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F e d e r a l e s e r v eB a n k
R
OF DALLAS
ROBERT
D. M c T E E R , J R .
P R E S ID E N T
A N D C H IE F E X E C U T I V E O F F I C E R
December 21, 1992
DALLAS, TE X A S
75222
Notice 92-124
TO:
The Chief Executive Officer of each
member bank and others concerned in
the Eleventh Federal Reserve District
SUBJECT
Request for Comments on Proposed Amendments to
Regulation B (Equal Credit Opportunity)
DETAILS
The Federal Reserve Board has issued for public comment proposed
amendments to Regulation B (Equal Credit Opportunity) regarding the right of
credit applicants to receive copies of appraisal reports.
The proposed amendments would define the scope of the appraisal
provision of the regulation to cover loans secured by a lien on a residential
structure containing one to four family units. The other revisions would
require a creditor to notify applicants in writing of their right to receive a
copy of an appraisal report.
If an applicant is interested in obtaining a
copy of the report, the proposed amendment would call for the applicant to
make a written request for the appraisal report within 90 days of a credit
decision.
The Bo a r d ’s proposal implements amendments to the Equal Credit
Opportunity Act contained in the Federal Deposit Insurance Corporation
Improvement Act of 1991.
The Board must receive comments by February 5, 1993. Comments
should be addressed to William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington,
D.C. 20551. All comments should refer to Docket No. R-0782.
ATTACHMENT
A copy of the B o a r d ’s notice as it appears on pages 57697-702, Vol.
57, No. 235, of the Federal Register dated December 7, 1992, is attached.
For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas:
Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162,
Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
- 2 -
MORE INFORMATION
For more information, please contact Eugene Coy at (214) 922-6201.
For additional copies of this B a n k ’s notice, please contact the Public Affairs
Department at (214) 922-5254.
Sincerely yours,
J8 . A ^c
Federal Register / Vol. 57, No. 235 / Monday, December 7, 1992 / Proposed Rules
57697
FEDERAL RESERVE SYSTEM
12 CFR Part 202
[R egulation B; D ocket No. R -0782)
Equal Credit Opportunity; Appraisals
and Enforcement
Board of Governors of th e
Federal Reserve System.
ACTiON: Proposed rule.
AGENCY:
The Board is proposing to
revise Regulation B to im plement an
Equal Credit O pportunity Act
am endment concerning appraisals that
was enacted into law as part of the
Federal Deposit Insurance Corporation
Improvement Act of 1991. The proposed
revisions to Regulation B would define
the scope of the appraisal provision to
cover applications to be secured by a
lien on a residential structure
containing one to four family units; set
time limits for an applicant to request a
copy of an appraisal report and for a
creditor to provide a copy; and require
most creditors to notify applicants in
writing of the right to receive a copy of
an appraisal report. Comment is
specifically solicited on w hether a more
limited approach should be adopted or
w hether any regulations at all are
desirable to im plement the statute. In
addition, an am endm ent on general
enforcement would be incorporated into
Regulation B.
DATES: Comments must be received on
or before February 5,1993.
ADDRESSES: Comments should refer to
Docket No. R-0782 and be mailed to
William W. Wiles, Secretary, Board of
Governors of the Federal Reserve
System, Washington, DC 20551.
Comments also may be delivered to the
guard station in the Gccles Building
courtyard entrance on 20th Street NW.
(between Constitution Avenue and C
Street, NW.) between 8:45 and 5:15
weekdays. Except as provided in the
Board’s rules regarding the availability
of information (12 CFR 261.8),
comments received at the above address
will be available for inspection and
copying by any member of the public in
the Freedom of Information Office, room
B-1122 of the Eccles Building, between
9 a.m. and 5 p.m. weekdays.
FOR FURTHER INFORMATION CONTACT: In
the Division of Consumer and
Community Affairs, Adrienne Hurt,
Mary Jane Seebach or John Wood, at
(202) 452-2412 or 452-3867; for the
hearing impaired only, contact Dorothea
Thompson, Telecommunications Device
for the Deaf (TDD), at (202) 452-3544,
Board of Governors of the Federal
Reserve System, Washington, DC 20551.
SUMMARY:
57698
Federal Register / Vol. 57, No. 235 / Monday, December 7, 1992 / Proposed Rules
SUPPLEMENTARY INFORMATION:
(1) Background
The Equal Credit Opportunity Act
(ECOA), 15 U.S.C. 1691—
1691f, makes it
unlawful for creditors to discriminate in
any aspect of a credit transaction on the
basis of gender, marital status, race,
national origin, color, religion, age
(provided the applicant has the capacity
to contract), because all or part of an
applicant’s income derives from any
public assistance, or because an
applicant has in good faith exercised
any right under the Consumer Credit
Protection Act. The ECOA also provides
that a credit applicant has the right to
obtain a written statement of reasons for
a denial of credit. The act is
implemented by the Board’s Regulation
B, 12 CFR part 202. A staff commentary
to the regulation, 12 CFR part 202 Supp.
I, applies and interprets the
requirements of Regulation B.
The Federal Deposit Insurance
Corporation Im provem ent Act
A m endm ents to the ECOA Concerning
Appraisals
Fair lending legislation was
introduced in 1990 that gave credit
applicants the right to receive copies of
appraisal reports used in connection
with their credit applications. This
provision ultimately became law as part
of the Federal Deposit Insurance
Corporation Improvement Act (FDICIA),
Public Law 102-242, 105 Stat. 2236
(1991), which was enacted into law in
December 1991.
Section 223(d) of FDICIA amends the
ECOA by adding paragraph (e) to
section 701 to provide that: Each
creditor shall promptly furnish an
applicant, upon written request by the
applicant made within a reasonable
period of time of the application, a copy
of the appraisal report used in
connection with the applicant's
application for a loan that is or would
have been secured by a lien on
residential real property. The creditor
may require the applicant to reimburse
the creditor for the cost of the appraisal.
The Senate report suggests that by
providing loan applicants w ith the right
to obtain copies of appraisal reports, the
applicants—perhaps with the aid of
counsel—will better be able to
determine whether a loan was denied
due to a discriminatory appraisal.1 The
statutory provision became effective
1 For history on the appraisal provision see S.
Rep. No. 167, 102d Cong., 1st Sess.; S. Rep. No. 461,
101st Cong. 2d Sess.; 137 Cong. Rec. S2519 (daily
ed. February 28,1991); 136 Cong. Rec. S14592,
14598-99 (daily ed. October 5,1990).
upon enactment of FDICIA in December
1991.
(2) The Proposed Revisions to
Regulation B Implementing the ECOA
Appraisal Provision
Section 703(a) of the ECOA, 15 U.S.C.
1691b(a), authorizes the Board to
prescribe rules that in the judgment of
the Board are necessary or proper to
effectuate the purposes of the ECOA, to
prevent circumvention or evasion of the
act, or to facilitate or substantiate
compliance with the act. Pursuant to
this authority, the Board proposes to
implement the ECOA appraisal
provision by (1) defining its scope to
cover applications to be secured by a
lien on a residential structure
containing one to four units; (2)
imposing time limitations for applicants
to request copies of appraisals and for
creditors to provide copies; and (3)
requiring creditors to inform credit
applicants of their right to obtain copies
of appraisal reports upon written
request. The proposed rules would ba
included in a new § 202.5a of
Regulation B.
The draft proposal follows the general
approach taken by the Board in
implementing the ECOA and other
consumer credit laws. That is, it
specifies precise rules to provide clarity
to the law (given creditor exposure to
civil liability for violations of the law)
and to allow federal regulators in the
on-site examination process to
uniformly and objectively assess
creditors’ compliance with the law.
In addition to soliciting comment on
the specific provisions of the proposal,
the Board solicits comment on whether
an alternative approach to
implementing the ECOA appraisal
provision is more appropriate. In
particular, the Board solicits comment
on the following two questions.
• Should the Board simply
incorporate the language of the
appraisal provision in ECOA section
701(e) into Regulation B, without
further substantive interpretation?
» Should certain language or terms,
but not all language or terms found in
section 701(e), be interpreted and
defined in the regulation? This might
include, for example, just the coverage
definition, the coverage and timing
rules, or other combinations. Please
specify.
Because the law has been in effect for
almost one year without a detailed
regulation in place, the Board also
solicits comment on the following four
questions;
• Do creditors currently notify
applicants, orally or in writing, of the
right to receive a copy of an appraisal
report?
• Are creditors automatically
providing copies of appraisal reports to
all applicants (whether an application is
rejected, accepted, or withdrawn)?
• Are creditors making appraisal
reports available to applicants upon oral
request, as opposed to requiring written
requests?
• In making appraisal reports
available to applicants, are creditors
imposing additional fees for providing
copies (beyond the cost of the
appraisal)? If so, what types of fees are
being imposed and in w hat amounts?
Section 202.5a—Rules on Providing
Appraisal Reports
Paragraph (a}—A pplicant Right to Copy
o f Appraisal
Scope of Coverage
The appraisal provision applies to an
application that is or w ould be secured
by a lien on residential real property.
The term “residential real property” is
not defined in the statute. A literal
interpretation could mean any real
property on w hich a residence is or may
be built. This would include credit
applications involving land only, as
well as applications for large
com m ercial/residential development
projects. It would exclude residences
that might not be considered real
property under state law, such as mobile
homes and cooperatives.
Concerns about appraisals seem
primarily focused on single and small
multifamily homes. Therefore, the
Board’s proposed rule would apply the
appraisal provision to a credit
application that is or would be secured
by a dwelling, defined to be a
residential structure containing one to
four units. The proposal would exclude
loans to be secured by land only or large
multifamily residences. For example,
loans to develop, purchase, or improve
an apartment complex with five or more
family units in a low-income urban area
would not be covered* The proposal,
however, would cover credit
applications for business purposes that
are to be secured by a one-to-four family
residence.
The proposal would also include
mobile homes and individual
cooperative units, w hether or not such
dwellings are considered real property
under state law. Where a statutory
provision is intended to apply to credit
transactions involving residences, the
exclusion of a dwelling because it is not
deemed to be real property u nder state
law appears to be unwarranted.
Moreover, this coverage is consistent
with another provision of Regulation B
Federal Register / Vol. 57, No. 235 / Monday, December 7, 1992 / Proposed Rules
(§ 202.13) and other Board consumer
credit regulations like Regulation Z
(implementing the T ruth in Lending
Act).
The Board solicits specific comment
on whether the proposed scope of
coverage should be broadened to
include any loan secured by property
intended for residential purposes
whether or not one to four units, and
any loan to be secured by residential
land. Although the concern about the
undervaluation of property in certain
neighborhoods may be mainly focused
on credit secured by an individual
residence, arguably the concern extends
to loans involving any residential
property in a particular neighborhood.
Tima Limitations
The law provides that an applicant
must make a request w ithin a reasonable
period of time of the application. A
section-by-section analysis of the
appraisal provision in a 1990 Senate
Report states that what constitutes a
reasonable period of time would depend
on a balancing of factors, such as how
long lenders routinely maintain loan
fdes and how long a loan applicant
might need to identify and act upon
suspected discrimination. [See S. Rep.
No. 461 at 14.) An aggrieved applicant
may file suit for an alleged ECOA
violation up to two years from the date
of the alleged violation. ECOA section
706(f), 15 U.S.C. 1691e(f). Under
Regulation B, 12 CFR 202.12, creditors
are required to maintain loan files for up
to 25 months (12 months for business
credit).
Under the proposed rule, applicants
would be required to make written
requests for an appraisal report no later
than 90 days after receiving notice from
the creditor of the action taken on an
application, or a notice of
incompleteness, in accordance with the
notification rules set forth in § 202.9 of
Regulation B. If an applicant withdraws
an application, the request for an
appraisal report must be made w ithin 90
days of the withdrawal. Ninety days
seems representative of the period of
time that creditors keep loan files
"active." In light of the regulation’s
record retention requirement and the
statute of lim itations for filing an ECOA
lawsuit, giving an applicant up to 90
days after notice of the credit decision
to ask for a copy of an appraisal report
could be viewed as too short a time
period. The Board believes, however,
that if applicants are told at the
application stage of their right to obtain
a copy of an appraisal report, applicants
wanting copies will generally request
them in close proximity to the
application process and, therefore, the
proposed time limit would not
prematurely extinguish the applicant's
right. Application records, including
appraisal reports, are available for the
25-month record retention period
should an applicant need access to an
appraisal report in the event of
litigation.
Tne law states that a creditor must
“ prom ptly" furnish a copy of an
appraisal report upon written request by
an applicant. Under the proposed rule,
a creditor would have to provide a copy
of the report within 15 days of receiving
a written request or within 15 days of
obtaining an appraisal report, whichever
occurs later. The 15-day rule for
providing an appraisal report to an
applicant seems feasible. A creditor’s
duty to provide a copy of the report
would arise only after the applicant has
made a written request, the creditor has
received the report and, if required, the
applicant has paid for the appraisal. Of
course, a creditor may accept oral
instead of written requests for appraisal
reports. Where more than one applicant
applying for crodit makes a written
request for a copy of an appraisal report,
the creditor need only provide a copy to
one of the applicants.
The Board Delieves that the timing
requirements in proposed paragraph
(a)(1) are reasonable interpretations of
the language of the law but solicits
specific comment on whether the time
limitations proposed are overly
burdensome for creditors or too
restrictive for applicants.
For purposes of proposed § 202.5a, an
appraisal report is the complete
appraisal report signed by the appraiser;
it includes all information submitted to
the lender by the appraiser for the
purpose of determining the value of
residential property. See S, Rep. No. 461
at 14. In addition, an appraisal report is
not limited to reports prepared by third
parties, it refers to the document(s)
relied upon by a creditor in evaluating
the market value of residential property
containing one to four family units, on
which a lien will be taken as collateral
for an extension of credit, including
reports prepared by the,creditor.
Paragraph (b)— Notice o f Right to Copy
o f Appraisal
Proposed paragraph (b)(1) would
require creditors to provide applicants
with written notice of the section 701(e)
right to a copy of an appraisal report.
The notice would have to be given, in
a form that an applicant may retain, no
later than 15 days after a creditor
receives an application. There are no
location or format requirements, but the
disclosure should be noticeable. The
flexibility of the timing requirement
57699
would allow creditors to provide the
appraisal notice with other federal law
disclosures required to be given to
applicants around the time of
application. For example, the appraisal
notice could be provided on the
estimates of settlement costs given to
certain applicants under the Real Estate
Settlement Procedures Act, or the
docum ent containing Truth in Lending
Act disclosures required under
Regulation Z, 12 CFR 226.5b and
226.19(b), respectively, for home equity
lines of credit and adjustable rate
mortgage loans.
The notice would inform the
applicant of the right to receive a copy
of an appraisal report. It would specify
that a request for a report must be in
writing and must be provided no later
than 90 days after the applicant receives
notice of the action taken on the
application or a notice of
incompleteness under § 202.9. In the
case of a withdrawn application, the
applicant’s request would have to be
made within 90 days of the withdrawal.
An address to which requests should be
sent must be specified, to facilitate
compliance. Generally, a creditor must
provide an appraisal report within 15
days after receiving a request, but if an
applicant does not send the request in
the m anner specified in the notice, the
creditor must exercise reasonable
diligence in providing a copy of the
appraisal to the applicant.
Some home mortgage loan
applications are handled through
intermediaries. Under proposed
paragraph (b)(2), if a loan application is
received through a broker or other third
party that is not an agent of the creditor,
notice has to be given within 15 days
after the application reaches the creditor
rather than 15 days from the time of
application.
The Congress believed that the
appraisal provision might help in
detecting credit discrimination
associated with the appraisal of
property. Requiring creditors to give
applicants written notice of their
statutory right to an appraisal report
may be necessary to give full effect to
the law. It may be important to assure
that applicants are notified of this new
right—particularly to the extent there
has been a lender practice of not making
appraisals available to applicants. The
notice requirement may also serve to
deter a creditor that might otherwise use
appraisals in a discriminatory manner.
Moreover, compliance with the notice
requirement does not seem to be
complex.
57700
Federal Register / Vol. 57, No. 235 / Monday, December 7, 1992 / Proposed Rules
Paragraph (c)—Exceptions
Proposed paragraph (c) excepts from
the written notice requirement creditors
that routinely give copies of appraisal
reports to applicants, for example, at
closing or upon sending a denial notice.
The legislative history suggests that the
appraisal provision is not intended to
affect creditors that routinely provide
copies of appraisal reports. It also states
that the law is not intended to modify
regulations of the National Credit Union
Administration regulations regarding
appraisals, and the proposed rule so
provides under proposed paragraph
(c)(2).2
Proposed paragraph (c)(1) would
except from ihe written notice
requirement creditors that routinely give
co{ ies of appraisal reports to all
applicants applying for loans to be
secured by a one to four family
residence who, if required, have paid for
or are willing to pay for an appraisal,
whether or not credit is granted or
denied. Under proposed paragraph
(c)(1), the 15-day timing rule for
providing an appraisal report to an
applicant generally would not apply.
These creditors would, however, be
subject to the same timing rales as other
creditors, if an applicant makes a
written request for the report prior to
the time the creditor would routinely
provide it.
The Board believes that the
requirements of proposed § 202.5a are
necessary to carry out congressional
intent in enacting the appraisal
provision and to effectuate the purpose
of the ECOA. Nevertheless, to minimize
any compliance burden, mandatory
compliance with a final rule w ould not
be required until October 1,1993. This
should give creditors time to make
whatever adjustments to their credit
application procedures are necessary to
comply with the new rule.
notify the Department of Housing and
Urban Development (HUD) of violations
of the ECOA that may also constitute
violations of the Fair Housing Act
(FHA), provided that the matter has not
been referred to the DOJ. Where the
discovery of such violations result from
a complaint, the agencies must notify
the complainant that such notice has
been given and that there are other
remedies available under the FHA.
Paragraphs (b)(3H5) incorporate these
amendments to section 706 of the ECOA
w ithout substantive change.
Appendix C—Sample Disclosure Forms
A sample disclosure notice—Form C 9—would be added to Appendix C.
Proper use of this form satisfies
compliance w ith proposed § 202.5a of
Regulation B. Creditors may design their
own forms, or add to or modify the
model form, to reflect their individual
policies and procedures. For example, if
a creditor wants to give applicants the
option to call and leave certain
identifying inform ation/their name, and
the address to w hich an appraisal report
should be sent, the creditor may modify
the notice accordingly.
Section 202.14—Enforcement,
Penalties, and Liabilities
(3) Form of Comments
The Board requests that, when
possible, comments on this proposal be
submitted using a standard type face
with a type size of 10 to 12 pitch in
double-spaced text. This will enable the
Board to more efficiently convert
comments into an automated format. An
IBM-compatible DOS-based file
containing comments may be submitted
on 3V-i inch or 5 Vi in ch computer
diskettes if accompanied by the
matching, original written comments.
The Board will adopt a final rule
following a 60-day comment period, and
after a review of the comments received.
The Board contemplates issuing a final
rale during the first quarter of 1993 with
a mandatory compliance date of October
1, 1993.
Paragraph Ik)—Penalties and Liabilities
Soction 223(a)-{c) of FDICIA amends
section 708 of the ECOA to require that
the federal financial supervisory
agencies refer alleged pattern and
practice discrimination cases to the
Department of Justice (DOJ)- The DOJ is
now empowered to seek actual and
punitive damages for ECOA violations,
in addition, the agencies are required to
Economic Im pact Statement
The Board's Division of Research and
Statistics has prepared an economic
impact statement on the proposed
revisions to Regulation B. A copy of the
analysis may be obtained from
Publications Services, Board of
Governors of the Federal Reserve
System, Washington, DC 20551, at (202)
452-3245.
* Federal credit unions roust make available to
any requesting member/applicant, a copy of the
appraisal used in connection with the member's
real estate-related loan application. The appraisal
must be available for 25 months after the applicant
has received notice of the action taken on the
application. A real estate-related loan is one for
which an application is made to finance or
refinance the purchase, construction. Improvement,
repair, or maintenance of a dwelling. A dwelling is
any structure intended for occupancy as a residence
by one or more families and any vacant land which
(4)
(5) Paperwork Reduction Act
In accordance w ith section 3507 of
the Paperwork Reduction Act of 1980
(44 U.S.C. 35; 5 CFR 1320.13), the
proposed information collection will be
reviewed by the Board under the
authority delegated to it by the Office of
Management and Budget after
consideration of the comments received
during the public comment period.
A detailed description of the
proposed recordkeeping disclosure
requirem ents (including the reasons for
them, the lenders that w ould be subject
to them, and how frequently disclosures
may be required) is contained elsewhere
in this notice. A proposed model
disclosure form would be added to
A ppendix C of Regulation B.
The information collection is
mandatory (15 U.S.C. 1691(a)). The
requirem ents will apply to both large
and small mortgage lenders. The impact
on small lenders will depend upon the
extent of the disclosures and the options
for compliance offered by the final
regulations. The model disclosure form
in the regulation w ill somewhat ease
compliance burdens on the lenders. In
addition, lenders that regularly provide
appraisal reports to applicants (whether
the loan is approved or denied) need not
comply w ith the notice requirement of
the regulation.
The following information about
paperwork burden relates only to the
effect of the proposal on state member
banks. Lenders that are subject to
Regulation B other than state member
banks are supervised by other Federal
agencies. For purposes of the Paperwork
Reduction Act, these agencies will
report their own estimates of the
paperwork burden imposed by the new
ECOA requirement.
The Board preliminarily estimates
that the disclosure requirem ent will
result in an annual reporting burden of
13,021 hours for State member banks.
Proposed Information Collection
Report title: Recordkeeping and
Disclosure Requirements in
Connection w ith Regulation B (Equal
Credit Opportunity)
Report number: Not applicable
OMB docket number: 7100-0201
Frequency: As needed
Reporters: State member banks
is offered for sale or lease for the construction or
location of a residence. 12 CFR 701.31(c)(3); S. Rap.
No. 167 at 90.
Federal Register / Vol. 57, No. 235 / Monday, December 7, 1992 / Proposed Rules
Number of records
subject to require
ment
Appraisal report upon request ........................................................................................................
Notice of right to appraisal ..........................................................................................................
List of Subjects in 12 CFR P art 202
Agad, Banks, Banking, Civil rights,
Consumer protection, Crodit, Federal
Reserve System, Marital status
discrimination, Minority groups,
Penalties, Religious discrimination,
Reporting and recordkeeping
requirements, Sex discrimination,
Women.
For the reasons set forth in the
preamble, and pursuant to authority
granted in 15 U.S.C. 1691b of the ECOA,
the Board proposes to amend 12 CFR
part 202 as follows:
PART 202—EQUAL CREDIT
OPPORTUNITY
1. The authority citation for part 202
continues to read as follows:
Authority: 15 U.S.C. 1691-1691f.
2. Section 202.1 is am ended by
revising the last sentence of paragraph
(b) to read as follows:
$ 202.1
*
*
Authority, sc o p * , m i pu rp ose.
*
*
*
(b) Purpose. * * * The regulation
also requires creditors to notify
applicants of action taken on their
applications; to report credit history in
the names of both spouses on an
account; to retain records of credit
applications; to collect information
about the applicant’s race and other
personal characteristics in applications
for certain dwelling-relatad loans; and
to provide applicants upon written
request w ith copies of appraisal reports
used in connection w ith credit
transactions.
3. Section 202.5a is added to read as
follows:
§ 2 0 2.5s
reports.
R u les on providing appraisal
(a) Applicant right to copy o f
appraisal. (1) Upon written request, a
creditor shall furnish an applicant with
a copy of the appraisal report used in
connection with an application for
credit that is to be secured by a lien on
a dwelling. The creditor may require
reimbursement from the applicant for
the cost of the appraisal. The creditor
shall mail or deliver a copy of an
appraisal report w ithin 15 days after
receiving a written request from the
applicant, or after receiving the report,
whichever occurs later.
125,000
625,000
(2) The applicant request for the
report referred to in paragraph (a)(1) of
this section shall be made no later than
90 days after the creditor has provided
notice of the action taken on the
application, or a notice of
Incompleteness, in accordance with
§ 202.9. In the case of a withdrawn
application, the applicant request shall
be made no later than 90 days after the
application is withdrawn.
13} Dwelling means a residential
structure that contains one to four units.
The term includes an individual
condominium or cooperative unit, and a
mobile or other manufactured home,
(4) For purposes of this section, an
appraisal report refers to the document
relied upon bv a creditor in evaluating
the market value of residential property
containing a dwelling on which a lien
will be taken as security for an
extension of credit.
(b) Notice o f right to copy o f
appraisal. (1) A creditor shall notify an
applicant in writing of the right to
receive a copy of an appraisal report
under paragraph (a) of this section. The
notice shall be provided in a form that
the applicant may retain, no later than
15 days after the creditor receives an
application. The notice shall specify
that the applicant’s request for the
appraisal report must be in writing and
m ust be received by the creditor no later
than 90 days after die creditor provides
notice of the action taken on the
application or a notice of
incompleteness (or in the case of a
withdrawal application 90 days after the
withdrawal). An address to which a
request should be sent shall be specified
in the notice.
(2) For an application received
through a broker or other person that is
not an agent of the creditor, the creditor
m ust provide the notice required under
this paragraph (b) within 15 days after
the application reaches the creditor.
(c) Exceptions. (1) A creditor that
regularly provides copies of appraisal
reports to applicants (whether credit is
granted or denied or the application is
withdrawn) generelly need not comply
with the notice requirement in this
section, except that if an applicant
makes a written request for a copy of en
appraisal report prior to the time the
report is routinely provided, the creditor
shall mail or deliver a copy of the report
to the applicant within the 15-dav time
Estimated lime per
response (miriutss)
x
....
—
5.00
.25
=
57701
Estimated total
number of hours
Of annua! reoorting
burden
....
....
10,417
2,604
period specified in paragraph (a) of this
section.
(2) A creditor that provides copies of
appraisal reports pursuant to regulations
of the National Credit Union
Administration is not subject to the
requirements of this section.
4.
Section 202.14 is amended by
revising paragraph (b)(3) and adding
paragraphs (b)(4) and (b)(5) to read as
follows:
§ 202.14 Enforcem ent, p e n sitie s and
!labilities.
*
*
*
*
*
fb) Penalties and liabilities. * * *
*
*
*
*
*
(3) Section 706(g) provides that, if an
agency responsible for administrative
enforcement is unable to obtain
compliance w ith the act or this
regulation, it may refer the matter to the
Attorney General of the United States.
In addition, if the Board, the
Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the
Office of Thrift Supervision, or the
National Credit Union Administration
has reason to believe that one or more
creditors has engaged in a pattern or
practice of discouraging or denying
applications in violation of the act or
this regulation, the agency shall refer
the matter to the Attorney General of the
United States and may refer a matter to
the Attorney General if the agency has
reason to believe that one or more
creditors has violated section 701(a) of
the act.
(4) Section 706(h) provides that on
referral, or whenever the Attorney
General has reason to believe that one
or more creditors are engaged in a
pattern or practice in violation of the act
or this regulation, the Attorney General
may bring a civil action for such relief
as may be appropriate, including actual
and punitive damages and injunctive
relief.
(5) Section 706(k) provides that if the
Board, the Comptroller of the Currency,
the Federal Deposit Insurance
Corporation, the Office of Thrift
Supervision, or the National Credit
Union Administration has reason to
believe, as a result of a consumer
complaint, conducting a consumer
compliance examination, or otherwise,
that a violation of the act or this
regulation has occurred which is also a
violation of the Fair Housing Act, and
the matter is not referred to the Attorney
57702
Federal Register / Vol. 57, No. 235 / Monday, December 7 , 1992 / Proposed Rules
General of the United States, the agency
shall notify the Secretary of the
Department of Housing and Urban
Development and notify the applicant
that the Secretary of Housing and Urban
Development has been notified and that
remedies for the violation may be
available under the Fair Housing Act.
*
*
*
*
*
5. Appendix C to part 202 is amended
by revising the first sentence and by
adding a new sentence at the end of the
first paragraph of the introduction, by
adding a new sentence to the end of the
last paragraph of the introduction, and
by adding sample Form C-9 in
numerical order to read as follows:
Appendix C to Part 202—Sample
Notification Forms
This appendix contains nine sample
notification forms. * * * Form C -9 is
designated for use in notifying an applicant
of the right to receive a copy of an appraisal
under § 202.5a.
*
*
*
*
*
*
* * Proper use o f Form'C-9 will satisfy
the requirements of § 202.5a,
Form C-9 — S am p le D isclosu re o f Right To
R eceive a Copy o f an A ppraisal
You have the right to a copy o f the
appraisal report obtained in connection with
your application for credit provided that, if
required, you have paid for or are willing to
pay for the appraisal. You can get a copy of
this report by writing to us at the address
listed below. We must hear from you no later
than 90 days after you are notified about the
action taken on your credit application. (If
you withdraw your application, you must
make your request for an appraisal report
within 90 days of the withdrawal.) You can
telephone us, instead of writing, but by doing
so you are not assured o f preserving your
rights.
[In your letter, give us the following
information:]
(Creditor's name and address)
By order of the Board o f Governors of the
Federal Reserve System, November 30,1992.
William W. Wiles,
Secretary of the Board.
[FR Doc. 9 2-29430 Filed 1 2 -4-92 ; 8:45 am]
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