District Circular Letters

February 14, 2002

BANKING SUPERVISION AND REGULATION:
REGULATION C—REVISIONS AND
REQUEST FOR COMMENT

To State Member Banks, Bank
Holding Companies, U.S. Branches
and Agencies of Foreign Banks,
and Others Concerned,
in the Twelfth Federal Reserve District

Final Revisions and Request for Comment (R-1001 and R-1120)

The Federal Reserve Board has published revisions to its Regulation C, which implements the Home Mortgage Disclosure Act (HMDA), and are intended to improve the quality and consistency of data collected on home mortgage loans.

The amendments to Regulation C require lenders to disclose pricing data on higher cost loans, expand the number of nondepository institutions subject to HMDA's reporting requirements, and revise certain regulatory definitions.

Data collected under Regulation C help the public and regulatory agencies enforce fair lending laws and are used to determine whether financial institutions are serving the housing needs of their communities.

The changes to Regulation C will facilitate fair lending analysis and enhance understanding of the home mortgage market generally and the subprime market in particular. The Board took into account changes in the home mortgage market, including growth in areas such as subprime lending and loan preapproval programs. At the same time, the Board has attempted to minimize the increase in the data collection and reporting burden by limiting proposed changes to those most likely to have significant benefit.

The Board also adopted a number of clarifying and technical changes, in addition to reorganizing Regulation C for easier use.

The amendments are effective for data collection beginning January 1, 2003.

In a related action, the Board is requesting public comment on the following:

• The appropriate threshold for collecting price data on higher cost loans
• A proposal to require lenders to ask telephone applicants their race, ethnicity, and sex. lenders already ask these questions in in-person, mail and internet applications.
• A proposal to require lenders to report lien status for applications and originated loans

Comment is requested by April 12, 2002.

Additional Information

All circulars and documents are available on the Internet through the Federal Reserve Bank of San Francisco's Internet site, at http://www.frbsf.org/banking/letters. Paper copies of the Board's notice (Dockets R-1001 and R-1120) are available from our Corporate Services Department. To request copies to be sent by mail, please call (415) 974-2060.

For additional information about the Regulation C amendments, please contact our Banking Supervision and Regulation Department at (415) 974-3329.

FEDERAL RESERVE BANK OF SAN FRANCISCO