This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
Proposed Rules Federal Register
49420
Vol. 61, No. 184
Friday, September 20, 1996
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 338
RIN 3064–AB72
Fair Housing
AGENCY: Federal Deposit Insurance
Corporation.
ACTION: Proposed rule.
SUMMARY: The FDIC is proposing to
amend its fair housing regulation by
clarifying certain nondiscriminatory
advertising requirements with regard to
placement and display of the Equal
Housing Lender poster. The FDIC also
proposes to offer insured state
nonmember banks the option of
displaying the Equal Housing
Opportunity poster required by
regulations of the U.S. Department of
Housing and Urban Development and/or
using the advertising slogan ‘‘Equal
Opportunity Lender.’’ The agency
further proposes to remove its fair
housing recordkeeping requirements
that serve as a substitute monitoring
program permitted by the Federal
Reserve Board’s Regulation B, which
implements the Equal Credit
Opportunity Act, and its requirement
that insured state nonmember banks
maintain and report a home loan
application register in accordance with
Regulation C, which implements the
Home Mortgage Disclosure Act. Instead,
the FDIC will simply cross-reference
Regulations B and C and require
recordation and reporting of loan denial
reasons.
This action is being taken in
accordance with section 303 of the
Riegle Community Development and
Regulatory Improvement Act of 1994,
which requires the federal bank and
thrift regulatory agencies to review and
streamline their regulations and policies
in order to improve efficiency, reduce
unnecessary costs, eliminate
unwarranted constraints on credit
availability, and remove inconsistencies
and outmoded and duplicative
requirements. The intended effect of
these amendments is to reduce burden
on insured state nonmember banks and
to conform the FDIC’s fair housing
regulation with those of the other
federal bank and thrift regulatory
agencies.
DATES: Comments must be received on
or before November 19, 1996.
ADDRESSES: Written comments should
be addressed to the Office of the
Executive Secretary, FDIC, 550 17th
Street, NW., Washington, DC 20429.
Comments also may be hand delivered
to Room 402, 1776 F Street, NW.,
Washington, DC between 8:30 a.m. and
5:00 p.m. on business days, or sent by
facsimile transmission (202–898–3838)
or by Internet (comments@fdic.gov).
Comments received will be available for
public inspection and photocopying at
the FDIC Public Information Center,
Room 100, 801 17th Street, NW.,
Washington, DC between 9 a.m. and
4:30 p.m. on business days.
FOR FURTHER INFORMATION CONTACT:
Michael R. Evans, Fair Lending Analyst,
Fair Lending Section, Division of
Compliance and Consumer Affairs,
(202) 942–3091; or Lori J. Sommerfeld,
Attorney, Regulation and Legislation
Section, Legal Division, (202) 898–8515;
Federal Deposit Insurance Corporation,
550 17th Street, NW., Washington, DC
20429.
SUPPLEMENTARY INFORMATION:
I. Background
The FDIC’s fair housing regulation, 12
CFR part 338, contains two parts:
nondiscriminatory advertising
requirements (subpart A) and
recordkeeping requirements (subpart B).
Subpart A prohibits insured state
nonmember banks from discriminating
in home loan advertising and sets forth
the text of the Equal Housing Lender
poster that must be displayed on bank
premises. The intent of subpart A is to
prevent discrimination in connection
with any residential real estate-related
transaction on the basis of race, color,
sex, religion, national origin, familial
status or handicap. The regulation
specifies that this requirement may be
satisfied by including in written and
visual advertisements a copy of the
logotype with the Equal Housing Lender
legend contained in the Equal Housing
Lender poster or, in oral advertisements,
by including a statement that the bank
is an ‘‘Equal Housing Lender.’’ The
advertising requirements enforce section
805 of Title VIII of the Civil Rights Act
of 1968 (the Fair Housing Act), as
amended by the Fair Housing
Amendments Act of 1988 (Pub. L. 100–
430, 102 Stat. 1636).
The purpose of subpart B
(recordkeeping requirements) is two-
fold. First, it requires certain insured
state nonmember banks to request and
retain information regarding the race,
national origin, sex, marital status and
age of applicants for a home purchase
loan. The purpose of collecting and
retaining this information is to monitor
an institution’s compliance with the
Equal Credit Opportunity Act of 1974
(ECOA) (15 U.S.C. 1691–91f). Subpart B
also serves as a substitute monitoring
program permitted by Regulation B of
the Federal Reserve System. See 12 CFR
202.13(d). However, the data collection
and retention requirements of subpart B
go beyond the requirements of
Regulation B. For example, insured state
nonmember banks that have no office
located in a primary metropolitan
statistical area (PMSA) or a metropolitan
statistical area (MSA), or that have total
assets of $10 million or less, are also
required to request and retain
information on the location (street
address, city, state, and zip code) of the
property to be purchased. Further,
insured state nonmember banks that
have an office located in a PMSA or an
MSA and that have total assets
exceeding $10 million are required to
request and retain essentially all of the
information listed on the model
Residential Loan Application Form
contained in appendix B of Regulation
B (see 12 CFR part 202, appendix B).
This includes such data as employment
history of the applicant, number of
dependents, assets and liabilities,
detailed characteristics of the subject
property, and the loan request.
Appendix B specifies that institutions
may delete any information requested
on the model form provided that
appropriate notices concerning optional
use of titles and disclosure of certain
income information and limitations
concerning marital status requests are
provided. Thus, the other information
on the model form is not required by
Regulation B.
Second, subpart B notifies insured
state nonmember banks of their duty to
maintain and report a register of home
loan applications, and to update the
register on a timely basis, in accordance
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
Proposed Rules Federal Register
49420
Vol. 61, No. 184
Friday, September 20, 1996
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 338
RIN 3064–AB72
Fair Housing
AGENCY: Federal Deposit Insurance
Corporation.
ACTION: Proposed rule.
SUMMARY: The FDIC is proposing to
amend its fair housing regulation by
clarifying certain nondiscriminatory
advertising requirements with regard to
placement and display of the Equal
Housing Lender poster. The FDIC also
proposes to offer insured state
nonmember banks the option of
displaying the Equal Housing
Opportunity poster required by
regulations of the U.S. Department of
Housing and Urban Development and/or
using the advertising slogan ‘‘Equal
Opportunity Lender.’’ The agency
further proposes to remove its fair
housing recordkeeping requirements
that serve as a substitute monitoring
program permitted by the Federal
Reserve Board’s Regulation B, which
implements the Equal Credit
Opportunity Act, and its requirement
that insured state nonmember banks
maintain and report a home loan
application register in accordance with
Regulation C, which implements the
Home Mortgage Disclosure Act. Instead,
the FDIC will simply cross-reference
Regulations B and C and require
recordation and reporting of loan denial
reasons.
This action is being taken in
accordance with section 303 of the
Riegle Community Development and
Regulatory Improvement Act of 1994,
which requires the federal bank and
thrift regulatory agencies to review and
streamline their regulations and policies
in order to improve efficiency, reduce
unnecessary costs, eliminate
unwarranted constraints on credit
availability, and remove inconsistencies
and outmoded and duplicative
requirements. The intended effect of
these amendments is to reduce burden
on insured state nonmember banks and
to conform the FDIC’s fair housing
regulation with those of the other
federal bank and thrift regulatory
agencies.
DATES: Comments must be received on
or before November 19, 1996.
ADDRESSES: Written comments should
be addressed to the Office of the
Executive Secretary, FDIC, 550 17th
Street, NW., Washington, DC 20429.
Comments also may be hand delivered
to Room 402, 1776 F Street, NW.,
Washington, DC between 8:30 a.m. and
5:00 p.m. on business days, or sent by
facsimile transmission (202–898–3838)
or by Internet (comments@fdic.gov).
Comments received will be available for
public inspection and photocopying at
the FDIC Public Information Center,
Room 100, 801 17th Street, NW.,
Washington, DC between 9 a.m. and
4:30 p.m. on business days.
FOR FURTHER INFORMATION CONTACT:
Michael R. Evans, Fair Lending Analyst,
Fair Lending Section, Division of
Compliance and Consumer Affairs,
(202) 942–3091; or Lori J. Sommerfeld,
Attorney, Regulation and Legislation
Section, Legal Division, (202) 898–8515;
Federal Deposit Insurance Corporation,
550 17th Street, NW., Washington, DC
20429.
SUPPLEMENTARY INFORMATION:
I. Background
The FDIC’s fair housing regulation, 12
CFR part 338, contains two parts:
nondiscriminatory advertising
requirements (subpart A) and
recordkeeping requirements (subpart B).
Subpart A prohibits insured state
nonmember banks from discriminating
in home loan advertising and sets forth
the text of the Equal Housing Lender
poster that must be displayed on bank
premises. The intent of subpart A is to
prevent discrimination in connection
with any residential real estate-related
transaction on the basis of race, color,
sex, religion, national origin, familial
status or handicap. The regulation
specifies that this requirement may be
satisfied by including in written and
visual advertisements a copy of the
logotype with the Equal Housing Lender
legend contained in the Equal Housing
Lender poster or, in oral advertisements,
by including a statement that the bank
is an ‘‘Equal Housing Lender.’’ The
advertising requirements enforce section
805 of Title VIII of the Civil Rights Act
of 1968 (the Fair Housing Act), as
amended by the Fair Housing
Amendments Act of 1988 (Pub. L. 100–
430, 102 Stat. 1636).
The purpose of subpart B
(recordkeeping requirements) is two-
fold. First, it requires certain insured
state nonmember banks to request and
retain information regarding the race,
national origin, sex, marital status and
age of applicants for a home purchase
loan. The purpose of collecting and
retaining this information is to monitor
an institution’s compliance with the
Equal Credit Opportunity Act of 1974
(ECOA) (15 U.S.C. 1691–91f). Subpart B
also serves as a substitute monitoring
program permitted by Regulation B of
the Federal Reserve System. See 12 CFR
202.13(d). However, the data collection
and retention requirements of subpart B
go beyond the requirements of
Regulation B. For example, insured state
nonmember banks that have no office
located in a primary metropolitan
statistical area (PMSA) or a metropolitan
statistical area (MSA), or that have total
assets of $10 million or less, are also
required to request and retain
information on the location (street
address, city, state, and zip code) of the
property to be purchased. Further,
insured state nonmember banks that
have an office located in a PMSA or an
MSA and that have total assets
exceeding $10 million are required to
request and retain essentially all of the
information listed on the model
Residential Loan Application Form
contained in appendix B of Regulation
B (see 12 CFR part 202, appendix B).
This includes such data as employment
history of the applicant, number of
dependents, assets and liabilities,
detailed characteristics of the subject
property, and the loan request.
Appendix B specifies that institutions
may delete any information requested
on the model form provided that
appropriate notices concerning optional
use of titles and disclosure of certain
income information and limitations
concerning marital status requests are
provided. Thus, the other information
on the model form is not required by
Regulation B.
Second, subpart B notifies insured
state nonmember banks of their duty to
maintain and report a register of home
loan applications, and to update the
register on a timely basis, in accordance
49421Federal Register / Vol. 61, No. 184 / Friday, September 20, 1996 / Proposed Rules
with the Federal Reserve Board’s
Regulation C (12 CFR part 203), which
implements the Home Mortgage
Disclosure Act (HMDA). Institutions are
subject to HMDA and Regulation C if
their assets exceed $10 million and they
have offices located in a PMSA or MSA.
Information collected under the
provisions of this subpart must include
the type of loan requested, the purpose
of the loan, whether the loan was
approved or denied (including an
option for collecting denial reasons for
disapproved loans), and information on
the purchaser, if the loan was sold. This
information is consistent with
Regulation C.
Subpart B, however, goes beyond the
data reporting requirements of
Regulation C. Regulation C requires the
collection and reporting of race, sex and
income of applicants for home loans
only for institutions with assets of $30
million or more that have offices located
in a PMSA or MSA. Additionally,
Regulation C specifies that the loan
register must be current within 30
calendar days after the end of each
calendar quarter in which final action is
taken. Subpart B extends the collection
and reporting of the race, sex, and
income of applicants for home loans to
institution with assets between $10
million and $30 million and requires
that an institution enter all required
data onto the register within 30 calendar
days after final disposition of the loan
application.
On September 23, 1994, Congress
passed the Riegle Community
Development and Regulatory
Improvement Act (Pub. L. 103–325, 108
Stat. 2160) (CDRIA). Section 303 of
CDRIA requires the federal bank and
thrift regulatory agencies to: (1) review
and streamline their regulations and
written policies in order to improve
efficiency, reduce unnecessary cost,
eliminate unwarranted constraints on
credit availability and remove
inconsistencies and outmoded and
duplicative requirements; (2) work
jointly with other federal banking
regulators to make uniform all
regulations and guidelines
implementing common statutory or
supervisory policies; and (3) submit a
joint progress report to Congress, due
two years from the date the legislation
was enacted.
In response to the mandate of section
303 of CDRIA, the FDIC began a
systematic review of its regulations and
written policies. On December 6, 1995,
the FDIC solicited public comment to
assist the agency in identifying ways in
which its regulations and written
policies could be streamlined and made
consistent with those of the other
federal bank and thrift regulatory
agencies. See 60 FR 62345. As a result
of the agency’s internal review and
public comments received, the FDIC has
determined that it is appropriate to
revise 12 CFR part 338 to clarify or
eliminate certain provisions in order to
reduce burden on insured state
nonmember banks and to make the
FDIC’s fair housing regulation
consistent with those of the other
federal bank and thrift regulators.
II. The Proposed Rule
A. General
The FDIC is proposing to revise its
fair housing regulation, 12 CFR part 338,
by clarifying certain nondiscriminatory
advertising requirements with regard to
placement and display of the Equal
Housing Lender poster. The FDIC also
proposes to offer insured state
nonmember banks the option of
displaying the Equal Housing
Opportunity poster required by the U. S.
Department of Housing and Urban
Development (HUD) and/or using the
slogan ‘‘Equal Opportunity Lender.’’
The agency further proposes to remove
its fair housing recordkeeping
requirements that serve as a substitute
monitoring program permitted by the
Federal Reserve Board’s Regulation B,
which implements ECOA. Finally, the
agency proposes to remove its
requirement that insured state
nonmember banks maintain a home
loan application register consistent with
that required to be maintained by the
Federal Reserve Board’s Regulation C,
which implements HMDA, and a
requirement that those institutions
report race, sex and income of
applicants. Instead, the FDIC will
simply cross-reference Regulations B
and C and require recordation and
reporting of loan denial reasons.
B. Subpart A—Nondiscriminatory
Advertising
The FDIC proposes to revise subpart
A to clarify certain nondiscriminatory
advertising requirements that currently
reference HUD’s regulations, to allow
the FDIC’s Equal Housing Lender poster
or HUD’s Equal Housing Opportunity
poster to be displayed by insured state
nonmember institutions, as well as to
allow the option of using either the
slogan ‘‘Equal Housing Lender’’ or
‘‘Equal Opportunity Lender’’ in oral
advertisements, and to clarify the
display of the Equal Housing Lender
poster.
As a result of HUD’s regulatory review
in accordance with President Clinton’s
March 4, 1995, executive memorandum
directing all federal agencies to simplify
their regulations, HUD recently removed
part 109 (Fair Housing Advertising)
from its regulations (24 CFR part 109)
and intends to relegate the information
contained in the former part 109 to
other non-codified guidance. See 61 FR
14378 (April 1, 1996). Accordingly, the
FDIC is proposing to revise § 338.1 to
eliminate a reference to part 109.
Section 338.1 is also proposed to be
revised to reflect the proposed changes
to §§ 338.3 and 338.4 discussed below.
The FDIC proposes to add a new section
to § 338.3 advising all insured state
nonmember banks to refer to HUD for
further guidance concerning fair
housing advertising beyond that set
forth in § 338.3. No changes are
proposed for § 338.2, Definitions.
The FDIC proposes to revise the
nondiscriminatory advertising
requirements set forth in § 338.3.
Currently, insured state nonmember
banks are required to include in all
written and visual advertisements a
copy of the Equal Housing Lender
logotype and legend contained in the
Equal Housing Lender poster prescribed
in § 338.4, or, with respect to oral
advertisements, a statement that the
bank is an ‘‘Equal Housing Lender.’’
Under the proposed revision to § 338.3,
insured state nonmember banks will
have the option of using a copy of the
Equal Housing Opportunity logotype
and legend contained in the Equal
Housing Opportunity poster as
prescribed in § 110.25(a) of HUD’s rules
and regulations (24 CFR 110.25(a)) in
written and visual advertisements. With
respect to oral advertisements, insured
state nonmember banks will also have
the option of using the slogan ‘‘Equal
Opportunity Lender’’ in lieu of the
slogan ‘‘Equal Housing Lender.’’ The
optional use of either poster or slogan is
designed to provide flexibility for
institutions that offer a broader array of
loan products than mortgage loans (e.g.,
auto, consumer, and credit card
extensions of credit). Comments from a
trade organization, which were received
in response to the FDIC’s December 6,
1995, solicitation of comments, also
suggest that the use of ‘‘Equal
Opportunity Lender’’ is more
understandable within the banking
industry.
The FDIC considered eliminating its
Equal Housing Lender poster. However,
eliminating the FDIC’s poster
requirement would result in all insured
state nonmember banks having to
replace existing FDIC posters and
display instead the Equal Housing
Opportunity poster prescribed by HUD.
Pursuant to § 110.10(c) of HUD’s
regulations (24 CFR 110.10(c)), lenders
that engage in residential real estate-
with the Federal Reserve Board’s
Regulation C (12 CFR part 203), which
implements the Home Mortgage
Disclosure Act (HMDA). Institutions are
subject to HMDA and Regulation C if
their assets exceed $10 million and they
have offices located in a PMSA or MSA.
Information collected under the
provisions of this subpart must include
the type of loan requested, the purpose
of the loan, whether the loan was
approved or denied (including an
option for collecting denial reasons for
disapproved loans), and information on
the purchaser, if the loan was sold. This
information is consistent with
Regulation C.
Subpart B, however, goes beyond the
data reporting requirements of
Regulation C. Regulation C requires the
collection and reporting of race, sex and
income of applicants for home loans
only for institutions with assets of $30
million or more that have offices located
in a PMSA or MSA. Additionally,
Regulation C specifies that the loan
register must be current within 30
calendar days after the end of each
calendar quarter in which final action is
taken. Subpart B extends the collection
and reporting of the race, sex, and
income of applicants for home loans to
institution with assets between $10
million and $30 million and requires
that an institution enter all required
data onto the register within 30 calendar
days after final disposition of the loan
application.
On September 23, 1994, Congress
passed the Riegle Community
Development and Regulatory
Improvement Act (Pub. L. 103–325, 108
Stat. 2160) (CDRIA). Section 303 of
CDRIA requires the federal bank and
thrift regulatory agencies to: (1) review
and streamline their regulations and
written policies in order to improve
efficiency, reduce unnecessary cost,
eliminate unwarranted constraints on
credit availability and remove
inconsistencies and outmoded and
duplicative requirements; (2) work
jointly with other federal banking
regulators to make uniform all
regulations and guidelines
implementing common statutory or
supervisory policies; and (3) submit a
joint progress report to Congress, due
two years from the date the legislation
was enacted.
In response to the mandate of section
303 of CDRIA, the FDIC began a
systematic review of its regulations and
written policies. On December 6, 1995,
the FDIC solicited public comment to
assist the agency in identifying ways in
which its regulations and written
policies could be streamlined and made
consistent with those of the other
federal bank and thrift regulatory
agencies. See 60 FR 62345. As a result
of the agency’s internal review and
public comments received, the FDIC has
determined that it is appropriate to
revise 12 CFR part 338 to clarify or
eliminate certain provisions in order to
reduce burden on insured state
nonmember banks and to make the
FDIC’s fair housing regulation
consistent with those of the other
federal bank and thrift regulators.
II. The Proposed Rule
A. General
The FDIC is proposing to revise its
fair housing regulation, 12 CFR part 338,
by clarifying certain nondiscriminatory
advertising requirements with regard to
placement and display of the Equal
Housing Lender poster. The FDIC also
proposes to offer insured state
nonmember banks the option of
displaying the Equal Housing
Opportunity poster required by the U. S.
Department of Housing and Urban
Development (HUD) and/or using the
slogan ‘‘Equal Opportunity Lender.’’
The agency further proposes to remove
its fair housing recordkeeping
requirements that serve as a substitute
monitoring program permitted by the
Federal Reserve Board’s Regulation B,
which implements ECOA. Finally, the
agency proposes to remove its
requirement that insured state
nonmember banks maintain a home
loan application register consistent with
that required to be maintained by the
Federal Reserve Board’s Regulation C,
which implements HMDA, and a
requirement that those institutions
report race, sex and income of
applicants. Instead, the FDIC will
simply cross-reference Regulations B
and C and require recordation and
reporting of loan denial reasons.
B. Subpart A—Nondiscriminatory
Advertising
The FDIC proposes to revise subpart
A to clarify certain nondiscriminatory
advertising requirements that currently
reference HUD’s regulations, to allow
the FDIC’s Equal Housing Lender poster
or HUD’s Equal Housing Opportunity
poster to be displayed by insured state
nonmember institutions, as well as to
allow the option of using either the
slogan ‘‘Equal Housing Lender’’ or
‘‘Equal Opportunity Lender’’ in oral
advertisements, and to clarify the
display of the Equal Housing Lender
poster.
As a result of HUD’s regulatory review
in accordance with President Clinton’s
March 4, 1995, executive memorandum
directing all federal agencies to simplify
their regulations, HUD recently removed
part 109 (Fair Housing Advertising)
from its regulations (24 CFR part 109)
and intends to relegate the information
contained in the former part 109 to
other non-codified guidance. See 61 FR
14378 (April 1, 1996). Accordingly, the
FDIC is proposing to revise § 338.1 to
eliminate a reference to part 109.
Section 338.1 is also proposed to be
revised to reflect the proposed changes
to §§ 338.3 and 338.4 discussed below.
The FDIC proposes to add a new section
to § 338.3 advising all insured state
nonmember banks to refer to HUD for
further guidance concerning fair
housing advertising beyond that set
forth in § 338.3. No changes are
proposed for § 338.2, Definitions.
The FDIC proposes to revise the
nondiscriminatory advertising
requirements set forth in § 338.3.
Currently, insured state nonmember
banks are required to include in all
written and visual advertisements a
copy of the Equal Housing Lender
logotype and legend contained in the
Equal Housing Lender poster prescribed
in § 338.4, or, with respect to oral
advertisements, a statement that the
bank is an ‘‘Equal Housing Lender.’’
Under the proposed revision to § 338.3,
insured state nonmember banks will
have the option of using a copy of the
Equal Housing Opportunity logotype
and legend contained in the Equal
Housing Opportunity poster as
prescribed in § 110.25(a) of HUD’s rules
and regulations (24 CFR 110.25(a)) in
written and visual advertisements. With
respect to oral advertisements, insured
state nonmember banks will also have
the option of using the slogan ‘‘Equal
Opportunity Lender’’ in lieu of the
slogan ‘‘Equal Housing Lender.’’ The
optional use of either poster or slogan is
designed to provide flexibility for
institutions that offer a broader array of
loan products than mortgage loans (e.g.,
auto, consumer, and credit card
extensions of credit). Comments from a
trade organization, which were received
in response to the FDIC’s December 6,
1995, solicitation of comments, also
suggest that the use of ‘‘Equal
Opportunity Lender’’ is more
understandable within the banking
industry.
The FDIC considered eliminating its
Equal Housing Lender poster. However,
eliminating the FDIC’s poster
requirement would result in all insured
state nonmember banks having to
replace existing FDIC posters and
display instead the Equal Housing
Opportunity poster prescribed by HUD.
Pursuant to § 110.10(c) of HUD’s
regulations (24 CFR 110.10(c)), lenders
that engage in residential real estate-