Full text of Federal Reserve Bank of New York Circulars : 9125. Home Mortgage Disclosure

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FEDERAL RESERVE BANK
OF NEW YORK
Circular No. 9125
August 7, 1981

H O M E M O R T G A G E D ISC L O SU R E
R evision o f R egulation C
To A ll Institutions Subject to the Home Mortgage Disclosure Act, and
Others Concerned, in the Second Federal Reserve District:

The Board of Governors of the Federal Reserve System has revised its Regulation C, “ Home Mortgage
Disclosure,” in order to simplify the regulation and further implement the Home Mortgage Disclosure Act.
The following is quoted from the text of the Board’s announcement:
HMDA requires financial institutions located in standard metropolitan statistical areas (SMSAs) to disclose
publicly the location of their residential mortgage loans. Institutions with more than $10 million in assets are
covered.
The Board’s action, effective immediately for the most part, followed amendment of the Act by the Congress
and extension of its life by five years. The amendments to the Act require (1) compilation and disclosure of
mortgage loan data on a calendar (rather than fiscal) year basis; (2) itemization of data by census tract and county
(rather than by census tract and ZIP Code); (3) the use of a standard disclosure format to be prescribed by the
Federal Reserve; (4) a system of central data repositories in each SMSA, and (5) aggregation of mortgage loan
data to cover all institutions in each SMSA.
The Board in November amended Regulation C to implement the changeover to calendar year compilation of
the data required by the Act. The Board’s further revisions of the regulation implement the other changes in the
Act.
At the same time the Board has further revised the regulation — in keeping with the Board’s Regulatory
Improvement Project for review and simplification of all of its regulations — to simplify the language and
substance of Regulation C, to focus disclosure requirements on those that are most useful and that can be provided
at reasonable cost, and to make the regulation more concise. The revised regulation is nearly a third shorter than
the existing regulation.
The principal revisions of Regulation C:
—Require depsoitory institutions to report the location of property on which they make mortgage or home
improvement loans, and related data, to their primary Federal regulators. The data will be forwarded to the
Federal Reserve for compilation and aggregation. To this end the Board has prepared a standard reporting form,
which will be supplied to lenders in the near future.
—Require covered institutions, effective September 30, 1981, to display a notice in their lobby that informa­
tion about the institution’s mortgage lending is available. The Board will furnish such a notice upon request.
—Permit the use of either 1970 or 1980 census tracts as a basis for reporting, pending full availability of 1980
census tract maps from the Census Bureau.
—Permit most institutions that have been exempt (on grounds of size or location) but which lose their exemp­
tion, to begin compiling data for the year following the year in which the exemption is lost (rather than for the year
preceding the loss).
—Require disclosures of conventional loans and of FHA, FmHA (Farmers Home Administration) and VA
loans, but not (as previously required) the sum of the conventional and other types of loans.
—Avoid duplicate reporting of loans by a branch and a head office of a lending institution located in the same
SMSA.
—Limit reports by branch offices to data on loans made on property in the SMSA where the branch is located.
Printed on the following pages is a summary description of the revised Regulation C. The complete text
of the revised regulation and the official notice of the Board’s action, including the Board’s regulatory
analysis, will be published in the Federal Register. Single copies of that text may be obtained from the Division
of Consumer and Community Affairs >Board of Governors of the Federal Reserve System, Washington, D.C.
20551 (Tel. No. 202-452-2412), or from the Circulars Division of this Bank (Tel. No. 212-791-5216).
Printed copies of the revised Regulation C, in pamphlet form, will be sent to all member banks in the
Second Federal Reserve District and others who maintain sets of the Board’s regulations as soon as they are
available. Questions regarding Regulation C may be directed to our Consumer Affairs and Bank Regulations
Department (Tel. No. 212-791-5914).




A

n t h o n y

m

.So

l o m o n

,

President.

FEDERAL R ES ERVE SYSTEM
[ 1 2 CFR P a r t
[Regulation

203]

C; D o c k e t No. R - 0 3 5 0 ]

HOME MORTGAGE D I S C L O S U R E
R e visio n of Regulation C

AGENCY:

Board o f G o v e r n o r s o f the Federal

A CTI ON :

Final

R ese rve System.

rule.

SUMMARY:
The B o a r d i s a d o p t i n g i n f i n a l f or m a r e v i s e d v e r s i o n o f R e g u l a t i o n C.
R e g u l a t i o n C i m p l e m e n t s t h e Home M o r t g a g e D i s c l o s u r e A c t and r e q u i r e s d e p o s i t o r y
i n s t i t u t i o n s w ith o f f i c e s in s t a n d a rd m e t r o p o l i t a n s t a t i s t i c a l a r e a s (SMSAs) to
d i s c l o s e d a t a a b o u t t h e i r home m o r t g a g e and home im p r ov em e n t l o a n s e a c h y e a r .
I n s t i t u t i o n s w i t h l e s s t h a n $ 1 0 m i l l i o n i n a s s e t s a r e exempt f rom c o v e r a g e .
The r e v i s i o n i m p l e m e n t s c e r t a i n amendments t o t h e a c t made by t h e H o u s ­
i n g and Community D e v e l o p m e n t A c t o f 1980, and s i m p l i f i e s t h e r e g u l a t i o n g e n e r a l l y .
The p r o p o s e d r e v i s i o n was p u b l i s h e d f o r comment a t 46 FR 1 1780 ( F e b r u a r y 10, 1 9 8 1 ) .
A r e g u l a t o r y a n a l y s i s h a s been p r e p a r e d , t o c o m p l y b o t h w i t h t h e expanded
r u l e m a k i n g p r o c e d u r e s s e t f o r t h i n t h e B o a r d ' s p o l i c y s t a t e m e n t o f J a n u a r y 19,
1979 (44 FR 3 9 5 7 ) and w i t h t h e r e q u i r e m e n t s o f t h e R e g u l a t o r y F l e x i b i l i t y A c t
( Pu b. L. 9 6 - 3 5 4 ) .
C o p i e s may be o b t a i n e d f r om t h e C ons um er A f f a i r s o f f i c e o f
any F e d e r a l R e s e r v e Bank o r fr om t h e B o a r d ' s D i v i s i o n o f C o n s u m e r and Community
A f f a i r s , B o a r d o f G o v e r n o r s o f t h e F e d e r a l R e s e r v e S y s t e m , W a s h i n g t o n , D. C.
20551.
The B o a r d a l s o a d o p t e d m o r t g a g e l o a n d i s c l o s u r e f or m HMDA-1, whose
u s e w i l l be m a n d a t o r y f o r t h e r e p o r t i n g o f 1981 l o a n d a t a .
T h i s f or m h a s been
s u b m i t t e d t o t h e O f f i c e o f Management and B u d g e t i n a c c o r d a n c e w i t h t h e r e q u i r e ­
ments o f the Paperwork R ed u ctio n Act.
The B o a r d w i l l i s s u e i t i n f i n a l f or m
o nc e t h e 0MB r e v i e w p r o c e d u r e s have been c o m p l e t e d .
E F F E C T I V E D ATE S:
The r e g u l a t i o n t a k e s e f f e c t i m m e d i a t e l y ,
n o t i c e r e q u i r e m e n t t a k e s e f f e c t on S e p t e m b e r 30, 1981.

except th a t

a lo bby

FOR FURTHER I NFORMATI ON, CONTACT:
J ohn C. Wood, S e n i o r A t t o r n e y , o r C l a u d i a
Y a r u s , J e s s e F i l k i n s , o r Ly nn G o l d f a d e n , S t a f f A t t o r n e y s , D i v i s i o n o f C ons umer
and Community A f f a i r s , B o a r d o f G o v e r n o r s o f t h e F e d e r a l R e s e r v e S y s t e m , W a s h i n g ­
t o n , D.C .
20551 ( 2 0 2 - 4 5 2 - 3 8 6 7 ) .
SUPPLEMENTARY INFORMATI ON:
(1)
General.
R e g u l a t i o n C i m p l e m e n t s t h e Home
M o r t g a g e D i s c l o s u r e A c t (HMDA), 12 U . S . C . 2801 e t s e q . , and r e q u i r e s d e p o s i ­
t o r y i n s t i t u t i o n s o v e r $ 1 0 m i l l i o n i n a s s e t s t h a t h av e o f f i c e s i n SMSAs t o
make a n n u a l d i s c l o s u r e o f t h e i r m o r t g a g e l e n d i n g a c t i v i t y .
On O c t o b e r 8, 1 98 0,
p r o v i s i o n s o f t h e H o u s i n g and Community D e v e l o p m e n t A c t o f 1980 ( P u b . L. 9 6 - 3 9 9 )
amended HMDA and e x t e n d e d i t f o r a f i v e - y e a r p e r i o d .
The amendments r e q u i r e
( 1 ) t h a t d e p o s i t o r y i n s t i t u t i o n s c h a n g e t h e i r d a t a c o m p i l a t i o n and d i s c l o s u r e s
f r om a f i s c a l t o a c a l e n d a r y e a r b a s i s , b e g i n n i n g w i t h 198 0 d a t a ; ( 2 ) t h a t
d i s c l o s u r e s be made b y c e n s u s t r a c t and c o u n t y , r a t h e r t h a n by c e n s u s t r a c t




'

and Z I P c o d e ; ( 3 ) t h a t t h e F e d e r a l R e s e r v e B o a r d p r e s c r i b e a s t a n d a r d f o r m a t
f o r d i s c l o s u r e s ; ( 4 ) t h a t d i s c l o s u r e s t a t e m e n t s be made a v a i l a b l e a t c e n t r a l
d a t a r e p o s i t o r i e s i n each SMSA; and ( 5 ) t h a t a g g r e g a t e d a t a t a b l e s , c o v e r i n g
a l l i n s t i t u t i o n s i n each SMSA, be p r e p a r e d and made a v a i l a b l e by t h e F e d e r a l
F in a n c i a l I n s t i t u t i o n s Examination C ouncil (F F IE C ).
On December 8, 1 9 8 0 , t h e
B o a r d p u b l i s h e d an amendment t o R e g u l a t i o n C t o i mp lem en t c a l e n d a r y e a r d i s c l o ­
s u r e s f o r 1980 and s u b s e q u e n t y e a r s ( 4 5 FR 8 0 8 1 3 ) .
On F e b r u a r y 10, 1 98 1, t h e B o a r d p u b l i s h e d a p r o p o s e d r e v i s i o n o f
R e g u l a t i o n C t o i mplement t h e r e m a i n i n g s t a t u t o r y c h a n g e s (46 FR 1 1 7 8 0 ) , and
r e c e i v e d a p p r o x i m a t e l y 225 comments.
The B o a r d i s now a d o p t i n g a r e v i s e d
R e g u l a t i o n C i n f i n a l form.
The B o a r d h a s a l s o a d o p t e d a r e v i s e d v e r s i o n o f t h e HMDA-1 f o r m .
As
r e q u i r e d by t h e P a p e r w o r k R e d u c t i o n A c t (Pub. L. 9 6 - 5 1 1 ) , t h e f o rm must s t i l l
u n d e r g o 0MB r e v i e w .
The B o a r d w i l l p u b l i s h t h e f i n a l v e r s i o n a f t e r t h a t r e v i e w
h a s been c o m p l e t e d .
Under 5 U .S .C . 5 5 3 ( d ) , th e ge n era l requirem ent to d e la y the e f f e c t i v e
d a t e o f a r u l e u n t i l 30 d a y s o r more a f t e r i t s p u b l i c a t i o n d o e s n o t a p p l y w h e re ,
as in t h i s c a s e , the r u l e r e l i e v e s r e s t r i c t i o n s .
A c c o r d in g ly , the r e g u l a t i o n
i s e f f e c t i v e im m ediately, w ith the e x c e p t io n o f a lobby n o t i c e requirem ent
w h i c h becomes e f f e c t i v e on S e p t e m b e r 30, 1 9 8 1 , t o a l l o w t i m e f o r a c h i e v i n g
compliance.

I
|

t

(2)
Revised r e g u l a t i o n .
The B o a r d h a s t a k e n t h i s o p p o r t u n i t y t o
r e d r a f t t h e r e g u l a t i o n i n a s i m p l i f i e d , more c o n c i s e f or m , i n k e e p i n g w i t h t h e
o b j e c t i v e s o f i t s R e g u l a t o r y I mpr o vement P r o j e c t .
The r e v i s e d r e g u l a t i o n i s
a p p r o x i m a t e l y 30 p e r c e n t s h o r t e r t h a n t h e o r i g i n a l v e r s i o n , and s h o u l d be
e a s i e r t o u s e and c o mp ly w i t h .
Some o f t h e p r i n c i p a l c h a n g e s i n t h e r e v i s e d
r e g u l a t i o n are as f o llo w s .
F i r s t , d i s c l o s u r e s a r e no l o n g e r r e q u i r e d a t a
b r a n c h o f f i c e i n t h e SMSA wher e t h e i n s t i t u t i o n ' s home o f f i c e i s l o c a t e d .
A
d i s c l o s u r e s t a t e m e n t w i l l c o n t i n u e t o be a v a i l a b l e a t t h e home o f f i c e ; i t w i l l
c o n t a i n c o m p l e t e d a t a f o r a l l SMSAs i n w h i c h t h e i n s t i t u t i o n h as o f f i c e s .
Second, d i s c l o s u r e s at o t h e r branch o f f i c e s are o n l y r e q u ir e d t o g i v e data
a b o u t l o a n s on p r o p e r t y i n t h e SMSA where t h e b r a n c h i s l o c a t e d .

I

T h i r d , the " t o t a l r e s i d e n t i a l mortgage l o a n s " c a t e g o r y (t h a t i s , the
sum o f t h e FHA/FmHA/VA l o a n c a t e g o r y and t h e c o n v e n t i o n a l l o a n c a t e g o r y ) i s
no l o n g e r r e q u i r e d .
F o u r t h , g e o g r a p h i c b r e a k d o w n s a r e t o be g i v e n i n t e r m s o f
c e n s u s t r a c t s o r c o u n t i e s ; Z I P c o d e s a r e no l o n g e r u s e d .
F i f t h , an i n s t i t u t i o n
may u s e e i t h e r 1970 o r 1980 c e n s u s t r a c t b o u n d a r i e s i n g e o c o d i n g l o a n s . S i x t h ,
a l o b b y n o t i c e i s r e q u i r e d r e g a r d i n g t h e a v a i l a b i l i t y o f HMDA d a t a .
F in a lly,
an i n s t i t u t i o n t h a t h a s exempt s t a t u s and t h a t s u b s e q u e n t l y l o s e s i t s e x e m p t i o n
must b e g i n t o c o m p i l e and r e p o r t d a t a o n l y , i n g e n e r a l , f o r t h e c a l e n d a r y e a r
f o l 1owing th e l o s s o f exemption ( r a t h e r than f o r the p re c e d in g y e a r , as in the
present re g u la tio n ).
*

*

*

*

*

[NOTE:
The c o m p l e t e t e x t o f t h e F e d e r a l R e g i s t e r n o t i c e , i n c l u d i n g t h e r e g u l a t o r y
t e x t , can be o b t a i n e d f rom any F e d e r a l R e s e r v e Bank o r f rom t h e D i v i s i o n o f C on su m e r
and Community A f f a i r s , B o a r d o f G o v e r n o r s o f t h e F e d e r a l R e s e r v e S y s t e m , W a s h i n g t o n ,
D. C.
20551.




*

REGULATORY ANALYSIS OF REVISED REGULATION C (HOME MORTGAGE DISCLOSURE)




Board o f G o vernors o f
the Federal

R e s e r v e S ys te m

A u g u s t 4,

1981

REGULATORY ANALYSIS OF REVISED REGULATION C (HOME MORTGAGE DISCLOSURE)

Introd uction.
The r e g u l a t o r y a n a l y s i s t h a t f o l l o w s h a s been p r e p a r e d
p u r s u a n t t o t h e B o a r d ' s p o l i c y s t a t e m e n t o f J a n u a r y 19, 1979 ( 44 FR 3 9 5 7 ) , - c o n ­
c e r n i n g expanded r u l e m a k i n g p r o c e d u r e s .
I t a l s o s a t i s f i e s the requirem ent f o r
a f i n a l r e g u l a t o r y f l e x i b i l i t y a n a l y s i s under the R e g u la t o r y F l e x i b i l i t y A ct,
5 U . S . C . 604.
The Home M o r t g a g e D i s c l o s u r e A c t amendments o f 1980 e x t e n d w i t h amend­
ments and a f i v e - y e a r s u n s e t p r o v i s i o n t h e Home M o r t g a g e D i s c l o s u r e A c t o f 1975
(HMDA).
HMDA was m o t i v a t e d by c o n g r e s s i o n a l c o n c e r n t h a t
" . . . some d e p o s i t o r y i n s t i t u t i o n s have s om et i me s c o n t r i b u t e d t o t h e
d e c l i n e o f c e r t a i n g e o g r a p h i c a r e a s by t h e i r f a i l u r e p u r s u a n t t o t h e i r
c h a r t e r i n g r e s p o n s i b i l i t i e s t o p r o v i d e a d e q u a t e home f i n a n c i n g t o
q u a l i f i e d a p p l i c a n t s on r e a s o n a b l e t e r m s and c o n d i t i o n s . " 2./
The p u r p o s e o f HMDA was
" . . . t o p r o v i d e t h e c i t i z e n s and p u b l i c o f f i c i a l s o f t h e U n i t e d
S t a t e s w i t h s u f f i c i e n t i n f o r m a t i o n t o e n a b l e them t o d e t e r m i n e w h e t h e r
d e p o s i t o r y i n s t i t u t i o n s a re f i l l i n g t h e i r o b l i g a t i o n s to s e rv e the
h o u s i n g n e e d s o f t h e c o m m u n i t i e s and n e i g h b o r h o o d s i n w h i c h t h e y a r e
l o c a t e d and t o a s s i s t p u b l i c o f f i c i a l s i n t h e i r d e t e r m i n a t i o n o f t h e
d i s t r i b u t i o n o f p u b l i c s e c t o r i n v e s t m e n t s i n a manner d e s i g n e d t o
improve th e p r i v a t e in ve stm en t e n v ir o n m e n t . " 1 /
The 1980 HMDA amendments t o t h e 1975 a c t i mpo se s u b s t a n t i a l a d d i t i o n a l
c o s t s t h a t f a l l l a r g e l y upon e i t h e r t h e f i n a n c i a l i n s t i t u t i o n r e g u l a t o r y
agencies o r o th e r federal agencies.
The k ey amendments i n c l u d e :
( 1) m a n d a t o r y
d i s c l o s u r e o f HMDA d a t a on a c a l e n d a r y e a r b a s i s ; ( 2 ) e s t a b l i s h m e n t by t h e
F e d e r a l R e s e r v e B o a r d o f a u n i f o r m d i s c l o s u r e f o r m a t ; ( 3 ) d i s c l o s u r e by c e n s u s
t r a c t f o r s t a n d a r d m e t r o p o l i t a n s t a t i s t i c a l a r e a ( SM SA) c o u n t i e s w i t h p o p u l a t i o n s
t h a t e xc e ed 3 0 , 0 0 0 , and d i s c l o s u r e by c o u n t y name f o r SMSA c o u n t i e s w i t h 3 0 , 0 0 0
o r f e we r r e s i d e n t s ; ( 4 ) e s t a b l i s h m e n t o f a c e n t r a l r e p o s i t o r y i n eac h SMSA f o r
HMDA d i s c l o s u r e s t a t e m e n t s ; ( 5) a g g r e g a t i o n o f HMDA d a t a f o r a l l c o v e r e d i n s t i ­
t u t i o n s w i t h i n each SMSA, and t h e p r o d u c t i o n o f a v a r i e t y o f t a b l e s s h o w i n g
t h e r e l a t i o n s h i p between t h e g e o g r a p h i c d i s t r i b u t i o n o f d i s c l o s e d l o a n s and
c e n s u s t r a c t i ncome l e v e l , r a c i a l c o m p o s i t i o n , l o c a t i o n , and age o f h o u s i n g
stock.
O v e r v i e w o f t h e HMDA amendments.
The 1980 amendments, a s impl em en te d by r e v i s e d R e g u l a t i o n C, r e q u i r e
d e p o s i t o r y i n s t i t u t i o n s w i t h o f f i c e s l o c a t e d w i t h i n SMSAs a n n u a l l y t o c o m p i l e

1/

Home M o r t g a g e D i s c l o s u r e A c t ,

2/

Ibid.,




Sec.

302.

Pub.

L. 9 4 - 2 0 0 ,

12 U . S . C .

2801-2 809,

Sec.

302.

-

2 -

and d i s c l o s e t o t h e p u b l i c , by g e o g r a p h i c l o c a t i o n , t h e number and d o l l a r
v a l u e o f t h e r e s i d e n t i a l l o a n s t h e y e i t h e r o r i g i n a t e o r p u r c h a s e d u r i n g each
calendar year.
T h i s r e s i d e n t i a l l o a n d a t a must be d i s c l o s e d by c e n s u s t r a c t
number f o r c o u n t i e s w i t h i n SMSAs t h a t have p o p u l a t i o n s e x c e e d i n g 3 0 , 0 0 0 .
R esi­
d e n t i a l l o a n s e x t e n d e d on p r o p e r t i e s w i t h i n SMSA c o u n t i e s t h a t do n o t e xce ed
3 0 , 0 0 0 r e s i d e n t s must be d i s c l o s e d by c o u n t y name.
The home m o r t g a g e d i s c l o s u r e
d a t a t h a t a r e c o m p i l e d a r e t o be made a v a i l a b l e t o t h e p u b l i c and t h e a p p r o p r i a t e
s u p e r v i s o r y a g e n c y by t h e r e p o r t i n g i n s t i t u t i o n w i t h i n 90 d a y s o f t h e end o f t h e
relevant calendar year.
Each i n s t i t u t i o n r e p o r t i n g u n d e r t h e p r o v i s i o n s o f t h e
a c t i s r e q u i r e d t o m a i n t a i n t h e d i s c l o s u r e s t a t e m e n t i n a t l e a s t one o f f i c e
i n each SMSA i n w h i c h i t d o e s b u s i n e s s .
B e n e f i t s , a c c u r a c y and c o s t s .
One o f t h e s t u d i e s c o n s i d e r e d i n t h e
r e g u l a t o r y a n a l y s i s o f r e v i s e d R e g u l a t i o n C was t h e F e d e r a l Home Loan Bank
Board/ Federal D e p o s it In s u r a n c e C o r p o r a t io n (FHLBB/FDIC) s tu d y commissioned
t o e v a l u a t e t h e 1975 Home M o r t g a g e D i s c l o s u r e A c t . 2 /
A l t h o u g h t h e F H L B B / F DI C
s t u d y f o c u s e d on t h e 1975 Home M o r t g a g e D i s c l o s u r e A c t and was c a r r i e d o u t
i n 1 977, t h e s t u d y r e m a i n s r e l e v a n t t o an e v a l u a t i o n o f t h e b e n e f i t s , a c c u r a c y ,
and c o s t s o f t h e 1980 a c t b e c a u s e v e r y few f u n d a m e n t a l p r o v i s i o n s o f t h e
o r i g i n a l la w h av e been amended.
The f o l l o w i n g s e c t i o n r e v i e w s t h e b a s i c f i n d i n g s
o f t h e FHLBB/ F D I C s t u d y .
The e co n om i c i m p a c t o f t h e c e n t r a l r e p o s i t o r y s y s t e m
and HMDA a g g r e g a t i o n a r e a l s o r e v i e w e d .
The b e n e f i t s o f HMDA a r e n o t q u a n t i f i a b l e i n d o l l a r t e r m s , a l t h o u g h
t h e F H L B B / F DI C s t u d y d i d i d e n t i f y a number o f u s e s t h a t have been made o f t h e
d is c lo s u r e inform ation.
F i r s t , HMDA h a s been u s e f u l t o t h e f i n a n c i a l i n s t i t u ­
t i o n r e g u l a t o r y a g e n c ie s in f u l f i l l i n g t h e i r s t a t u t o r y r e s p o n s i b i l i t i e s under
t h e Community R e i n v e s t m e n t A c t (CRA) and c i v i l r i g h t s l a w s .
In t h i s c o n t e x t ,
HMDA d a t a have been u se d t o i d e n t i f y p o s s i b l e d i s c r i m i n a t o r y l e n d i n g p r a c t i c e s
re la t e d to the geographic l o c a t io n o f the d w e llin g .
The d i s c l o s u r e d a t a have
a l s o been employed t o a l e r t r e g u l a t o r s t o p o s s i b l e d i s c r i m i n a t o r y l e n d i n g p r a c ­
t i c e s b a s e d upon t h e a p p l i c a n t ' s r a c e , c o l o r , o r n a t i o n a l o r i g i n .
S e c o n d , HMDA d a t a have been u s e d by l o c a l p u b l i c o f f i c i a l s t o h e l p
determine t a r g e t areas f o r p u b lic investm ent.
T h i r d , communit y and p u b l i c
i n t e r e s t g r o u p s h ave made u s e o f HMDA d a t a i n e v a l u a t i n g d e p o s i t o r y i n s t i t u t i o n s '
CRA r e c o r d s and have b a s e d most CRA p r o t e s t s o f d e p o s i t o r y i n s t i t u t i o n a p p l i c a ­
t i o n s on l e n d i n g p a t t e r n s d e v e l o p e d f rom t h e d a t a .
D e s p i t e th e d a t a ' s u s e f u l ­
n e s s f o r CRA p r o t e s t p u r p o s e s , r e l a t i v e l y few communit y g r o u p s h av e s o u g h t
to o b ta in the in fo rm a tio n , at l e a s t in the e a r l y y e a r s . i /
A c t u a l u s a g e by

3/

" A n a l y s i s o f t h e Home M o r t g a g e D i s c l o s u r e A c t D a t a f rom T h r e e S t a n d a r d
M e t r o p o l i t a n S t a t i s t i c a l A r e a s , " JRB A s s o c i a t e s , McLean, V i r g i n i a ,
November 1979.

£/

A U. S. L e a g u e o f S a v i n g s A s s o c i a t i o n s s u r v e y o f 2 , 8 0 0 s a v i n g s and l o a n s
f o u n d t h a t 71 p e r c e n t o f t h e r e s p o n d e n t s had n o t r e c e i v e d a s i n g l e r e q u e s t
f o r t h e i r 1977 f i s c a l y e a r d i s c l o s u r e s t a t e m e n t s .
A m e ri c an B a n k e r ,
A u g u s t 28, 1978.
S i m i l a r l y , t h e F H LB B /F D IC s t u d y o f HMDA f o u n d t h a t r e ­
q u e s t s f o r HMDA s t a t e m e n t s f rom i n s t i t u t i o n s i n t h e t h r e e s u r v e y a r e a s
were i n f r e q u e n t ; 41 p e r c e n t o f t h e i n s t i t u t i o n s r e p o r t e d no r e q u e s t s ,
w h i l e an a d d i t i o n a l 18 p e r c e n t o f t h e i n s t i t u t i o n s r e p o r t e d r e c e i v i n g o n l y
one r e q u e s t .




—

- 3 -

community g r o u p s i s d i f f i c u l t t o a s s e s s , h o w e ve r, b e c a u s e a s i n g l e u m b r e l l a
o r g a n i z a t i o n may o b t a i n t h e d i s c l o s u r e d a t a and d i s s e m i n a t e t h e i n f o r m a t i o n
w i d e l y t h r o u g h o u t i t s m embers hip.
A l t h o u g h communit y g r o u p s have n o t made
much p u b l i c i z e d u s e o f HMDA d a t a t o d a t e , t h e i r u t i l i z a t i o n o f t h e d i s c l o s u r e
i n f o r m a t i o n may i n c r e a s e i n t h e f u t u r e .
F i n a l l y , b a s e d on t h e f i n d i n g s o f t h e F HLB B/ FDI C s t u d y and a r e v i e w
o f t h e comments on t h e p r o p o s e d r e g u l a t i o n , i t a p p e a r s t h a t t h e v a s t m a j o r i t y
o f r e p o r t i n g i n s t i t u t i o n s have r e c e i v e d few b e n e f i t s f rom HMDA.
In summary, HMDA d a t a have been p r i m a r i l y u s e f u l t o t h e r e g u l a t o r y
a g e n c i e s i n c a r r y i n g o ut t h e i r r e s p o n s i b i l i t i e s u n d e r t h e a n t i - d i s c r i m i n a t i o n
r e g u l a t i o n s and have a l s o been o f v a l u e t o community g r o u p s and l o c a l p u b l i c
officia ls.
A c cu ra cy o f the d i s c l o s u r e sta tem ents i s c r i t i c a l to t h e i r u t i l i t y .
The F HL B B/ FD IC s t u d y f o u n d t h a t a s i g n i f i c a n t p e r c e n t a g e o f t h e d e p o s i t o r y
i n s t i t u t i o n d i s c l o s u r e s t a t e m e n t s were t o o i n a c c u r a t e t o be u s e d f o r t h e i r
intended purpose.
B as e d on a s u r v e y o f a s a m p l e o f l e n d i n g i n s t i t u t i o n s f ro m
t h r e e S MS A s , t h e s t u d y f o u n d t h a t :
( 1 ) i n s t i t u t i o n s t h a t f a i l e d t o u s e an
a d d r e s s c o d i n g g u i d e t o i d e n t i f y p r o p e r t y c e n s u s t r a c t numbers a c h i e v e d a p o o r
l e v e l o f g e o c o d i n g a c c u r a c y ; ( 2 ) 25 o f 43 i n s t i t u t i o n s s amp le d ( 5 8 p e r c e n t )
made a g g r e g a t i o n e r r o r s i n more t h a n 50 p e r c e n t o f t h e c e n s u s t r a c t l i n e s ;
( 3 ) 29 o f 43 i n s t i t u t i o n s i n t h e s a m p l e ( 6 7 p e r c e n t ) had a g g r e g a t i o n e r r o r s
s o s e v e r e t h a t t h e i r s t a t e m e n t s were c o n s i d e r e d t o o i n a c c u r a t e t o be u se d f o r
t h e i r in tended purpose.
A number o f r e c o m m e n d a t i o n s were o f f e r e d i n t h e F HL B B/ FD IC s t u d y t o
r e c t i f y t h e a c c u r a c y p r o bl em .
One r ec o mm e n da t io n , a d o p t e d a s an amendment t o
t h e a c t i n 1 9 8 0, d i r e c t s t h e F e d e r a l R e s e r v e B o a r d t o p r e s c r i b e a s t a n d a r d f o r m a t
f o r d i s c l o s u r e s r e q u i r e d u n d e r HMDA. J y
The s t a n d a r d f o r m a t s h o u l d e l i m i n a t e
some e r r o r s w i t h v e r y l i t t l e a d d i t i o n a l c o s t t o t h e i n s t i t u t i o n s .
The s t u d y a l s o
recommended t h a t e x a m i n a t i o n p r o c e d u r e s be i mplemented t o a s s e s s and i m p r o v e
t h e a c c u r a c y o f t h e g e o c o d i n g and a g g r e g a t i o n o f d i s c l o s u r e d a t a .
Moreover,
t h e s t u d y s u g g e s t e d t h a t a d d i t i o n a l e x a m i n a t i o n t i m e be a l l o t t e d f o r a c c u r a c y
reviews o f the d i s c l o s u r e statements.
I t was e s t i m a t e d t h a t i m p l e m e n t a t i o n
o f t h e l a t t e r r ec omm end at i on w o u l d c o s t a p p r o x i m a t e l y 20 a d d i t i o n a l m a n - y e a r s
(at l e a s t $300,0 00 in the f i r s t y e a r ) o f e xam ination time per y e a r .
The F HL B B/ FD IC s t u d y a s s e s s e d t h e a n nu a l c o s t s o f HMDA c o m p l i a n c e .
C o s t e s t i m a t e s were c a l c u l a t e d on b o t h a p e r l o a n and an a g g r e g a t e b a s i s .
The
s t u d y e s t i m a t e d t h a t , n a t i o n w i d e , HMDA c o s t t h e 8 , 1 3 8 r e p o r t i n g i n s t i t u t i o n s
a p p r o x i m a t e l y $ 5 . 8 m i l l i o n i n 1977.
B as e d on t h e s e e s t i m a t e s , r e p o r t i n g
i n s t i t u t i o n s would have i n c u r r e d an a v e r a g e c o s t o f $ 7 1 3 t o c o m p i l e and d i s c l o s e
t h e i r HMDA d a t a i n 1977.
The 44 d e p o s i t o r y i n s t i t u t i o n s i n t h e s t u d y i n c u r r e d
an a v e r a g e c o s t p e r l o a n o f $ 1 . 4 2 .
A c ro ss se ctio n a n a ly s is of these lenders
r e v e a l e d t h a t t h e 13 i n s t i t u t i o n s w i t h a ut om at ed r e s i d e n t i a l l o a n f i l e s and more
t h a n 1 , 0 0 0 l o a n s i n t h e i r d i s c l o s u r e s t a t e m e n t s i n c u r r e d an a v e r a g e p e r l o a n

5/

S e c t i o n 2 0 3 . 4 ( b ) o f t h e r e g u l a t i o n s p e c i f i e s t h e new HMDA r e p o r t i n g f o r m a t .
The p r e s c r i b e d f orm i n r e v i s e d R e g u l a t i o n C i s s u b s t a n t i a l l y s i m i l a r t o
t h e form c u r r e n t l y employed by t h e v a s t m a j o r i t y o f c o v e r e d i n s t i t u t i o n s .




- 4 -

c o s t o f $ 1 . 3 6 ; t h e 13 i n s t i t u t i o n s w i t h between 200 and 1 , 0 0 0 l o a n s i n t h e i r
HMDA s t a t e m e n t s i n c u r r e d an a v e r a g e c o s t o f $ 1 . 6 8 p e r l o a n ; and t h e 11 l e n d e r s
w i t h f e w e r t h a n 200 l o a n s i n c u r r e d an a v e r a g e c o s t o f $ 3 . 6 7 p e r l o a n .
I n g e n e r a l , t h e c o s t s o f HMDA c o m p l i a n c e f a l l d i s p r o p o r t i o n a t e l y on
t h o s e le n d e r s t h a t are m a r g i n a l l y in th e r e s i d e n t i a l real e s t a t e market.
Com­
m e rc ia l banks t y p i c a l l y i n c u r a g r e a t e r average c o s t per loan than e i t h e r s a v i n g s
and l o a n a s s o c i a t i o n s o r mutual s a v i n g s b a n k s b e c a u s e c o m m e rc ia l b a n k s t y p i c a l l y
extend fewer r e s i d e n t i a l lo a n s than th e se o t h e r le n d e r s .
A c c o r d in g to the
F H L B B / F D I C s t u d y , i n s t i t u t i o n s t h a t d i s c l o s e f e w e r t h a n 200 l o a n s p e r y e a r
i n c u r an a v e r a g e c o s t p e r l o a n t h a t i s 2 . 7 t i m e s a s g r e a t a s t h e a v e r a g e c o s t
per lo a n o f le n d e r s r e p o r t i n g o ver 1,000 lo a n s per y e a r.
Moreover, those
i n s t i t u t i o n s l e a s t a c t i v e i n r e s i d e n t i a l f i n a n c i n g a r e l i k e l y t o be t h e s m a l l e r
depository in s t it u t io n s .
A s a r e s u l t , t h e c o s t s o f HMDA c o m p l i a n c e a r e b o r n e
d i s p r o p o r t i o n a t e l y by t h e s m a l l e r d e p o s i t o r y i n s t i t u t i o n s , w h i c h i n t u r n p a s s
t h e s e c o s t s on t o t h e i r c u s t o m e r s .
Establishm ent of central r e p o s i t o r i e s .
The 1980 amendments t o HMDA
d i r e c t the Federal F i n a n c i a l I n s t i t u t i o n s E xam ination C o u n c il (F F IE C ) in c o n s u l ­
t a t i o n w i t h t h e S e c r e t a r y o f t h e D e p a r t m e n t o f H o u s i n g and U rban D e v e l o p m e n t
(HUD) t o e s t a b l i s h a c e n t r a l r e p o s i t o r y f o r HMDA d a t a f o r each SMSA.
The
c e n t r a l d a t a r e p o s i t o r y w i l l r e c e i v e and m a i n t a i n a l l HMDA s t a t e m e n t s o f t h e
c o v e r e d i n s t i t u t i o n s w i t h o f f i c e s l o c a t e d i n i t s SMSA.
The s t a t e m e n t s on f i l e
a t t h e c e n t r a l r e p o s i t o r y w i l l be made a v a i l a b l e t o t h e p u b l i c f o r i n s p e c t i o n
and c o p y i n g .
The p r i n c i p a l b e n e f i t o f t h e c e n t r a l r e p o s i t o r y s y s t e m i s t h a t u s e r s
o f HMDA d a t a w i l l be a b l e t o o b t a i n a l l o f t h e v a r i o u s i n s t i t u t i o n s ' d i s c l o s u r e
s t a t e m e n t s a t one l o c a t i o n .
The c u r r e n t s y s t e m r e q u i r e s u s e r s t o c o n t a c t t h e
i n s t i t u t i o n s on an i n d i v i d u a l b a s i s t o o b t a i n t h e d i s c l o s u r e d a t a .
The r e p o r t i n g r e q u i r e m e n t s o f t h e c e n t r a l r e p o s i t o r y s y s t e m a r e
i mpleme nte d by § 2 0 3 . 5 ( d ) o f t h e r e g u l a t i o n .
The r e p o r t i n g i n s t i t u t i o n s w i l l
in c u r a s l i g h t i n c r e a s e in c o s t s under t h i s s e c t i o n o f the r e g u l a t i o n .
Incre­
mental c o s t s w i l l be t h o s e i n c u r r e d t o make two a d d i t i o n a l c o p i e s o f t h e HMDA
s t a t e m e n t and h a n d l i n g and p o s t a g e c o s t s t o m a i l t h e s t a t e m e n t s t o t h e a p p r o ­
p r i a t e s u p e r v i s o r y agency.
A s s u m i n g t h e t y p i c a l HMDA s t a t e m e n t c o n t a i n s
a p p r o x i m a t e l y 20 p a g e s , i t i s e s t i m a t e d t h a t i t w i l l c o s t t h e a v e r a g e i n s t i t u ­
t i o n a p p r o x i m a t e l y $ 8 . 0 0 a n n u a l l y t o c o p y and f o r w a r d t h e s t a t e m e n t s t o t h e
a p p r o p r i a t e s u p e r v i s o r y agency.
O t h e r c o s t s t h a t a r i s e f rom t h e e s t a b l i s h m e n t o f t h e c e n t r a l r e p o s i t o r y
s y s t e m w i l l be b o r n e by t h e c e n t r a l r e p o s i t o r y and t h e r e g u l a t o r y a g e n c i e s .
T h e se c o s t s c o n s i s t o f some h a n d l i n g , t r a i n i n g , s t o r a g e and p u b l i c i n f o r m a t i o n
costs.
A lth o u g h the c o s t s to th e c e n t r a l r e p o s i t o r y system w i l l p ro b a b ly not
be e x c e s s i v e , t h e b e n e f i t s a l s o a r e l i k e l y t o be s m a l l .
The s y s t e m d o e s n ot
p r o v i d e any new i n f o r m a t i o n and i s s o l e l y a c o n v e n i e n c e f o r u s e r s .
A g g r e g a t i o n o f HMDA d a t a .
The 1980 amendments d i r e c t t h e F F I E C t o
c o m p i l e a n n u a l l y f o r each SMSA a g g r e g a t e d a t a by c e n s u s t r a c t f o r a l l d e p o s i t o r y




- 5 -

i n s t i t u t i o n s t h a t are r e q u ire d t o d i s c l o s e data under the act.
In a d d i t i o n ,
t h e F F I E C i s d i r e c t e d t o p r o d u c e t a b l e s f o r e ac h SMSA t h a t a g g r e g a t e c o v e r e d
i n s t i t u t i o n s ' l e n d i n g p a t t e r n s f o r v a r i o u s c a t e g o r i e s o f ce n su s t r a c t s grouped
a c c o r d i n g t o l o c a t i o n , a ge o f h o u s i n g s t o c k , i ncome l e v e l and r a c i a l c h a r a c t e r ­
istics.
T a b l e s g e n e r a t e d f rom t h e a g g r e g a t i o n p r o c e s s a r e t o be made a v a i l a b l e
t o t h e p u b l i c by December 31 o f t h e y e a r f o l l o w i n g t h e c a l e n d a r y e a r on w h i c h
th e data are based.
A g g r e g a t i o n o f HMDA d a t a w i l l i n v o l v e s u b s t a n t i a l c o s t s , l a r g e l y t o t h e
fin a n c ia l i n s t i t u t i o n re g u la to ry agencies.
The FHLBB/ F D I C HMDA s t u d y e s t i m a t e d
a g g r e g a t i o n c o s t s t o be a p p r o x i m a t e l y $1 m i l l i o n a n n u a l l y w i t h a p o s s i b l e
v a r i a t i o n i n a c t u a l c o s t s o f anyw her e f ro m m i n u s - 3 0 p e r c e n t t o 50 p e r c e n t o f t h a t
estim ate.
A c o s t a n a l y s i s p r e p a r e d by F e d e r a l R e s e r v e S y s te m s t a f f d u r i n g
1980 e s t i m a t e d t h a t a g g r e g a t i o n o f HMDA d a t a w i l l c o s t a p p r o x i m a t e l y $ 3 0 0 , 0 0 0
in the f i r s t y e a r .
A g g r e g a t i o n w i l l i mpo se m i n o r b u r d e n s on t h e r e p o r t i n g i n s t i t u t i o n s ,
a r i s i n g f rom t h e need t o send two a d d i t i o n a l c o p i e s o f t h e i r d i s c l o s u r e s t a t e ­
ments t o t h e a p p r o p r i a t e s u p e r v i s o r y a g e n c y .
I n a d d i t i o n , some i n s t i t u t i o n s
w i l l b e a r c o s t s t h a t a r i s e f rom h a v i n g t o c o r r e c t i n c o m p l e t e o r i n a c c u r a t e
statem ents t h a t are uncovered in the e d i t i n g p r o c e s s .
A lth o u g h the c o s t s o f a g g r e g a t io n are q u a n t i f i a b l e , the b e n e f i t s c a n ­
n o t be m ea s ur ed i n d o l l a r t e r m s .
Two p r i n c i p a l b e n e f i t s were c i t e d i n t h e 198 0
HMDA h e a r i n g s and i n p u b l i c comments r e c e i v e d on t h e p r o p o s e d r e g u l a t i o n t o
support aggregation.
F i r s t , i t was a r g u e d t h a t t h e u t i l i t y o f u s i n g and e v a l u ­
a t i n g t h e HMDA s t a t e m e n t s o f i n d i v i d u a l i n s t i t u t i o n s w i l l be e nh an ce d i f com­
p a r i s o n s can be made o f a g g r e g a t e SMSA l e n d i n g p a t t e r n s .
Second, a g g re g a t e
l e n d i n g p a t t e r n s can be u sed by p u b l i c o f f i c i a l s t o a i d i n t h e d e t e r m i n a t i o n
of ta r g e t areas f o r p u b lic investment.
I t seems u n l i k e l y t h a t t h e f i r s t s u g g e s t e d u s e w i l l p r o v i d e s i g n i f i c a n t
benefits.
E x p e r i e n c e w i t h e n f o r c e m e n t o f t h e CRA and a n t i - d i s c r i m i n a t i o n l a w s
s u g g e s t s t h a t a g g r e g a t io n w i l l not m a t e r i a l l y a id r e g u l a t o r s in t h e i r enforcem ent
re sp o n sib ilitie s.
Home l o a n i n f o r m a t i o n c u r r e n t l y i s p r e p a r e d on an i n d i v i d u a l
i n s t i t u t i o n b a s i s and t h a t i s t h e f orm i n w h i c h i t i s p r i n c i p a l l y u s e d .
U sually,
when c o m p a r i n g one i n s t i t u t i o n ' s r e c o r d w i t h o t h e r s , c o m p a r i s o n s must be between
i n s t i t u t i o n s o f s i m i l a r t y p e s and s i z e s t o be a n a l y t i c a l l y s o u n d .
H a v i n g an
o v e r a l l v i e w o f SMSA l e n d i n g p a t t e r n s i s n o t l i k e l y t o be p a r t i c u l a r l y h e l p f u l
i n e v a l u a t i n g t h e CRA o r c i v i l r i g h t s r e c o r d s o f i n d i v i d u a l l e n d e r s .
Aggregate
HMDA l e n d i n g p a t t e r n s may be a u s e f u l t o o l f o r p u b l i c o f f i c i a l s ' e f f o r t s t o
t a r g e t p u b l i c in ve stm en t.
However, i t i s d i f f i c u l t t o d e t e r m i n e w h e t h e r t h e
s u b s t a n t i a l c o s t s o f a g g r e g a t i o n a r e o u t w e i g h e d by t h e b e n e f i t s some p u b l i c
o f f i c i a l s w i l l r e c e i v e from t h e a v a i l a b i l i t y o f t h e a g g r e g a t e d d a t a .
Moreover,
i f in d iv id u a l sta te s o r l o c a l i t i e s fin d aggregate lending inform ation valuable
f o r p l a n n i n g p u r p o s e s , t h e y p r o b a b l y c o u l d c o m p i l e t h e i n f o r m a t i o n more q u i c k l y
and p e r h a p s i n a more u s e f u l f o r m a t t h a n can be done i n W a s h i n g t o n .
E co n om ic i m pa c t a n a l y s i s o f r e v i s e d R e g u l a t i o n C .
S e c t i o n 203.2 o f the r e g u l a t i o n p r o v i d e s d e f i n i t i o n s ( f o r example, o f
t h e t y p e s o f d e p o s i t o r y i n s t i t u t i o n s t h a t a r e c o v e r e d by t h e r e g u l a t i o n and o f
t h e t y p e s o f r e s i d e n t i a l l o a n s t h a t must be d i s c l o s e d ) .
The o r i g i n a l r e g u l a t i o n
d e f i n e d a f i r s t l i e n l o a n s e c u r e d by r e s i d e n t i a l p r o p e r t y even i f i t was f o r




- 6 -

home i mpr o vement p u r p o s e s , a s a r e s i d e n t i a l m o r t g a g e l o a n .
T h is re s u lt e d in
some d i s t o r t i o n o f t h e d a t a b e c a u s e i t e s s e n t i a l l y r e q u i r e d l e n d e r s t o c a t e ­
g o r i z e home im pr o vem ent l o a n s s e c u r e d by a f i r s t l i e n a s home p u r c h a s e l o a n s .
The p r o p o s a l t h a t was p u b l i s h e d f o r comment would have r e q u i r e d l e n d e r s t o *
c a t e g o r i z e l o a n s a s e i t h e r home p u r c h a s e o r home impr ovement l o a n s a c c o r d i n g
t o t h e i r p u r p o s e a s s t a t e d by t h e b o r r o w e r .
The p r o p o s e d d e f i n i t i o n s were
i n t u i t i v e l y a p p e a l i n g and wo ul d have p r o v i d e d more a c c u r a t e i n f o r m a t i o n a b out
the r e s i d e n t i a l c r e d i t a c t i v i t y o f covered l e n d e r s .
However, some commenters
s t a t e d t h a t t h e p r o p o s e d c h a n g e w ould be bu rde ns ome b e c a u s e t h e y g e n e r a l l y r e c o r d
a l l f i r s t l i e n l o a n s t o g e t h e r on t h e i r b o o k s .
From t h e i r p e r s p e c t i v e , t h e
o r i g i n a l d e f i n i t i o n s were s a t i s f a c t o r y .
O t h e r commenters f a v o r e d t h e p r o p o s e d
d e f i n i t i o n s b e c a u s e t h e y a r e i n a c c o r d w i t h t h e i r own l o a n c l a s s i f i c a t i o n
procedures.
The f i n a l r e g u l a t i o n g i v e s i n s t i t u t i o n s t h e o p t i o n t o t r e a t a f i r s t
l i e n l o a n f o r r e h a b i l i t a t i o n o r r e p a i r a s a home p u r c h a s e o r home impr ovement
l o a n , d e p e n d i n g on how t h e i n s t i t u t i o n n o r m a l l y r e c o r d s s u c h l o a n s on i t s b o o k s .
The f i n a l r e g u l a t i o n i s a c l e a r impr ovement o v e r t h e o r i g i n a l d e f i n i t i o n .
It
w i l l r e d u c e d i s t o r t i o n i n t h e d a t a and a l l o w l e n d e r s t o c h o o s e t h e l e a s t
b ur dens ome a l t e r n a t i v e i n c a t e g o r i z i n g t h e i r l o a n s f o r p u r p o s e s o f t h e a c t .
W h i l e some c o n t i n u e d d i s t o r t i o n o f t h e d a t a i s l i k e l y , i t s h o u l d be r e d u c e d
b e c a u s e i n s t i t u t i o n s t h a t p r e f e r t o c a t e g o r i z e f i r s t l i e n home i mp rovement
l o a n s a s s u c h , w i l l n o t be r e q u i r e d t o c a t e g o r i z e them a s home p u r c h a s e l o a n s .
The f i n a l r e g u l a t i o n w i l l n o t i mpo se any new c o s t s on t h e r e p o r t i n g i n s t i t u t i o n s
and may r e d u c e c o s t s f o r l e n d e r s t h a t p r e v i o u s l y had t o s e t up a s e p a r a t e d a t a
c o l l e c t i o n s y s t e m f o r p u r p o s e s o f HMDA c o m p l i a n c e .
S e c t i o n 2 0 3 . 3 o f t h e r e v i s e d r e g u l a t i o n i n c l u d e s t h e same e x e m p t i o n
s t a n d a r d s a s e x i s t e d u n d e r p r e v i o u s R e g u l a t i o n C.
These s t a n d a rd s p r o v id e a
b l a n k e t e x e m p t i o n f o r a ny d e p o s i t o r y i n s t i t u t i o n t h a t d o e s n o t have an o f f i c e
i n an a r e a d e s i g n a t e d a s an SMSA.
I n a d d i t i o n , any d e p o s i t o r y i n s t i t u t i o n ,
r e g a r d l e s s o f l o c a t i o n , i s exempt i f i t h a s y e a r - e n d a s s e t s o f l e s s t h a n $ 10
m illion.
The e x e m p t i o n s t a n d a r d s i n § 2 0 3 . 3 o f t h e r e v i s e d r e g u l a t i o n a r e
i d e n t i c a l t o t h o s e mandated by t h e s t a t u t e .
Th e s e e x e m p t i o n s t a n d a r d s a p p e a r
t o r e f l e c t t h e c o n g r e s s i o n a l p e r c e p t i o n s t h a t d i s i n v e s t m e n t by d e p o s i t o r y
i n s t i t u t i o n s i s l a r g e l y an u r b a n p r o b l e m , and t h a t HMDA r e q u i r e m e n t s s h o u l d
n o t i mp os e a d i s p r o p o r t i o n a t e b u r d e n on s m a l l d e p o s i t o r y i n s t i t u t i o n s .
A s n o t e d , t h e F HL B B/ FD IC s t u d y o f HMDA f o u n d t h a t t h e c o s t s o f c o m p l i ­
a nce f a l l d i s p r o p o r t i o n a t e l y on t h o s e l e n d e r s m a r g i n a l l y a c t i v e i n t h e home
loan market.
The FHLB B/ FDI C s t u d y f o u n d t h a t t h e c o s t s o f c o m p l i a n c e , on a
p e r l o a n b a s i s , were a p p r o x i m a t e l y two t i m e s a s h i g h f o r i n s t i t u t i o n s r e p o r t i n g
f e w e r t h a n 200 l o a n s p e r y e a r t h a n t h e y were f o r i n s t i t u t i o n s e x t e n d i n g between
2 00 and 1 , 0 0 0 l o a n s p e r y e a r .
The s t u d y a l s o f o u n d t h a t i n s t i t u t i o n s d i s c l o s i n g
f e w e r t h a n 200 l o a n s p e r y e a r i n c u r an a v e r a g e c o s t p e r l o a n ( $ 3 . 6 7 ) t h a t i s
a p p ro x im a t e ly t h re e tim es h i g h e r than the average c o s t per loan o f le n d e r s
re p o rtin g over 1,000 per y ea r.

depository

W h i l e t h e $ 1 0 m i l l i o n a s s e t e x e m p t i o n d o e s r e d u c e t h e number o f s m a l l
i n s t i t u t i o n s i n SMSAs t h a t must c o mp ly w i t h HMDA, i t r e s u l t s i n




- 7 -

i n e q u i t a b l e t r e a t m e n t o f t h e d i f f e r e n t t y p e s o f i n s t i t u t i o n s c o v e r e d by t h e a c t . A/
The c u r r e n t e x e m p t i o n s t a n d a r d s f a i l t o r e c o g n i z e t h e s p e c i a l i z a t i o n t h a t e x i s t s
i n t h e r e s i d e n t i a l l o a n m a r k e t between co m me r ci a l b a n k s and t h r i f t i n s t i t u t i o n s .
A c o m p a r i s o n between t h e t y p i c a l co m me rc ia l bank and t h r i f t i n s t i t u t i o n , of- any
s i m i l a r a s s e t s i z e , w i l l reveal a l a r g e d i s p a r i t y in the perce n ta ge o f le n d a b le
f u n d s d e v o t e d t o home l o a n s .
As a r e s u l t , t h e $10 m i l l i o n a s s e t e x e m p t i o n
s t a n d a r d a l l o w s many t h r i f t i n s t i t u t i o n s t h a t a r e r e l a t i v e l y a c t i v e r e s i d e n t a l
l e n d e r s t o be exempt f rom d i s c l o s u r e r e q u i r e m e n t s and hence p u b l i c r e v i e w o f
t h e ir lending a c t iv i t y .
At t h e same t i m e , t h i s e x e m p t i o n s t a n d a r d r e q u i r e s
many co m me r ci a l b a n k s w i t h a s s e t s i n e x c e s s o f $10 m i l l i o n , b u t m a k i n g f e w e r home
l o a n s t h a n t h e s m a l l e r exempt t h r i f t i n s t i t u t i o n s , t o c o m p i l e and d i s c l o s e
t h e i r home l o a n a c t i v i t y .
S i n c e t h e r e p o r t i n g c o s t s p e r l o a n r i s e a s t h e number
o f l o a n s d i s c l o s e d d e c l i n e s , i t f o l l o w s t h a t s m a l l e r - s i z e d c om me rc ia l b a n k s b e a r
a d i s p r o p o r t i o n a t e s h a r e o f t h e t o t a l c o s t o f HMDA r e p o r t i n g .
An a l t e r n a t i v e e x e m p t i o n s t a n d a r d t h a t i s more e q u i t a b l e t h a n t h e
a s s e t s i z e e x e m p t i o n s t a n d a r d w ou ld b a s e e x e m p t i o n upon t h e s i z e o f an i n s t i t u ­
t i o n ' s home p u r c h a s e and home im pr o vem ent l o a n p o r t f o l i o and t h e number o f s u c h
l o a n s made by t h e l e n d e r i n a c a l e n d a r y e a r . 2 j
This two-part te st i s b e tte r
a d apt e d t h a n an a s s e t - s i z e s t a n d a r d t o m e a s u r i n g w h e t h e r an i n s t i t u t i o n i s
s u f f i c i e n t l y a c t i v e i n t h e home l o a n m a r k e t t o . j u s t i f y t h e c o s t s o f r e p o r t i n g .
An e x e m p t i o n s t a n d a r d t h a t r e q u i r e s a l e n d e r t o r e p o r t i f i t ha s
a home l o a n p o r t f o l i o o f more t h a n $ 10 m i l l i o n o r e x t e n d s 200 o r more home
loans in a cale ndar y e a r i s a c o s t - e f f e c t iv e standard to e s t a b l is h .
This
s p e c i f i c a l t e r n a t i v e e x e m p t i o n s t a n d a r d r e f l e c t s t h e c o s t f i n d i n g s o f t h e FHLBB/
FDIC stu d y .
Such an e x e m p ti o n s t a n d a r d w ould s u b s t a n t i a l l y r e d u c e t h e
number o f i n s t i t u t i o n s r e q u i r e d t o r e p o r t u n d e r t h e a c t .
/ However, t h e
i m p a c t on t h e p r o p o r t i o n o f r e s i d e n t i a l l o a n s d i s c l o s e d w ould be l e s s s u b s t a n ­
t i a l s i n c e t h e e x c l u d e d i n s t i t u t i o n s a r e t h e l e a s t a c t i v e home l e n d e r s .

1

6/

The $ 10 m i l l i o n a s s e t s t a n d a r d exempts a p p r o x i m a t e l y 826 ( 1 4 p e r c e n t ) o f
t h e SMSA b a s e d co mme rci al b a n k s and 160 (7 p e r c e n t ) o f t h e s a v i n g s and
l o a n a s s o c i a t i o n s w i t h o f f i c e s i n d e s i g n a t e d SMSA a r e a s .

7/

A s i m i l a r e x e m p t i o n s t a n d a r d was p r o p o s e d by t h e F e d e r a l R e s e r v e B o a r d i n
h e a r i n g s b e f o r e C o n g r e s s on t h e HMDA amendments i n May 1980.

8/

The c u t o f f o f 200 l o a n s i s b a s e d upon t h e f i n d i n g o f t h e F H L B B / F D I C s t u d y
t h a t p e r - l o a n r e p o r t i n g c o s t s e s c a l a t e s h a r p l y when f e w e r t h a n 2 0 0 l o a n s
a r e t o be r e p o r t e d .
T h i s p o r t i o n o f t h e e x e m p t i o n s t a n d a r d w ou ld be
n e c e s s a r y t o e n s u r e t h a t i n s t i t u t i o n s e x t e n d i n g a s i g n i f i c a n t number o f
home l o a n s i n a g i v e n c a l e n d a r y e a r c a n n o t a v o i d r e p o r t i n g r e q u i r e m e n t s by
s e l l i n g th e se lo a n s in the secondary market, th e re b y k ee p in g t h e i r y e a r - e n d
home l o a n p o r t f o l i o b e l ow $10 m i l l i o n .

V

E s t i m a t e s o f t h e number o f c o v e r e d i n s t i t u t i o n s t h a t w ou ld be r e q u i r e d t o
r e p o r t u n d e r t h i s e x e m p ti o n s t a n d a r d a r e b a s e d on December 1979 c a l l r e p o r t
data.




- 8 -

The a l t e r n a t i v e e x e m p t i o n s t a n d a r d wo ul d r e d u c e t h e number o f commer­
c i a l b a n k s r e q u i r e d t o f i l e d i s c l o s u r e s t a t e m e n t s by a p p r o x i m a t e l y 69 p e r c e n t
( f r o m 5 , 1 6 0 r e p o r t i n g b a n k s t o a p p r o x i m a t e l y 1 , 6 1 2 c o v e r e d c om me rc ia l b a n k s ) . 1 2 /
A l t h o u g h t h e e x e m p t i o n s t a n d a r d w ou ld r e s u l t i n a s u b s t a n t i a l r e d u c t i o n i n ' t h e
number o f r e p o r t i n g c om me rc ia l b a n k s , i t w ould c o n t i n u e t o r e q u i r e t h e m a j o r
bank l e n d e r s i n t h e r e s i d e n t i a l l o a n m a r k e t t o f i l e d i s c l o s u r e s t a t e m e n t s .
U nd er t h i s e x e m p t i o n s t a n d a r d , a t l e a s t 88 p e r c e n t o f t h e d o l l a r v a l u e o f a l l
home p u r c h a s e and home impr ovement l o a n s h e l d by c om me rc ia l b a n k s h e a d q u a r t e r e d
i n SMSAs w ould be h e l d by b a n k s s u b j e c t t o r e p o r t i n g r e q u i r e m e n t s .
The e x e m p t i o n s t a n d a r d o u t l i n e d a b ov e w ould r e q u i r e a p p r o x i m a t e l y
2 , 2 5 5 s a v i n g s and l o a n a s s o c i a t i o n s and 296 mutual s a v i n g s b a n k s t o f i l e d i s c l o ­
sure statements.
T h i s would r e d u c e t h e number o f s a v i n g s and l o a n a s s o c i a t i o n s
and mutual s a v i n g s b a n k s t h a t a r e r e q u i r e d t o r e p o r t by a b o u t 3 p e r c e n t .
T he s e
2 , 5 5 1 t h r i f t i n s t i t u t i o n s h e l d o v e r 99 p e r c e n t o f t h e d o l l a r v a l u e o f a l l home
p u r c h a s e p l u s home impr ovement l o a n s h e l d by s a v i n g s and l o a n a s s o c i a t i o n s and
mutual s a v i n g s b a n k s h e a d q u a r t e r e d i n SMSAs a t y e a r - e n d 1979.
O v e r a l l , th e
a l t e r n a t i v e e x e m p t i o n s t a n d a r d w ou ld r e d u c e t h e t o t a l number o f r e p o r t i n g i n s t i ­
t u t i o n s by a p p r o x i m a t e l y 47 p e r c e n t .
D e s p i t e t h e s h a r p d r o p i n t h e number o f
r e p o r t i n g i n s t i t u t i o n s , a t l e a s t 97 p e r c e n t o f t h e d o l l a r v a l u e o f home p u r c h a s e
and home im pr o vem ent l o a n s h e l d b y a l l co m me rc ia l b a n k s , s a v i n g s and l o a n a s s o c i ­
a t i o n s , and mutual s a v i n g s b a n k s w i t h o f f i c e s i n SMSAs would be d i s c l o s e d .
The e x e m p t i o n s t a n d a r d o u t l i n e d ab ove w ou ld s i g n i f i c a n t l y r e d u c e t h e
number o f s m a l l i n s t i t u t i o n s t h a t must c o m p ly w i t h HMDA.
M o r e o v e r , t h e exemp­
t i o n s t a n d a r d would n o t r e s u l t i n a s i g n i f i c a n t r e d u c t i o n i n b e n e f i t s .
I n mos t
c a s e s c o n s u m e r c o m p l i a n c e e x a m i n e r s w ou ld be a b l e t o j u d g e an exempt l e n d e r ' s
CRA and c i v i l r i g h t s c o m p l i a n c e by r e v i e w i n g a s amp le o f r e s i d e n t i a l l o a n s fr om
the i n s t i t u t i o n ' s loan f i l e s .
The a d d i t i o n a l e x a m i n a t i o n b u r d e n t h a t r e s u l t s from
t h e a l t e r n a t i v e e x e m p t i o n s t a n d a r d s w ould o f f s e t some o f t h e s a v i n g s t h a t a r i s e
from t h e r e d u c t i o n i n c o m p l i a n c e c o s t s .
As n o t e d i n t h e p u b l i c comments r e c e i v e d
on t h e p r o p o s e d r e g u l a t i o n , a d o p t i o n o f t h e p o r t f o l i o e x e m p t i o n s t a n d a r d would
reduce the c o m m u n ities' a b i l i t y t o e v a lu a t e the r e s i d e n t i a l le n d i n g record o f
exempt i n s t i t u t i o n s .
However, t h e s e i n s t i t u t i o n s a r e o n l y exempt b e c a u s e o f
t h e i r l i m i t e d r e s i d e n t i a l l e n d i n g and t h e r e f o r e have v e r y l i t t l e l o a n d a t a t o
evaluate.
A n s w e r i n g t h e more b a s i c q u e s t i o n o f w h e t h e r o r n o t t h e y s h o u l d be
more e x t e n s i v e l y i n v o l v e d i n r e s i d e n t i a l l e n d i n g w ou ld n o t be m a t e r i a l l y a f f e c t e d
by t h e i r e x e m p t i o n f rom HMDA.
I n l i g h t o f i t s g o a l t o r e d u c e r e g u l a t o r y c o s t s and i n c o n s i d e r a t i o n
o f i t s r e s p o n s i b i l i t i e s u n d e r t h e new R e g u l a t o r y F l e x i b i l i t y A c t (Pub. L. 9 6 3 5 4 ) t h e B o a r d w e i g h e d t h e p o s s i b i l i t y o f a d o p t i n g t h e p o r t f o l i o e x e m p t i on
standard.
The B oa r d u l t i m a t e l y d e c i d e d n o t t o a d o p t a p o r t f o l i o e x e m p t i o n
p a r t l y b e c a u s e t h e S e n a t e had c o n s i d e r e d , and r e j e c t e d , a s i m i l a r p r o p o s e d
amendment d u r i n g t h e d e b a t e on t h e r e - e n a c t m e n t o f HMDA i n 1980.

10/

The 1 , 6 1 2 e s t i m a t e r e p r e s e n t s t h e minimum number o f c o m m e rc ia l b a n k s t h a t
wo ul d be r e q u i r e d t o r e p o r t .
A t l e a s t some b a n k s t h a t o r i g i n a t e and s e l l
t h e i r r e s i d e n t i a l l o a n s on a r e g u l a r b a s i s would be e x c l u d e d u n d e r t he
p o r t f o l i o e x e m p t i o n b u t w ou ld be r e q u i r e d t o r e p o r t b e c a u s e t h e y e x t e n d
more t h a n 200 home p u r c h a s e and home i mp rovement l o a n s i n a c a l e n d a r y e a r .




- 9 -

I n a l e t t e r t o C o n g r e s s , t h e B o a r d l a t e r recommended t h a t C o n g r e s s
r e c o n s i d e r a r e v i s e d mortgage p o r t f o l i o exemption stan d a rd .
The l e t t e r s u g g e s t e d
t h a t , i n a d d i t i o n t o t h e $10 m i l l i o n r e s i d e n t i a l l o a n p o r t f o l i o s t a n d a r d and
t h e 200 l o a n c r i t e r i o n , C o n g r e s s m i g h t c h o o s e t o d e s i g n a t e an u p p e r l i m i t on
the s i z e o f i n s t i t u t i o n th a t could avoid re p o r t in g .
I f t h i s amendment were
added t o t h e o r i g i n a l p r o p o s a l l a r g e i n s t i t u t i o n s would r e p o r t i r r e s p e c t i v e o f
the s i z e o f t h e i r r e s i d e n t i a l loan p o r t f o l i o .
I f $ 10 0 m i l l i o n i n a s s e t s were
e s t a b l i s h e d a s t h e s t a n d a r d , an a d d i t i o n a l 227 co mme rci al b a n k s w ou ld be r e q u i r e d
to r e p o r t .
Thes e 227 co m me rc ia l b a n k s h e l d 1.1 p e r c e n t o f t h e m o r t g a g e p l u s
home im pr o vem ent l o a n s h e l d by SMSA b a s e d c om me rc ia l b a n k s a s o f December 31,
1 97 9.
T a b l e 1 p r o v i d e s a c a t e g o r i z a t i o n o f c om me rc ia l b a n k s by a s s e t s i z e
u n d e r t h e p o r t f o l i o e x e m p t i o n s t a n d a r d p r o p o s e d by t h e B o a r d .
Se c tio n 203.3(b) allow s sta te -c h a rte re d i n s t i t u t i o n s , su b je c t to sta te
r e g u l a t i o n s s u b s t a n t i a l l y s i m i l a r t o r e v i s e d R e g u l a t i o n C, t o be exempt from
com pliance w ith the fe d e ra l r e g u l a t i o n .
This section requires i n s t i t u t i o n s
exempt f rom f e d e r a l r e g u l a t i o n t o f i l e two c o p i e s o f t h e i r d i s c l o s u r e s t a t e m e n t s
(pre pared under the p r o v i s i o n s o f t h e i r s t a t e law) w ith the a p p r o p r ia t e s t a t e
s u p e r v i s o r y agency.
T h i s m i n o r a d d i t i o n a l b ur de n i s n e c e s s a r y b e c a u s e e x em p ts t a t e i n s t i t u t i o n s must be i n c l u d e d i n t h e HMDA a g g r e g a t i o n p r o c e s s .
S e c t i o n 2 0 3 . 3 ( c ) a l l o w s i n s t i t u t i o n s t h a t become s u b j e c t t o r e p o r t i n g
re q u ire m e n ts d u r in g a c a le n d a r y e a r to re p o r t b e g in n in g w ith data f o r the
f i r s t c a l e n d a r y e a r a f t e r t h e y e a r i n w h i c h t h e i r e x e m p t i o n was l o s t .
The
p r e v i o u s r e g u l a t i o n r e q u ire d i n s t i t u t i o n s t h a t l o s t t h e i r exemption to f i l e
d i s c l o s u r e statem ents not o n ly f o r the y e a r in which th e y l o s t t h e i r exemption,
but a l s o f o r the p r i o r y e a r .
The r e v i s e d r e g u l a t i o n w i l l r e d u c e c o m p l i a n c e
b u r d e n s on a v e r a g e by a b o u t $ 1 , 4 2 6 f o r eac h i n s t i t u t i o n t h a t becomes s u b j e c t t o
re p o rtin g requirem ents.Al/
T h is f ig u r e represents a co n se rva tive estim ate
b e c a u s e i t i s more c o s t l y f o r i n s t i t u t i o n s t o c o m p i l e d a t a f rom a p r i o r y e a r
t h a n i t i s t o c o m p i l e t h e i n f o r m a t i o n on a c o n t i n u o u s b a s i s .
This p r o v is io n
should not r e s u l t in a s i g n i f i c a n t l o s s in consumer b e n e f i t s .
Moreover, the
d a t a f rom t h e y e a r p r i o r t o t h e y e a r i n w h i c h t h e e x e m p t i o n was l o s t wo ul d n o t
be a v a i l a b l e i n t i m e t o be i n c l u d e d i n t h e SMSA a g g r e g a t i o n p r o c e s s .
N ot e:
t h i s r u l e w i l l n ot h o l d f o r i n s t i t u t i o n s t h a t l o s e t h e i r s t a t e - e x e m p t s t a t u s .
T he se i n s t i t u t i o n s w i l l be r e q u i r e d t o b e g i n c o m p i l i n g f e d e r a l d i s c l o s u r e s t a t e ­
ments f o r t h e c a l e n d a r y e a r f o l l o w i n g t h e y e a r i n w h i c h t h e y c o m p i l e d t h e i r
l a s t annual s t a t e d i s c l o s u r e statem ent.
T h i s e x e m p t i o n w i l l e n s u r e an u n i n t e r ­
r u p t e d s e r i e s o f a n nu a l d i s c l o s u r e s t a t e m e n t s by i n s t i t u t i o n s t h a t l o s e t h e i r
s t a t e exemption.
The 1980 HMDA amendments r e q u i r e c o v e r e d i n s t i t u t i o n s t o c o m p i l e and
r e p o r t t h e i r HMDA d a t a on a c a l e n d a r y e a r b a s i s .
Se ction 203 .4(a ) o f the re g u ­
l a t i o n implements t h i s p r o v i s i o n o f th e a c t.
The g o a l o f t h i s r e g u l a t i o n i s t o
e s t a b l i s h a u n i f o r m r e p o r t i n g p e r i o d s o t h a t d a t a fr om a l l c o v e r e d i n s t i t u t i o n s
i n an SMSA may be compared o v e r an e q u i v a l e n t t i m e p e r i o d .
The o r i g i n a l R e g u l a ­
t i o n C a l l o w e d i n s t i t u t i o n s t o r e p o r t on a f i s c a l y e a r b a s i s .
As a r e s u l t , i t

1 1 / $ 1 , 4 2 6 r e p r e s e n t s t h e 1977 c o s t s o f c o m p i l i n g home m o r t g a g e d i s c l o s u r e
s t a t e m e n t s f o r two y e a r s f o r t h e a v e r a g e i n s t i t u t i o n c o v e r e d by t h e a c t .




I ABLE 1

A s s e t S i z e iL/
llio n s of d o lla rs)

$10
50
100
200
300

D istrib u tio n of Exempt and Covered Commercial Banks Categorized by Asset
~$*2e Under $10 M illio n P o rtfo lio Exemption Standardl y

Exempt _?/
(number o f i n s t i t u t i o n s )

Percentage o f Mortgage
P l u s Home Improvement
L o a n s Held by Exempt
Commercial B an k s
(Percentage)

2?78
591
171
31
25
iso ?

50
- 100
- 200
- 300
- and o v e r
TOTAL

7.5
2.4
0.8
0.2
0.1
r m

Percentage o f M o r t ­
ga ge P l u s Home
Improvement L o a n s
H e ld by C ov er ed
Commercial B an ks £ /
(Percentage)
1 .6 %
5 .5
8.7
4.9
68.0
88.7

Covered
(number o f i n s t i t u t i o n s )

156
418
436
172
430
1612

I mpa ct o f t h e $ 10 M i l l i o n P o r t f o l i o E x e m p t i o n
S t a n d a r d on S a v i n g s and Loan A s s o c i a t i o n and M ut ua l S a v i n g s B a n k s

Number C u r r e n t l y R e q u i r e d t o R e p o r t
U nder t h e $10 M i l l i o n A s s e t E x e m p t i o n

S&L
MSB

Number R e q u i r e d t o R e p o r t
U n d e r $10 M i l l i o n P o r t f o l i o
Exemption

2339
298

2255
296

P e r c e n t a g e o f M o r t g a g e P l u s Home Improvement
L o a n s Held by S&Ls and MSBs C ov er ed by t h e
$10 M i l l i o n P o r t f o l i o E x e mp ti o n

99.5%
99.9

V

A l l c a l c u l a t i o n s a r e b a s e d on y e a r - e n d 1979 C a l l R e p o r t d a t a .
A l l co mme rci al bank e s t i m a t e s a r e I n f l u e n c e d s l i g h t l y
by t h e f a c t t h a t co m me r ci a l b a n k s w i t h l e s s t h a n $ 1 0 0 m i l l i o n 1n a s s e t s do n o t s e p a r a t e l y r e p o r t u n s e c u r e d home im­
p ro vem ent l o a n s .
T h e r e f o r e , e s t i m a t e s f o r t h e s e b a n k s a r e b a se d s o l e l y on m o r t g a g e s and home improvement l o a n s
s e c u r e d by r e a l e s t a t e .

2J

Under the e x i s t i n g

3/

Some o f t h e c o m m e rc ia l b a n k s i n t h e exempt c a t e g o r y would be r e q u i r e d t o r e p o r t b e c a u s e t h e y e x t e n d more t h a n 2 00
home l o a n s p e r y e a r even t h o u g h t h e y m a i n t a i n home l o a n p o r t f o l i o s o f l e s s t h a n $10 m i l l i o n .

4/

T h i s column i n d i c a t e s t h a t 8 8 . 7 % o f t h e d o l l a r v a l u e o f m o r t g ag e p l u s home i mprovement l o a n s h e l d by commercial b a n k s
c u r r e n t l y r e q u i r e d t o r e p o r t u n d e r t h e $10 m i l l i o n a s s e t e x e m p t i o n s t a n d a r d w i l l s t i l l be c o v e r e d u n de r t h e p r o p o s e d
$10 m i l l i o n p o r t f o l i o e x e m p t i o n s t a n d a r d .
B e c a u s e o f r o u n d i n g , c o lu m n s t h r e e and f i v e do n o t sum t o 100%.




statute all

o f t h e 5 2 0 8 co mme rc ia l

banks in the t a b l e a re r e q u i r e d to r e p o r t .

- 10 -

was d i f f i c u l t t o a g g r e g a t e and compare d i f f e r e n t i n s t i t u t i o n s ' l e n d i n g r e c o r d s .
The s w i t c h t o a c a l e n d a r y e a r r e p o r t i n g p e r i o d was f i r s t i mpleme nte d by an
amendment t o R e g u l a t i o n C a d o p t e d i n November 1980. ±L' A s a r e s u l t , t h e
r e v i s e d r e g u l a t i o n d o e s n o t t e c h n i c a l l y c h a n g e t h e r e p o r t i n g p e r i o d fr om t h a t
w h i c h i s mandated i n t h e c u r r e n t r e g u l a t i o n . 11/
The 1980 HMDA amendments d i r e c t t h e F e d e r a l R e s e r v e B o a r d t o p r e ­
s c r i b e a s t a n d a r d f o r m a t f o r d i s c l o s u r e s o f HMDA d a t a .
C u r r e n t ly , the va st
m a j o r i t y o f c o v e r e d i n s t i t u t i o n s u s e a r e p o r t i n g f or m t h a t i s q u i t e s i m i l a r t o
t h e one s e t f o r t h i n R e g u l a t i o n C.
However, m i n o r v a r i a t i o n s do e x i s t a c r o s s
in stitutions.
While such v a r i a t i o n s in format are not s i g n i f i c a n t in a small
s a mp le s t u d y , t h e y p r e s e n t i m p e d i m e n t s t o a c o s t - e f f e c t i v e a g g r e g a t i o n
o f HMDA d a t a on an SMSA b a s i s .
V a r i a t i o n s in format r a i s e th e c o s t o f u s i n g
the d i s c l o s u r e data s u b s t a n t i a l l y , perhaps d o u b l in g the c o s t s a s s o c i a t e d w ith
a g g r e g a t i n g th e data.
P r e s c r i p t i o n o f a s t a n d a r d f o r m a t w i l l i mpo se some
o n e - t i m e c o s t s on t h e r e p o r t i n g i n s t i t u t i o n s .
Th e s e o n e - t i m e c o s t s a r i s e f rom
t h e need t o a l t e r t h e i n s t i t u t i o n ' s e x i s t i n g f o r m a t .
I n some c a s e s t h i s w i l l
i mp os e m i n o r c o m p u t e r p r o gr a mm i n g c h a n g e s ; i n a l l c a s e s i t w i l l i n v o l v e some
a d d itio n a l personnel t r a i n i n g .
The r e p o r t i n g f o r m a t p r e s c r i b e d i n t h e r e v i s e d r e g u l a t i o n d e l e t e s one
c o l u m n — t o t a l r e s i d e n t i a l m o r t g a g e l o a n s on l - t o - 4 f a m i l y d w e l l i n g s — fr om t h e
HMDA f or m i n o l d R e g u l a t i o n C.
T h i s column i s n o t r e q u i r e d u n d e r t h e a c t and
i s s i m p l y t h e summation o f c o l u m n s two and t h r e e .
D e l e t i o n o f t h i s column
s h o u l d r e d u c e b o t h t h e number o f e r r o r s i n t h e i n s t i t u t i o n s ' r e p o r t s , and on
n e t r e d u c e t h e c o s t s o f c o m p l i a n c e s i n c e t h e new f orm w i l l r e q u i r e f e w e r manual
o r c o m p u t e r c o m p u t a t i o n s and r e d u c e d p a p e r w o r k .
Moreover, d e le t io n o f t h i s

12/ 45 FR 8 0 8 1 3 , December 8,

1980.

1 3 / The r e g u l a t o r y amendment i mp os ed a o n e - t i m e c o s t on t h o s e i n s t i t u t i o n s
d i s c l o s i n g d a t a on o t h e r t h a n a c a l e n d a r y e a r b a s i s .
T h is one-time c o st
h a s two c o m p o n e n t s .
F i r s t , t h e r e i s the c o s t a s s o c i a t e d w ith c h a n g in g
o p e r a t i n g met ho ds t o c o n f o r m w i t h a c a l e n d a r r e p o r t i n g r e q u i r e m e n t .
These
c o s t s in v o lv e a d d itio n a l t r a i n i n g o f i n s t i t u t i o n personnel r e s p o n s ib le
f o r p r e p a r i n g t h e d i s c l o s u r e r e p o r t s and some m i n o r c o m p u t e r p r o gr a m m i n g
adju stm e n ts to r e f l e c t the c a l e n d a r y e a r r e p o r t i n g data re q u ire m e n ts.
T h e s e c o s t s a r e n o t e x p e c t e d t o be s i g n i f i c a n t .
Second i s t h e c o s t a s s o c i ­
a t e d w i t h p r e p a r i n g a s e p a r a t e d i s c l o s u r e s t a t e m e n t c o n t a i n i n g d a t a f o r any
p e r i o d p r i o r t o c a l e n d a r y e a r 198 0 w h i c h i s n o t c o v e r e d by t h e l a s t f u l l
y e a r r e p o r t p r i o r t o t h e 1980 c a l e n d a r y e a r r e p o r t .
In a d d i t i o n , t h o s e
i n s t i t u t i o n s r e p o r t i n g on a f i s c a l y e a r b a s i s w h i c h have d i s c l o s e d t h e i r
1980 f i s c a l y e a r r e p o r t s w i l l h av e t o d u p l i c a t e t h a t p o r t i o n o f t h e i r
f i s c a l 1 9 7 9 - 8 0 r e p o r t s t h a t f a l l s i n c a l e n d a r y e a r 1980.
The F H L B B / F DI C
s t u d y f o u n d t h a t 85 p e r c e n t o f t h e c o v e r e d i n s t i t u t i o n s i n t h e i r s u r v e y
c u r r e n t l y r e p o r t on a c a l e n d a r y e a r b a s i s .
Therefore, i t i s u n lik e ly that
t h i s r e g u l a t i o n w i l l i mpose any bu r de n on t h e b u l k o f t h e r e p o r t i n g i n s t i t u ­
tions.
However, t h e r e g u l a t i o n w i l l impos e an a d d i t i o n a l b u r d e n on t h o s e
i n s t i t u t i o n s n o t p r e v i o u s l y r e p o r t i n g on a c a l e n d a r y e a r b a s i s .




_

- 11 -

column s h o u l d r e s u l t i n a s i g n i f i c a n t s a v i n g s i n t h e a g g r e g a t i o n p r o c e s s s i n c e
i t w i l l r e d u c e by o n e - s e v e n t h t h e amount o f m a t e r i a l t h a t must be a g g r e g a t e d .
B a s e d on t h e F H L B B / F D I C s t u d y o f HMDA a g g r e g a t i o n c o s t s , d e l e t i o n o f one
column s h o u l d r e s u l t i n an a n n u a l c o s t s a v i n g s o f a b o u t $ 4 6 , 0 0 0 . i z /
S e c t i o n 2 0 3 .3 (b ) o f th e r e g u l a t i o n in e f f e c t r e q u i r e s e x e m p t-s ta t e
i n s t i t u t i o n s to f o l l o w the b a s i c r e p o r t i n g form at.
Because o f th e a g g r e g a t io n
r e q u i r e m e n t s s p e c i f i e d i n t h e A c t , s t a t e e x e m p t i o n s f ro m HMDA w i l l o n l y be
g i v e n by t h e B oa r d i f t h e s t a t e d i s c l o s u r e s t a t e m e n t i s s u b s t a n t i a l l y s i m i l a r
t o t h e HMDA-1 Form c o n t a i n e d i n t h e r e g u l a t i o n .
A gg reg ation requirements
n e c e s s i t a t e t h e e s t a b l i s h m e n t o f a u n i f o r m r e p o r t i n g f o r m a t b e c a u s e t h e exempts t a t e i n s t i t u t i o n s must be i n c o r p o r a t e d i n t o t h e a g g r e g a t i o n p r o c e s s .
This
r e q u i r e m e n t may i mpos e a d d i t i o n a l c o s t s on some o f t h e s e i n s t i t u t i o n s , a l t h o u g h
mos t o f t h e e x e m p t - s t a t e i n s t i t u t i o n s a l r e a d y c o m p i l e HMDA d a t a i n a f o r m a t
s i m i l a r to t h a t p r e s c r i b e d in the r e g u l a t i o n .
Se c tio n 203.4 o f r e v is e d R eg ula tio n C r e q u ir e s covered le n d e rs to
c o m p i l e t h e g e o g r a p h i c d i s c l o s u r e o f l o a n o r i g i n a t i o n s and p u r c h a s e s on s e p a r a t e
r e p o rt forms.
The p r e v i o u s r e g u l a t i o n a l s o r e q u i r e d s e p a r a t e d i s c l o s u r e r e p o r t s
f o r o r i g i n a t i o n s and p u r c h a s e s .
A n o t h e r 198 0 amendment t o t h e a c t r e q u i r e s l e n d e r s t o g e o co d e a l l
c o v e r e d l o a n s e x t e n d e d w i t h i n SMSAs on a c e n s u s t r a c t b a s i s u n l e s s t h e l o a n
i n v o l v e s a p r o p e r t y l o c a t e d i n an SMSA c o u n t y whose p o p u l a t i o n d o e s n o t e x c e ed
30,000.
S e c t i o n 2 0 3 . 4 ( b ) o f the r e v i s e d r e g u l a t i o n a llo w s covered l o a n s extended
i n t h e l e s s p o p u l o u s c o u n t i e s t o be g e o co d e d by c o u n t y name.
B as ed upon 1970
c e n s u s d a t a , a p p r o x i m a t e l y 19 p e r c e n t o f t h e c o u n t i e s l o c a t e d i n SMSAs h av e
p o p u l a t i o n s t h a t do n o t e xce ed 3 0 , 0 0 0 .
T h i s amendment makes two m o d i f i c a t i o n s i n t h e s t a t u t e .
F irst, it
a l l o w s l e n d e r s e x t e n d i n g c r e d i t i n SMSA c o u n t i e s w i t h s m a l l p o p u l a t i o n s ( 3 0 , 0 0 0
o r l e s s ) t o ge o c od e t h e s e l o a n s by c o u n t y name.
The p r e v i o u s r e g u l a t i o n r e q u i r e d
l e n d e r s t o ge o c od e t h e s e l o a n s by e i t h e r c e n s u s t r a c t o r Z I P co de .
The m o d i f i ­
c a t i o n in geocoding req u ire m en ts f o r l o a n s extended in th e se l e s s populous area s
w i l l r e d u c e t h e c o s t s o f HMDA c o m p l i a n c e a s w e l l a s i m p r o v e t h e a c c u r a c y o f t h e
r e p o r t s w i t h no a s s o c i a t e d l o s s i n t h e u s e f u l n e s s o f t h e d a t a .
The amendment
w i l l not reduce the u s e f u l n e s s o f the data because, in g e n e r a l, lo a n s in such
r u r a l a r e a s a r e a l r e a d y a g g r e g a t e d f o r CRA o r c i v i l r i g h t s a n a l y s i s .
The s e c o n d m o d i f i c a t i o n r e s u l t i n g f rom t h i s amendment t o t h e a c t
r e q u i r e s l e n d e r s t o g e o c o d e l o a n s by c e n s u s t r a c t i n SMSA c o u n t i e s whose p o pu ­
l a t i o n s e xc e ed 3 0 , 0 0 0 .
C o mp le te c o m p l i a n c e w i t h t h i s amendment i s i m p o s s i b l e
b e c a u s e t h e r e a r e u n t r a c t e d SMSA c o u n t i e s w i t h p o p u l a t i o n s t h a t e x c e ed 3 0 , 0 0 0 .
A s a r e s u l t , t h e r e v i s e d r e g u l a t i o n a l l o w s l e n d e r s e x t e n d i n g c r e d i t i n s u ch
u n t r a c t e d a r e a s t o r e p o r t t h e d a t a by c o u n t y name.
D i s c l o s u r e by c o u n t y name
i n t h e s e l a r g e u n t r a c t e d c o u n t i e s s h o u l d m a r g i n a l l y r e d u c e t h e c o s t s o f com­
p l i a n c e and i m p r o v e t h e a c c u r a c y o f t h e d i s c l o s u r e r e p o r t s .

1 4 / T h i s f i g u r e was d e r i v e d by c a l c u l a t i n g o n e - s e v e n t h o f t h e s t a t e m e n t
r e l a t e d and t r a c t l i n e r e l a t e d c o s t s o f a g g r e g a t i o n e s t i m a t e d i n t h e
1 97 9 F H LB B/ F DI C s t u d y .
T h i s c o s t s a v i n g s e s t i m a t e may be somewhat
o v e r s t a t e d i f t h e F e d e r a l R e s e r v e ' s more r e c e n t e s t i m a t e s o f a g g r e g a t i o n
c o s t s prove a c c u ra t e .




- 12 -

Se c tio n 203.4(d) o f the re v ise d r e g u la t io n r e q u ir e s d e p o s it o r y
i n s t i t u t i o n s t o u s e t h e 1980 C e n s u s o f P o p u l a t i o n and H o u s i n g :
CENSUS TRACTS,
F i n a l R e p o r t s , P HC 8 0- 2 s e r i e s p r e p a r e d by t h e B u r e a u o f t h e C e n s u s , U . S . D e p a r t ­
ment o f Commerce, t o d e t e r m i n e w h e t h e r p r o p e r t y i s l o c a t e d i n a p a r t i c u l a r ' c e n s u s
tract.
A c c o r d i n g t o t h e C e n s u s B u r e a u , 1980 c e n s u s t r a c t o u t l i n e maps w i l l n o t
be c o m p l e t e l y a v a i l a b l e u n t i l J a n u a r y 1 98 3.
C u r r e n t l y the Bureau o f the Census
ha s a v a i l a b l e f o r p u r c h a s e s t r e e t a d d r e s s c o d i n g g u i d e s b a s e d on t h e 1980
c e n s u s t r a c t b o u n d a r y d e f i n i t i o n s t h a t may be u se d by i n s t i t u t i o n s t o g e o c o d e
t h e i r home l o a n s .
However, s u c h g u i d e s a r e n o t a v a i l a b l e f o r r e c e n t l y d e s i g n a t e d
S M S A s, and may n o t be c o m p r e h e n s i v e e no ug h t o a l l o w an i n s t i t u t i o n t o g e o c o d e
e v e r y c o v e r e d l o a n i n an SMSA f o r w h i c h t h e g u i d e i s a v a i l a b l e .
I n r e c o g n i t i o n o f t h e f a c t t h a t t h e 198 0 c e n s u s t r a c t o u t l i n e maps a r e
not c u r r e n t l y a v a i l a b l e , the r e g u l a t i o n a l lo w s d e p o s i t o r y i n s t i t u t i o n s to
c o n t i n u e r e p o r t i n g on t h e b a s i s o f t h e 197 0 c e n s u s t r a c t d e f i n i t i o n s u n t i l t h e
c o m p l e t e 1980 c e n s u s t r a c t o u t l i n e map s e r i e s i s a v a i l a b l e .
The 1970 c e n s u s
t r a c t maps f o r e ac h SMSA have been a v a i l a b l e f o r some t i m e and may be p u r c h a s e d
from t h e B u r e a u o f t h e C e n s u s .
In a d d i t i o n , s t r e e t a d d r e s s c o d i n g g u i d e s b a s e d on
t h e 1970 c e n s u s t r a c t d e f i n i t i o n s a r e a v a i l a b l e a t a n omi na l f e e f rom t h e B u r e a u
o f the Census.
/ B e c a u s e r e p o r t i n g i n s t i t u t i o n s have t h e o p t i o n o f u s i n g t h e
1970 c e n s u s t r a c t d e f i n i t i o n s o r s w i t c h i n g t o t h e 1980 d e f i n i t i o n s d u r i n g t h i s
t r a n s i t i o n p e r i o d , i t i s im p o rta n t t h a t the d i s c l o s u r e statement c l e a r l y i d e n t i f y
which ce n su s served as the b a s i s f o r the re p o r t .

15

The d e c i s i o n t o a l l o w r e p o r t i n g on t h e b a s i s o f e i t h e r t h e 198 0 o r
1970 c e n s u s t r a c t d e f i n i t i o n s d u r i n g t h i s t r a n s i t i o n p e r i o d was b a s e d on comments
r e c e i v e d f rom t h e p u b l i c i n d i c a t i n g t h a t many i n s t i t u t i o n s had a l r e a d y s w i t c h e d
t o t h e 1980 c e n s u s t r a c t d e f i n i t i o n s .
B e c a u s e t h e f i n a l r e g u l a t i o n w i l l n o t be
p u b l i s h e d u n t i l m i d - 1 9 8 1 , i t c o u l d be more c o s t l y t o r e q u i r e t h o s e i n s t i t u t i o n s
t h a t have a l r e a d y made t h e t r a n s i t i o n t o t h e 1980 c e n s u s t r a c t d e f i n i t i o n s
to
s w i t c h back a g a i n t o t h e 1970 d e f i n i t i o n s .
I t i s b e l ie v e d t h a t as lo n g as the
d i s c l o s u r e s t a t e m e n t s c l e a r l y i d e n t i f y w h i c h c e n s u s was u se d a s t h e b a s i s f o r
t h e r e p o r t t h e u s e f u l n e s s o f t h e r e p o r t s w i l l be l a r g e l y u n a f f e c t e d .
A s w i t c h f rom t h e 1 9 70 t o t h e 1980 c e n s u s i s c l e a r l y d e s i r a b l e i n
o r d e r t o t a k e a d v a n t a g e o f t h e most r e c e n t d e m o g r a p h i c i n f o r m a t i o n .
However,
t h e c h a n g e o v e r fr om p r e p a r a t i o n o f d i s c l o s u r e s t a t e m e n t s on t h e b a s i s o f t h e
1970 c e n s u s t r a c t d e f i n i t i o n s t o t h e 198 0 d e f i n i t i o n s w i l l c r e a t e some p r o b l e m s
for users.
T he se p r o b l e m s a r e m i t i g a t e d by t h e f a c t t h a t o n l y 8 p e r c e n t o f t h e
1970 c e n s u s t r a c t s h ave had s u b s t a n t i a l b o u n d a r y c h a n g e s i n t h e t r a n s i t i o n f rom
t h e 197 0 t o 1980 c e n s u s .
Nonetheless, the changeover w i ll com plicate a n a l y s i s
o f a giv e n i n s t i t u t i o n ' s r e s i d e n t i a l le n d i n g record o ve r time.
T h is problem
may be overcome by u s e r s when a c o p y o f t h e 1 9 8 0 - 1 9 7 0 C e n s u s T r a c t E q u i v a l e n c y
L i s t becomes a v a i l a b l e from t h e B u r e a u o f t h e C e n s u s .
The e q u i v a l e n c y l i s t
w i l l a l lo w u s e r s t o determ ine the p r i n c i p a l boundary changes t h a t have o c cu rred
i n t h e t r a n s i t i o n fr om t h e 197 0 t o 1980 c e n s u s .

15/

The 1 97 0 P H C ( l ) S e r i e s r e p o r t s c o n t a i n i n g t h e c e n s u s t r a c t maps were p r i c e d
i n t h e $ . 4 5 t o $ 1 2 . 7 5 r a n g e i n 1976.
S t r e e t a d d re s s c o d in g g u id e s f o r both
t h e 197 0 and 1980 c e n s u s a r e a l s o a v a i l a b l e from t h e B ur e a u o f t h e C e n s u s .
The 1980 g u i d e s r a n g e i n p r i c e f rom $ . 7 8 t o $ 7 0 . 2 7 f o r an SMSA w i t h an
a v e r a g e p r i c e o f $ 6 . 5 4 p e r SMSA.




_

- 13 -

The r e p o r t i n g o p t i o n a u t h o r i z e d i n § 2 0 3 . 4 ( d ) w i l l c r e a t e a p r o bl em
f o r i n d i v i d u a l u s e r s o f t h e HMDA d a t a .
The p r o b l em a r i s e s i f u s e r s want t o
compare an i n s t i t u t i o n t h a t p r e p a r e d i t s d i s c l o s u r e s t a t e m e n t on a 198 0 c e n s u s
t r a c t b a s i s w i t h a n o t h e r i n s t i t u t i o n t h a t p r e p a r e d t h e r e p o r t on a 197 0 c e n s u s
tract basis.
T h i s p r o b l em i s m i t i g a t e d by t h e f a c t t h a t most u s e r s o f t h e
d a t a a r e p r i m a r i l y c o n c e r n e d w i t h t h e s m a l l s u b s e t o f c e n s u s t r a c t s t h a t com­
p r is e t h e i r neighborhood.
Once a g a i n t h e c o m p a r a b i l i t y p r o b l e m may be overcome
by u s i n g t h e C e n s u s T r a c t E q u i v a l e n c y L i s t .
The o p t i o n t o c o m p i l e s t a t e m e n t s on e i t h e r a 1970 o r 198 0 c e n s u s
t r a c t b a s i s w i l l n o t c r e a t e a p r o b l e m f o r t h e HMDA a g g r e g a t i o n p r o j e c t .
A 1980
t o 197 0 c e n s u s t r a c t c o n v e r s i o n f i l e i s a v a i l a b l e f o r p u r c h a s e f o r $ 9 4 7 0 .
This
f i l e w i l l be employed t o c o n v e r t i n s t i t u t i o n s ' r e p o r t s p r e p a r e d on a 1980 c e n s u s
t r a c t b a s i s i n t o t h e i r 1970 e q u i v a l e n t s .
The c o n v e r t e d r e p o r t s w i l l be combined
w i t h t h e r e p o r t s p r e p a r e d on t h e 1970 c e n s u s t r a c t b a s i s i n each SMSA.
The
c ombined r e p o r t s w i l l t h e n be matched w i t h s o c i o e c o n o m i c d a t a f rom t h e 1 97 0
c e n s u s t o p r o d u c e t h e a g g r e g a t i o n t a b l e s r e q u i r e d by t h e A c t .
Use o f t h e 1970
s o c i o e c o n o m i c d a t a w i l l be n e c e s s a r y u n t i l t h e f i n a l c o u n t o f t h e 1980 c e n s u s
i s released.
S e c t i o n 2 0 3 . 5 o f t h e r e g u l a t i o n p r e s c r i b e s t h e d a t e and manner by
w h i c h i n s t i t u t i o n s must make t h e i r d i s c l o s u r e s t a t e m e n t s a v a i l a b l e .
Section
2 0 3 . 5 ( b ) r e q u i r e s t h a t d e p o s i t o r y i n s t i t u t i o n s make t h e i r d i s c l o s u r e s t a t e m e n t s
a v a i l a b l e a t t h e i r home o f f i c e and a t one b r a n c h i n each SMSA i n w h i c h t h e y
have an o f f i c e , o t h e r t h a n t h e SMSA i n w h i c h t h e home o f f i c e i s l o c a t e d .
This
p r o v i s i o n reduces the com pliance burden because under the old r e g u l a t i o n a
l e n d e r had t o make t h e s t a t e m e n t s a v a i l a b l e a t b o t h t h e home o f f i c e and at
one b r a n c h i n e v e r y SMSA.
The r e v i s e d r e g u l a t i o n p r o v i d e s f o r a more l i b e r a l
d i s c l o s u r e r e q u i r e m e n t , b e c a u s e eac h l e n d e r ' s s t a t e m e n t w i l l now be a v a i l a b l e
a t t h e c e n t r a l r e p o s i t o r y a s w e l l a s t h e i n s t i t u t i o n ' s home o f f i c e .
S e c t i o n 2 0 3 . 5 ( b ) o f t h e r e v i s e d r e g u l a t i o n p r o v i d e s f o r a more l i b e r a l
b r a n c h o f f i c e d i s c l o s u r e r e q u i r e m e n t t h a n e x i s t i n g R e g u l a t i o n C.
U nd er t h e
e x i s t i n g r e g u l a t i o n , an i n s t i t u t i o n may e i t h e r make t h e e n t i r e i n s t i t u t i o n - w i d e
d i s c l o s u r e s t a t e m e n t a v a i l a b l e a t one b r a n c h i n eac h SMSA, o r t h e i n s t i t u t i o n
may o m i t d e t a i l e d g e o g r a p h i c b r e a k d o w n s f o r l o a n s on p r o p e r t y i n o t h e r SMSAs a t
the lo c a l branch o f f i c e .
In t h e l a t t e r c a s e th e i n s t i t u t i o n ' s d i s c l o s u r e s t a t e ­
ment would i n c l u d e a c o m p l e t e g e o g r a p h i c breakdown f o r l o a n s i n t h e l o c a l SMSA,
a t o t a l f i g u r e f o r eac h o t h e r SMSA i n w h i c h t h e i n s t i t u t i o n h a s o f f i c e s , and an
a g g r e g a t e f i g u r e f o r l o a n s on p r o p e r t y l o c a t e d o u t s i d e SMSAs i n w h i c h t h e i n s t i ­
t u t i o n h a s an o f f i c e .
The r e v i s e d r e g u l a t i o n would p e r m i t b r a n c h o f f i c e d i s c l o ­
s u r e s t o o m i t a l l d a t a r e l a t i n g t o SMSAs o t h e r t h a n t h e SMSA i n w h i c h t h e p a r t i ­
c u l a r branch o f f i c e i s located.
T h i s r u l e c h a n g e s h o u l d r e s u l t i n some r e d u c t i o n i n d a t a c o m p i l a t i o n
and r e p r o d u c t i o n c o s t s f o r t h o s e i n s t i t u t i o n s w i t h b r a n c h o f f i c e s i n more t h a n
one SMSA.
The r u l e c h a n g e w i l l n o t r e d u c e t h e c o n s u m e r b e n e f i t s s i n c e t h e
e n t i r e d i s c l o s u r e s t a t e m e n t w i l l be a v a i l a b l e a t t h e i n s t i t u t i o n ' s home o f f i c e .
Se c tio n 203.5(d ) o f the f i n a l r e g u la t io n r e q u ir e s covered i n s t i t u t i o n s
t o p o s t a l o b b y n o t i c e i n a l l o f t h e i r SMSA b a s e d o f f i c e s .
The l o b b y n o t i c e
s h o u l d i n d i c a t e t h a t t h e i n s t i t u t i o n ' s a n n u a l HMDA s t a t e m e n t i s a v a i l a b l e f o r




- 14 -

r e v i e w by t h e p u b l i c .
T h i s i s a more r e s t r i c t i v e r e q u i r e m e n t t h a n t h a t w h i c h
e x i s t e d under the p r e v i o u s r e g u l a t i o n .
The p r o p o s e d r e g u l a t i o n t h a t was p u b l i s h e d
f o r comment s u g g e s t e d t h a t a l l n o t i f i c a t i o n r e q u i r e m e n t s would be d r o p p e d .
The d e c i s i o n t o r e q u i r e a l o b b y n o t i c e i s b a s e d on t h e b e l i e f t h a t t h e p r i o r
n o t i f i c a t i o n r e q u i r e m e n t ( w h i c h a l s o p e r m i t t e d n o t i c e t o be g i v e n w i t h p e r i o d i c
s t a t e m e n t s o r i n a n e w s p a p e r ) d i d n o t a s s u r e t h a t t h e p u b l i c would be e f f e c t i v e l y
i n f o r m e d o f t h e a v a i l a b i l i t y o f t h e HMDA i n f o r m a t i o n .
The l o b b y n o t i f i c a t i o n r e q u i r e m e n t w i l l i mpo se some c o s t s on t h o s e
i n s t i t u t i o n s t h a t p r e v i o u s l y u sed a medium o f c o m m u n i c a t i o n o t h e r t h a n a l o b b y
notice.
I t i s b e l i e v e d t h a t on n e t t h e r e w i l l be an i n c r e a s e i n c o s t due t o
t h i s requirem ent.
S p e c i f i c c o s t s a r e d i f f i c u l t t o c a l c u l a t e b e c a u s e t h e number
o f i n s t i t u t i o n s t h a t c u r r e n t l y u s e l o b b y n o t i c e s i s unknown.
I f a l l 8700
i n s t i t u t i o n s had t o p r o d u c e o r p u r c h a s e a l o b b y n o t i c e f o r e ac h head o f f i c e
and t h e i r a p p r o x i m a t e l y 5 0 , 0 0 0 b r a n c h o f f i c e s , t h e n e t c o s t s c o u l d be r e l a t i v e l y
la r g e in the aggregate.
Two f a c t o r s m i t i g a t e a g a i n s t a l a r g e c o s t i n c r e a s e .
F i r s t , some i n s t i t u t i o n s a l r e a d y u s e l o b b y n o t i c e s .
Second, t h o s e i n s t i t u t i o n s
t h a t a r e c u r r e n t l y u s i n g a l t e r n a t i v e n o t i f i c a t i o n methods w i l l n ot have t o
expend t h o s e f u n d s u n d e r t h e new r e g u l a t i o n .
On t h e o t h e r hand, i f most
i n s t i t u t i o n s c h o s e t o p l a c e a good q u a l i t y n o t i c e i n t h e i r l o b b i e s t h e a g g r e g a t e
c o s t s c o u l d be i n e x c e s s o f $ 2 2 5 , 0 0 0 . JJj/
T h e s e c o s t s can be s u b s t a n t i a l l y r e d u c e d by u t i l i z a t i o n o f a s t a n d a r d
HMDA l o b b y n o t i c e p r o v i d e d by t h e F e d e r a l R e s e r v e .
The c o s t t o t h e F e d e r a l
R e s e r v e i s a p p r o x i m a t e l y 40 c e n t s a p i e c e .
S e c t i o n 2 0 5 . 3 ( e ) r e q u i r e s l e n d e r s t o f o r w a r d two c o p i e s o f t h e i r
d i s c l o s u r e s t a t e m e n t eac h y e a r t o t h e i r a p p r o p r i a t e s u p e r v i s o r y a g e n c y .
This
a d d i t i o n a l b u r d e n a r i s e s f rom t h e r e q u i r e m e n t i n t h e a c t t h a t an a g g r e g a t i o n
o f HMDA d a t a be p r e p a r e d each y e a r .
The a g g r e g a t e c o s t t o a l l c o v e r e d l e n d e r s
o f t h i s a d d i t i o n a l r e p o r t i n g r e q u i r e m e n t i s e s t i m a t e d t o be a b o u t $ 6 5 , 0 0 0
annually.
1Z/

16/

The $ 2 2 5 , 0 0 0 e s t i m a t e i s b a s e d on 8 7 0 0 i n s t i t u t i o n s s p e n d i n g 20 d o l l a r s
each f o r one m a s t e r p o s t e r and $1 each f o r c o p i e s f o r t h e i r a p p r o x i m a t e l y
50,000 oth e r o f f i c e s .
The $ 20 e s t i m a t e i s b a s e d upon i n f o r m a t i o n f rom
b a n k s and W a s h i n g t o n a r e a p r i n t - s h o p s .

17/

T h i s e s t i m a t e i s b a s e d on 8 , 1 3 8 r e p o r t i n g i n s t i t u t i o n s i n c u r r i n g
c o s t o f $ 8 . 0 0 t o c o p y and f o r w a r d two c o p i e s o f t h e i r d i s c l o s u r e
to the a p p r o p r i a t e s u p e r v i s o r y agency.




an a v e r a g e
statement

FEDERAL RESERVE
[12
[R e gulation

CFR
C;

Part

S Y S TE M
203]

Docket

No.

R-0350]

HOME MORTGAGE D I S C L O S U R E
R evision

AG EN CY :

Board

of

Governors

ACTION:

Final

of the

of

Regulation

Federal

Reserve

C

System.

rule.

SUMMARY:
The B o a r d i s a d o p t i n g i n f i n a l f o r m a r e v i s e d v e r s i o n o f R e g u l a t i o n C.
R e g u l a t i o n C i m p l e m e n t s t h e Home M o r t g a g e D i s c l o s u r e A c t and r e q u i r e s d e p o s i t o r y
i n s t i t u t i o n s w ith o f f i c e s in s ta n d a rd m e t r o p o lit a n s t a t i s t i c a l a re a s (SMSAs) to
d i s c l o s e d a t a a b o u t t h e i r home m o r t g a g e and home i m p r o v e m e n t l o a n s e a c h y e a r .
I n s t i t u t i o n s w i t h l e s s t h a n $ 10 m i l l i o n i n a s s e t s a r e exempt from c o v e r a g e .
The r e v i s i o n i m p l e m e n t s c e r t a i n a m en dm en ts t o t h e a c t made by t h e
H o u s i n g and C o m m u n i t y D e v e l o p m e n t A c t o f 1 9 8 0 , and s i m p l i f i e s t h e r e g u l a t i o n
ge nerally.
The p r o p o s e d r e v i s i o n was p u b l i s h e d f o r comment a t 4 6 FR 1 1 7 8 0
( F e b r u a r y 10, 1 9 8 1 ) .
A r e g u l a t o r y a n a l y s i s h a s been p r e p a r e d , t o c o m p l y b o t h w i t h t h e
expanded ru le m a k in g p ro c e d u r e s s e t f o r t h in the B o a r d 's p o l i c y statem ent o f
J a n u a r y 1 9 , 1 9 7 9 ( 4 4 FR 3 9 5 7 ) and w i t h t h e r e q u i r e m e n t s o f t h e R e g u l a t o r y
F l e x i b i l i t y A c t ( Pub. - L . 9 6 - 3 5 4 ) .
C o p i e s may be o b t a i n e d f r o m t h e C o n s u m e r
A f f a i r s o f f i c e o f any F e d e r a l R e s e r v e Bank o r from th e B o a r d ' s D i v i s i o n o f
C o n s u m e r and C om m u n i t y A f f a i r s , B o a r d o f G o v e r n o r s o f t h e F e d e r a l R e s e r v e
S y s t e m , W a s h i n g t o n , D. C.
20551.
The B o a r d a l s o a d o p t e d m o r t g a g e l o a n d i s c l o s u r e f o r m H M D A - 1 , w ho se
u s e w i l l be m a n d a t o r y f o r t h e r e p o r t i n g o f 1 9 8 1 l o a n d a t a .
T h i s f o r m h a s bee n
s u b m i t t e d t o t h e O f f i c e o f M a n a g e m e n t and B u d g e t i n a c c o r d a n c e w i t h t h e r e q u i r e ­
ments o f th e Paperwork R e d u c tio n Act.
The B o a r d w i l l i s s u e i t i n f i n a l f o r m
o n c e t h e 0MB r e v i e w p r o c e d u r e s h a v e been c o m p l e t e d .
E F F E C T IV E DATES:
The r e g u l a t i o n t a k e s e f f e c t i m m e d i a t e l y ,
n o t i c e r e q u i r e m e n t t a k e s e f f e c t on S e p t e m b e r 3 0 , 1 9 8 1 .

except

that

a lobby

FOR FURTHER I N F O R M A T I O N , CONTACT:
J o h n C. Wood, S e n i o r A t t o r n e y , o r C l a u d i a
Y a r u s , J e s s e F i l k i n s , o r Lynn G o l d f a d e n , S t a f f A t t o r n e y s , D i v i s i o n o f Consumer
and Community A f f a i r s , B oard o f G o v e r n o r s o f th e F e d e r a l R e s e r v e S y s te m , W a s h i n g ­
t o n , D.C.
20551 ( 2 0 2 - 4 5 2 - 3 8 6 7 ) .
SUPPLEMENTARY INFORMATION:
(1)
General.
R e g u l a t i o n C i m p l e m e n t s t h e Home
M o r t g a g e D i s c l o s u r e A c t ( H M D A ) , 12 U . S . C . 280 1 e t _ s e £ . , and r e q u i r e s d e p o s i ­
t o r y i n s t i t u t i o n s o v e r $ 1 0 m i l l i o n i n a s s e t s t h a t h a v e o f f i c e s i n S M S A s t o make
annual d i s c l o s u r e o f t h e i r mortgage le n d in g a c t i v i t y .
On O c t o b e r 8 , 1 9 8 0 , p r o ­
v i s i o n s o f t h e H o u s i n g and C o m m u n i t y D e v e l o p m e n t A c t o f 1 9 8 0 ( P u b . L. 9 6 - 3 9 9 )
a mended HMDA and e x t e n d e d i t f o r a f i v e - y e a r p e r i o d .
The a m en dm e nt s r e q u i r e




-

2

-

( 1 ) t h a t d e p o s i t o r y i n s t i t u t i o n s c h a n g e t h e i r d a t a c o m p i l a t i o n and d i s c l o s u r e s
from a f i s c a l t o a c a l e n d a r y e a r b a s i s , b e g i n n i n g w ith 1980 d a t a ; (2) t h a t
d i s c l o s u r e s be made by c e n s u s t r a c t and c o u n t y , r a t h e r t h a n by c e n s u s t r a c t
and Z I P c o d e ; (3) t h a t th e F e d e r a l R e s e r v e B oard p r e s c r i b e a s t a n d a r d fo rm a t
f o r d i s c l o s u r e s ; ( 4 ) t h a t d i s c l o s u r e s t a t e m e n t s be made a v a i l a b l e a t c e n t r a l
d a t a r e p o s i t o r i e s i n e a c h S M S A; a n d ( 5 ) t h a t a g g r e g a t e d a t a t a b l e s , c o v e r i n g
a l l i n s t i t u t i o n s i n e a c h S M S A , be p r e p a r e d and made a v a i l a b l e by t h e F e d e r a l
F in a n c ia l I n s t i t u t i o n s Exam ination Council (F F IE C ).
On D e c e m b e r 8 , 1 9 8 0 , t h e
B o a r d p u b l i s h e d an amendment t o R e g u l a t i o n C t o i m p l e m e n t c a l e n d a r y e a r d i s c l o ­
s u r e s f o r 1 9 8 0 a n d s u b s e q u e n t y e a r s ( 4 5 FR 8 0 8 1 3 ) .
On F e b r u a r y 1 0 , 1 9 8 1 , t h e B o a r d p u b l i s h e d a p r o p o s e d r e v i s i o n o f
R e g u l a t i o n C t o i m p l e m e n t t h e r e m a i n i n g s t a t u t o r y c h a n g e s ( 4 6 FR 1 1 7 8 0 ) , and
r e c e i v e d a p p r o x i m a t e l y 225 comments.
The B o a r d i s now a d o p t i n g a r e v i s e d
R e g u l a t i o n C in f i n a l form.
The B o a r d h a s a l s o a d o p t e d a r e v i s e d v e r s i o n - o f t h e
r e q u i r e d by t h e P a p e r w o r k R e d u c t i o n A c t ( P u b . L. 9 6 - 5 1 1 ) , t h e
u n d e r g o 0MB r e v i e w .
The B o a r d w i l l p u b l i s h t h e f i n a l v e r s i o n
h a s been c o m p l e t e d .

HMDA-1 f o r m .
As
form must s t i l l
a f t e r th a t review

Under 5 U . S . C . 5 5 3 ( d ) , t h e g e n e r a l r e q u ir e m e n t t o d e l a y th e e f f e c t i v e
d a t e o f a r u l e u n t i l 3 0 d a y s o r more a f t e r i t s p u b l i c a t i o n d o e s n o t a p p l y w h e r e
a s in t h i s c a s e , the r u le r e l i e v e s r e s t r i c t i o n s .
A c c o r d i n g l y , the r e g u l a t i o n
i s e f f e c t i v e im m e d ia te ly , w ith the e x c e p t io n o f a lo b b y n o t i c e re q u ire m e n t
w h i c h b ec o me s e f f e c t i v e on S e p t e m b e r 3 0 , 1 9 8 1 , t o a l l o w t i m e f o r a c h i e v i n g
com pliance.

(2)
Revised r e g u l a t i o n .
The B o a r d h a s t a k e n t h i s o p p o r t u n i t y
r e d r a f t t h e r e g u l a t i o n i n a s i m p l i f i e d , more c o n c i s e f o r m , i n k e e p i n g w i t h t h e
o b j e c t i v e s o f i t s R e g u l a t o r y Improvement P r o j e c t .
The r e v i s e d r e g u l a t i o n i s
a p p r o x i m a t e l y 3 0 p e r c e n t s h o r t e r t h a n t h e o r i g i n a l v e r s i o n , and s h o u l d be
e a s i e r t o u s e and c o m p l y w i t h .
Some o f t h e p r i n c i p a l c h a n g e s i n t h e r e v i s e d
r e g u l a t i o n a r e as f o l l o w s .
F i r s t , d i s c l o s u r e s a r e no l o n g e r r e q u i r e d a t a
b r a n c h o f f i c e i n t h e SM SA w h e r e t h e i n s t i t u t i o n ' s home o f f i c e i s l o c a t e d .
A
d i s c l o s u r e s t a t e m e n t w i l l c o n t i n u e t o be a v a i l a b l e a t t h e home o f f i c e ; i t w i l l
c o n t a i n c o m p le t e d a ta f o r a l l SMSAs in w hich the i n s t i t u t i o n has o f f i c e s .
Second, d i s c l o s u r e s at o th e r branch o f f i c e s are o n ly r e q u ir e d to g i v e data
a b o u t l o a n s on p r o p e r t y i n t h e SMSA w h e r e t h e b r a n c h i s l o c a t e d .
T h i r d , the " t o t a l r e s i d e n t i a l m ortgage l o a n s " c a t e g o r y ( t h a t i s , the
sum o f t h e FHA/FmHA/VA l o a n c a t e g o r y and t h e c o n v e n t i o n a l l o a n c a t e g o r y ) i s
no l o n g e r r e q u i r e d .
F o u r t h , g e o g r a p h i c b r e a k d o w n s a r e t o be g i v e n i n t e r m s o f
c e n s u s t r a c t s o r c o u n t i e s ; Z I P c o d e s a r e no l o n g e r u s e d .
F i f t h , an i n s t i t u t i o n
may u s e e i t h e r 1 9 7 0 o r 1 9 8 0 c e n s u s t r a c t b o u n d a r i e s i n g e o c o d i n g l o a n s , u n t i l
t h e 1 9 8 0 c e n s u s t r a c t o u t l i n e maps f o r t h e SM SA a r e i s s u e d by t h e C e n s u s B u r e a u
S i x t h , a l o b b y n o t i c e i s r e q u i r e d r e g a r d i n g t h e a v a i l a b i l i t y o f HMDA d a t a .
F i n a l l y , an i n s t i t u t i o n t h a t h a s e x e m p t s t a t u s and t h a t s u b s e q u e n t l y l o s e s i t s
e x e m p t i o n m u s t b e g i n t o c o m p i l e and r e p o r t d a t a o n l y , i n g e n e r a l , f o r t h e c a l e n
d a r y e a r f o l l o w i n g the l o s s o f exem ption ( r a t h e r than f o r the p r e c e d in g y e a r ,
as in the p r e s e n t r e g u l a t i o n ) .




to

- 3 -

changes

§

203.1

These changes are d i s c u s s e d in g r e a t e r
c o n ta in e d in the r e v is e d r e g u l a t i o n .

A uth ority,

purpose

d etail

below,

along

w ith

other

and s c o p e .

S e c t io n 203.1 c o r r e s p o n d s to § 2 0 3 .1 (a ) o f the e x i s t i n g r e g u l a t i o n .
( E x i s t i n g § 2 0 3 . 1 ( b ) now a p p e a r s i n § 2 0 3 . 6 . )
I t g i v e s u s e r s o f the r e g u l a t i o n
a b r i e f o v e r v i e w o f t h e p u r p o s e , c o v e r a g e , and r e q u i r e m e n t s o f t h e a c t and r e g u ­
la tio n .
I t d o e s n o t , h o w e v e r , p r o v i d e d e f i n i t i v e a n s w e r s on m a t t e r s o f c o v e r a g e
and r e g u l a t o r y r e q u i r e m e n t s ; t h e s e a re fo u n d in th e re m a in d e r o f th e r e g u l a t i o n .
P a r a g r a p h ( d ) r e f e r e n c e s t h e s y s t e m o f c e n t r a l d a t a r e p o s i t o r i e s and
d a t a a g g r e g a t i o n m a n d a t e d by t h e amended a c t .
The B o a r d b e l i e v e s t h a t i n c l u d i n g
i t h e r e may h e l p e x p l a i n some o f t h e r e g u l a t o r y r e q u i r e m e n t s and make t h e
r e g u la t io n e a s i e r to use.

§

203.2

D e fin itio n s.

A n umbe r o f t h e d e f i n i t i o n s d i f f e r
S e v e ra l o f the d e f in e d term s in the e x i s t i n g
incorporated in to other d e f in it io n s .

from th e e x i s t i n g r e g u l a t i o n .
r e g u l a t i o n h a v e been d e l e t e d and

Branch o f f i c e .
The d e f i n i t i o n c o n t i n u e s t o d e f i n e b r a n c h o f f i c e i n
t e r m s o f a p p r o v a l a s a b r a n c h by a s u p e r v i s o r y a g e n c y .
A s p e c ific exclu sio n
h a s been a d d e d f o r a u t o m a t e d t e l l e r m a c h i n e s a n d o t h e r e l e c t r o n i c t e r m i n a l s .
A l t h o u g h s u c h m a c h i n e s may r e q u i r e a p p r o v a l a s b r a n c h e s , t h e y a r e n o t b r a n c h
o f f i c e s fo r purposes of t h is re g u la tio n .
A d m i n i s t r a t i v e o f f i c e s , data p r o c e s ­
s i n g o f f i c e s , and l o a n p r o d u c t i o n o f f i c e s a r e n o t c o v e r e d b e c a u s e t h e y a r e n o t
approved as b ra nch e s.
D epository i n s t i t u t i o n .
The d e f i n i t i o n c o n d i t i o n s c o v e r a g e on t h e
making of f e d e r a l l y r e l a t e d m ortgage lo a n s .
" F e d e r a lly re la t e d mortgage lo a n "
i s d e f i n e d in a f o o t n o t e ( i t a p p e a r s as a s e p a r a t e l y d e f i n e d term in th e e x i s t i n g
r e g u l a t i o n ) and i s s i m i l a r t o t h e d e f i n i t i o n i n t h e R e a l E s t a t e S e t t l e m e n t P r o ­
cedures Act.
An i n s t i t u t i o n q u a l i f i e s a s a d e p o s i t o r y i n s t i t u t i o n f o r R e g u l a ­
t i o n C p u r p o s e s i f ( 1 ) i t m a k e s f i r s t - l i e n m o r t g a g e l o a n s on l - t o - 4 f a m i l y
d w e l l i n g s i n t h e U n i t e d S t a t e s o r P u e r t o R i c o , and ( 2 ) i t i s f e d e r a l l y i n s u r e d
o r r e g u l a t e d , or o r i g i n a t e s l o a n s t h a t a r e i n s u r e d o r g u a r a n t e e d by HUD, VA, o r
a n o t h e r f e d e r a l a g e n c y , o r t h a t a r e i n t e n d e d t o be s o l d t o FNMA, GNMA, o r FHLMC.
The r e v i s e d d e f i n i t i o n i n c o r p o r a t e s B o a r d I n t e r p r e t a t i o n § 2 0 3 . 0 0 1 ,
c o n c e r n i n g t h e t r e a t m e n t o f m a j o r i t y - o w n e d s u b s i d i a r i e s ( b o t h d e p o s i t o r y and
n o n - d e p o s i t o r y ) o f an i n s t i t u t i o n .
(S in c e Board I n t e r p r e t a t i o n § 203.001 i s
now r e d u n d a n t , i t i s r e s c i n d e d . )
F e d e r a l H o u s i n g A u t h o r i t y ( F H A ) , F a r m e r s Home A d m i n i s t r a t i o n ( F m HA ),
o r V e t e r a n s A d m i n i s t r a t i o n " ( VA) l o a n s .
T h e s e l o a n s a r e d e f i n e d by r e f e r e n c e
t o th e a u t h o r i t y in f e d e r a l law f o r t h e i r i n s u r a n c e o r g u a r a n t e e .
The d e f i n i ­
t i o n i s v i r t u a l l y unch an g ed from th e e x i s t i n g r e g u l a t i o n .




4

Home i m p r o v e m e n t l o a n .
T h i s d e f i n i t i o n h a s been c h a n g e d i n s e v e r a l
ways.
The e x i s t i n g r e g u l a t i o n r e q u i r e d t h a t a s e c u r e d home i m p r o v e m e n t l o a n
be s e c u r e d b y c o l l a t e r a l o t h e r t h a n a f i r s t l i e n on r e s i d e n t i a l r e a l p r o p e r t y .
The F e b r u a r y p r o p o s a l w o u l d h a v e r e q u i r e d c l a s s i f i c a t i o n o f a n y l o a n made f o r
home i m p r o v e m e n t p u r p o s e s - - i n c l u d i n g a l o a n s e c u r e d by a f i r s t l i e n - - a s a
home i m p r o v e m e n t l o a n .
U n d er t h e r e v i s e d r e g u l a t i o n , i n s t i t u t i o n s may t r e a t
f f r s t - l i e n l o a n s f o r home i m p r o v e m e n t p u r p o s e s i n t h e same way t h e y n o r m a l l y
r e c o r d t h e m.
T h u s , t h e y may c l a s s i f y them e i t h e r a s home i m p r o v e m e n t l o a n s o r
a s home p u r c h a s e s .
F o o tn o te 2 d i r e c t s a t t e n t i o n t o t h i s s p e c i a l r u l e , which
i s s e t f o r t h i n f o o t n o t e 3.
A r e f i n a n c i n g f o r home i m p r o v e m e n t p u r p o s e s i s t o be r e p o r t e d a s a
home i m p r o v e m e n t l o a n w h e t h e r t h e o r i g i n a l l o a n was f o r home i m p r o v e m e n t , p u r ­
c h a s e o f a d w e l l i n g , o r some o t h e r p u r p o s e .
An e x c l u s i o n f o r c e r t a i n t y p e s o f
re fin a n c e d lo a n s in co n ta in e d in § 2 0 3 . 4 ( c ) ( 3 ) .
L ik e the e x i s t i n g d e f i n i t i o n , the r e v i s e d v e r s i o n r e q u ir e s both th a t
t h e l o a n be f o r home i m p r o v e m e n t p u r p o s e s ( a s s t a t e d by t h e b o r r o w e r ) and t h a t
t h e l o a n be r e c o r d e d a s a home i m p r o v e m e n t l o a n on t h e i n s t i t u t i o n ' s b o o k s .
The r e c o r d i n g r e q u i r e m e n t i s s a t i s f i e d e v e n i f t h e i n s t i t u t i o n u s e s some o t h e r
te rm - - s u c h as " m o d e r n i z a t i o n l o a n s " - - t o i d e n t i f y l o a n s t h a t f a l l w i t h i n th e
d e f i n i t i o n o f home i m p r o v e m e n t l o a n s .
The w or d " a p p l i c a t i o n " r e p l a c e s t h e w o r d
" t r a n s a c t i o n " b e c a u s e t h e B o a r d b e l i e v e s t h a t i t mor e p r e c i s e l y d e f i n e s t h e
tim e at which the i n t e n t o f the b orrow e r i s e x p r e s s e d .

n ition

Home p u r c h a s e l o a n .
r e s i d e n t i a l mortgage

of

T h is d e f i n i t i o n c o rre sp o n d s to the e x i s t i n g
loan.
I t h a s been s u b s t a n t i a l l y r e w r i t t e n .

d e fi­

The e x i s t i n g d e f i n i t i o n c o v e r e d a n y l o a n s e c u r e d by a f i r s t l i e n on
r e s id e n t ia l real p ro p e rty.
The r e v i s e d r e g u l a t i o n g i v e s i n s t i t u t i o n s t h e - o p t i o n
t o c l a s s i f y f i r s t - l i e n home i m p r o v e m e n t l o a n s a s home i m p r o v e m e n t l o a n s i f t h a t
i s t h e way t h e i n s t i t u t i o n n o r m a l l y r e c o r d s t he m.
Footnote 3 to the r e v is e d
home p u r c h a s e l o a n d e f i n i t i o n s e t s f o r t h t h i s o p t i o n .
Any s e c u r e d home p u r c h a s e l o a n i s c o v e r e d by t h e d e f i n i t i o n , r e g a r d ­
l e s s o f the type o f l i e n .
The r e q u i r e m e n t t h a t i t be s e c u r e d by a f i r s t l i e n
h a s been e l i m i n a t e d .
S i m i l a r l y , the r e v i s e d d e f i n i t i o n i n c l u d e s a l l r e f i n a n ­
c i n g s f o r home p u r c h a s e p u r p o s e s ( o t h e r t h a n t h o s e e x p r e s s l y e x c l u d e d u n d e r
§ 203.4(c)(3)).
The r e v i s e d d e f i n i t i o n c l a r i f i e s t h e e x c l u s i o n a p p l i c a b l e t o o t h e r
t h a n p e r m a n e n t f i n a n c i n g , by a p a r e n t h e t i c a l r e f e r e n c e t o c o n s t r u c t i o n and
bridge loans.
T h e s e a r e t o be e x c l u d e d w h e t h e r o r n o t t h e r e i s a f i r m t a k e ­
o ut commitment f o r perm anent f i n a n c i n g .
I t a l s o i n c o r p o r a t e s the d e f i n i t i o n
o f r e s i d e n t i a l re a l p r o p e r t y , which a p p e a rs as a s e p a r a t e d e f i n i t i o n in the
e x istin g regu lation .

$ 203.3

E x e m p t i o n s .^

R egulation

The c a t e g o r i e s o f d e p o s i t o r y i n s t i t u t i o n s e l i g i b l e
C a r e t h e same a s i n t h e e x i s t i n g r e g u l a t i o n .




for

exemption

from

5

In p a ra g ra p h ( a ) ( 1 ) , the o n ly d i f f e r e n c e in the a s s e t s i z e exemption
f r o m e x i s t i n g § 2 0 3 . 3 ( a ) ( 1 ) i s t h e u s e o f D e c e m b e r 31 a s t h e d a t e f o r d e t e r m i n i n g
an i n s t i t u t i o n ' s a s s e t s i z e ; t h e e x i s t i n g r e g u l a t i o n u s e d t h e p h r a s e " t h e l a s t
day o f i t s l a s t f u l l f i s c a l y e a r . "
In p arag rap h ( a ) ( 2 ) , the s u b s t i t u t i o n o f the
• Commerce f o r t h e O f f i c e o f M a n a g e m e n t and B u d g e t ( 0M B)
to the act.

U.S. Department o f
r e f l e c t s an amendment

The s t a t e l a w e x e m p t i o n s e t f o r t h i n p a r a g r a p h ( b ) i s a v a i l a b l e t o
s t a t e - c h a r t e r e d d e p o s i t o r y i n s t i t u t i o n s t h a t are s u b j e c t to s t a t e laws c o n ­
t a i n i n g r e q u i r e m e n t s s u b s t a n t i a l l y s i m i l a r t o t h o s e o f R e g u l a t i o n C, i f t h e r e
i s a l s o a d e q u a te p r o v i s i o n f o r e n f o rc e m e n t o f th e s t a t e law.
The p r o c e d u r e s
t o be f o l l o w e d i n a p p l y i n g t o t h e B o a r d f o r an e x e m p t i o n a p p e a r i n A p p e n d i x B
to the r e v is e d r e g u l a t io n .
A new p r o v i s i o n i n t h e r e v i s e d r e g u l a t i o n i m p l e m e n t s c e r t a i n amend­
ments t o th e a c t .
T h e s e amendments r e q u i r e t h a t l o a n d a t a f o r a l l d e p o s i t o r y
i n s t i t u t i o n s , i n c l u d i n g t h o s e t h a t a re s u b j e c t t o s t a t e la w in p l a c e o f th e
f e d e r a l l a w , be a g g r e g a t e d and t h a t d i s c l o s u r e s t a t e m e n t s be made a v a i l a b l e a t
t h e c e n t r a l r e p o s i t o r y i n e a c h S M S A.
I n s t i t u t i o n s exem pt u n d e r t h e t e r m s o f
t h i s p r o v i s i o n m u s t s u b m i t t h e d a t a r e q u i r e d by t h e i r s t a t e l a w t o t h e i r s t a t e
su p e rv iso ry age n cie s.
These a g e n c ie s w i l l then forw a rd the data f o r t r a n s m i t t a l
t o t h e a p p r o p r i a t e c e n t r a l r e p o s i t o r y and t o t h e B o a r d f o r a g g r e g a t i o n .
P a rag rap h (c) c o rre sp o n d s to e x i s t i n g § 2 0 3 . 3 ( b ) , c o v e r in g l o s s of
exemption.
The e x i s t i n g r u l e r e q u i r e d t h a t an i n s t i t u t i o n c o m p i l e and d i s c l o s e
da ta b e g i n n i n g w i t h th e l a s t f u l l f i s c a l y e a r p r e c e d i n g t h e y e a r in w h ic h th e
e x e m p t i o n was l o s t .
The new r u l e r e q u i r e s an i n s t i t u t i o n t h a t b e c o m e s s u b j e c t
to the r e p o r t i n g re q u ire m e n ts d u r in g a c a le n d a r y e a r to c om p ile loan data
b e g i n n i n g w i t h t h e c a l e n d a r y e a r f o l 1o w i n g t h e y e a r i n w h i c h t h e i n s t i t u t i o n
became s u b j e c t t o t h e r e g u l a t i o n .
T h i s r u l e d o e s n o t a p p l y t o an i n s t i t u t i o n ,
e xemp t u n d e r t h e s t a t e l a w e x e m p t i o n .
I f s u c h an i n s t i t u t i o n l o s e s i t s e x em p ­
t i o n , i t must c o m p i l e l o a n da ta b e g i n n i n g w i t h th e f i r s t c a l e n d a r y e a r f o r
w h ic h i t d o e s n ot f i l e a r e p o r t u n d e r s t a t e law.
Some e x a m p l e s may h e l p t o i l l u s t r a t e how t h e new r u l e w o r k s .
F irst,
i f an i n s t i t u t i o n o p e n s a home o r b r a n c h o f f i c e i n an SMSA on A p r i l 1, 1 9 8 2 ,
t h e r e b y l o s i n g i t s e x em p t s t a t u s , i t m u s t c o m p i l e and r e p o r t i t s 1 9 8 3 d a t a .
( T h e r e p o r t w o u l d h a v e t o be a v a i l a b l e by M a r c h 31, 1 9 8 4 . )
On t h e o t h e r harvd, i f an i n s t i t u t i o n h a s been exem pt b e c a u s e i t i s
s u b j e c t t o a s t a t e d i s c l o s u r e l a w , and t h e i n s t i t u t i o n l o s e s t h a t e x e m p t i o n on
A p r i l 1, 1 9 8 2 , t h e r e s u l t i s d i f f e r e n t .
A s s u m i n g t h e i n s t i t u t i o n h a s made i t s
s t a t e - r e q u i r e d r e p o r t c o v e r i n g 1 9 8 1 , and d o e s n o t h a v e t o make a s t a t e r e p o r t
f o r 1 9 8 2 , t h e n i t m u s t b e g i n c o m p i l i n g and r e p o r t i n g d a t a u n d e r R e g u l a t i o n C
f o r 1 9 8 2 , m a k i n g i t a v a i l a b l e by M a r c h 31, 1 9 8 3 .
F i n a l l y , i f on D e c e m b e r 3 1 , 1 9 8 2 , an i n s t i t u t i o n ' s a s s e t s e x c e e d $ 1 0
• m i l l i o n d o l l a r s f o r t h e f i r s t t i m e , t h e i n s t i t u t i o n m u s t c o m p i l e and r e p o r t i t s
1 9 8 3 d a t a and make i t a v a i l a b l e by M a r c h 31, 1 9 8 4 .




6

The r u l e i n p a r a g r a p h ( c ) c o v e r s n o t o n l y an i n s t i t u t i o n t h a t l o s e s
i t s e x e m p t i o n , b u t a l s o a n e w l y c o v e r e d i n s t i t u t i o n t h a t was n o t p r e v i o u s l y
s u b j e c t to the r e g u l a t i o n .
F o r e x a m p l e , an i n s t i t u t i o n t h a t d o e s n o t make
f e d e r a l l y r e l a t e d m o rtg a g e l o a n s as d e f i n e d in f o o t n o t e 1 un de r § 2 0 3 . 2 i s n o t
s u b j e c t to the r e g u l a t i o n .
I f the i n s t i t u t i o n then b e g in s making such l o a n s ,
the r u l e in p a ra g ra p h ( c ) ( 1 ) a p p l i e s .
A l t h o u g h n o t e x p r e s s l y s t a t e d i n t h e r e g u l a t i o n , new e x e m p t i o n s w i l l
become e f f e c t i v e i m m e d i a t e l y .
T h u s , a n e w l y e x em pt i n s t i t u t i o n nee d n o t r e p o r t
l o a n d a t a f o r t h e y e a r i n w h i c h i t b ec o me s e x em p t o r f o r s u b s e q u e n t y e a r s , s o
l o n g as i t r e m a in s exempt.
The new r u l e s on c h a n g e o f
§ 2 0 3 . 0 0 2 no l o n g e r a p p l i c a b l e ; t h i s

§

203.4

C om pilation

of

loan

s t a t u s make e x i s t i n g B o a r d I n t e r p r e t a t i o n
in te rp re ta tio n is the refore rescinded.

data.

S e c t io n 203.4 s e t s f o r t h the r u l e s f o r the c o m p ila t io n o f loan data
and d e s c r i b e s w h a t d a t a a r e i n c l u d e d .
I t c o n t a i n s some s u b s t a n t i v e c h a n g e s
f r o m t h e e x i s t i n g r e g u l a t i o n and a l s o h a s been s i g n i f i c a n t l y r e w r i t t e n .
P a r a g r a p h ( a ) d e s c r i b e s t h e m o r t g a g e l o a n d a t a t o be c o m p i l e d on a
calendar year b a sis.
The c h a n g e o v e r f r o m f i s c a l y e a r c o m p i l a t i o n r e f l e c t s one
o f t h e a mendments t o t h e a c t ; t h e e x i s t i n g r e g u l a t i o n was amended l a s t y e a r t o
i m p l e m e n t t h i s c h a n g e ( 4 5 FR 8 0 8 1 3 , D e c e m b e r 8 , 1 9 8 0 ) .
The r e v i s e d r e g u l a t i o n ( l i k e t h e e x i s t i n g r e g u l a t i o n ) r e q u i r e s t h a t
l o a n d a t a be s hown i n t e r m s o f t h e n u mb er o f l o a n s and t h e t o t a l d o l l a r amount
of loans.
The d e f i n i t i o n o f " t o t a l d o l l a r a m o u n t , " s e t f o r t h i n e x i s t i n g
§ 2 0 3 . 4 ( a ) ( 3 ) , a p p e a r s as f o o t n o t e 4.
The e x i s t i n g r e g u l a t i o n e s s e n t i a l l y
d e f i n e d t o t a l d o l l a r a m ou nt a s t h e p r i n c i p a l b a l a n c e due on a l o a n ( e i t h e r t h e
o r i g i n a l b a l a n c e o r t h e b a l a n c e due a t t h e t i m e t h e l o a n was p u r c h a s e d f r o m
another le n d e r).
The r e g u l a t i o n p e r m i t t e d i n c l u s i o n o f u n p a i d f i n a n c e c h a r g e s
i n t h e c a s e o f p u r c h a s e d home i m p r o v e m e n t l o a n s .
The o p t i o n t o i n c l u d e u n p a i d
f i n a n c e c h a r g e s now e x t e n d s t o o r i g i n a t e d a s w e l l a s p u r c h a s e d home i m p r o v e m e n t
1oans.
P a r a g r a p h ( b ) , c o n c e r n i n g f o r m a t a nd i t e m i z a t i o n o f d a t a , i n c o r p o r a t e s
p o r t i o n s o f e x i s t i n g § 2 0 3 . 4 ( a ) and ( c ) and c o n t a i n s a nu mb er o f c h a n g e s .
It
r e q u i r e s t h a t d a t a be c o m p i l e d s e p a r a t e l y f o r o r i g i n a t i o n s and p u r c h a s e s ( a s
d o e s t h e e x i s t i n g r e g u l a t i o n ) , and r e q u i r e s i n s t i t u t i o n s t o u s e a s t a n d a r d d i s ­
c l o s u r e f o r m a t p r e s c r i b e d by t h e B o a r d , i n k e e p i n g w i t h a s t a t u t o r y a m endment.
The B o a r d h a s a d o p t e d a s t a n d a r d f o r m and a c c o m p a n y i n g i n s t r u c t i o n s ,
b u t i s n o t p u b l i s h i n g them t o d a y b e c a u s e t h e y m u s t be s u b m i t t e d t o 0MB f o r
review .
A f t e r t h e r e v i e w p r o c e d u r e , t h e f i n a l f o r m and i n s t r u c t i o n s w i l l be
p u b l i s h e d i n t h e F e d e r a l R e g i s t e r , and t h e y w i l l become A p p e n d i x C t o t h e r e g u ­
la tion .




7

P a ra g ra p h ( b ) ( 1 ) d e s c r i b e s the re q u ire d g e o g ra p h ic it e m iz a t i o n of
data.
A s i n t h e e x i s t i n g r e g u l a t i o n , d a t a g e n e r a l l y m u s t be b r o k e n down b y
t h e S M S A w i t h i n w h i c h t h e p r o p e r t y t h a t s e c u r e s t h e l o a n ( o r t h a t i s t o be
im proved) i s lo c a t e d .
W i t h i n e a c h S M S A , t h e d a t a i s t o be f u r t h e r i t e m i z e d by
th e c e n s u s t r a c t in which the p r o p e r t y i s lo c a t e d .
P a r a g r a p h ( b ) ( l ) ( i ) s e t s f o r t h two e x c e p t i o n s t o c e n s u s t r a c t
r e p o r t i n g ; t h e s e d i f f e r t o some e x t e n t f r o m t h e e x i s t i n g r e g u l a t i o n .
F irst,
lo a n s r e l a t i n g to p r o p e r t y in any c o u n ty h a v in g a p o p u la t io n o f 30,0 00 or l e s s
m u s t be i t e m i z e d by c o u n t y r a t h e r t h a n by c e n s u s t r a c t .
(The term " c o u n t y "
in c l u d e s s i m i l a r s t a t e p o l i t i c a l s u b d i v i s i o n s such as p a r i s h e s . )
This excep­
t i o n i m p l e m e n t s an amendment t o t h e a c t .
The r e v i s e d r e g u l a t i o n s p e c i f i e s - t h a t t h e 1 9 8 0 c e n s u s c o u n t i s t o
be u s e d f o r d e t e r m i n i n g w h e t h e r a c o u n t y h a s a p o p u l a t i o n o f 3 0 , 0 0 0 o r l e s s .
In o r d e r t o p r o v i d e a s i m p l e r u l e , th e r e g u l a t i o n does not r e q u i r e a d ju s t m e n t
o f the 1980 ce n su s f i g u r e s in l a t e r y e a r s .
Fo r e xa m p le , i f a c c o r d i n g t o th e
1 9 8 0 c e n s u s t h e c o u n t y had a p o p u l a t i o n o f 2 8 , 0 0 0 , an i n s t i t u t i o n may d i s c l o s e
l o a n s on p r o p e r t y i n t h a t c o u n t y by t h e c o u n t y name ( r a t h e r t h a n c e n s u s t r a c t )
f o r 1981 and l a t e r y e a r s , even i f th e p o p u l a t i o n o f th e c o u n t y s u b s e q u e n t l y
s u rp a sse s 30,000.
The s e c o n d e x c e p t i o n t o c e n s u s t r a c t r e p o r t i n g i s t h a t an i n s t i t u t i o n
m u s t a l s o i t e m i z e l o a n s by c o u n t y i f t h e p r o p e r t y i s i n an a r e a t h a t h a s n o t
b e e n a s s i g n e d c e n s u s t r a c t n u m b e r s on t h e maps i n t h e " C E N S U S T R A C T S , P H C 8 0 - 2 "
s e r i e s ( o r on t h e c o r r e s p o n d i n g 1 9 7 0 s e r i e s ) .
T h i s r u l e a p p l i e s even t o c o u n t i e s
w ith p o p ulatio n s over 30,000.
It c o r r e s p o n d s to the c u r r e n t p r o v i s i o n in Regu­
l a t i o n C p e r m i t t i n g c o m p i l a t i o n on t h e b a s i s o f Z I P c o d e f o r u n t r a c t e d a r e a s .

e xistin g
property
o ffice .
T h is rule
property

The r u l e s e t f o r t h i n p a r a g r a p h ( b ) ( l ) ( i i ) i s u n c h a n g e d f r o m t h e
regu lation :
t h e d a t a n e e d n o t be b r o k e n down a t a l l f o r l o a n s on
l o c a t e d o u t s i d e a n y S M S A i n w h i c h t h e i n s t i t u t i o n h a s a home o r b r a n c h
The i n s t i t u t i o n may s i m p l y r e p o r t a l l s u c h l o a n s a s a lump sum f i g u r e .
a p p l i e s b o t h t o l o a n s on p r o p e r t y o u t s i d e a n y SM SA and t o l o a n s on
i n an SM SA w h e r e t h e i n s t i t u t i o n h a s no home o r b r a n c h o f f i c e .

P a rag rap h ( b ) ( 2 ) r e q u i r e s t h a t loan data f o r each g e o g r a p h ic c a t e g o r y
( c e n s u s t r a c t , c o u n t y , e t c . ) be f u r t h e r i t e m i z e d by t y p e o f l o a n .
The l o a n
c a t e g o r i e s a re s u b s t a n t i v e l y u n ch anged from t h o s e in th e e x i s t i n g r e g u l a t i o n
e x c e p t t h a t th e " a l l r e s i d e n t i a l m o r t g a g e l o a n s " c a t e g o r y , d e s c r i b e d in e x i s t i n g
§ 2 0 3 . 4 ( a ) ( 1 ) ( i i i ) , h a s bee n d e l e t e d .
T h a t c a t e g o r y r e p r e s e n t e d t h e sum o f
t h e p r e c e d i n g tw o home p u r c h a s e c a t e g o r i e s ( F H A / FmHA/VA l o a n s and c o n v e n t i o n a l
m o r t g a g e l o a n s ) ; i t d i d n o t p r o v i d e new o r d i f f e r e n t i n f o r m a t i o n , and h e n c e i s
unnecessary.
D e l e t i o n o f t h i s c a t e g o r y w i l l mean i m m e d i a t e c o s t s a v i n g s f o r
m any i n s t i t u t i o n s and u l t i m a t e l y w i l l r e s u l t i n s a v i n g s e v e n t o i n s t i t u t i o n s
t h a t must re p ro gra m t h e i r co m p ute rs because o f t h i s d e l e t i o n .
P a r a g r a p h ( b ) ( 2 ) ( v ) r e q u i r e s an i n s t i t u t i o n t o p r e s e n t , a s an a d d e n ­
dum i t e m , d a t a a b o u t l o a n s made t o n o n - o c c u p a n t b o r r o w e r s ( t h o s e who d i d n o t
i n t e n d - - a t the tim e o f lo a n a p p l i c a t i o n - - t o use the p r o p e r t y as a p r i n c i p a l
d w e llin g).
T h i s r e q u i r e m e n t , ho w e ver, does n ot a p p l y t o l o a n d a ta in the
outside -SM SA category.




Footnote 6 in co rp o rate s part of e x is t in g § 2 0 3 .4 (c ).
The f o o t n o t e
p e r m i t s an i n s t i t u t i o n t o a s s u m e , u n l e s s i t s r e c o r d s on a p a r t i c u l a r l o a n
c o n t a i n i n f o r m a t i o n t o t h e c o n t r a r y , t h a t a p u r c h a s e d l o a n was t o an o c c u p a n t
borrower.
The p h r a s e i n e x i s t i n g § 2 0 3 . 4 ( c ) l i m i t i n g t h i s p r e s u m p t i o n t o l o a n s
on l - t o - 4 f a m i l y d w e l l i n g s h a s b ee n d e l e t e d a s u n n e c e s s a r y , s i n c e p a r a g r a p h
( b ) ( 2 ) ( v ) a p p lie s o n ly to such lo a n s.
P a r a g r a p h ( c ) , l i s t i n g c e r t a i n m o r t g a g e l o a n d a t a t h a t a r e t o be
e x c lu d e d from d a ta c o m p i l a t i o n , c o r r e s p o n d s t o e x i s t i n g § 2 0 3 . 4 ( a ) ( 4 ) ( i ).
P a r a g r a p h s ( c ) ( 1 ) and ( 3 ) , r e g a r d i n g l o a n s on w h i c h t h e i n s t i t u t i o n a c t s i n a
f i d u c i a r y c a p a c i t y and c e r t a i n r e f i n a n c i n g s t h a t i n v o l v e no i n c r e a s e i n t h e
o u t s t a n d i n g p r i n c i p a l b a l a n c e , a r e c a r r i e d o v e r w i t h o u t ch an ge from th e e x i s t i n g
regulation.
P a r a g r a p h ( c ) ( 2 ) s p e c i f i c a l l y e x c l u d e s l o a n s on u n i m p r o v e d l a n d ,
and c o r r e s p o n d s t o a l i m i t a t i o n t o i m p r o v e d r e a l p r o p e r t y c o n t a i n e d i n t h e
e x i s t i n g d e f i n i t i o n o f " r e s id e n t ia l real p ro p e rty ."
Paragraph (d ), d e f in in g geographic u n it s f o r co m p ila tio n purposes,
p a r a l l e l s § 2 0 3 .4 (b ) o f the e x i s t i n g r e g u la t io n .
The r e f e r e n c e t o t h e O f f i c e
o f M a n a g e m e n t and B u d g e t , a s t h e a g e n c y r e s p o n s i b l e f o r d e f i n i n g SMSA b o u n d a r i e s ,
h a s bee n r e p l a c e d b y a r e f e r e n c e t o t h e U . S . D e p a r t m e n t o f Commer ce, r e f l e c t i n g
an amendment t o t h e a c t .
P a r a g r a p h ( d ) ( 1 ) p r o v i d e s t h a t f o r c o m p i l a t i o n p u r p o s e s , SMSA b o u n d ­
a r i e s a r e t h o s e i n e f f e c t on J a n u a r y 1 o f t h e y e a r i n w h i c h t h e l o a n s a r e made,
r e f l e c t i n g t h e s t a t u t o r y ch an ge from f i s c a l to c a l e n d a r y e a r c o m p i l a t i o n .
Thus,
e v e n i f a c o u n t y b e c o m e s p a r t o f an SMSA d u r i n g t h e r e p o r t i n g y e a r , a l l l o a n s
made i n t h e c o u n t y i n t h a t y e a r a r e t o be r e p o r t e d a s b e i n g o u t s i d e t h e S MS A.
F o r t h e s u c c e e d i n g y e a r , l o a n s made i n t h a t c o u n t y w i l l be r e p o r t e d a s b e i n g
w i t h i n t h e SMSA.
The e x i s t i n g r e g u l a t i o n p e r m i t t e d a d e p o s i t o r y i n s t i t u t i o n t o u s e
m a p s , d i r e c t o r i e s , o r c o m p u t e r p r o g r a m s t h a t c o n t a i n e d more r e c e n t d e f i n i t i o n s
o f SMSA a r e a s t h a n t h o s e i n e f f e c t on t h e f i r s t d a y o f t h e r e p o r t i n g y e a r .
B e c a u s e o f t h e nee d f o r u n i f o r m i t y i n a g g r e g a t i o n , t h e B o a r d h a s e l i m i n a t e d
t h i s option.
As n o t e d a b o v e , t h e r e g u l a t i o n r e q u i r e s t h a t d e p o s i t o r y i n s t i t u ­
t i o n s a l l u s e t h e SMSA d e f i n i t i o n i n e f f e c t on J a n u a r y 1 o f t h e c a l e n d a r y e a r
t o w hich th e d i s c l o s u r e s t a t e m e n t r e l a t e s , so t h a t a l l th e r e p o r t s f o r a g i v e n
SMSA w i l l be c o n s i s t e n t w i t h e a c h o t h e r .
A d e p o s i t o r y i n s t i t u t i o n may s t i l l
u s e d i r e c t o r i e s o r c o m p u t e r p r o g r a m s i n s t e a d o f maps t o t a b u l a t e l o a n s by S MS A,
c e n s u s t r a c t , o r c o u n t y , p r o v i d e d t h e c o r r e c t SMSA and c e n s u s t r a c t d e f i n i t i o n s
h a v e been i n c o r p o r a t e d i n t o t h e d i r e c t o r y o r p r o g r a m .
P a r a g r a p h ( d ) ( 2 ) r e q u i r e s , i n g e n e r a l , t h a t 1 9 8 0 c e n s u s t r a c t maps be
used f o r c o m p ila tio n purposes.
B e c a u s e t h e c o m p l e t e s e r i e s o f t r a c t maps f o r
t h e 1 9 8 0 c e n s u s i s n o t y e t a v a i l a b l e f o o t n o t e 7 p r o v i d e s f l e x i b i l i t y f o r an
in te rim period.
An i n s t i t u t i o n may c o n t i n u e t o u s e t h e 1 9 7 0 c e n s u s t r a c t s
u n t i l t h e 1 9 8 0 s e r i e s maps a r e a v a i l a b l e f o r i t s SMSA.
In s t it u t io n s that report
l o a n s i n s e v e r a l S M S A s may c o n t i n u e t o u s e t h e 1 9 7 0 c e n s u s t r a c t s , s w i t c h i n g t o
t h e 1 9 8 0 s e r i e s maps f o r a n y g i v e n SMSA when t h a t s e r i e s b e c o m e s a v a i l a b l e .
T h i s d i f f e r s from the p r o p o s a l , w h ic h would have r e q u i r e d i n s t i t u t i o n s to use
t h e 1 9 7 0 c e n s u s t r a c t maps u n t i l t h e c o m p l e t e s e r i e s o f 1 9 8 0 maps f o r a l l S M S A s
became a v a i l a b l e .




9

/
I n s t i t u t i o n s a r e n o t r e q u i r e d t o s w i t c h t o t h e 1 98 0 s e r i e s maps m i d ­
year.
O nce t h e 1 9 8 0 s e r i e s maps a r e i s s u e d by t h e B u r e a u o f t h e C e n s u s f o r a n y
g i v e n S M S A , i n s t i t u t i o n s m u s t u s e t h o s e maps f o r t h a t SMS A b e g i n n i n g w i t h
January 1 o f the next ca le n d a r year.
The B o a r d b e l i e v e s t h a t a l l o w i n g u s e o f
e i t h e r 1970 o r 1980 c e n s u s t r a c t s , p e n d in g a v a i l a b i l i t y o f t h e 1980 s e r i e s ,
p r o v i d e s needed f l e x i b i l i t y .
Some i n s t i t u t i o n s h a v e a l r e a d y b e g u n t o g e o c o d e
l o a n s on t h e b a s i s o f 1 98 0 c e n s u s t r a c t s , u s i n g s t r e e t a d d r e s s i n d e x e s w h i c h
a r e c u r r e n t l y a v a i l a b l e f o r t h e u r b a n a r e a s o f many S M S A s .
M a n d a t i n g an imme­
d i a t e c h a n g e o v e r t o 1980 t r a c t s f o r a l l i n s t i t u t i o n s i s n ot f e a s i b l e in th e
a b s e n c e o f t h e c o m p l e t e s e r i e s o f 1 9 8 0 c e n s u s t r a c t m aps .

cable

S e c t io n 2 0 3 . 4 ( b ) ( 3 ) o f the e x i s t i n g r e g u la t io n ,
c o d e s , h a s bee n d e l e t e d a s o b s o l e t e .

ZIP

§ 203.5

D isclo su re

and

reporting

dealing

with

a p p li­

requirem ents.

The t i t l e o f r e v i s e d § 2 0 3 . 5 r e f l e c t s t h e f a c t t h a t , u n d e r t h e amended
a c t , d e p o s i t o r y i n s t i t u t i o n s are r e q u ir e d not o n ly to d i s c l o s e m ortgage loan
data at c e r t a i n o f f i c e s , but a l s o to re p o rt the data - - f o r p u rpose s o f a v a i l ­
a b i l i t y a t c e n t r a l d a t a r e p o s i t o r i e s and f o r m u l t i - i n s t i t u t i o n a l d a t a a g g r e g a ­
t i o n by t h e F e d e r a l F i n a n c i a l I n s t i t u t i o n s E x a m i n a t i o n C o u n c i l .
Th is se ction
c o n t a i n s s e v e r a l c h a n g e s from e x i s t i n g § 2 0 3 . 5 .
P a ra g ra p h (a) r e f l e c t s the change
y e a r to calend ar year.
I t s e t s M a r c h 31 a s
su re state m en ts, th u s r e t a i n i n g the 90-day
regulation.
The f i v e - y e a r r e t e n t i o n p e r i o d
m e n t s a t an i n s t i t u t i o n ' s o f f i c e s .
The a c t
t i o n p e r i o d f o r d a t a on f i l e a t t h e c e n t r a l

i n b a s i s f o r c o m p i l a t i o n from f i s c a l
t h e due d a t e f o r t h e a n n u a l d i s c l o ­
i n t e r v a l p r o v i d e d by th e e x i s t i n g
a p p lie s o n ly to d is c lo s u r e s t a t e ­
and r e g u l a t i o n do n o t s e t a r e t e n ­
data r e p o s i t o r i e s .

P a r a g r a p h (b) r e p r e s e n t s a s u b s t a n t i a l r e v i s i o n o f i t s c o u n t e r p a r t
in the e x i s t i n g r e g u la t io n .
I t r e q u ir e s a v a i l a b i l i t y o f the e n t i r e d i s c l o s u r e
s t a t e m e n t a t t h e home o f f i c e , b u t p e r m i t s a b r a n c h o f f i c e d i s c l o s u r e s t a t e m e n t
t o o m i t a l l t h e d a t a r e l a t i n g t o p r o p e r t y l o c a t e d o u t s i d e t h e SM SA w h e r e t h a t
branch o f f i c e i s located.
A branch o f f i c e d i s c l o s u r e under the r e v is e d r e g u l a ­
t i o n n ee d o n l y c o n t a i n d a t a c o n c e r n i n g l o a n s on p r o p e r t y l o c a t e d i n t h a t b r a n c h ' s
S MS A.
T h i s d a t a m u s t , o f c o u r s e , be b r o k e n down by c e n s u s t r a c t ( o r by c o u n t y ,
i f one o f th e a v a i l a b l e e x c e p t i o n s a p p l i e s ) .
I n s t i t u t i o n s may p r o v i d e more
t h a n t h e m inimum d i s c l o s u r e s r e q u i r e d , i f t h e y w i s h - - s u c h a s t o t a l f i g u r e s
by SM SA f o r o t h e r S M S A s i n w h i c h t h e i n s t i t u t i o n h a s o f f i c e s , and a t o t a l f i g u r e
f o r a l l l o a n s o u t s i d e such SMSAs.
I n s t i t u t i o n s a l s o c o n t i n u e t o have t h e o p t i o n
o f making the e n t i r e d i s c l o s u r e statem ent a v a i l a b l e at branch o f f i c e s .
P a r a g r a p h ( b ) ( 2 ) a l s o d i f f e r s from e x i s t i n g § 2 0 3 . 5 ( b ) ( l ) ( i i ) in t h a t
i t no l o n g e r r e q u i r e s t h a t a d i s c l o s u r e s t a t e m e n t be made a v a i l a b l e a t a b r a n c h
o f f i c e t h a t i s i n t h e same SMSA a s t h e home o f f i c e .
The B o a r d b e l i e v e s t h a t
t h i s r e q u i r e m e n t i s n o t m a n d a t e d by t h e s t a t u t e , a nd i s u n n e c e s s a r y , g i v e n t h e
new p r o v i s i o n f o r c e n t r a l d a t a r e p o s i t o r i e s .

to

respond

d isclo su re

Paragraph
prom ptly

(b )(3 ), lik e e x is t in g § 2 0 3 .5 (b )(4 ), requires
t o r e q u e s t s foi* i n f o r m a t i o n a b o u t t h e o f f i c e s

statem ents




are

a vailab le .

an i n s t i t u t i o n
where i t s

10 -

E x i s t i n g § 2 0 3 . 5 ( b ) ( 2 ) h a s bee n d e l e t e d .
I t d e a lt w ith the a v a i l ­
a b i l i t y o f d i s c l o s u r e s t a t e m e n t s a t i n s t i t u t i o n s ( s u c h a s some c r e d i t u n i o n s )
whose o f f i c e s a re i n a c c e s s i b l e t o t h e g e n e r a l p u b l i c .
The B o a r d b e l i e v e s t h a t
i f an i n s t i t u t i o n d o e s n o t a c c e p t d e p o s i t s f r o m t h e g e n e r a l p u b l i c , i t i s l e s s
e s s e n t i a l t o make i t s s t a t e m e n t s a v a i l a b l e i n a p u b l i c p l a c e .
These i n s t i t u ­
t i o n s rem ain s u b j e c t , o f c o u r s e , t o th e r e q u i r e m e n t s r e g a r d i n g a v a i l a b i l i t y o f
d i s c l o s u r e s t a t e m e n t s a t home and b r a n c h o f f i c e s .
In a d d i t i o n , t h e d i s c l o s u r e
s t a t e m e n t s o f t h e s e i n s t i t u t i o n s w i l l now be a v a i l a b l e t o t h e g e n e r a l p u b l i c
at the c e n tra l data r e p o s i t o r i e s .
P a r a g r a p h ( c ) , c o n c e r n i n g p h o t o c o p y i n g and h o u r s o f a v a i l a b i l i t y ,
i n c o r p o r a t e s m inor language changes f o r c l a r i f i c a t i o n but i s s u b s t a n t i v e l y
unchanged from § 2 0 3 . 5 ( c ) o f the e x i s t i n g r e g u l a t i o n .
N o t i f i c a t i o n o f t h e a v a i l a b i l i t y o f m o r t g a g e l o a n d a t a , r e q u i r e d by
e x i s t i n g § 2 0 3 . 5 ( b ) ( 3 ) , had been d e l e t e d by t h e p r o p o s a l .
After con sid eration
o f t h e comments, th e B oard b e l i e v e s t h a t th e n o t i c e s e r v e s th e u s e f u l p u r p o s e
o f a d v i s i n g in t e r e s t e d p a r t i e s about the a v a i l a b i l i t y o f the data.
Section
2 0 3 .5 (d ) o f the r e v is e d r e g u la t io n r e q u ir e s a lobby n o tic e .
T h i s new r e q u i r e m e n t d i f f e r s f r o m
r e q u i r e d n o t i c e and l i s t e d t h r e e e x a m p l e s o f
requirem ent:
n o t i c e i n an a c c o u n t s t a t e m e n t
a n e w s p a p e r , and n o t i c e p o s t e d i n l o b b i e s o f

the e x i s t i n g r e g u l a t i o n , w hich
methods t h a t s a t i s f i e d the
t o d e p o s i t o r s , p u b l i c a t i o n in
the i n s t i t u t i o n ' s o f f i c e s .

A sim p le p o ste r g i v i n g n o tic e o f the a v a i l a b i l i t y o f the i n s t i t u t i o n ' s
HMDA d a t a w i l l s u f f i c e .
T h e r e a r e no s p e c i a l f o r m a t o r t y p e - s i z e r e q u i r e m e n t s ,
a nd no r e q u i r e d t e r m i n o l o g y .
To m i n i m i z e t h e c o s t s t o i n s t i t u t i o n s , t h e B o a r d
w i l l p r o v i d e p o s t e r s t h a t i n s t i t u t i o n s may u s e i f t h e y w i s h .
P a r a g r a p h ( e ) i s new.
It req u ire s that a d ep ository in s t it u t io n
s e n d t w o c o p i e s o f i t s e n t i r e d i s c l o s u r e s t a t e m e n t - - t h e same s t a t e m e n t t h a t
i t m a ke s a v a i l a b l e a t i t s home o f f i c e — t o t h e a p p r o p r i a t e r e g i o n a l o f f i c e o f
i t s s u p e r v i s o r y agency (as l i s t e d in Appendix A).
T h i s t r a n s m i t t a l to the
s u p e r v i s o r y a g e n c y w i l l be t h e f i r s t s t e p ' i n t h e p r o c e s s by w h i c h d i s c l o s u r e
s t a t e m e n t s w i l l become a v a i l a b l e a t c e n t r a l d a t a r e p o s i t o r i e s and d a t a w i l l be
a g g r e g a t e d t o c o v e r a l l r e p o r t i n g i n s t i t u t i o n s i n e a c h SM SA .
The due d a t e f o r
r e p o r t i n g t o t h e s u p e r v i s o r y a g e n c y i s t h e same a s t h a t f o r d i s c l o s u r e a t home
and b r a n c h o f f i c e s .

$ 203.6

Adm inistrative

enforcement

and s a n c t i o n s

for

v io la tio n s.

P a r a g r a p h ( a ) , w h i c h c o r r e s p o n d s t o e x i s t i n g § 2 0 3 . 1 ( b ) and l i s t s
t h e a g e n c i e s r e s p o n s i b l e f o r e n f o r c i n g t h e a c t and r e g u l a t i o n , h a s been
r e l o c a t e d to t h i s s e c t io n f o r c o n s i s t e n c y in form at w ith o th e r r e g u l a t i o n s
i s s u e d by t h e B o a r d .
P a ra g ra p h (b) c o r r e s p o n d s to § 2 03 .6 o f the e x i s t i n g r e g u l a t i o n .
It
s t a t e s t h a t d e p o s i t o r y i n s t i t u t i o n s f o u n d t o be i n v i o l a t i o n a r e s u b j e c t t o
a d m i n i s t r a t i v e s a n c t i o n s s e t f o r t h i n § 305 o f t h e a c t .
It a lso provides r e l i e f
f o r an u n i n t e n t i o n a l e r r o r i n c o m p i l a t i o n o r d i s c l o s u r e r e s u l t i n g f r o m a bona
f i d e m is ta k e as lo n g as the d e p o s i t o r y i n s t i t u t i o n m a i n t a i n s p r o c e d u r e s r e a s o n ­
a b l y a d a pted t o a v o i d any s u c h e r r o r .



11

Appendix A -- Federal enforcement agencies.
Appendix A l i s t s the federal enforcement agencies for the various
types of depository in stitutions subject to Regulation C.
Appendix B -- State exemptions.
Appendix B describes the procedures for seeking a Board determination
of exemption in accordance with § 203.3(b). I f the Board determines that certain
state-chartered depository in stitutions are subject to state laws that are sub­
sta n tially similar to the federal law and that provide adequate provision for
enforcement, the Board may exempt these institutions from the requirements of
the federal law.
The procedures set forth in Appendix B correspond to those found in
the state exemption supplement to the existing regulation, with editorial
revisions and a few additional provisions. Paragraph (d) contains a paren­
thetical reference to § 203.3(b) to note the requirement that exempt i n s t i ­
tutions send the state-required loan data to their state supervisory agencies.
Paragraph (e) corresponds to original paragraphs (d)(2) and (e).
Paragraph (e)(1) c l a r i f i e s that the Board may require a reapplication for an
exemption because of amendments to the act or regulation. Depending upon the
extent of the amendments, the Board may require a complete application or simply
updating of information in areas affected by the amendment.
In the case of the most recent amendments to the act, which required
the Board to promulgate this revised regulation, the Board will require a
complete reapplication by the currently exempt states.
Paragraph (e)(5) was added to the supplement to address situations
when certain of the revocation procedures might be inappropriate.
Appendix C — Mortgage Loan Disclosure Form (HMDA-1).
The Board has
sure form HMDA-1, which
subsequent years. This
submitted to the Office
the requirements of the
final form once the 0MB

adopted a revised version of the mortgage loan d isc lo ­
in stitutions must use to report loan data for 1981 and
form i s not being published at this time. It is being
of Management and Budget for review, in keeping with
Paperwork Reduction Act. The Board will publish it in
review procedures have been completed.

(3)
Regulatory a na lysis . A regulatory analysis was published with
the proposed regulation in February, to comply both with the expanded rulemaking
procedures set forth in the Board's policy statement of January 19, 1979
(44 FR 3957), and with the requirements of the Regulatory F l e x ib ility Act
(Pub. L. 96-354). A final regulatory analysis has been prepared, but is not
being published in the Federal Register. Copies may be obtained from the
Consumer Affairs office of any Federal Reserve Bank or from the Board's Division
of Consumer and Community Affairs, Board of Governors of the Federal Reserve
System, Washington, D. C. 20551.



12 -

/
(4)
FFIEC's aggregation tables. The 1980 amendments to HMDA require
that the FFIEC aggregate the loan data covering all in stitutions in each SMSA,
and that it publish tables showing lending patterns on the basis of location,
income level, age of housing stock, and racial characteristics. The Board
published proposed formats for the tables, on behalf of the FFIEC, when it
published the proposed revision of the regulation in February. The comments
received concerning the proposed tables have been transmitted to the FFIEC for
it s consideration. No further versions of the tables are being published at
this time.
(5)
Text of revised regulation. In consideration of the foregoing
and pursuant to the authority granted in 12 U.S.C. 2804(a), the Board hereby
amends Regulation C (12 CFR Part 203) to read as follows:
PART 203 -- HOME MORTGAGE DISCLOSURE
§ 203.1
§ 203.2
§ 203.3
§ 203.4
§ 203.5
§ 203.6
Appendix A
Appendix B
Appendix C
§ 203.1

Authority, purpose, and scope.
Definitions.
Exemptions.
Compilation of loan data.
Disclosure and reporting requirements.
Administrative enforcement and sanctions for violations.
Federal enforcement agencies.
State exemptions.
[Reserved for disclosure form and instructions.]

Authority, purpose and scope.

(a)
Authority. This regulation is issued by the Board of Governors
of the Federal Reserve System pursuant to the Hom Mortgage Disclosure Act of
e
1975, as amended (Title 12, §§ 2801 through 2811 of the United States Code).
(b) Purpose. The purpose of this regulation is to provide the public
with loan data to determine whether depository institutions are serving the
housing needs of the communities and neighborhoods in which they are located.
The purpose is also to assi st public o f f i c i a l s in distributing public sector
investments so as to attract private investment to neighborhoods where i t is
needed. This regulation is not intended to encourage unsound lending practices
or the allocation of credit.
(c) Scope. This regulation applies to depository in stitutions that
make federally related mortgage loans. It requires a covered depository i n s t i ­
tution to disclose loan data at certain of it s offices and to report the data
to it s supervisory agency.




13

J

(d)
Central data rep osito ries. The act requires that the loan data
be made available at central data repositories located within each standard
metropolitan sta tis tic a l area. It also requires the Federal Financial I n s t i ­
tutions Examination Council to aggregate mortgage loan data for all i n s t i t u ­
tions in each standard metropolitan sta tis tic a l area, showing lending patterns
by location, age of housing stock, income level, and racial character!'sties.
A l i s t i n g of central data repositories can be obtained from the Department of
Housing and Urban Development, Washington, D.C. 20410, or from any of the
agencies listed in Appendix A.
§ 203.2

Definitions.
For the purposes of this regulation, the following definitions apply:

(a) Act means the Hom Mortgage Disclosure Act of 1975 (Title I I I of
e
Public Law 94-200), as amended in 1980 (Title I I I of Public Law 96-399), codified
in Title 12, §§ 2801 through 2811 of the United States Code.
(b) Branch office means an office approved as a branch of the deposi­
tory institution by it s federal or state supervisory agency, but excludes free­
standing automated te lle r machines and other electronic terminals.
(c) Depository in stitution means a commercial bank, savings bank,
savings and loan association, building and loan association, homestead asso ci­
ation (including a cooperative bank), or credit union, that makes federally
related mortgage loans. \ j A majority-owned non-depository subsidiary is
deemed to be part of it s parent depository institution for the purposes of
this regulation. A majority-owned depository subsidiary may, at the parent
depository i n s t it u t io n 's option, be treated as part of it s parent or as a
distinc t entity.
1/

"Federally related mortgage loan" means any loan (other than temporary
financing such as a construction loan) that
(i) Is secured by a f i r s t lien on residential real property (including
individual units of condominiums and cooperatives) that is designed p r i n c i ­
pally for the occupancy of from 1 to 4 families and is located in a state;
and
(i i ) ( A) Is made in whole or in part by a depository institution the
deposits or accounts of which are insured by an agency of the federal
government, or by a depository institution that is regulated by an agency
of the federal government; or
(B) Is made in whole or in part, or is insured, guaranteed, supple­
mented, or assisted in any way, by the Secretary of Housing and Urban
Development or any other officer or agency of the federal government or
under or in connection with a housing or urban development program admini­
stered by any such officer or agency; or
(C) -Is intended to be sold by the depository institution that
originates the loan to the Federal National Mortgage Association, the
Government National Mortgage Association, or the Federal Hom Loan Mortgage
e
Corporation, or to a financial institution from which it is to be purchased
by the Federal Hom Loan Mortgage Corporation.
e




14 (d) Federal Housing Authority (FHA), Farmers Hom Administration
e
(FmHA), or Veterans Administration (VA) loans means mortgage loans insured
under Title I I of the National Housing Act or under Title V of the Housing Act
of 1949 or guaranteed under Chapter 37 of Title 38 of the United States Code.
(e) Hom improvement loan means any loan, including a refinancing,
e
(i) whose proceeds, as stated by the borrower to the lender at the time of the
loan application, are to be used for repairing, rehabilitating, or remodeling
a residential dwelling located in a state; and ( i i ) that is recorded on the
depository i n s t i t u t i o n 's books as a home improvement loan, U
(f) Hom purchase loan means any loan, including a refinancing,
e
secured by and made for the purpose of purchasing residential real property
located in a state (including single-family homes, dwellings for from 2 to 4
families, other multi-family dwellings, and individual units of condominiums
or cooperatives). 2/ The term does not include temporary financing (such as
a bridge loan or a construction loan) or the purchase of an interest in a
pool of mortgage loans (such as mortgage participation certificates issued
or guaranteed by the Federal Hom Loan Mortgage Corporation, the Government
e
National Mortgage Association, or the Farmers Hom Administration).
e
(g) State means any state of the United States of America, the
Dist rict of Columbia, and the Commonwealth of Puerto Rico.
§ 203.3

Exemptions.

(a) Asset size and location.
A depository institution is exempt •
from all requirements' of this regulation
(1)

I f it s total assets on December 31 are $10,000,000 or less; or

(2) I f it has neither a home office nor a branch office in a standard
metropolitan sta tis tic a l area (SMSA) as defined by the U.S. Department of
Commerce.
(b) State law. A state-chartered depository institution is exempt
from the requirements of this regulation i f it i s subject to state laws that
contain, as determined by the Board in accordance with Appendix B, (1) require­
ments substantially similar to those imposed by this regulation, and (2) ade­
quate provisions for enforcement. For purposes of data aggregation, however,
an institution exempted under this paragraph shall submit the data required by
the disclosure laws of it s state to it s state supervisory agency.

2/

See footnote 3.

3/

An institution may categorize a f i r s t - l i e n loan made for home improvement
purposes as a home purchase loan i f that is the manner in which it normally
records f i r s t - l i e n loans.




- 15 (c)
Change of status. (1) An institution that becomes subject to
the requirements of this regulation shall compile loan data beginning with the
calendar year following the year in which it becomes subject, except that:
(2)
An institution that is exempt under § 203.3(b) and that subse­
quently loses it s exemption shall compile loan data in compliance with this
regulation beginning with the calendar year following the year for which i t
last reported loan data under the state disclosure law.
§ 203.4

Compilation of loan data.

(a) Data to be included. A depository institution shall compile
data on the number and total dollar amount i./ of home purchase and home improve
ment loans that it originates and purchases, for each calendar year beginning
with calendar year 1981.
(b) Format. The loan data shall be compiled separately for origin a­
tions and purchases, using the form set forth in Appendix C, and shall be
itemized as follows:
(1) Geographic itemization. The loan data shall be itemized by stan
dard metropolitan statisti cal area (SMSA). Within each SMSA, the data shall be
further itemized by the census tract in which the property to be purchased or
improved is located, except that
(i) If the property is located in a county with a population 5/ of
30,000 or less or in an area that has not been assigned census tracts, itemiza­
tion by county shall be used instead of itemization by census tract.
( i i ) If the property is located outside any SMSA, or is located in
an SMSA in which the institution has neither a home nor a branch office, no
itemization (by SMSA, county, or census tract) is required and the data for
all such loans shall instead be listed as an aggregate sum.

4/

"Total dollar amount" means (i) the original principal amount of loans
originated by the depository institution (to the extent of its ownership
interest, when the loan is made jo intly or cooperatively) and ( i i ) the
unpaid balance of loans purchased by the depository institution (to the
extent of its ownership interest in such purchased loans). For hom
e
improvement loans, whether originated or purchased, the amount to be
reported may include unpaid finance charges.

5/

The population is to be determined by reference to the "1980 Census of
Population, NUMBER OF INHABITANTS, PC80-1-A" series prepared by the Bureau
of the Census, U.S. Department of Commerce, Washington, D.C. 20233. Until
this publication becomes available, county population shall be determined
using the "1980 Census of Population and Housing, FINAL POPULATION AND
HOUSING UNIT COUNTS (Advance Reports), PHC80-V" series, also prepared by
the Bureau of the Census.




- 16
(2) Type-of-loan itemization. The loan data within each geographic
category described in paragraph (b)(1) of this section shall be further itemized
as follows:
(i)
(ii)

FHA, FmHA, and VA loans on l-to-4 family dwellings;
Other home purchase (conventional) loans on l-to-4 family

dwe'l 1i ngs;
(iii)

Hom improvement loans on l-to-4 family dwellings;
e

(iv) Total home purchase and home improvement loans on dwellings for
more than 4 fami 1ies;. and
(v) Total home purchase and home improvement loans on l-to-4 family
dwellings (from categories ( i ) , ( i i ) , and ( i i i ) above) made to any borrower
who did not, at the time of the loan application, intend to use the property
as a principal dwelling. .6/ This addendum item is not required for loans on
property in the outside-SMSAs category described in paragraph (b)(1) ( i i ) of
this section.
(c)

Excluded data.

A depository institution shall not disclose loan

data for
(1) Loans originated and purchased by the depository institution
acting as trustee or in some other fiduciary capacity;
(2)

Loans on unimproved land; or

(3) Refinancings that the depository institution originates, i f
there is no increase in the principal that is outstanding on the existing loan
at the time of the refinancing and i f the institution and the borrower are the
same parties on the existing loan and the refinancing.
(d)

SMSAs and census tra cts.

For purposes of geographic itemization

(1) A depository institution shall use the SMSA boundaries defined
by the U.S. Department of Commerce, Washington, D. C. 20233, as of the f i r s t
day of the calendar year for which the data are compiled.

6/

A depository institution may assume, unless it s records contain information
to the contrary, that a loan that it purchases does not fall within this
category.




17
(2) A depository institution shall use the census tract numbers and
boundaries on the census tract maps in the "1980 Census of Population and
Housing, CENSUS TRACTS, PHC80-2" series prepared by the Bureau of-the Census.Z/
If a census tract number is duplicated within an SMSA, then the census tract
shall also be identified by county, city, or town name.
§ 203.5

Disclosure and reporting requirements.

(a) Time requirements for disclosure statements. A depository
in stitution shall make it s loan data disclosure statements available to the
public by March 31 following the calendar year for which the data were compiled,
and shall continue to make them available for five years from that date.
(b) Offices at which disclosure statements are to be made available.
(1) A depository institution shall make a complete disclosure statement
available at it s home office.
(2) A depository institution shall also make a disclosure state­
ment available in at least one branch office in each SMSA where it has offices,
other than the SMSA in which the home office is located.
The statement at a
branch office may omit, at the option of the institution, all data other than
the data relating to property located in the SMSA where that branch is located.
(3) Upon request, a depository institution shall promptly provide
information regarding the office(s) of the institution where it s disclosure
statements are available.
(c) Manner of making disclosure statements available. A depository
institution shall make its loan data disclosure statements available to anyone
requesting them for inspection or copying during the hours the office is normally
open to the public for business. A depository institution that provides photo­
copying f a c i l i t i e s may impose a reasonable charge for this service.
(d) Notice of a vailab ilit y. A depository institution shall provide
notice of the availabi1ity of it s mortgage loan data by posting a notice in the
lobbies of it s home and branch offices that are located in SMSAs.
(e) Reporting requirements. For purposes of data aggregation, a
depository institution shall send two copies of its complete disclosure state­
ment to the regional office of it s enforcement agency by March 31 f o l 1owing'the
calendar year for which the data were compiled.

7/

An institution may use either 1970 or 1980 census tract boundaries in
geocoding loans in an SMSA until the 1980 census tract outline maps for
that SMSA become available from the Bureau of the Census.




18 -

J
§ 203.6

Administrative enforcement and sanctions for v io l a t io n s .

(a) Administrative enforcement. As set forth more fully in §§ 305(b)
and 306(b) of the act, compliance with the act and this regulation is enforced
by the Comptroller of the Currency, the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Federal Hom Loan Bank Board, and the
e
National Credit Union Administration.
(b) Sanctions for v io la tio ns. (1) A violation of the act or this
regulation is subject to administrative sanctions as provided in § 305(c) of
the act.
(2) An error in compiling or disclosing required data is not con­
sidered a violation of the act or this regulation i f the error was unintentional
and resulted from a bona fide mistake despite the maintenance of procedures
reasonably adapted to avoid such an error.




- 19 -

Appendix A

FEDERAL ENFORCEMENT AGENCIES
The following l i s t indicates which federal agency enforces Regulation C
for particular c l a sse s'o f institutions. Any questions concerning compliance by a
particular institution should be directed to the appropriate enforcing agency.
NATIONAL BANKS
Comptroller of the Currency
Office of Customer and Community Programs
Washington, D.C. 20219
STATE MEMBER BANKS
Federal Reserve Bank serving the d is t r ic t in which the state member bank is
1ocated.
NONMEMBER INSURED BANKS AND MUTUAL SAYINGS BANKS
Federal Deposit Insurance Corporation Regional Director for the region in which
the bank is located.
SAVINGS INSTITUTIONS’INSURED BY THE FSLIC AND MEMBERS OF THE FHLB SYSTEM
(except for Savings Banks insured by FDIC)
The Federal Home Loan Bank Board Supervisory Agent in the d is t r ic t in which the
in stitution is located.
CREDIT UNIONS
Office of Consumer Affairs
National Credit Union Administration
1776 G Street, N.W.
Washington, D.C. 20456
OTHER DEPOSITORY INSTITUTIONS
Federal Deposit Insurance Corporation Regional Director for the region in
which the institution is located.




20

Appendix B

STATE EXEMPTIONS
(3 )
App1ication. Any state, } j state-chartered depository i n s t i t u ­
tion, or association of such depository institutions may apply to the Board
pursuant to this appendix and the Board's Rules of Procedure (12 CFR 262) for
an exemption under § 203.3(b). Such an exemption requires a determination that
a state-chartered depository institution is subject to state law requirements J./
substantially similar to those imposed by this regulation, and that there is
adequate provision for enforcement of those requirements.
(b) Supporting documents.
letter, shall include

The application, which may be made by

(1) A copy of the full text of the relevant state law, including
provisions for enforcement;
(2) A statement of reasons why the state requirements are substan­
t i a l l y similar to those imposed by the act and this regulation, including an
explanation why any differences are not signific ant; and
(3) An undertaking to inform the Board within 30 days of the occur­
rence of any change in the relevant state law.
(c) Public notice of f i l i n g . The Board will publish in the Federal
Register notice of the f i l i n g of an application that complies with the above
requirements. A copy of the application will be made available for examination
during business hours at the Board and at the Federal Reserve Bank of each
Federal Reserve District in which the applicant is situated. The Board will
provide a period of time for interested persons to submit written comments.
For multiple applications concerning the same state law, the Board may (1)
consolidate the notice of receipt of all such applications in one Federal
Register notice, and (2) dispense with publication of notice of applications
subsequently received.
(d) Grant of exemption. If the Board determines that some or all
state-chartered depository institutions are subject to requirements substan­
t i a l l y similar to those imposed by this regulation, and that there is adequate
provision for enforcement, the Board will exempt such institution(s) from

y

"State" includes any subdivision of a state.

j?/

"State law" includes any regulations which implement the law, any o fficial
interpretations of the law, and regulations of a state agency or department
that has jurisdiction over a class(es) of depository institutions.




21

the -requirements of this regulation (except as specified in § 203. 3(b)) by
publishing notice of the exemption in the Federal Register. The Board also
will furnish a copy of the notice to the applicant, to each state authority
responsible for administrative enforcement of the state law, to the regulatory
authorities specified in § 305(b) of the act, and to each participant in the
proceeding.
(e)
Subsequent amendments; revocation of exemption. (1) The Board
will inform the appropriate state o fficia l of any subsequent amendments to this
regulation (including published interpretations of the Board) that might require
amendment of the state law. The Board may require reapplication for an exemption.
(2) The Board reserves the right to revoke an exemption i f at any
time it determines that state law does not in fact impose requirements substan­
t i a l l y similar to those imposed by this regulation, or that there is not in
fact adequate provision for enforcement.
(3) The Board will publish notice of i t s intent to revoke an exemp­
tion in the Federal Register and will send the notice to the appropriate state
o f f i c i a l . The Board will allow time after publication for interested persons
to submit written comments.
(4) I f an exemption is revoked, the Board will publish notice of the
revocation in the Federal Register and will send a copy of the notice to the
appropriate state o fficial and to the regulatory authorities specified in
§ 305(b) of the act.
(5) The Board may dispense with the procedures set forth in this
section in any case in which it finds such procedures unnecessary.

By order of the Board of Governors, August 4, 1981.

[signed] William W Wiles
.
Wi11iam W Wiles
.
Secretary of the Board

[SEAL]