disclosure). The staff
commentary is amended to increase the
asset-size exemption threshold for
depository institutions based on the
annual percentage change in the
Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPIW).
The adjustment from $39 million to $40
million reflects the increase of that
index by 2.21 percent during the twelvemonth period ending in November
2010. Thus, depository institutions with
assets of $40 million or less as of
December 31, 2010 are exempt from
collecting data in 2011.
DATES: Effective January 1, 2011.
FOR FURTHER INFORMATION CONTACT: John
C. Wood, Counsel, Division of
Consumer and Community Affairs, at
(202) 452–3667; for users of
Telecommunications Device for the Deaf
(TDD) only, contact (202) 263–4869.
SUPPLEMENTARY INFORMATION: The Home
Mortgage Disclosure Act (HMDA; 12
U.S.C. 2801 et seq.) requires most
mortgage lenders located in
metropolitan areas to collect data about
their housing-related lending activity.
Annually, lenders must report those
data to their federal supervisory
agencies and make the data available to
the public. The Board’s Regulation C (12
CFR part 203) implements HMDA.
Prior to 1997, HMDA exempted
depository institutions with assets

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SUMMARY:

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totaling $10 million or less, as of the
preceding year-end. Provisions of the
Economic Growth and Regulatory
Paperwork Reduction Act of 1996
(codified at 12 U.S.C. 2808(b)) amended
HMDA to expand the exemption for
small depository institutions. The
statutory amendment increased the
asset-size exemption threshold by
requiring a one-time adjustment of the
$10 million figure based on the
percentage by which the CPIW for 1996
exceeded the CPIW for 1975, and it
provided for annual adjustments
thereafter based on the annual
percentage change in the CPIW. The
one-time adjustment increased the
exemption threshold to $28 million for
1997 data collection.
Section 203.2(e)(1)(i) of Regulation C
provides that the Board will adjust the
threshold based on the year-to-year
change in the average of the CPIW, not
seasonally adjusted, for each twelvemonth period ending in November,
rounded to the nearest million dollars.
Pursuant to this section, the Board has
adjusted the threshold annually, as
appropriate.
For 2010, the threshold was $39
million. During the twelve-month
period ending in November 2010, the
CPIW increased by 2.21 percent; as a
result, the exemption threshold will
increase to $40 million. Thus,
depository institutions with assets of
$40 million or less as of December 31,
2010 are exempt from collecting data in
2011. An institution’s exemption from
collecting data in 2011 does not affect
its responsibility to report data it was
required to collect in 2010.
Final Rule

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PART 203—HOME MORTGAGE
DISCLOSURE (REGULATION C)
1. The authority citation for part 203
continues to read as follows:

■

Authority: 12 U.S.C. 2801–2810.

2. In Supplement I to part 203, under
Section 203.2 Definitions, 2(e) Financial
Institution, paragraph 2(e)–2 is revised
to read as follows:

■

Supplement I to Part 203—Staff
Commentary
*

*

*

Section 203.2

*

*

*

*

Definitions

*

*

*

2(e) Financial Institution.

*

*

*

*

*

2. Adjustment of exemption threshold for
depository institutions. For data collection in
2011, the asset-size exemption threshold is
$40 million. Depository institutions with
assets at or below $40 million as of December
31, 2010 are exempt from collecting data for
2011.

*

*

*

*

*

By order of the Board of Governors of the
Federal Reserve System, acting through the
Director of the Division of Consumer and
Community Affairs under delegated
authority, December 17, 2010.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2010–32210 Filed 12–22–10; 8:45 am]
BILLING CODE 6210–01–P

Under the Administrative Procedures
Act, notice and opportunity for public
comment are not required if the Board
finds that notice and public comment
are unnecessary. 5 U.S.C. 553(b)(B). The
amendment in this notice is technical.
Comment 2(e)–2 is amended to update
the exemption threshold. This
amendment merely applies the formula
established by Regulation C for
determining any adjustments to the
exemption threshold. For these reasons,
the Board has determined that
publishing a notice of proposed
rulemaking and providing opportunity
for public comment are unnecessary.
Therefore, the amendment is adopted in
final form.

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List of Subjects in 12 CFR Part 203
Banks, Banking, Federal Reserve
System, Mortgages, Reporting and
recordkeeping requirements.
■ For the reasons set forth in the
preamble, the Board amends 12 CFR
part 203 as follows:

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FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Regulation Z; Docket No. R–1394]

Truth in Lending
Board of Governors of the
Federal Reserve System.
ACTION: Interim final rule, correction.
AGENCY:

This document corrects
certain cross-references and
typographical errors in the regulation,
staff commentary to the regulation, and
the supplementary information of the
interim final rule published in the

SUMMARY:

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80676

Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations

Federal Register of October 28, 2010 (75
FR 66554) (Docket No. R–1394). A
paragraph describing revisions to staff
comment 1(d)(5)–1 is also added to the
section-by-section analysis of the
supplementary information. The interim
final rule amends Regulation Z, which
implements the Truth in Lending Act,
in order to implement provisions of the
Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010.
DATES: This correction is effective
December 27, 2010.
Compliance Date: To allow time for
any necessary operational changes,
compliance with the interim final rule
as corrected is optional until April 1,
2011.
Comments: Comments must be
received on or before December 27,
2010.
FOR FURTHER INFORMATION CONTACT:
Jamie Z. Goodson, Attorney, or Lorna M.
Neill, Senior Attorney, Division of
Consumer and Community Affairs,
Board of Governors of the Federal
Reserve System, at (202) 452–3667 or
452–2412; for users of
Telecommunications Device for the Deaf
(TDD) only, contact (202) 263–4869.
SUPPLEMENTARY INFORMATION: The Board
published an interim final rule in the
Federal Register on October 28, 2010
(75 FR 66554) (Docket No. R–1394),
amending Regulation Z (Truth in
Lending) to implement provisions of the
Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010,
Public Law 111–208, 124 Stat. 1376 (Jul.
21, 2010).
In the interim final rule, Docket No.
R–1394, published on October 28, 2010,
(75 FR 66554) make the following
corrections:
1. On page 66555, in the first column,
line 24, correct ‘‘April 1, 2010’’ to read
‘‘April 1, 2011’’.
2. On page 66556, in the third
column, immediately under the heading
‘‘IV. Section-by-Section Analysis,’’ add
the following:

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‘‘Section 226.1 Authority, Purpose,
Coverage, Organization, Enforcement
and Liability
Section 226.1(d) Organization
Section 226.1(d) describes how
Regulation Z is organized. Section
226.1(d)(5) describes Subpart E of
Regulation Z, which this interim final
rule amends by adding new § 226.42,
‘‘Valuation Independence.’’ The interim
final rule also revises comment 1(d)(5)–
1 to add a new subpart 1(d)(5)–1.ii,
stating that compliance with the interim
final rule is mandatory on April 1, 2011,
for open- and closed-end extensions of
consumer credit secured by the

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consumer’s principal dwelling. The
revised comment also states that
§ 226.36(b), which is substantially
similar to § 226.42(c) and (e), is removed
effective April 1, 2011. The comment
explains that applications for closedend extensions of credit secured by the
consumer’s principal dwelling that are
received by creditors before April 1,
2011, are subject to § 226.36(b)
regardless of the date on which the
transaction is consummated. However,
parties subject to § 226.36(b) may, at
their option, choose to comply with
§ 226.42 instead of § 226.36(b), for
applications received before April 1,
2011. To illustrate, the comment
explains that an application for a
closed-end extension of credit secured
by the consumer’s principal dwelling
received by a creditor on March 20,
2011, and consummated on May 1,
2011, is subject to § 226.36(b), but the
creditor may choose to comply with
§ 226.42 instead. The comment further
explains that, for an application for
open- or closed-end credit secured by
the consumer’s principal dwelling that
is received on or after April 1, 2011, the
creditor must comply with § 226.42.’’
3. On page 66558, in the first column,
line 50, correct ‘‘Section 226.42(b)(5)’’ to
read ‘‘Section 226.42(b)(3)’’.
3a. On page 66558, in the second
column, line 4, correct ‘‘§ 226.42(b)(5)’’
to read ‘‘§ 226.42(b)(3)’’.
4. On page 66559, in the third
column, line 41, correct ‘‘comment
42(c)(1)(1)–3’’ to read ‘‘comment
42(c)(1)–3’’.
5. On page 66570, in the first column,
lines 1–3, remove ‘‘companies that
publicly hold themselves out as’’.
6. On page 66574, in the second
column, lines 1–2, correct ‘‘on rates’’ to
read ‘‘on information about rates’’.
7. On page 66575, in the third
column, line 39, correct ‘‘comment
42(g)–6’’ to read ‘‘comment 42(g)(1)–6.’’
8. On page 66576, in the second
column, line 34, correct ‘‘§ 226.42(b)(2)’’
to read ‘‘§ 226.42(b)(1)’’.
9. On page 66578, in the second
column, line 23, correct ‘‘18,749,687’’ to
read ‘‘75,894’’.
10. On page 66580, in the second
column, revise the List of Subjects
under 12 CFR Part 226 to read as
follows: ‘‘Advertising, Consumer
protection, Federal Reserve System,
Mortgages, Reporting and
recordkeeping, Truth in Lending’’.
Authority Citation for Part 226
[Corrected]
11. On page 66580, in the second
column, under the authority citation,
correct the reference to ‘‘124 Stat. 1376,
2188’’ to read ‘‘124 Stat. 1376, 2187’’.

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§ 226.42 [Corrected]
12. On page 66581, in the third
column, line 1, in § 226.42(d)(3)(i),
correct ‘‘based the value’’ to read ‘‘based
on the value’’.
13. On page 66582, in the first
column, line 29, in § 226.42(f)(2)(i)
introductory text, correct ‘‘a creditor
shall’’ to read ‘‘a creditor or its agents
shall’’.
Supplement I to Part 226 [Corrected]
14. On page 66583, in the first
column, line 57, in paragraph 1(d)(5)–
1.ii, correct ‘‘(ii)’’ to read ‘‘ii.’’.
15. On page 66583, in the first
column, line 63, in paragraph 1(d)(5)–
1.ii, correct ‘‘§ 226.42(b) and (e)’’ to read
‘‘§ 226.42(c) and (e).’’
16. On page 66583, in the third
column, lines 50–51, in paragraph
42(c)(1)–3, correct ‘‘See comment
42(b)(5)–1.’’ to read ‘‘See comment
42(b)(3)–1.’’
17. On page 66584, in the first
column, line 7, in paragraph 42(c)(1)–4,
correct ‘‘exceed’’ to read ‘‘exceeds’’.
18. On page 66584, in the third
column, lines 13–14, in paragraph
42(d)(2)(ii)–1, correct ‘‘(as defined in
paragraph (d)(4)(ii) and comment
42(d)(4)(ii)–1)’’ to read ‘‘(as defined in
paragraph (d)(5)(i) and comment
42(d)(5)(i)–1)’’.
19. On page 66585, in the first
column, lines 1 and 3, in paragraph
42(d)(3)–1 (continued from previous
page), correct ‘‘paragraph (d)(2)’’ to read
‘‘paragraph (d)(3)’’.
20. On page 66585, in the second
column, lines 35–36 and line 37, in
paragraph 42(d)(4)(ii)–1, correct
‘‘paragraph (d)(4)(i)’’ to read ‘‘paragraph
(d)(4)(ii)’’.
21. On page 66585, in the second
column, line 46, in paragraph
42(d)(5)(i)–1, correct ‘‘paragraphs (d)(3)
and (d)(4)(ii)’’ to read ‘‘paragraphs (d)(2)
and (d)(4)(i)’’.
22. On page 66587, in the first
column, lines 22–26, in paragraph
42(g)(1)–1, correct ‘‘Uniform Standards
of Professional Appraisal Practice
established by the Appraisal Standards
Board of the Appraisal Foundation (as
defined in 12 U.S.C. 3350(9) (USPAP)’’
to read ‘‘Uniform Standards of
Professional Appraisal Practice (USPAP)
established by the Appraisal Standards
Board of the Appraisal Foundation (as
defined in 12 U.S.C. 3350(9))’’.
23. On page 66587, in the second
column, line 31, in paragraph 42(g)(1)–
4, add ‘‘and’’ before ‘‘other persons that
provide ‘settlement services’ ’’.
By order of the Board of Governors of the
Federal Reserve System, acting through the

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Federal Register / Vol. 75, No. 246 / Thursday, December 23, 2010 / Rules and Regulations
Secretary under delegated authority,
December 14, 2010.
Robert deV. Frierson,
Deputy Secretary of the Board.

living. 73 FR 22836 (April 28, 2008). In
brief, the Board proposed to, and as
adopted in the final rule, did replace
median household income with median
family income or median earnings for
individuals as better measures, more
flexible, and in line with standards used
by other Federal agencies. 73 FR 71909
(Nov. 26, 2008).
As discussed in the preamble to the
final rule, NCUA also undertook as part
of the regulatory changes to facilitate the
low-income designation process by
eliminating the requirement for credit
unions to apply for the designation.
NCUA is in the process of implementing
geo-coding software to make the
calculation automatically for credit
unions during the examination process.

[FR Doc. 2010–31824 Filed 12–22–10; 8:45 am]
BILLING CODE P

NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 701
RIN 3133–AD75

The Low-Income Definition
National Credit Union
Administration (NCUA).
ACTION: Final rule.
AGENCY:

NCUA is amending the
definition of ‘‘low-income members’’ to
clarify that, in determining if a credit
union qualifies for a low-income
designation, the comparison of credit
union data, whether individual or
family income data, must be with
statistical data for the same category.
The amendment will clarify the
intention of the original regulatory text
so it is consistent with the geo-coding
software the agency uses to make the
low-income credit union (LICU)
designation.

SUMMARY:

Effective December 23, 2010 this
rule finalizes without change, the
interim final rule published on August
5, 2010, 75 FR 47171 (Aug. 5, 2010).
That interim rule was effective upon
publication on August 5, 2010.
FOR FURTHER INFORMATION CONTACT:
Regina Metz, Staff Attorney, Office of
General Counsel, National Credit Union
Administration, 1775 Duke Street,
Alexandria, Virginia 22314–3428, or
telephone: (703) 518–6540.
SUPPLEMENTARY INFORMATION:

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DATES:

Background
The Federal Credit Union Act (Act)
authorizes the NCUA Board (Board) to
define ‘‘low-income members’’ so that
credit unions with a membership
consisting of predominantly low-income
members can benefit from certain
statutory relief and receive assistance
from the Community Development
Revolving Loan Fund. 12 U.S.C.
1752(5), 1757a(b)(2)(A), 1757a(c)(2)(B),
1772c–1. This authority has been
implemented in § 701.34 of NCUA
regulations, known as the low-income
rule. 12 CFR 701.34. In April 2008, the
Board proposed substantial changes to
the rule, which had previously been
based on measuring median household
income, with geographic differentials
for certain areas with higher costs of

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NCUA will make the determination of
whether a majority of an FCU’s members are
low-income based on data it obtains during
the examination process. This will involve
linking member address information to
publicly available information from the U.S.
Census Bureau to estimate member earnings.
Using automated, geo-coding software,
NCUA will use member street addresses
collected during FCU examinations to
determine the geographic area and
metropolitan area for each member account.
NCUA will then use income information for
the geographic area from the Census Bureau
and assign estimated earnings to each
member.

73 FR at 71910–11. NCUA’s software
ensures that the same categories of data
available for member income at a
particular credit union are compared
with like categories of statistical data on
income from the Census Bureau. In
particular, individual member earnings
information is compared to median
individual earnings data and family
income information is compared to
median family income data.1
The final rule in November 2008 also
provided credit unions, as an alternative
1 NCUA’s geo-coding software, known within the
agency as the ‘‘Low-Income Designation Assessment
Tool,’’ is currently a stand-alone software program
developed by NCUA’s Office of the Chief
Information Officer with guidance from regional
staff experienced in low-income designation.
Regional staff as well as Economic Development
Specialists currently use the tool as needed based
on requests from credit unions. Eventually, the
same software rules will be embedded into the
NCUA AIRES examination software. The current
version performs 30 different ratio calculations for
each member based on a variety of factors and data
to determine whether the member meets the lowincome definition. The variety of ratios is expansive
in order to provide all of the possible options for
members to meet the definition. Factors recognize
the following: (1) Data sources include both
decennial income data as well as American
Community Survey income data; (2) different data
is incorporated for metro vs. non-metro geographic
areas; and (3) ratio options include comparisons of
census tract and block group income data, to zip
code, county, MSA, state, and national data, plus
comparisons of county income data to CBSA, state,
and national income data.

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to relying on NCUA’s geo-coding
software, the option of providing actual
income information about their
members as a basis for qualifying as a
LICU. Confusion has arisen regarding
the appropriate comparison of actual
member information and statistical data
from the Census Bureau, prompting the
need for this clarifying amendment. The
confusion arises from a discussion in
the preamble to the final rule, where the
Board stated:
The rule also provides an alternative basis
for an FCU to qualify for a LICU designation.
An FCU may be able to demonstrate the
actual income of its members based on data
it has, for example, from loan applications or
surveys of its members. An FCU may qualify
as a LICU if it can establish a majority of its
members meet the low-income formula. For
example, an FCU with 1,000 members may
be able to show the actual income of 501 or
more of its members is equal to or less than
80% of the MFI for the metropolitan area(s)
where they live. As a practical matter, the
Board thinks few FCUs will need this option
because NCUA’s approach of matching
member residential information with Census
Bureau income information will provide an
estimate very close to members’ actual
income.

73 FR at 71911. The rule provides
median family income or median
individual earnings as alternatives and,
as noted above, NCUA’s geo-coding
software compares like categories of
data. Unfortunately, the above-quoted
statement in the preamble indicated
that, as an alternative to relying on the
NCUA’s geo-coding, a credit union
could apply for a low-income
designation relying on a comparison of
actual income data for individual
members to statistical data on median
family income as the basis for the
designation. This would not be a valid
or meaningful comparison. The Board
believes that, as a matter of logic and
statistical reasoning, only like categories
of data may be compared in making the
determination that a credit union’s
membership meets the low-income
definition. Actual individual member
income information should not be
measured against median family
income, but rather, against individual
median earnings.
Interim Final Rule and Comments
In July 2010, the Board issued an
interim final rule amending
§ 701.34(a)(1) by clarifying that median
family income and median earnings for
individuals are alternative bases on
which credit union members may
qualify as low income. 75 FR 47171
(Aug. 5, 2010). In addition, the interim
final rule amended the subsection of the
rule regarding the option for credit
unions to submit their own information

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