On March 24, 2017, the CFPB issued proposed amendments to the Equal Credit Opportunity Act’s implementing regulation, Regulation B, to facilitate compliance with revisions to the Home Mortgage Disclosure Act’s implementing regulation, Regulation C. The proposed amendments are effective January 1, 2018.
Specifically, while current Regulation C requires covered financial institutions to collect, record, and report applicant demographic information, revised Regulation C will permit applicants to self-identify using disaggregated ethnic and racial categories beginning January 1, 2018. The collection of this type of information, however, is currently not allowed under Regulation B. The proposed amendments address this issue by providing creditors required to collect and retain demographic information under Regulation B with the option of permitting applicants to self-identify in the same manner allowed by revised Regulation C.
The proposed amendments also provide an updated Uniform Residential Loan Application (2016 URLA), which will eventually replace the 2004 URLA. The 2016 URLA, issued by Fannie Mae and Freddie Mac (the Enterprises), contains a number of changes. The changes consist of, among other things, a Demographic Information section (section 7) addressing Regulation C’s revised requirements for collecting applicant demographic information, including the requirement that financial institutions permit applicants to self-identify using disaggregated ethnic and racial categories. Because the Enterprises have not yet implemented the 2016 URLA nor confirmed an implementation date, however, the proposed amendments provide that the 2016 URLA will replace the 2004 URLA on the early of the cutover date the Enterprises eventually designate for use of the 2016 URLA, or January 1, 2022. In the meantime, the Enterprises have made available for use a Demographic Information Addendum, which is identical in form to section 7 of the 2016 URLA.
A copy of the proposed amendments can be viewed here: http://files.consumerfinance.gov/f/documents/201703_cfpb_NPRM-to-amend-Regulation-B.pdf.