Fed approves amendments to Reg C

<p>WASHINGTON – The Federal Reserve Board approved regulatory changes the agency said are intended to improve the quality and consistency of data collected on home mortgage loans. The amendments to Reg C which implements the home Mortgage Disclosure Act (HMDA), require lenders to disclose pricing data on higher cost loans, expand the number of nondepository institutions subject to HMDA reporting requirements, and revise certain regulatory definitions. The amendments are effective Jan. 1, 2003. In writing the amendments, the Fed took into account changes in the home mortgage market, including growth in areas such as subprime lending and loan preapproval programs. The Board also attempted to minimize the increase in data collection and reporting burden by limiting proposed changes to those it determined the most likely to have the most effect. The final rule: requires lenders to report the spread between the annual percentage rate and the yield on the comparable Treasury security for originated loans with APRs greater than the yield on the security by a certain threshold – the Board tentatively set the threshold at 3 percentage points for first-lien loans and 5 percentage point for subordinate-lien loans. It is seeking comments on the appropriateness of these two thresholds. requires lenders to identify loans subject to the Home ownership and Equity Protection Act (HOEPA). conforms the categories for reporting race and ethnicity to government-wide standards established by the Office of Management and Budget and allows applicants to record more than one race. requires lenders to report denials of applications for credit received through certain preapproval programs and identify originated loans intiated through preapproval programs. It permits, but doesn’t require, lenders to report request for preapproval that the lender approves but that applicants don’t pursue. expands the coverage of nondepository lenders by adding a dollar-volume threshold of $25 million to the current loan-percentage test. modifies the definitions of “refinancing” and “home improvement loan” to generate more consistent, accurate, and useful data. requires lenders to report whether the loan involves a manufactured home. The Fed is also seeking comment on requiring lenders to ask telephone applicants their race, ethnicity, and sex, and on requiring lenders to report lien status for applications and originated loans. The deadline for submitting comments is April 1. -</p> <p>[email protected]</p>