ECOA Supporting Statement 01-18-13

CONSUMER FINANCIAL PROTECTION BUREAU
INFORMATION COLLECTION REQUEST – SUPPORTING STATEMENT
EQUAL CREDIT OPPORTUNITY ACT APPRAISAL RULE
(REGULATION B) 12 CFR 1002.14
(OMB CONTROL NUMBER: 3170-0013)
The Bureau of Consumer Financial Protection (Bureau) is providing a supporting
statement for changes to Regulation B. This statement addresses the information collection
requirements in Regulation B that are affected by the Bureau’s final rule as described below. The
title of this information collection is ECOA Appraisal Final Rule.
TERMS OF CLEARANCE: In accordance with 5 CFR 1320, OMB has been withholding
approval, providing that the agency shall examine public comment in response to the notice of
proposed rulemaking and include in this supporting statement submitted to OMB at the final rule
stage a description of how the agency has responded to any public comments on the information
collection requirements, including comments on maximizing the practical utility of the collection
and minimizing the burden.
A. JUSTIFICATION
1. Circumstances Necessitating the Data Collection
In response to the recent mortgage crisis, Congress amended the Equal Credit
Opportunity Act (ECOA) to require creditors to automatically provide mortgage applicants with
a copy of appraisal reports and valuations prepared in connection with an application for a loan to
be secured by a first lien on a dwelling. This change was enacted as part of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (Dodd-Frank Act), Pub. L. 111-203, 124 Stat. 1376,
§1474 (2010).
The Bureau is the agency responsible for rulemaking under ECOA (except with respect to
persons excluded from the Bureau’s rulemaking authority by section 1029 of the Dodd-Frank
Act). Regulation B is the implementing regulation for ECOA. 12 CFR Part 1002. The Bureau
is amending Regulation B and its Official Interpretations to implement the new statutory
requirement regarding appraisals and other written valuations.
The rule requires creditors to provide copies of appraisals and other written valuations to
applicants in certain transactions. Under the rule, copies of all appraisals and other written
valuations conducted in connection with an application for a loan to be secured by a first lien on
a dwelling must be furnished to applicants free of charge. Copies of these materials must be
furnished promptly upon completion, or three business days prior to consummation of the
transaction (for closed-end credit) or account opening (for open-end credit), whichever is first to
the consumer consent and other applicable provisions of the E-Sign Act, 15 U.S.C. §§ 7001 et

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seq. Currently, ECOA requires that copies of appraisals be provided only upon request. The rule
ensures that consumers receive information prior to closing about how the property’s value was
determined, including in situations where a valuation other than an appraisal is performed.
The rule also requires that creditors in covered loans (those that are to be secured by a
first lien on a dwelling) provide a disclosure within three days of application that informs the
applicant regarding the purpose of the appraisal, that the creditor will provide the consumer a
copy of any appraisal, and that the consumer may choose to have a separate appraisal conducted
at the expense of the consumer (Initial Appraisal Disclosure). As discussed below, this
disclosure is not an information collection requirement.
2. Use of the Information
This information collection is required by statute. As discussed above, creditors will
furnish copies of appraisals and other written valuations to applicants for credit to be secured by
a first lien on a dwelling. Disclosures are not submitted to the federal government.
The information collection requirements in the rule are the provision of copies of
appraisals and other written valuations to applicants in certain transactions. Under the rule,
copies of all appraisals and other written valuations conducted in connection with an application
for a loan to be secured by a first lien must be furnished to applicants free of charge. These
copies may be delivered by creditors to consumers physically or electronically.
3. Use of Information Technology
To reduce burden, the Initial Appraisal Disclosure described above may be submitted to
consumers electronically subject to compliance with the consumer consent and other applicable
provisions of the E-Sign Act, 15 U.S.C. §§ 7001 et seq. Disclosures made as an accompaniment
to the application form accessed by the applicant electronically also are eligible for an exception
to the E-Sign Act consent requirement under Regulation B, § 1002.4(d)(2). Additionally, most
disclosures are computer generated. The Bureau expects that creditors will be able transmit
copies of appraisals and other written valuations to the loan applicant either electronically or in
hard copy.
4. Efforts to Identify Duplication

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This information collection does duplicate, in part, two other Federal efforts.
Specifically, the information collection requirement duplicates in part the Truth in Lending Act
requirement to provide free copies of written appraisals for higher-risk mortgages. 15 U.S.C.
1639h. In addition, the requirement also duplicates in part the National Credit Union
Administration’s regulation requiring national credit unions to provide copies of appraisal reports
to loan applicants upon request. 12 CFR 701.31(c)(5). However, where duplicative requirements
apply, a creditor need only provide an applicant one copy of each appraisal and other written
valuation to comply with all three requirements.
5. Efforts to Minimize Burdens on Small Entities
Of the estimated 14,000 depository institutions and independent mortgage banks that
originate mortgage loans, 9,000 are estimated to fall below the small entity thresholds of $175
million in assets for depository institutions and $7 million in assets for independent mortgage
banks.
As noted in the Bureau’s rule, currently, ECOA requires that copies of appraisals be
provided upon request. The Bureau believes, based on its outreach, that currently it is routine
business practice for appraisals to be sent to consumers for all first lien residential mortgage
transactions that result in an origination and that copies of other written valuations in these
transactions, as well as written appraisals and other written valuations conducted for applications
that do not result in a loan, could be forwarded on to consumers by electronic means in many
cases. This should minimize burden by reducing the time and resources necessary to compile
and distribute the copies of written appraisals and valuations. Additionally, the Bureau has taken
steps in the final rule to minimize the situations in which creditors would need to provide copies
of multiple versions of the same appraisal or other written valuation. The ongoing burden is at a
per application level.
6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
This information is not submitted to the federal government. These disclosures are
required by statute, 15 U.S.C. 1691(e). The burdens on respondents are the minimum necessary
to comply with the statute, and to assist borrowers in obtaining information about how the
property’s value was determined by the creditor.
7. Circumstances Requiring Special Information Collection
Information is not reported to the Bureau. There are no special circumstances. The
collection of information requirements in the changes to Regulation B are consistent with the
applicable guidelines contained in 5 CFR 1320.5(d)(2).
8. Consultation Outside the Agency

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The Bureau published a notice of proposed rulemaking in the Federal Register for public
comment. In preparing the proposal, the Bureau relied upon certain outreach conducted under an
interagency process for the higher-risk mortgage appraisals rulemaking process, as well as
consumer testing for a proposed Loan Estimate form as part of the TILA-RESPA rulemaking
process. The comment period for the Paperwork Reduction Act analysis expired on October 22,
2012. While the Bureau received 68 comments on the proposal, none addressed the Paperwork
Reduction Act analysis. Prior to issuing the proposed rule, the Bureau consulted with other
Federal agencies consistent with section 1022 of the Dodd-Frank Act. Prior to issuing the final
rule, the Bureau consulted again with these agencies consistent with section 1022 of the DoddFrank Act.
9. Payments or Gifts to Respondents
No payments or gifts are provided to respondents.
10. Assurances of Confidentiality
There are no assurances of confidentiality provided to respondents.
11. Justification for Sensitive Questions
This information collection does not include questions of a sensitive nature. While some
industry commenters suggested that certain information that was a part of or related to written
valuations contained proprietary information, there is no basis in the statute for an exclusion
from the copy requirement. The Bureau notes that creditors will have a year to adapt their
systems so that any information they may view as proprietary information that may be contained
on any written valuations currently does not appear on written valuations that will be provided to
consumers on or after January 18, 2014. In addition, the final rule did not adopt the proposal to
include written comments and related documents in the copy requirement, and also allows
creditors to provide valuations from government-sponsored enterprises (GSEs) on GSE-approved
forms for disclosure to consumers, rather that the copy of the detailed information the GSE
provides to the creditor which some creditors believed to be proprietary. These steps narrow the
scope of what must be disclosed from the proposal, and further reduce any risk that creditors
would be required to provide copies of documents that include information that they view as
proprietary.
12. Estimated Burden of Information Collection
Creditors will be required to provide copies of appraisals and other written valuations to
applicants promptly upon their completion or three days before consummation or account
opening, whichever is earlier. In the Initial Appraisal Disclosure, the creditor will be required to

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provide a short, written disclosure; this disclosure must be provided within three business days of
application. This disclosure is provided by the Bureau and must be given to the applicant. The
public disclosure of information originally supplied by the Federal government to the recipient
for the purpose of disclosure to the public is not included within the definition of “collection of
information” in 5 CFR 1320.3(c)(2) and therefore has no burden under the PRA. Accordingly,
the Bureau does not consider this disclosure an information collection and calculates no burden
for that disclosure.
The total estimated burden for the roughly 14,000 creditors that originate mortgages and
therefore are subject to the rule will be approximately 519,000 hours of ongoing burden annually
and 14,200 hours in one-time burden. Since creditors already provide consumers copies of
appraisals if a loan closes, the Bureau assumes that there are no required software or information
technology upgrades associated with implementing the rule with respect to appraisals, because all
of the actions required by the rule are already practiced by the affected institutions; one-time
software upgrades may be needed to include other written valuations in the materials provided to
applicants. The Bureau expects that the amount of time required to implement each of the
changes for a given institution may vary based on the size, complexity, and practices of the
respondent, and include reviewing the final rule and training staff on its requirements, as
described in the Paperwork Reduction Act section of the final rule.
These burden estimates include additional burden arising from the requirement to
disclose copies of valuations other than appraisals. That requirement is included in the statute
and the final rule. The final rule reduces this burden, however, by taking into account concerns
voiced by several industry commenters who stated that the Bureau’s list of examples of
documents that must be copied was too broad, including “written comments and other
documents” relating to valuation reports. In the commentary to the final rule, the references to
“written comments and other documents” have been removed.
The total annualized on-going burden for the depository institutions and credit unions
with more than $10 billion in assets (including their depository affiliates) that originate mortgage
loans is estimated to be roughly 225,400 hours and the annualized ongoing burden for all nondepository institutions that originate mortgage loans is estimated to be 171,300 hours. These
respondents are estimated to incur an additional 5,200 hours and 4,000 hours in one-time burden,
respectively. For purposes of the PRA analysis under this rule, the Bureau assumes roughly
85,700 on-going burden hours and 2,000 one-time hours for the non-depository institutions.1 For
purposes of PRA the Bureau assumes half of the burden for non-depository institutions, with the
other half allocated to the FTC which shares enforcement authority under Regulation B with the
Bureau.
13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
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There may be a small additional burden for privately insured credit unions estimated to originate mortgages. The
Bureau will assume half of the burden these institutions.

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The Bureau has not determined that there are any capital or start-up costs other than those
captured in item 12 of the supporting statement.
14. Estimated Cost to the Federal Government
As the Bureau does not collect any information, there are no costs to the Bureau
associated with this information collection.
15. Program Changes or Adjustments
The Bureau’s rule implements in Regulation B the information collection requirements
described above. The Bureau’s rule makes no changes to the other information collections in
Regulation B since the last OMB approval.
16. Plans for Tabulation, Statistical Analysis, and Publication
The results of the information collection will not be published.
17. Display of Expiration Date
We believe that displaying the OMB expiration date is inappropriate because it
could cause confusion by leading consumers to believe that the regulation sunsets as of
the expiration date. Consumers are not likely to be aware that the Bureau intends to
request renewal of OMB approval and obtain a new expiration date before the old one
expires.
18. Exceptions to the Certification Requirement
None.

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