The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Federal R eserve Bank OF DALLAS R O B E R T D. M C T E E R , J R . P R E S ID E N T DALLAS, TE XAS A N P C H IE F E X E C U T I V E O F F I C E R August 30, 1996 75265-5906 Notice 96-82 TO: The Chief Executive Officer of each financial institution in the Eleventh Federal Reserve District SUBJECT Slip-sheet Amendments to Regulations H, K, Z, BB, EE, and to the Official Staff Commentary on Regulation B DETAILS The Board of Governors of the Federal Reserve System has published slip-sheet amendments to Regulation H, effective April 1, 1996; Regulation K, with various effective dates; Regulation Z, effective September 25 and September 30, 1995; Regulation BB, effective January 1, 1996; Regulation EE, effective February 20, 1996; and the Official Staff Com mentary on Regulation B, effective June 5, 1995. ENCLOSURES The amendment slip sheets and an updated index to regulations are enclosed. Please insert them in your Regu lations binders. 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 Intrastale (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 regarding Regulation H, please contact Lynn Black at (214) 922-6069. For more infor mation regarding Regulation K, please contact Richard Burda at (713) 652-1503. For more information regarding Regulation Z or the Official Staff Commentary on Regulation B, please contact Eugene Coy at (214) 922-6201. For more information regarding Regulation BB, please contact Gloria Vasquez Brown at (214) 922-5266. For more information regarding Regulation EE, please contact Jane Schmoker at (214) 922-5101. For additional copies of this Bank’s notice, the slip sheets, or the index to regulations, please contact the Public Affairs Department at (214) 922-5254. Sincerely yours, Board of Governors of the Federal Reserve System • Amendments to Regulation H Membership o f State Banking Institutions in the Federal Reserve System March 1996* 1. Effective A pril I, 1996, section 208.20 is am ended to read as follow s: S E C T IO N 2 0 8 .2 0 — S u sp ic io u sA ctiv ity R ep o rts (a) Purpose. This section ensures that a state m em ber bank files a suspiciousactivity report when it detects a known or suspected violation o f federal law, or a suspicious transaction related to a moneylaundering activity or a violation o f the Bank Secrecy Act. This section applies to all state member banks. (b) Definitions. For the purposes of this section: (1) F in C E N m e an s the F in a n c ia l Crim es Enforcement Network o f the Department o f the Treasury. (2) In stitu tion-affilia ted p a rty means any institution-affiliated party as that term is defined in 12 USC 1786(r), or 1813(u) and 1818(b)(3), (4) or (5). (3) SAR means a suspicious-activity re port on the form prescribed by the Board (c) SARs required. A state member bank shall file a SAR with the appropriate fed eral law enforcement agencies and the Department of the Treasury in accordance with the form’s instructions by sending a completed SAR to FinCEN in the follow ing circumstances: (1) In s id e r a b u se in v o lv in g any amount. Whenever the state member bank detects any known or suspected federal criminal violation, or pattern of criminal violations, committed or at* A c o m p le te R e g u la tio n H . a s a m e n d e d e ffe c tiv e A pril 1, 1996. c o n s is ts o f— • th e re g u la tio n p a m p h le t d a te d O c to b e r 1995 (se e in sid e c o v e r) a nd • th is s lip sheet. tempted against the bank or involving a transaction or transactions conducted through the bank, where the bank be lieves that it was either an actual or potential victim of a criminal violation, or series of criminal violations, or that the bank was used to facilitate a crimi nal transaction, and the bank has a sub stantial basis for identifying one of its directors, officers, employees, agents, or o ther institution-affiliated parties as having committed or aided in the com mission of a criminal act regardless of the amount involved in the vio’.uion. (2) Violations aggregating $5,000 or more where a suspect can be identified. Whenever the state member bank de tects any known or suspected federal criminal violation, or pattern o f crimi nal violations, committed or attempted against the bank or involving a transac tion or transactions conducted through the bank and involving or aggregating $5,000 or more in funds or other assets, where the bank believes that it was ei ther an actual or potential victim of a criminal violation, or series of criminal violations, or that the bank was used to facilitate a criminal transaction, and the bank has a substantial basis for identi fying a possible suspect or group of suspects. If it is determined prior to fil ing this report that the identified sus pect or group of suspects has used an “ alias,” then information regarding the true identity of the suspect or group of suspects, as well as alias identifiers, such as driver’s license or Social Se curity num bers, addresses and te le phone numbers, must be reported. (3) Violations aggregating $25,000 or more regardless o f a potential suspect. Whenever the state member bank de tects any known or suspected federal 1 Regulation H criminal violation, or pattern o f crimi nal violations, committed or attempted against the bank or involving a transac tion or transactions conducted through the bank and involving or aggregating $25,000 or more in funds or other as sets, where the bank believes that it was either an actual or potential victim o f a criminal violation, or series o f criminal violations, or that the bank was used to facilitate a criminal trans action, even though there is no substan tial basis for identifying a possible sus pect or group of suspects. (4) Transactions aggregating $5,000 or more that involve potential money laun dering or violations o f the Bank Se crecy Act. Any transaction (which for purposes of this paragraph (c)(4) means a deposit, withdrawal, transfer between accounts, exchange of currency, loan, extension o f credit, purchase or sale of any stock, bond, certificate o f deposit, or other monetary instrument or invest ment security, or any other payment, transfer, or delivery by, through, or to a financial institution, by whatever means effected) conducted or attempted by, at or through the state member bank and involving or aggregating $5,000 or more in funds or other assets, if the bank knows, suspects, or has reason to suspect that— (i) the transaction involves funds de rived from illegal activities or is in tended or conducted in order to hide or disguise funds or assets derived from illegal activities (including, without limitation, the ownership, na ture, source, location, or control of such funds or assets) as part o f a plan to violate or evade any law or regulation or to avoid any transac tion-reporting requirement under fed eral law; (ii) the transaction is designed to evade any regulations promulgated under the Bank Secrecy Act; or (iii) the transaction has no business or apparent lawful purpose or is not the sort in which the particular cus tomer would normally be expected to 2 engage, and the bank knows of no reasonable explanation for the trans action after examining the available facts, including the background a n d ^ A possible purpose o f the transaction. (d) Time fo r reporting. A state member bank is required to file a SAR no later than 30 calendar days after the date of initial detection of facts that may consti tute a basis for filing a SAR. If no sus pect was identified on the date of detec tion of the incident requiring the filing, a state m em ber bank may delay filing a SAR for an additional 30 calendar days to identify a suspect. In no case shall report ing be delayed more than 60 calendar days after the date of initial detection of a reportable transaction. In situations in volving violations requiring immediate at tention, such as when a reportable viola tion is ongoing, the financial institution shall immediately notify, by telephone, an appropriate law enforcement authority and the Board in addition to filing a timely SAR. (e) Reports to state and local authorities. State member banks are encouraged to file a copy o f the SAR with state and lo cal law en fo rc em en t ag en cies w here appropriate. (f) Exceptions. (1) A state member bank need not file a SAR for a robbery or burglary com mitted or attempted that is reported to appropriate law enforcement authorities. (2) A state member bank need not file a SAR for lost, missing, counterfeit, or stolen securities if it files a report pur suant to the reporting requirements of 17 CFR 240.17f-1. (g) Retention o f records. A state member bank shall maintain a copy o f any SAR filed and the original or business record equivalent o f any supporting documenta tion for a period o f five years from the date of the filing o f the SAR. Supporting docum entation shall be identified and maintained by the bank as such, and shall be deemed to have been filed with the SAR. A state member bank must make all Regulation H supporting documentation available to ap propriate law enforcement agencies upon request. (h) Notification to board o f directors. The management of a state member bank shall promptly notify its board of directors, or a committee thereof, of any report filed pur suant to this section. (i) Compliance. Failure to file a SAR in accordance with this section and the in structions may subject the state member bank, its directors, officers, employees, agents, or other institution-affiliated par ties to supervisory action. (j) C onfidentiality o f SARs. SARs are confidential. Any state member bank sub poenaed or otherwise requested to dis close a SAR or the information contained in a SAR shall decline to produce the SAR or to provide any information that would disclose that a SAR has been pre pared or filed citing this section, applica ble law (e.g., 31 USC 5318(g)), or both, and notify the Board. (k) Safe harbor. The safe-harbor provi sions of 31 USC 5318(g). which exempts any state member bank that makes a dis closure of any possible violation of law or regulation from liability under any law or regulation of the United States, or any constitution, law or regulation of any state or political subdivision, covers all reports o f suspected or known criminal violations and suspicious activities to law enforce ment and financial institution supervisory authorities, including supporting documen tation, regardless of whether such reports are filed pursuant to this section or are filed on a voluntary basis. 3 Board of Governors of the Federal Reserve System Amendments to Regulation K International Banking Operations ^J^Tuly 1996* 1. E ffective D ecem ber 21, 1995, section 2 1 1 .2 is a m e n d e d by re d e sig n a tin g paragraphs (u) and (v) as paragraphs (v) and (w), respectively, and by adding new paragraphs (u) and (x) to read as follows: (u) Strongly capitalized means— (1) in relation to a parent m em ber bank, that the standards set out in 12 CFR 208.33(b)(1) are satisfied; and (2) in relation to an Edge or agreement corporation or a bank holding company, that it has a total risk-based capital ra tio of 10.0 percent or greater. * • * * * * (x) Well managed means that the Edge or agreement corporation, its parent member bank, if any, and the bank holding com pany have each received a composite rat ing of 1 or 2 at its most recent examina tion or review and are not subject to any supervisory enforcement action. 2. E ffective D ecem ber 21, 1995, section 2 1 1 .5 is a m e n d e d b y re d esig n a tin g p a ra g ra p h s (c )(2 ) a n d (c )(3 ) as paragraphs (c)(3) and (c)(4), respectively. In the third sentence o f newly designated paragraph (c)(3), the word "accepted" is replaced with the word "received. ” A new paragraph (c)(2) is added to read as follows: (2) (i) Expanded general consent fo r de novo investments. Notwithstanding the amount limitations of paragraph (c)(1) * A c o m p le te R e g u la tio n K , as a m e n d e d e ffe c tiv e M a y 9, 1996, c o n s is ts o f — • th e r e g u la tio n p a m p h le t d a te d J a n u a ry 1994 (se e in sid e c o v e r) a n d • th is s lip sheet. Ite m s 1. 2, 3. 5. 6. 7, 8, a n d 10 a re n ew . Ite m s 4 a n d 9 w e re in c lu d e d in th e J a n u a r y 1995 slip sh eet. o f this section, but subject to the other limitations o f this section, the Board grants expanded general consent author ity for investments in an organization by an investor that is strongly capital ized and well managed if— (A) the activities of the organization are limited to activities in which a national bank may engage directly or in which a subsidiary may engage under section 211.5(d); (B) in the case of an investor that is an Edge corporation that is not en gaged in banking or an agreement corporation, the total am ount in vested in such organization (in one transaction or a series o f transac tions) does not exceed the lesser of 20 percent of the investor’s tier 1 capital or 2 percent of the tier 1 cap ital of the parent member bank; (C) in the case o f a bank holding company or member bank investor, the total amount invested in such or ganization (in one transaction or a series of transactions) directly or in directly does not exceed 2 percent of the investor’s tier 1 capital; (D) all investments made, directly or indirectly, by an Edge corporation not engaged in banking or an agree ment corporation during the previous 12-month period under paragraph (c)(2) o f this section, when aggre gated with the proposed investment, would not exceed the lesser of 50 percent o f the total capital of the Edge or agreement corporation, or 5 percent o f the total capital of the par ent member bank; (E) all investments made, directly or indirectly, by a member bank or a bank holding company during the p rev io u s 12-m onth p erio d u n der paragraph (c)(2) of this section, when 1 Regulation K aggregated with the proposed invest ment, would not exceed 5 percent of its total capital; and (F) both before and immediately af ter the proposed investment the in vestor, its parent member bank, if any, and any parent bank holding company are strongly capitalized and well managed. (ii) Determining aggregate investment limits. For purposes o f determ ining compliance with the aggregate invest m ent lim its set out in p arag rap h s (c)(2)(i)(D) and (E) of this section, an investment by an investor in a subsidi ary shall be counted only once notwith standing that such subsidiary may, within 12 months o f the date of making the investment, downstream all or any part o f such investm ent to another subsidiary. (iii) Additional investments. An inves tor that makes investments under para graph (c)(2)(i) o f this section may also make additional investments in an or ganization under the standards set forth in paragraphs (c)(l)(ii), (c)(l)(iii) and (c)(l)(iv) of this section. (iv) Ineligible investments. The follow ing investments are not eligible for the g en e ra l c o n se n t u n d e r p a ra g ra p h (c)(2)(i) o f this section: (A) an investment in a foreign coun try where the investor does not have an affiliate or a branch; (B) the establishment or acquisition of an initial subsidiary bank in a for eign country; (C) investments in general partner ships or unlimited liability com pa nies; and (D) an acquisition o f shares or assets o f an organization that is not an affil iate or joint venture of the investor. (v) Post-investment notice. By the end of the month following the month in which the investment is made, the in vestor shall provide the Board with the following information relating to the investment: (A) if the investment is in a joint venture, the respective responsibili ties o f the p a rtie s to the jo in t venture; (B) projections for the organization in which the investment is made the first year following the invest^ ment; and (C) where the investment is made in an organization that incurred a loss in the last year, a description of the reasons for the loss and the steps taken to address the problem. 3. Effective April 1, 1996, section 211.8 is amended by replacing the words "crimi nal referral form " with the words “suspicious-activity report. ” 4. E ffe c tiv e J a n u a ry 1, 1995, sectio n 211.21(e) is amended to read as follows: (e) Change the status o f an office means convert a representative office into a branch or agency, or an agency into a branch, but does not include renewal of the license o f an existing office. 5. Effective May 9, 1996, section 211,22(aM is amended to read as follow s. Sectiw^ 2 1 1 .2 2 (c ) is d e leted , a n d se c tio n 211.22(d) is redesignated as 211.22(c). (a) Determination o f home state. (1) A foreign bank (except a foreign bank to which paragraph (a)(2) of this section applies) that has any combina tion of domestic agencies or subsidiary com m ercial lending co m p an ies that were established before September 29, 1994, in more than one state and have been continuously operated shall select its home state from those states in which such offices or subsidiaries are located. A foreign bank shall do so by filing with the Board a declaration of home state by June 30, 1996. In the absence of such selection, the Board shall designate the home state for such foreign banks. Regulation K (2) A foreign bank that, as o f Septem ber 29, 1994, had declared a home state or had a home state determined pursu ant to the law and regulations in effect prior to that date shall have that state as its home state. (3) A fo re ig n b ank th a t has any branches, agencies, subsidiary commer cial lending companies, or subsidiary banks in one state, and has no such of fices or subsidiaries in any other states, shall have as its home state the state in which such offices or subsidiaries are located. 6. E ffe c tiv e J a n u a ry 24, 1996, sectio n 211.24 is amended by revising paragraphs (a)(2)(i) and (ii) to read as follows: (i) Prior notice fo r certain representative offices. After providing 45 d ay s’ prior written notice to the Board, a foreign bank that is subject to the BHC Act, ei ther directly or through section 8(a) of the IB A (12 USC 3106(a)), may establish— (A) a regional administrative office; or (B) a representative office, but only if the Board has previously determined that the foreign bank proposing to es tablish a representative office is subject to comprehensive supervision or regula tion on a consolidated basis by its home-country supervisor, or previously has been approved for a representative office by Board order. The Board may waive the 45-day period if it finds that immediate action is required by the cir cumstances presented. The notice pe riod shall commence at the time the no tice is received by the appropriate Reserve Bank. The Board may suspend the period or require Board approval prior to the establishment of such an office if the notification raises signifi cant policy, prudential, or supervisory concerns. (ii) General consent fo r representative of fices. The Board grants its general consent for a foreign bank that is subject to sec tion 8(a) of the IBA (12 USC 3106(a)) to establish a representative office that solely engages in limited administrative func tions (such as separately m aintaining back-office support system s) that are clearly defined, are performed in connec tion with the United States banking activi ties of the foreign bank, and do not in volve contact or liaison with customers or potential custom ers beyond incidental contact with existing customers relating to administrative matters (such as verifica tion or correction of account information), provided that the foreign bank notifies the Board in writing within 30 days of the establishment of the representative office. 7. E ffe c tiv e J a n u a ry 24, 1996, sectio n 211.24 is amended by redesignating para graph (d)(3) as (d)(4) and adding a new paragraph (d)(3) to read as follows: (3) Special-purpose foreign -g overn m ent banks. A foreign government-owned or ganization engaged in banking activities in its home country that are not commer cial in nature may apply to the Board for determination that the organization is not a foreign bank for purposes of this sec tion. A written request setting forth the basis for such a determination may be submitted to the Reserve Bank of the Dis trict in which the foreign organization's representative office is located in the United States or to the Board in the case o f a proposed establishment of a represen tative office. The Board will review and act upon each such request on a case-bycase basis. 8. Effective A pril 1, 1996, section 211.24(f) is amended by replacing the words “crim inal referral form ” with the words “suspi cious-activity report. ” 9. Effective January 1, 1995, section 211.29 is added to read as follows: S E C T IO N 2 1 1 .2 9 — A p p lic a tio n s by S ta te -L ic e n se d B ra n c h e s and A g e n c ie s to C o n d u c t A c tiv ities N o t P e rm issib le fo r F ed eral B ran ch es 3 Regulation K (a) Scope. A state-licensed branch or agency shall file with the Board a prior written application for permission to en gage in or continue to engage in any type of activity that— (1) is not perm issible for a federal branch, pursuant to statute, regulation, official bulletin or circular, or order or interpretation issued in writing by the Office o f the Comptroller of the Cur rency; or (2) is rendered impermissible due to a subsequent change in statute, regula tion, official bulletin or circular, written order or interpretation, or decision o f a court of competent jurisdiction. (b) Exceptions. No application shall be required by a state-licensed branch or agency to conduct any activity that is oth erwise permissible under applicable state and federal law or regulation and that— (1) has been determined by the FDIC pursuant to 12 CFR 362.4(c)(i)— (ii>(A) not to present a significant risk to the affected deposit insurance fund; (2) is permissible for a federally li censed branch but the OCC imposes a quantitative limitation on the conduct of such activity by the federal branch; (3) is conducted as agent rather than as principal, provided that the activity is one that could be conducted by a statechartered bank headquartered in the sam e state in w hich the branch or agency is licensed; or (4) any other activity that the Board has determined may be conducted by any state-licensed branch or agency of a foreign bank without further applica tion to the Board. (c) Contents o f application. An applica tion submitted pursuant to paragraph (a) of this section shall be in letter form and shall contain the following information: (1) a brief description of the activity, including the manner in which it will be conducted and an estimate of the ex pected dollar volume associated with the activity; (2) an analysis o f the impact o f the proposed activity on the condition of the U.S. operations o f the foreign bank in general and o f the branch or agency in particular, including a copy, if avails able, o f any feasibility study, manage^ ment plan, financial projections, busi n ess plan , o r s im ila r d o c u m en t concerning the conduct of the activity; (3) a resolution by the a p p lic a n t's board of directors or, if a resolution is not required pursuant to the applicant’s organizational documents, evidence of approval by senior management, au thorizing the conduct of such activity and the filing o f this application; (4) if the activity is to be conducted by a state-licensed insured branch, a state ment by the applicant of whether or not it is in compliance with 12 CFR 346.19 and 346.20, Pledge of Assets, and As set Maintenance, respectively; (5) if the activity is to be conducted by a state-licensed insured branch, state ments by the applicant— (i) that it has complied with all re quirements o f the Federal Deposit In surance Corporation concerning an application to conduct the activity and the status o f the application, in cluding a copy of the FD IC ’s dispo sition of such application, if avail able, and (ii) explaining why the activity will* pose no significant risk to the deposit insurance fund; and (6) any other information that the Re serve Bank deems appropriate. (d) Factors considered in determination. (1) The Board shall consider the fol lowing factors in determining whether a proposed activity is consistent with sound banking practice: (A) the types o f risks, if any, the ac tivity poses to the U.S. operations of the foreign banking organization in general and the branch or agency in particular; (B) if the activity poses any such risks, the magnitude of each risk; and (C) if a risk is not de minimis, the actual or proposed procedures to con trol and minimize the risk. Regulation K (2) Each o f the factors set forth in paragraph (d)(1) of this section shall be evaluated in light o f the financial con dition of the foreign bank in general and the branch or agency in particular and the volume of the activity. (e) Application procedures. Applications pursuant to this section shall be filed with the responsible Reserve Bank for the for eign bank. An application shall not be deemed complete until it contains all the inform ation requested by the Reserve Bank and has been accepted. Approval of such an application may be conditioned on the applicant's agreement to conduct the activity subject to specific conditions or limitations. (f) Divestiture or cessation. (1) In the event that an applicant’s ap plication for permission to continue to conduct an activity is not approved by the Board or, if applicable, the FDIC, the applicant shall submit a detailed written plan of divestiture or cessation of the activity to the responsible Re serve Bank within 60 days o f the disap proval. The divestiture or cessation plan shall describe in detail the manner in which the applicant will divest itself of or cease the activity and shall include a projected timetable describing how long the divestiture or cessation is expected to take. Divestitures or cessation shall be complete within one year from the date of the disapproval, or within such shorter period of time as the Board shall direct. (2) In the event that a foreign bank op era tin g a state b ra n ch or ag en cy chooses not to apply to the Board for permission to continue to conduct an activity that is not permissible for a federal branch or which is rendered im permissible due to a subsequent change in statute, regulation, official bulletin or circular, written order or interpretation, or decision of a court of competent ju risdiction, the foreign bank shall submit a written plan of divestiture or cessa tio n , in co n fo rm a n ce w ith section 211.29(f)(1), o f this part within 60 days o f the effective date o f this part or of such change or decision. 10. Effective March 25, 1996, section 211.30 is added to read as follows: S E C T IO N 2 1 1 .3 0 — C rite ria fo r E v a lu a tin g th e U .S . O p era tio n s o f F o re ig n B an k s N o t S u b jec t to C o n so lid a te d S u p erv isio n (a) G eneral. P ursuant to the Foreign B ank S u p erv isio n E n h a n ce m en t Act, Pub.L. 102-242. 105 Stat. 2286 (1991), the Board shall develop and publish crite ria to be used in evaluating the operations of any foreign bank in the United States that the Board has determined is not sub ject to comprehensive supervision or regu lation on a consolidated basis. (b) Criteria. Following a determination by the Board that, having taken into ac count the standards set forth in section 211.24(c)(1) of this subpart, a foreign bank is not subject to comprehensive, consolidated supervision by its homecountry supervisor, the Board shall con sider the following criteria in determining whether the foreign bank’s U.S. opera tions should be permitted to continue and, if so, whether any supervisory constraints should be placed upon the bank in con nection with those operations: (1) the proportion of the foreign bank’s total assets and total liabilities that are located or booked in its home country, as well as the distribution and location of its assets and liabilities that are lo cated or booked elsewhere; . (2) the extent to which the operations and assets o f the foreign bank and any affiliates are subject to supervision by its home-country supervisor; (3) whether the appropriate authorities in the home country o f such foreign bank are actively working to establish arrangements for the comprehensive, consolidated supervision of such bank and whether demonstrable progress is being made; 5 Regulation K (4) whether the foreign bank has effec tive and reliable systems of internal controls and management information and reporting, which enable its manage ment properly to oversee its worldwide operations; (5) whether the foreign bank’s homecountry supervisor has any objection to the bank continuing to operate in the United States; (6) whether the foreign bank’s homeco u n try su p e rv iso r and the hom ecountry supervisor o f any parent o f the foreign bank share material information regarding the operations of the foreign bank with other supervisory authorities; (7) the relationship of the U.S. opera tions to the other operations o f the for eign bank, including whether the for eign bank maintains funds in its U.S. offices that are in excess of amounts due to its U.S. offices from the foreign bank's non-U.S. offices; (8) the soundness of the foreign bank’s overall financial condition; (9) the managerial resources of the for eign bank, including the competence, experience, and integrity of the officers and directors and the integrity o f its principal shareholders; (10) the scope and frequency o f exter nal audits o f the foreign bank; (11) the operating record o f the foreign bank generally and its role in the bank ing system in its home country; (12) the foreign bank’s record of com pliance with relevant laws, as well as the adequacy o f its money-laundering controls and procedures, in respect of its worldwide operations; (13) the operating record of the U.S. offices of the foreign bank; (14) the views and recommendations of the Office of the Comptroller o f the Currency or the state banking regulators 6 in those states in which the foreign bank has operations, as appropriate; (15) whether the foreign bank, if re quested, has provided the Board w i t l adequate assurances that such informa tion will be made available on the op erations or activities o f the foreign bank and any o f its affiliates as the Board deems necessary to determine and enforce compliance with the Inter national Banking Act, the Bank Hold ing Company Act, and other applicable federal banking statutes; and (16) any other information relevant to the safety and soundness of the U.S. operations of the foreign bank. (c) Restrictions on U.S. operations. (1) Terms o f agreement. Any foreign bank that the Board determines is not subject to comprehensive supervision or regulation on a consolidated basis by its home-country supervisor may be re quired to enter into an agreement to conduct its U.S. operations subject to such restrictions as the Board, having considered the criteria set forth in para graph (b) of this section, determines to be appropriate in order to ensure the sa fe ty and so u n d n e ss o f its U.S. operations. (2) Failure to enter into o r com ply with agreement. A foreign bank that isj required by the Board to enter into an agreement pursuant to paragraph (c)(1) o f this section and either fails to do so or fails to comply with the terms of such agreement may be subject to en forcement action in order to ensure safe and sound banking operations under 12 USC 1818, or to termination or a rec ommendation for termination of its U.S. operations under section 211.25(a) and (e) o f this subpart and section (7)(e) of the IB A (12 USC 3105(e)). Board of Governors of the Federal Reserve System Amendments and Corrections to Regulation Z Truth in Lending ovember 1995* 1. Effective September 25, 1995, paragraph (c)(1) o f appendix K is revised to read as follow s: * * * * including fees paid directly to the broker or the lender (for delivery to the broker) w hether such fees are paid in cash or financed.* * A ssum ed annual dw elling appreciation rate: 4% * P a ra g ra p h (6 ) is e ffe c tiv e o n th e e a rlie r o f — • 6 0 d a y s a fte r th e d a te o n w h ic h th e B o a rd o f G o v e r n o r s o f th e F e d e ra l R e s e rv e S y s te m is s u e s final r e g u l a ti o n s i m p l e m e n t i n g p a r g a g r a p h ( 6 ) o r • S e p t e m b e r 3 0 , 1996. P 10 = Min (103,385.84, 137,662.72) 9 30,000(1 + i) '0 -o + 2 j =o 0(1 + i)'<H 3. E ffective Septem ber 30, 1995, section 106(d)(3) was added to read as follow s: * * * * * = 103,385.84 i = .1317069438 Total-annual-loan-cost rate (100(.1317069438 X 1)) = 13.17% TRUTH IN LENDING ACT 4 ^ 2 -■ E ffective Sep tem b er 30, 1995, section 106(a) was am ended by adding a third sentence and a new paragraph (6) to read as follow s: * * * The finance charge shall not in clude fees and amounts imposed by third party closing agents (including settlement agents, attorneys, and escrow and title companies) if the creditor does not re quire the imposition o f the charges or the services provided and does not retain the charges. * * * * * * * (3) Any tax levied on security instru ments or on documents evidencing indebt edness if the payment of such taxes is a precondition for recording the instrument securing the evidence of indebtedness. 4. E ffective Sep tem b er 30, 1995, section 106(e), p a ra grap hs (2) and (5), were am ended to read as follow s: * * * * * (2) Fees for preparation o f loan-related documents. * * * * * (5) Appraisal fees, including fees related to any pest infestation or flood hazard in spections conducted prior to closing. * * * * * * (6) Borrower-paid mortgage broker fees, • A c o m p le te R e g u la tio n Z , a s a m e n d e d e ffe c tiv e S e p te m b e r 25, 1995, c o n s is ts o f — • th e r e g u la tio n p a m p h le t d a te d J u ly 1995 (s e e in sid e f ro n t c o v e r ) a n d • th is s lip sheet. 5. E ffective Septem ber 30, 1995, section 106(f) was added to read as follow s: (f) Tolerances fo r accuracy. In connection with credit transactions not under an open end credit plan that are secured by real property or a dwelling, the disclosure of 1 Regulation Z the finance charge and other disclosures affected by any finance charge— (1) shall be treated as being accurate for purposes o f this title if the amount disclosed as the finance charge— (A) does not vary from the actual fi nance charge by more than $100; or (B) is greater than the amount re quired to be disclosed under this ti tle; and (2) shall be treated as being accurate for purposes of section 125 if— (A) except as provided in subpara graph (B), the amount disclosed as the finance charge does not vary from the actual finance charge by more than an amount equal to oneh a lf o f one percen t o f the total amount of credit extended; or (B) in case o f a transaction, other than a mortgage referred to in sec tion 103(aa), which— (i) is a refinancing o f the principal balance then due and any accrued and unpaid finance charges o f a residential mortgage transaction as defined in section 103(w), or is any subsequent refinancing o f such a transaction; and (ii) does not provide any new con solidation or new advance; if the amount disclosed as the fi nance charge does not vary from the actual finance charge by more than an amount equal to one per cent of the total amount o f credit extended. 6. Effective September 30, 1995, a sentence was added to the end o f section 121(c) to read as follow s: .* * * In the case o f any consumer credit transaction a portion o f the interest on which is determined on a per diem basis and is to be collected upon the consum mation of such transaction, any disclosure with respect to such portion of interest shall be deemed to be accurate for pur poses o f this title if the disclosure is based on information actually known to the creditor at the time that the disclosure documents are being prepared for the con summation of the transaction. 7. Effective Septem ber 30, 1995, sections 125(h) and (i) were added to read as follow s: (h) Limitation on rescission. An obligor shall have no rescission rights arising solely from the form o f written notice used by the creditor to inform the obligor o f the rights o f the obligor under this sec tion, if the creditor provided the obligor the appropriate form o f written notice published and adopted by the Board, or a comparable written notice of the rights of the obligor, that was properly completed by the creditor, and otherwise complied with all other requirements of this section regarding notice. (i) Rescission rights in foreclosure. (1) N otw ithstanding section 139, and subject to the time period provided in subsection (f), in addition to any other right o f rescission available under this section for a transaction, after the initi ation o f any judicial or nonjudicial foreclosure process on the prim ary dwelling o f an obligor securing an ex tension of credit, the obligor shall h a v ^ a rig h t to re sc in d the tra n sa c tio n equivalent to other rescission rights provided by this section, if— (A) a mortgage broker fee is not in cluded in the finance charge in accor dance with the laws and regulations in effect at the time the consumer credit transaction was consummated; or (B) the form of notice o f rescission for the transaction is not the appro priate form o f written notice pub lished and adopted by the Board or a comparable written notice, and other wise complied with all the require m e n ts o f th is sectio n re g ard in g notice. (2) Notwithstanding section 106(f), and subject to the time period provided in subsection (f), for the purposes o f exer- Regulation Z cising any rescission rights after the in itiation of any judicial or nonjudicial foreclosure process on the principal dwelling of the obligor securing an ex tension o f credit, the disclosure o f the finance charge and other disclosures af fected by any finance charge shall be treated as being accurate for purposes o f this section if the amount disclosed as the finance charge does not vary from the actual finance charge by more than $35 or is greater than the amount required to be disclosed under this title. (3) Nothing in this subsection affects a consum er’s right o f rescission in re coupment under State law. (4) This subsection shall apply to all consum er credit transactions in exis tence or consummated on or after the date o f the enactment of the Truth in Lending Act Amendments of 1995. 8. E ffective Septem ber 30, 1995, section 130(a)(2)(A)(iii) was added to read as follow s: * * * , or (iii) in the case of an individ ual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $200 or greater than $2,000; or 9. Effective Septem ber 30, 1995, sections 131(e) and (f) were added to read as follow s: (e) L iability o f assignee fo r consum er c re d it tr a n sa c tio n s se c u re d by real property. (1) E xcept as otherw ise specifically provided in this title, any civil action against a creditor for a violation o f this title, and any proceeding under section 108 against a creditor, with respect to a consum er credit transaction secured by real property may be maintained against any assignee o f such creditor only if— (A) the violation for which such ac tion or proceeding is brought is ap parent on the face of the disclosure statem ent pro vided in connection with such transaction pursuant to this title; and (B) the assignment to the assignee was voluntary. (2) For the purpose o f this section, a violation is apparent on the face o f the disclosure statement if— (A) the disclosure can be determined to be incomplete or inaccurate by a com parison am ong the disclosure statem ent, any item ization o f the am ount financed, the note, or any other disclosure o f disbursement; or (B) the disclosure statement does not use the terms or format required to be used by this title. (f) Treatment o f servicer. (1) A servicer o f a consumer obligation arising from a consumer credit transac tion shall not be treated as an assignee o f such obligation for purposes of this section unless the servicer is or was the owner of the obligation. (2) A servicer of a consumer obligation arising from a consum er credit transac tion shall not be treated as the owner of the obligation for purposes o f this sec tion on the basis o f an assignment of the obligation from the creditor or an other assignee to the servicer solely for the administrative convenience of the servicer in servicing the obligation. Upon written request by the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address, and telephone num ber o f the owner o f the obligation or the master servicer o f the obligation. (3) For purposes of this subsection, the term “ servicer” has the same meaning as in section 6(i)(2) o f the Real Estate Settlement Procedures Act o f 1974. (4) This subsection shall apply to all consum er credit transactions in exis tence or consummated on or after the 3 Regulation Z date o f the enactment of the Truth in Lending Act Amendments of 1995. 10. Effective September 30, 1995, section 139 was added to read as follow s: SECTION 139— Certain Limitations on Liability (a) Limitations on liability. For any con sumer credit transaction subject to this ti tle that is consummated before the date of the enactment o f the Truth in Lending Act Amendments of 1995, a creditor or any assignee of a creditor shall have no civil, administrative, or criminal liability under this title for, and a consumer shall have n o 'ex tend ed rescission rights under sec tion 125(f) with respect to— (1) the creditor’s treatment, for disclo sure purposes, of— (A ) ta x e s d e sc rib e d in sec tio n 106(d)(3); (B ) fees d e sc rib e d in se ctio n 106(e)(2) and (5); (C) fees and amounts referred to in the 3rd sentence o f section 106(a); or (D) borrower-paid mortgage broker fees referred to in section 106(a)(6); (2) the form of written notice used by the creditor to inform the obligor -of the rights of the obligor under section 125 if the creditor provided the obligor with a properly dated form o f written notice 4 published and adopted by the Board or a comparable written notice, and other wise complied with all the requirements o f this section regarding notice; or (3) any disclosure relating to the fi nance charge imposed with respect to the transaction if the amount or per centage actually disclosed— (A) may be treated as accurate for purposes o f this title if the amount disclosed as the finance charge does not vary from the actual finance charge by more than $200; (B) may, under section 106(f)(2), be treated as accurate for purposes of section 125; or (C) is greater than the am ount or percentage required to be disclosed under this title. (b) Exceptions.—Subsection (a) shall not apply to— (1) any individual action or counter claim brought under this title which was filed before June 1, 1995; (2) any class action brought under this title for which a final order certifying a class was entered before January 1, 1995; (3) the named individual plaintiffs in any class action brought under this title which was filed before June 1, 1995; o r ^ ^ k (4) any consum er credit transaction with respect to which a timely notice of rescission was sent to the cred ito r before June 1, 1995. Board of Governors of the Federal Reserve System Amendments to Regulation BB Community Reinvestment £ July 1996* 1. E ffe c tiv e J a n u a ry 1, 1996, se ctio n 228.12(h)(3) is revised to read as follows: * * * * * (3) activities that promote economic de velopm ent by financing businesses or farms that meet the size eligibility stan dards of 13 CFR 121.802(a)(2) and (3) or have gross annual revenues of $1 million or less; or * * * * * 2. E ffe c tiv e J a n u a ry 1, 1996, sec tio n 228.27(h) is revised to read as follows: (h) Plan amendment. During the term of a plan, a bank may request the Board to approve an amendment to the plan on * A c o m p le te R e g u la tio n B B , as a m e n d e d e ffe c tiv e J a n u ary 1. 1996. c o n s is ts o f — • th e reg u la tio n p a m p h le t d a te d J u ly 1995 (se e in side f ro n t c o v e r) a n d • th is s lip sheet. grounds that there has been a material change in circumstances. The bank shall develop an amendment to a previously approved plan in accordance with the public participation requirements of para graph (d) of this section. 3. E ffe c tiv e J a n u a ry 1, 1996, sectio n 228.51(a) is revised to read as follows: (a) Effective date. Sections of this part become applicable over a period of time in accordance with the schedule set forth in paragraph (c) of this section. Notwith standing paragraph (c) o f this section, w hen a b an k , e ith e r v o lu n ta rily or mandatorily, becomes subject to the per formance tests and standards o f sections 228.21 through 228.27, the bank must comply with all the pertinent requirements o f sections 228.11 through 228.44, and no longer must comply with the requirements o f sections 228.3 through 228.7. 1 Board of Governors of the Federal Reserve System Amendments to the Official Staff Commentary on Regulation B, Equal Credit Opportunity • August 1995* 1. E ffe c tiv e J u n e 5, 1995, co m m en t 2<c)(])(i)-l is added to read as follow s: 1. A pplication fo r credit. A refinance or extend the term of or other loan is adverse action plicant applied in accordance creditor's procedures. refusal to a business if the ap with the 2. E ffe c tiv e A p r il 1, 1991, co m m en t 2(c)(2)(ii)-2 is added to read as follow s: 2. Current delinquency o r default. The term “ adverse action” does not include a creditor’s termination o f an account when the accountholder is currently in default or delinquent on that account. Notification in accordance with section 202.9 of the regulation generally is required, however, if the creditor’s action is based on a past delinquency or default on the account. ^ ^ ^ 3 . E ffe c tiv e J u n e 5, 1995, co m m en t 2(c)(2)(iii)-2 is added to read as follow s: 2. Application fo r increase in available credit. A refusal or failure to authorize an account transaction at the point of sale or loan is not adverse action, except when the refusal is a denial o f an application, submitted in accordance with the credi tor’s procedures, for an increase in the amount of credit. 4. Effective June 5, 1995, the title fo r com ment 2(p) is am ended to read "Empiri* T h e c o m p le te c o m m e n ta r y , a s a m e n d e d e ffe c tiv e Ju n e 5, 1995, c o n s is ts o f — • th e p a m p h le t d a te d M a y 19 9 0 (se e in sid e c o v e r) a nd • th is s lip sheet. I te m s 1, 3 , 4 , 5, 7 , 8 , 9 , 10, 11, a n d 15 a re n e w . T h e o th e r ite m s w e re in c lu d e d in th e slip s h e e t d a te d A u g u s t 1992. cally D erived and Other Credit Scoring Systems, ” and com ments 2(p)-3 and -4 are added to read as follow s: 3. Pooled-data scoring systems. A scoring system or the data from which to develop such a system may be obtained from ei ther a single credit grantor or multiple credit grantors. The resulting system will qualify as an empirically derived, dem on strably and statistically sound, credit scor ing system provided the criteria set forth in paragraph (p)(l)(i) through (iv) of this section are met. 4. Effects test and disparate treatment. An empirically derived, demonstrably and statistically sound, credit scoring system may include age as a predictive factor (provided that the age of an elderly appli cant is not assigned a negative factor or value). Besides age, no other prohibited basis may be used as a variable. Gener ally, credit scoring systems treat all appli cants objectively and thus avoid problems o f disparate treatment. In cases where a credit scoring system is used in conjunc tion with individual discretion, disparate treatment could conceivably occur in the evaluation process. In addition, neutral factors used in credit scoring system s could nonetheless be subject to challenge under the effects test. (See comment 6(a)2 for a discussion of the effects test). 5. Effective June 5, 1995, com ment 4-1 is am ended by adding fo u r sentences at the end to read as follow s: * * * Disparate treatment on a prohibited basis is illegal whether or not it results from a conscious intent to discriminate. Disparate treatment would be found, for example, where a creditor requires a m i 1 Regulation B Commentary nority applicant to provide greater docu mentation to obtain a loan than a simi larly situ ate d n o n m in o rity a p p lican t. Disparate treatment also would be found where a creditor waives or relaxes credit standards for a nonminority applicant but not for a similarly situated minority appli cant. Treating applicants differently on a prohibited basis is unlawful if the creditor lacks a legitimate nondiscriminatory rea son for its action, or if the asserted reason is found to be a pretext for discrimination. ply to a renewal request if the creditor uses the appraisal report previously ob tained in connection with the decision t a grant credit. fl Paragraph 5a(a)(2)(i) Notice 1. M ultiple applicants. When an applica tion that is subject to this section involves more than one applicant, the notice about the appraisal report need only be given to one applicant, but it must be given to the primary applicant where one is readily apparent. Paragraph 5a(a)(2)(ii) Delivery 6. Effective A pril 7, 1992, com ment 5(b)(2)-3 is added to read as follow s:. 3. C ollecting inform ation on b e h a lf o f creditors. Loan brokers, correspondents, or other persons do not violate the ECOA or Regulation B if they collect informa tion that they are otherwise prohibited from collecting, where the purpose o f col lecting the information is to provide it to a creditor that is subject to the Home Mortgage Disclosure Act or another fed eral or state statute or regulation requiring data collection. 7. Effective June 5, 1995, comments on sec tion 202.5a are added to read as follow s: SECTION 202.5a— Rules on Providing Appraisal Reports 5a(a) Providing Appraisals 1. Coverage. This section covers applica tions for credit to be secured by a lien on a dwelling, as that term is defined in sec tion 202.5a(c), whether the credit is for a business purpose (for example, a loan to start a business) or a consumer purpose (for example, a loan to finance a child’s education). 2. Renewals. If an applicant requests that a creditor renew an existing extension of credit, and the creditor obtains a new ap praisal report to evaluate the request, this section applies. This section does not ap 1. Reimbursement. Creditors may charge for photocopy and postage costs incurred in providing a copy of the appraisal re port, unless prohibited by state or other law. If the consumer has already paid for the report— for example, as part of an ap plication fee— the creditor may not re quire additional fees for the appraisal (other than photocopy and postage costs). 5a(c) Definitions 1. A p praisal reports. E xam ples o f ap praisal reports are— 1. a report prepared by an appraiser (whether or not licensed or certified), including written comments and othe4 documents submitted to the cred ito r in support o f the appraiser’s estimate or opinion o f value ii. a document prepared by the creditor’s staff which assigns value to the prop erty, if a third-party appraisal report has not been used iii. an internal review document reflect ing that the creditor’s valuation is different from a valuation in a third party’s appraisal report (or different from valuations that are publicly available or valuations such as manu facturers’ invoices for mobile homes) 2. O ther reports. The term “ appraisal re port” does not cover all documents relat ing to the value of the applicant’s prop erty. Exam ples o f reports not covered are— i. internal docum ents, if a third-party Regulation B Commentary appraisal report was used to establish the value o f the property ii. governm ental-agency statem ents o f appraised value iii. valuations lists that are publicly avail able (such as published sales prices or m ortgage am ounts, tax assess ments, and retail price ranges) and valuations such as manufacturers’ in voices for mobile homes 8. Effective June 5, 1995, the first sentence o f com ment 6(a)-2 is am ended to read as follow s: 2. Effects test. The effects test is a ju d i cial doctrine that was developed in a se ries of employment cases decided by the Supreme Court under title VII of the Civil Rights Act o f 1964 (42 USC 2000e et seq.), and the burdens of proof for such employment cases were codified by Con gress in the Civil Rights Act o f 1991 (42 USC 2000e-2). * * * 9. Effective June 5, 1995, comment 6 (b )(I)-l is am ended by adding three sentences at the end to read as follow s: * * * Except to the extent necessary to determine rights and remedies for a spe cific credit transaction, a creditor that of fers joint credit may not take the appli cants’ marital status into account in credit evaluations. B ecause it is unlawful for creditors to take marital status into ac count, creditors are barred from applying different standards in evaluating married and un m arried a pp licants. In m aking credit decisions, creditors may not treat joint applicants differently based on the existence, the absence, or the likelihood o f a m arital relationship betw een the parties. 10. Effective June 5, 1995, comments 8(a)-5 and -6 are added to read as follow s: 5. Determining need. In designing a spe c ia l-p u rp o se p ro g ra m u n d e r sectio n 202.8(a), a for-profit organization must determine that the program will benefit a class of people who would otherwise be denied credit or would receive it on less favorable terms. This determination can be based on a broad analysis using the organization’s own research or data from outside sources, including governmental reports and studies. For example, a bank could review Home Mortgage Disclosure Act data along with demographic data for its assessm ent area and conclude that there is a need for a special-purpose credit program for low-income minority borrowers. 6. Elements o f the program. The written plan must contain information that sup ports the need for the particular program. The plan also must either state a specific period o f time for which the program will last, or contain a statem ent regarding when the program will be reevaluated to determine if there is a continuing need for it. 11. Effective June 5, 1995, com ment 9-5 is added to read as follow s: 5. Prequalification and preapproval pro grams. W hether a creditor must provide a notice o f action taken for a prequalifica tion or preapproval request depends on the creditor’s response to the request, as discussed in the commentary to section 202.2(f). For instance, a creditor may treat the request as an inquiry if the creditor provides general information such as loan terms and the maximum amount a con sumer could borrow under various loan programs, explaining the process the con sumer must follow to submit a mortgage application and the information the credi tor will analyze in reaching a credit deci sion. On the other hand, a creditor has treated a request as an application, and is subject to the adverse-action notice re quirements o f section 202.9 if, after eval uating information, the creditor decides 3 Regulation B Commentary that it will not approve the request and communicates that decision to the con sumer. For example, if in reviewing a re quest for prequalification, a creditor tells the consumer that it would not approve an application for a m ortgage because of bankruptcy in the consum er’s record, the creditor has denied an application for credit. 12. Effective A pril 1, 1991, com ment ll(a )-2 is added to read as follow s: 2. Preem ption determ ination—Ohio. E f fective July 23, 1990, the Board has de termined that the following provision in the state law of Ohio is preempted by the federal law: • Section 4112.021(B)(1)— Unlawful dis criminatory practices in credit transac tions. This provision is preempted to the extent that it bars asking or favora bly considering the age o f an elderly applicant; prohibits the consideration of age in a credit scoring system; permits without limitation the consideration of age in real estate transactions; and lim its the consideration of age in specialpurpose credit programs to certain gov ernment-sponsored programs identified in the state law. 13. Effective A pril 7, 1992, comment 13(b)-4 is am ended to read as follow s: 4. A p p lica tio n s through loan-shopping services. W hen a creditor receives an ap plication through an unaffiliated loanshopping service, it does not have to re quest the monitoring information for pur poses o f the ECOA or R egulation B. Creditors subject to the Home Mortgage Disclosure Act should be aware, however, that data collection may be called for under Regulation C, which generally re quires creditors to report, among other things, the sex and race or national origin of an applicant on brokered applications o r a p p lic a tio n s re c e iv e d th ro u g h a correspondent. 14. Effective A pril 7, 1992, com ment 1 on ap pendix B is am ended to read as follow s: 1. FHLM C/FNMA form — residential l o a ^ ^ k application. The uniform residential l o a ^ ^ ap p licatio n form (F H L M C 65/F N M A 1003), in c lu d in g su p p le m e n ta l form (FHLM C 65A/FNM A 1003A), prepared by the Federal Home Loan Mortgage Cor poration and the Federal National M ort gage A ssociation and dated M ay 1991 may be used by creditors without violat ing this regulation even though the form ’s listing o f race or national origin catego ries in the “ Information for Government Monitoring Purposes” section differs from the classifications currently specified in section 202.13(a)(1). The classifications used on the FN M A -FH LM C form are those required by the U.S. Office of M an agement and Budget for notation o f race and ethnicity by federal programs in their administrative reporting and statistical ac tivities. Creditors that are governed by the monitoring requirements of Regulation B (w hich limits collection to applications primarily for the purchase or refinancing o f the ap plican t’s principal residence) should delete, strike, or modify the datacollection section on the form when using it for transactions not covered by se ctio n ^ _ 202.13(a) to ensure that they do not c o l - f l lect the information. Creditors that a r e ^ ^ subject to more extensive collection re quirements by a substitute monitoring pro gram under section 202.13(d) or by the Home Mortgage Disclosure Act (HMDA) may use the form as issued, in com pli ance w ith that substitute prog ram or HMDA. 15. Effective June 5, 1995, a com ment on a p pendix C is added to read as follow s: APPENDIX C— Sample Notification Forms Form C-9 Creditors may design their own form, add to, or modify the model form to reflect Regulation B Commentary their individual policies and procedures. For exam ple, a creditor may w ant to add— i. a telephone num ber that applicants may call to leave their name and the ii. address to which an appraisal report should be sent a notice o f the cost the applicant will be required to pay the creditor for the appraisal or a copy o f the report 5
@FedFRASER