Vol. 78 Wednesday,
No. 30 February 13, 2013
Part III
Department of the Treasury
Office of the Comptroller of the Currency
12 CFR Parts 34 and 164
Federal Reserve System
12 CFR Part 226
National Credit Union Administration
12 CFR Part 722
Bureau of Consumer Financial Protection
12 CFR Part 1026
Federal Housing Finance Agency
12 CFR Part 1222
Appraisals for Higher-Priced Mortgage Loans; Final Rule
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No. 30 February 13, 2013
Part III
Department of the Treasury
Office of the Comptroller of the Currency
12 CFR Parts 34 and 164
Federal Reserve System
12 CFR Part 226
National Credit Union Administration
12 CFR Part 722
Bureau of Consumer Financial Protection
12 CFR Part 1026
Federal Housing Finance Agency
12 CFR Part 1222
Appraisals for Higher-Priced Mortgage Loans; Final Rule
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10368 Federal Register / Vol. 78, No. 30 / Wednesday, February 13, 2013 / Rules and Regulations
1 For motor vehicle dealers as defined in section
1029 of the Dodd-Frank Act, TILA directs the Board
to prescribe regulations to carry out the purposes
of TILA and authorizes the Board to issue
regulations that contain such classifications,
differentiations, or other provisions, or that provide
for such adjustments and exceptions for any class
of transactions, that in the Board’s judgment are
necessary or proper to effectuate the purposes of
TILA, or prevent circumvention or evasion of TILA.
15 U.S.C. 5519; 15 U.S.C. 1604(a).
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Parts 34 and 164
[Docket No. OCC–2012–0013]
RIN 1557–AD62
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R–1443]
RIN 7100–AD90
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 722
RIN 3133–AE04
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
[Docket No. CFPB–2012–0031]
RIN 3170–AA11
FEDERAL HOUSING FINANCE
AGENCY
12 CFR Part 1222
RIN 2590–AA58
Appraisals for Higher-Priced Mortgage
Loans
AGENCY: Board of Governors of the
Federal Reserve System (Board); Bureau
of Consumer Financial Protection
(Bureau); Federal Deposit Insurance
Corporation (FDIC); Federal Housing
Finance Agency (FHFA); National
Credit Union Administration (NCUA);
and Office of the Comptroller of the
Currency, Treasury (OCC).
ACTION: Final rule; official staff
commentary.
SUMMARY: The Board, Bureau, FDIC,
FHFA, NCUA, and OCC (collectively,
the Agencies) are issuing a final rule to
amend Regulation Z, which implements
the Truth in Lending Act (TILA), and
the official interpretation to the
regulation. The revisions to Regulation
Z implement a new provision requiring
appraisals for ‘‘higher-risk mortgages’’
that was added to TILA by the Dodd-
Frank Wall Street Reform and Consumer
Protection Act (the Dodd-Frank Act or
Act). For mortgages with an annual
percentage rate that exceeds the average
prime offer rate by a specified
percentage, the final rule requires
creditors to obtain an appraisal or
appraisals meeting certain specified
standards, provide applicants with a
notification regarding the use of the
appraisals, and give applicants a copy of
the written appraisals used.
DATES: This final rule is effective on
January 18, 2014.
FOR FURTHER INFORMATION CONTACT:
Board: Lorna Neill or Mandie Aubrey,
Counsels, Division of Consumer and
Community Affairs, at (202) 452–3667,
or Carmen Holly, Supervisory Financial
Analyst, Division of Banking
Supervision and Regulation, at (202)
973–6122, Board of Governors of the
Federal Reserve System, Washington,
DC 20551.
Bureau: Owen Bonheimer, Counsel,
or William W. Matchneer, Senior
Counsel, Division of Research, Markets,
and Regulations, Bureau of Consumer
Financial Protection, 1700 G Street,
NW., Washington, DC 20552, at (202)
435–7000.
FDIC: Beverlea S. Gardner, Senior
Examination Specialist, Risk
Management Section, at (202) 898–3640,
Sumaya A. Muraywid, Examination
Specialist, Risk Management Section, at
(573) 875–6620, Glenn S. Gimble,
Senior Policy Analyst, Division of
Consumer Protection, at (202) 898–6865,
Sandra S. Barker, Senior Policy Analyst,
Division of Consumer Protection, at
(202) 898–3615, Mark Mellon, Counsel,
Legal Division, at (202) 898–3884, or
Kimberly Stock, Counsel, Legal
Division, at (202) 898–3815, or 550 17th
St. NW., Washington, DC 20429.
FHFA: Susan Cooper, Senior Policy
Analyst, (202) 649–3121, Lori Bowes,
Policy Analyst, Office of Housing and
Regulatory Policy, (202) 649–3111,
Ming-Yuen Meyer-Fong, Assistant
General Counsel, Office of General
Counsel, (202) 649–3078, or Sharron
P.A. Levine, Associate General Counsel,
Office of General Counsel, (202) 649–
3496, Federal Housing Finance Agency,
400 Seventh Street SW., Washington,
DC, 20024.
NCUA: John Brolin and Pamela Yu,
Staff Attorneys, or Frank Kressman,
Associate General Counsel, Office of
General Counsel, at (703) 518–6540, or
Vincent Vieten, Program Officer, Office
of Examination and Insurance, at (703)
518–6360, or 1775 Duke Street,
Alexandria, Virginia, 22314.
OCC: Robert L. Parson, Appraisal
Policy Specialist, (202) 649–6423, G.
Kevin Lawton, Appraiser (Real Estate
Specialist), (202) 649–7152, Carolyn B.
Engelhardt, Bank Examiner (Risk
Specialist—Credit), (202) 649–6404,
Charlotte M. Bahin, Senior Counsel or
Mitchell Plave, Special Counsel,
Legislative & Regulatory Activities
Division, (202) 649–5490, Krista
LaBelle, Special Counsel, Community
and Consumer Law Division, (202) 649–
6350, or 250 E Street SW., Washington
DC 20219.
SUPPLEMENTARY INFORMATION:
I. Background
In general, the Truth in Lending Act
(TILA), 15 U.S.C. 1601 et seq., seeks to
promote the informed use of consumer
credit by requiring disclosures about its
costs and terms. TILA requires
additional disclosures for loans secured
by consumers’ homes and permits
consumers to rescind certain
transactions that involve their principal
dwelling. For most types of creditors,
TILA directs the Bureau to prescribe
regulations to carry out the purposes of
the law and specifically authorizes the
Bureau to issue regulations that contain
such classifications, differentiations, or
other provisions, or that provide for
such adjustments and exceptions for
any class of transactions, that in the
Bureau’s judgment are necessary or
proper to effectuate the purposes of
TILA, or prevent circumvention or
evasion of TILA.1 15 U.S.C. 1604(a). For
most types of creditors and most
provisions of the statute, TILA is
implemented by the Bureau’s
Regulation Z. See 12 CFR part 1026.
Official Interpretations provide
guidance to creditors in applying the
rules to specific transactions and
interpret the requirements of the
regulation. See 12 CFR part 1026, Supp.
I. However, as explained in the section-
by-section analysis of this
SUPPLEMENTARY INFORMATION, the new
appraisal section of TILA addressed in
this final rule (TILA section 129H, 15
U.S.C. 1639h) is implemented not only
for all affected creditors by the Bureau’s
Regulation Z, but also, for creditors
overseen by the OCC and the Board,
respectively, by OCC regulations and
the Board’s Regulation Z. See 12 CFR
parts 34 and 164 (OCC regulations) and
part 226 (the Board’s Regulation Z). The
Bureau’s, the OCC’s and the Board’s
versions of the appraisal rules and
corresponding official interpretations
are substantively identical. The FDIC,
NCUA, and FHFA are adopting the
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srobinson on DSK4SPTVN1PROD with RULES3
1 For motor vehicle dealers as defined in section
1029 of the Dodd-Frank Act, TILA directs the Board
to prescribe regulations to carry out the purposes
of TILA and authorizes the Board to issue
regulations that contain such classifications,
differentiations, or other provisions, or that provide
for such adjustments and exceptions for any class
of transactions, that in the Board’s judgment are
necessary or proper to effectuate the purposes of
TILA, or prevent circumvention or evasion of TILA.
15 U.S.C. 5519; 15 U.S.C. 1604(a).
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Parts 34 and 164
[Docket No. OCC–2012–0013]
RIN 1557–AD62
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R–1443]
RIN 7100–AD90
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 722
RIN 3133–AE04
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
[Docket No. CFPB–2012–0031]
RIN 3170–AA11
FEDERAL HOUSING FINANCE
AGENCY
12 CFR Part 1222
RIN 2590–AA58
Appraisals for Higher-Priced Mortgage
Loans
AGENCY: Board of Governors of the
Federal Reserve System (Board); Bureau
of Consumer Financial Protection
(Bureau); Federal Deposit Insurance
Corporation (FDIC); Federal Housing
Finance Agency (FHFA); National
Credit Union Administration (NCUA);
and Office of the Comptroller of the
Currency, Treasury (OCC).
ACTION: Final rule; official staff
commentary.
SUMMARY: The Board, Bureau, FDIC,
FHFA, NCUA, and OCC (collectively,
the Agencies) are issuing a final rule to
amend Regulation Z, which implements
the Truth in Lending Act (TILA), and
the official interpretation to the
regulation. The revisions to Regulation
Z implement a new provision requiring
appraisals for ‘‘higher-risk mortgages’’
that was added to TILA by the Dodd-
Frank Wall Street Reform and Consumer
Protection Act (the Dodd-Frank Act or
Act). For mortgages with an annual
percentage rate that exceeds the average
prime offer rate by a specified
percentage, the final rule requires
creditors to obtain an appraisal or
appraisals meeting certain specified
standards, provide applicants with a
notification regarding the use of the
appraisals, and give applicants a copy of
the written appraisals used.
DATES: This final rule is effective on
January 18, 2014.
FOR FURTHER INFORMATION CONTACT:
Board: Lorna Neill or Mandie Aubrey,
Counsels, Division of Consumer and
Community Affairs, at (202) 452–3667,
or Carmen Holly, Supervisory Financial
Analyst, Division of Banking
Supervision and Regulation, at (202)
973–6122, Board of Governors of the
Federal Reserve System, Washington,
DC 20551.
Bureau: Owen Bonheimer, Counsel,
or William W. Matchneer, Senior
Counsel, Division of Research, Markets,
and Regulations, Bureau of Consumer
Financial Protection, 1700 G Street,
NW., Washington, DC 20552, at (202)
435–7000.
FDIC: Beverlea S. Gardner, Senior
Examination Specialist, Risk
Management Section, at (202) 898–3640,
Sumaya A. Muraywid, Examination
Specialist, Risk Management Section, at
(573) 875–6620, Glenn S. Gimble,
Senior Policy Analyst, Division of
Consumer Protection, at (202) 898–6865,
Sandra S. Barker, Senior Policy Analyst,
Division of Consumer Protection, at
(202) 898–3615, Mark Mellon, Counsel,
Legal Division, at (202) 898–3884, or
Kimberly Stock, Counsel, Legal
Division, at (202) 898–3815, or 550 17th
St. NW., Washington, DC 20429.
FHFA: Susan Cooper, Senior Policy
Analyst, (202) 649–3121, Lori Bowes,
Policy Analyst, Office of Housing and
Regulatory Policy, (202) 649–3111,
Ming-Yuen Meyer-Fong, Assistant
General Counsel, Office of General
Counsel, (202) 649–3078, or Sharron
P.A. Levine, Associate General Counsel,
Office of General Counsel, (202) 649–
3496, Federal Housing Finance Agency,
400 Seventh Street SW., Washington,
DC, 20024.
NCUA: John Brolin and Pamela Yu,
Staff Attorneys, or Frank Kressman,
Associate General Counsel, Office of
General Counsel, at (703) 518–6540, or
Vincent Vieten, Program Officer, Office
of Examination and Insurance, at (703)
518–6360, or 1775 Duke Street,
Alexandria, Virginia, 22314.
OCC: Robert L. Parson, Appraisal
Policy Specialist, (202) 649–6423, G.
Kevin Lawton, Appraiser (Real Estate
Specialist), (202) 649–7152, Carolyn B.
Engelhardt, Bank Examiner (Risk
Specialist—Credit), (202) 649–6404,
Charlotte M. Bahin, Senior Counsel or
Mitchell Plave, Special Counsel,
Legislative & Regulatory Activities
Division, (202) 649–5490, Krista
LaBelle, Special Counsel, Community
and Consumer Law Division, (202) 649–
6350, or 250 E Street SW., Washington
DC 20219.
SUPPLEMENTARY INFORMATION:
I. Background
In general, the Truth in Lending Act
(TILA), 15 U.S.C. 1601 et seq., seeks to
promote the informed use of consumer
credit by requiring disclosures about its
costs and terms. TILA requires
additional disclosures for loans secured
by consumers’ homes and permits
consumers to rescind certain
transactions that involve their principal
dwelling. For most types of creditors,
TILA directs the Bureau to prescribe
regulations to carry out the purposes of
the law and specifically authorizes the
Bureau to issue regulations that contain
such classifications, differentiations, or
other provisions, or that provide for
such adjustments and exceptions for
any class of transactions, that in the
Bureau’s judgment are necessary or
proper to effectuate the purposes of
TILA, or prevent circumvention or
evasion of TILA.1 15 U.S.C. 1604(a). For
most types of creditors and most
provisions of the statute, TILA is
implemented by the Bureau’s
Regulation Z. See 12 CFR part 1026.
Official Interpretations provide
guidance to creditors in applying the
rules to specific transactions and
interpret the requirements of the
regulation. See 12 CFR part 1026, Supp.
I. However, as explained in the section-
by-section analysis of this
SUPPLEMENTARY INFORMATION, the new
appraisal section of TILA addressed in
this final rule (TILA section 129H, 15
U.S.C. 1639h) is implemented not only
for all affected creditors by the Bureau’s
Regulation Z, but also, for creditors
overseen by the OCC and the Board,
respectively, by OCC regulations and
the Board’s Regulation Z. See 12 CFR
parts 34 and 164 (OCC regulations) and
part 226 (the Board’s Regulation Z). The
Bureau’s, the OCC’s and the Board’s
versions of the appraisal rules and
corresponding official interpretations
are substantively identical. The FDIC,
NCUA, and FHFA are adopting the
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