Application Process

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Rules and Regulations

Federal Register
Vol. 81, No. 42
Thursday, March 3, 2016

This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.

BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
RIN 3170–AA58

Application Process for Designation of
Rural Area under Federal Consumer
Financial Law; Procedural Rule
Bureau of Consumer Financial
Protection.
ACTION: Final rule.
AGENCY:

The Bureau of Consumer
Financial Protection (Bureau) is
adopting a procedural rule establishing
an application process under which a
person may identify an area that has not
been designated by the Bureau as a rural
area for purposes of a Federal consumer
financial law and apply for such area to
be so designated. Currently the Bureau
designates rural areas for purposes of
certain Federal consumer financial laws
relating to mortgage lending.
DATES: This final rule is effective March
3, 2016. The Bureau will begin
accepting applications submitted
according to the procedure established
herein on March 31, 2016.
FOR FURTHER INFORMATION CONTACT: Carl
Owens, Terry J. Randall, and James
Wylie, Counsels, Office of Regulations,
Consumer Financial Protection Bureau,
1700 G Street NW., Washington, DC
20552, at 202–435–7700.
SUPPLEMENTARY INFORMATION:
SUMMARY:

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I. Background
A. Rural Area Designations in Federal
Consumer Financial Law
Federal consumer financial law
provides special provisions and
exemptions for certain creditors doing
business in rural areas. For example, an
exemption from the requirement to
establish an escrow account for a
higher-priced mortgage loan (escrow
exception) partially depends on whether

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the creditor has extended credit secured
by properties in rural areas1 and a
special provision permits certain small
creditors to originate balloon-payment
qualified mortgages if the creditor has
extended a sufficient amount of credit
secured by properties in rural areas.2
The exemption and special provision
listed above were adopted as part of the
Bureau’s mortgage rules implementing
title XIV of the Dodd-Frank Wall Street
Reform and Consumer Protection Act
(Dodd-Frank Act),3 pursuant to its
authority under the Truth in Lending
Act (TILA), as amended by the DoddFrank Act. The Bureau adopted
revisions to these provisions that were
published in the Federal Register on
October 2, 2015.4 These revisions
included raising the loan origination
limit for determining eligibility for
small creditor status, including the
assets of a creditor’s affiliates that
regularly extended covered transactions
in the calculation of the asset limit for
small-creditor status, expanding the
definition of rural and underserved
areas by adding census blocks that are
not in urban areas as defined by the U.S.
Census Bureau to the existing countybased definition, and extending the
transition period that allowed certain
small creditors to make balloonpayment qualified mortgages regardless
of whether they operated predominantly
in rural or underserved areas to April 1,
2016. Title LXXXIX of the Fixing
America’s Surface Transportation Act,
entitled the HELP Rural Communities
Act,5 contained amendments to TILA
and new provisions relating to the
designation by the Bureau of rural areas
under ‘‘a Federal consumer financial
law (as defined under section 1002 of
the [Dodd-Frank Act]).’’
B. HELP Rural Communities Act
Application Process
Section 89002 of the HELP Rural
Communities Act requires the Bureau to
establish an application process under
1 12 CFR 1026.35(b), 1026.35(b)(2)(iii)(A), and
1026.35(b)(2)(iv)(A).
2 12 CFR 1026.43(f)(1).
3 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010).
4 Amendments Relating to Small Creditors and
Rural or Underserved Areas Under the Truth in
Lending Act (Regulation Z), 80 FR 59943, 59944
(Oct. 2, 2015).
5 HELP Rural Communities Act, Public Law 114–
94 (2015).

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which a person may apply to have an
area designated by the Bureau as a rural
area for purposes of a Federal consumer
financial law. Section 89002 of the
HELP Rural Communities Act also
provides details on many of the features
of the process, including evaluation
criteria for the Bureau’s determinations
on these applications, a period for
public comment on the applications,
and a sunset date for the application
process of two years after the date of
enactment of the HELP Rural
Communities Act. The Bureau is issuing
this procedural rule to establish the
process required by section 89002 of the
HELP Rural Communities Act.
Section 89003 of the HELP Rural
Communities Act separately made
amendments to TILA’s test with respect
to the Bureau’s discretionary authority
to establish the escrow exemption and
a special provision that permits certain
small creditors to originate balloonpayment qualified mortgages. This
procedural rule relates solely to the
application process under section 89002
and not to those amendments. The
Bureau understands that the HELP Rural
Communities Act amendments to TILA
may create some uncertainty for
creditors regarding how the Bureau will
exercise its newly expanded
discretionary authority with respect to
the exemption and special provision in
question, particularly in light of the
April 1, 2016, expiration of the
temporary period that allows certain
small creditors to originate balloonpayment qualified mortgages and
balloon-payment high cost mortgages,
regardless of their operations in rural or
underserved areas.6 The Bureau expects
to issue another notice in the Federal
Register shortly concerning the
amendments under section 89003. The
Bureau also anticipates providing an
interpretation of the term ‘‘rural area’’ in
section 89002(a) of the HELP Rural
Communities Act in that notice that
would define the type of area for which
applicants may submit applications
pursuant to this rule. The Bureau plans
to issue that notice before it begins
accepting applications pursuant to this
rule on March 31, 2016.
6 Amendments Relating to Small Creditors and
Rural or Underserved Areas Under the Truth in
Lending Act (Regulation Z), 80 FR 59943, 59968
(amending 12 CFR 1026.43(e)(i)(B)(ii)) (Oct. 2,
2015).

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II. Procedural Requirements
A. Administrative Procedure Act
No notice of proposed rulemaking is
required under the Administrative
Procedure Act (APA) because this rule
relates solely to agency procedure and
practice.7 Because the rule relates solely
to agency procedure and practice, it is
not substantive, and therefore is not
subject to the 30-day delayed effective
date for substantive rules under section
553(d) of the APA.8 The Bureau also
believes that this final rule meets the
requirements for the section 553(d)(3)
exception for good cause. Congress, in
section 89002(a) of the HELP Rural
Communities Act, required the Bureau
to establish an application process not
later than 90 days after the enactment of
the HELP Rural Communities Act.
Because the application process has a
required sunset period of two years from
the enactment of the HELP Rural
Communities Act under section
89002(g), there is good cause to
establish the procedure immediately to
provide the most time possible for
applicants to use the application
process. Therefore, the Bureau finds that
there is good cause to make the final
rule effective on March 3, 2016. Though
this final rule establishes the
application process immediately, the
Bureau will not begin accepting
applications until March 31, 2016. In
addition the Bureau currently expects to
issue a notice concerning the
amendments under section 89003 of the
HELP Rural Communities Act before
March 31, 2016, in light of the April 1,
2016, expiration of the temporary
provisions referenced in part I above,
and the Bureau expects that some
potential applicants may wish to
consider the content of that notice in
determining whether to apply. The
delay also will afford some time for the
Bureau to prepare internal procedures to
receive applications.

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B. Regulatory Flexibility Act
Because no notice of proposed
rulemaking is required, the Regulatory
Flexibility Act does not require an
initial or final regulatory flexibility
analysis.9
III. Legal Authority
The Bureau is issuing this rule
pursuant to its authority under section
1022(b)(1) of the Dodd-Frank Act, which
authorizes the Bureau to prescribe rules
as may be necessary or appropriate to
enable the Bureau to administer and
U.S.C. 553(b).
U.S.C. 553(d).
9 5 U.S.C. 603–604.

carry out the purposes and objectives of
Federal consumer financial law.10 The
Bureau is also issuing this rule pursuant
to the requirements of section 89002(a)
of the HELP Rural Communities Act.11
IV. Effective Date
The final rule is effective March 3,
2016. The Bureau will begin accepting
applications submitted according to the
procedure established herein on March
31, 2016. The HELP Rural Communities
Act provides that section 89002, which
requires the Bureau to establish this
process, shall cease to have any force or
effect on December 4, 2017.
V. Paperwork Reduction Act
According to the Paperwork
Reduction Act of 1995 (PRA) (44 U.S.C.
3501 et seq.) the Bureau may not
conduct or sponsor a collection of
information as defined by the PRA and,
notwithstanding any other provisions of
law, persons are not required to respond
to a collection of information unless it
displays a current valid Office of
Management and Budget (OMB) control
number. The collections of information
contained in this procedural rule, and
identified as such, have been approved
by OMB and assigned the control
number 3170–0061. The information
collection contained in this procedural
rule is required to obtain a benefit. The
information collection under this
procedural rule is an application to
request that the Bureau apply a rural
designation to a specific geographic
area.
VI. Application Process and
Instructions
A. Submission
The application shall be addressed to
the CFPB Rural Application
Coordinator, Bureau of Consumer
Financial Protection.
It may be submitted using one of the
following methods:
• Email: CFPB_Rural_Application@
cfpb.gov.
• Mail: ATTN: CFPB Rural
Application Coordinator, Research,
Markets, and Regulations Division,
Consumer Financial Protection Bureau,
1700 G Street NW., Washington, DC
20552.
• Hand Delivery/Courier: ATTN:
CFPB Rural Application Coordinator,
Research, Markets, and Regulations
Division, Consumer Financial
Protection Bureau, 1275 First Street NE.,
Washington, DC 20002.
If the application is submitted by
email, it and all attachments described

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10 12

U.S.C. 5512(b)(1).
11 Public Law 114–94, Title LXXXIX (2015).

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B. Content
The application shall contain the
following sections:
1. Area Identified
The application shall specifically
identify the area requested to be
designated as a rural area and the State
in which the area is located. An
application may identify more than one
area if the areas are contiguous (e.g.,
counties that share a border). Additional
areas that are not contiguous (e.g.,
counties that do not share a border)
must be identified in separate
applications.
The application shall provide
information describing the area
identified, for example:
a. The county that comprises the area
or in which the area is located; or
b. The Census block that comprises
the area, unless the area is comprised
entirely of whole counties.
2. Justification for Designation as Rural
Area
The applicant shall provide the
following information about the
evaluation criteria in section 89002(b) of
the HELP Rural Communities Act:
a. Census Bureau

75
85

below in part VI.C shall be compiled
into a single portable document format
(PDF) file. If the application is
submitted by mail, hand delivery, or
courier, the applicant shall provide
three copies of the complete
application. The application shall not
exceed 10 pages.

The application shall state whether
the area identified is classified as rural
or urban by the Director of the Bureau
of the Census and, if rural, explain the
basis for concluding that the area
identified was so classified, including
by attaching any supporting
documentation as described below in
part VI.C.
b. Office of Management and Budget
The application shall state whether
the area identified is classified as either
a metropolitan area, a micropolitan area,
or neither by the Director of the Office
of Management and Budget and, if
neither, explain the basis for concluding
that the area identified was so classified,
including by attaching any supporting
documentation as described below in
part VI.C.
c. Department of Agriculture—Rural
Development
The application shall state whether
the Secretary of Agriculture has
determined that properties in the area

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Federal Register / Vol. 81, No. 42 / Thursday, March 3, 2016 / Rules and Regulations
identified are eligible for programs of
the United States Department of
Agriculture Office of Rural Development
and, if so, explain the basis for
concluding that the Secretary has
determined as such, including by
attaching any supporting documentation
as described below in part VI.C.
d. Department of Agriculture—RuralUrban Commuting Codes
The application shall state the most
recent primary and secondary ruralurban commuting codes from the
Department of Agriculture for the area
identified or of which the area
identified is a part, including by
attaching any supporting documentation
as described below in part VI.C.
e. State Bank Supervisor
The application shall state whether
the State bank supervisor, as defined by
12 U.S.C. 1813(r), of the State where the
area identified is located has issued a
written opinion concerning whether the
area identified should be designated as
a rural area. Any such written opinion
shall be attached as described below in
part VI.C.
f. Population Density
The application shall provide the
population density of the area identified
expressed as the number of persons per
square mile using data from the Bureau
of the Census and explain the data
relied on, including by attaching
supporting documentation as described
below in part VI.C. The application
shall also provide the population
density of any nearby area with a greater
population density that has been
designated by the Bureau as a rural area.
3. Applicant Information
The application shall include the
following information about the
applicant:
a. Name
The application shall include the
name of the applicant.
b. Contact Information
The application shall include
information about how to contact the
applicant if the Bureau needs additional
information about the request.

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c. Living or Doing Business in the State
If the applicant is a natural person,
the application shall include only a
statement affirming that the applicant
lives or does business in the State in
which the area identified is located. If
the applicant is not a natural person, the
application shall include a statement
affirming that the applicant does

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business in the State in which the area
identified is located and evidence
supporting the statement as an
attachment as described in part VI.C.
Such evidence could include, for
example, evidence of incorporation in
the State, evidence of licensure to do
business in the State, evidence of
licensure to conduct a specific type of
business in the State, or evidence of an
office in the State. The applicant may
redact such evidence to withhold
sensitive personal information that is
not relevant to establishing that the
applicant does business in the State
where the area identified is located. The
applicant may also state on a cover page
to the attachment that it wishes the
entire attachment to be withheld from
the Federal Register publication of the
attachment.
C. Attachments
The application shall include any
other documents necessary to provide
the required information above as
attachments.
D. Further Instructions
Applicants should not include
personal information other than
information identified above in part
VI.B.3. The Bureau is required by the
HELP Rural Communities Act to publish
the application in the Federal Register.
The Bureau may redact the application
prior to publication in the Federal
Register to withhold any unnecessary
personal information included in the
application.
VII. Process for Considering
Applications
A. Receipt of Application and Initial
Review
Upon receipt of a request pursuant to
this process, the Bureau shall review the
request for preliminary matters,
including:
1. Completeness of the information set
forth above in part VI;
2. Ensuring that the area identified is
not already designated as a rural area
under the Federal consumer financial
laws;
3. Determining if there is an
application already pending for the
same area identified as described in
section 89002(d)(2) of the HELP Rural
Communities Act; and
4. Determining if an application for
the area identified has been denied less
than 90 days before the receipt of the
application as described in section
89002(f) of the HELP Rural
Communities Act.
If the Bureau determines that the
applicant has not submitted a complete

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11101

application (e.g., because the Bureau
cannot ascertain the relevant area from
the application), it shall contact the
applicant and specify the additional
information that is needed to complete
an application.
If the Bureau determines that the
applicant seeks the designation of a
rural area for an area that is already
designated as a rural area under the
Federal consumer financial laws, for an
area for which an application is already
pending, for an area for which an
application has been denied less than 90
days before the receipt of the
application, or if the Bureau determines
that the applicant neither lives nor does
business in the State in which the area
is located, the Bureau shall notify the
applicant that the Bureau will not
consider whether to designate the area
as rural and the reason for not
considering the application.
B. Publication of Application in the
Federal Register
Not later than 60 days after receipt of
a complete application, the Bureau shall
publish the application in the Federal
Register. The Bureau may redact the
application prior to publication in the
Federal Register to withhold any
unnecessary personal information
included in the application, as
discussed above in part VI.D.
C. Public Comment on Application
The Bureau shall accept public
comments on the application for not
fewer than 90 days after publication in
the Federal Register.
D. Decision on Designation
The Bureau shall review the
information contained in the
application and the public comments
and, not later than 90 days after the end
of the public comment period described
above in part VII.C, the Bureau shall
grant or deny the application in whole
or in part and shall publish such grant
or denial in the Federal Register along
with an explanation of what factors the
Bureau relied on in making such
determination. The Bureau shall base its
decision on the criteria set forth in
section 89002(b) of the HELP Rural
Communities Act and the rule of
construction in section 89002(c) of the
HELP Rural Communities Act. A
decision to grant an application in
whole or in part shall specify the area
designated as a rural area, and the time
period during which the designation is
effective by reference to the duration of
the designations of rural areas under the
Federal consumer financial laws.

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E. Sunset Date
The HELP Rural Communities Act
contemplates a process of up to 240
days for each application, including a
minimum of 90 days for public
comments. The Bureau will consider
any application received before April 8,
2017. The Bureau may, in its discretion,
consider an application received on or
after April 8, 2017, if it determines that
it is possible to complete the
designation decision process for that
application by the sunset date, based on
the time remaining, the complexity of
the application, and any other relevant
factors. The Bureau will notify the
applicant if it determines that it cannot
complete the application process, in
which case the Bureau shall not
consider the application nor publish the
application in the Federal Register as
described above in part VII.B.
Dated: February 26, 2016.
Richard Cordray,
Director, Bureau of Consumer Financial
Protection.

DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 71
[Docket No. FAA–2015–3108; Airspace
Docket No. 12–AAL–15]

Establishment of Class E Airspace,
South Naknek, AK
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:

This action establishes Class
E airspace extending upward from 700
feet above the surface at South Naknek
NR 2 Airport, South Naknek, AK, to
accommodate new Area Navigation
(RNAV) Global Positioning System
(GPS) standard instrument approach
procedures developed for the airport.
DATES: Effective 0901 UTC, May 26,
2016. The Director of the Federal
Register approves this incorporation by
reference action under Title 1, Code of
Federal Regulations, part 51, subject to
the annual revision of FAA Order
7400.9 and publication of conforming
amendments.

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SUMMARY:

FAA Order 7400.9Z,
Airspace Designations and Reporting
Points, and subsequent amendments can
be viewed online at http://www.faa.gov/
air_traffic/publications/. For further
information, you can contact the

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Richard Roberts, Federal Aviation
Administration, Operations Support
Group, Western Service Center, 1601
Lind Avenue SW., Renton, WA 98057;
telephone (425) 203–4517.
SUPPLEMENTARY INFORMATION:

BILLING CODE 4810–AM–P

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FOR FURTHER INFORMATION CONTACT:

Authority for This Rulemaking

[FR Doc. 2016–04643 Filed 3–2–16; 8:45 am]

ADDRESSES:

Airspace Policy Group, Federal Aviation
Administration, 800 Independence
Avenue SW., Washington, DC 29591;
telephone: 202–267–8783. The Order is
also available for inspection at the
National Archives and Records
Administration (NARA). For
information on the availability of FAA
Order 7400.9Z at NARA, call 202–741–
6030, or go to http://www.archives.gov/
federal_register/code_of_federalregulations/ibr_locations.html.
FAA Order 7400.9, Airspace
Designations and Reporting Points, is
published yearly and effective on
September 15.

The FAA’s authority to issue rules
regarding aviation safety is found in
Title 49 of the United States Code.
Subtitle I, Section 106 describes the
authority of the FAA Administrator.
Subtitle VII, Aviation Programs,
describes in more detail the scope of the
agency’s authority. This rulemaking is
promulgated under the authority
described in Subtitle VII, Part A,
Subpart I, Section 40103. Under that
section, the FAA is charged with
prescribing regulations to assign the use
of airspace necessary to ensure the
safety of aircraft and the efficient use of
airspace. This regulation is within the
scope of that authority as it establishes
controlled airspace at South Naknek NR
2 Airport, South Naknek, AK.
History
On November 24, 2015, the FAA
published in the Federal Register a
notice of proposed rulemaking (NPRM)
to establish Class E airspace extending
upward from 700 feet above the surface
at South Naknek NR 2 Airport, South
Naknek, AK. (80 FR 73150) FAA–2015–
3108. Interested parties were invited to
participate in this rulemaking effort by
submitting written comments on the
proposal to the FAA. No comments
were received.
Class E airspace designations are
published in paragraph 6005 of FAA
Order 7400.9Z, dated August 6, 2015,
and effective September 15, 2015, which
is incorporated by reference in 14 CFR
part 71.1. The Class E airspace
designation listed in this document will
be published subsequently in the Order.

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Availability and Summary of
Documents for Incorporation by
Reference
This document amends FAA Order
7400.9Z, Airspace Designations and
Reporting Points, dated August 6, 2015,
and effective September 15, 2015. FAA
Order 7400.9Z is publicly available as
listed in the ADDRESSES section of this
document. FAA Order 7400.9Z lists
Class A, B, C, D, and E airspace areas,
air traffic service routes, and reporting
points.
The Rule
This amendment to Title 14, Code of
Federal Regulations (14 CFR) part 71
establishes Class E airspace extending
upward from 700 feet above the surface
within a 6.5-mile radius of the South
Naknek NR 2 Airport, South Naknek,
AK. This airspace is established to
accommodate new Area Navigation
(RNAV) Global Positioning System
(GPS) standard instrument approach
procedures developed for the airport.
Regulatory Notices and Analyses
The FAA has determined that this
regulation only involves an established
body of technical regulations for which
frequent and routine amendments are
necessary to keep them operationally
current, is non-controversial and
unlikely to result in adverse or negative
comments. It, therefore: (1) Is not a
‘‘significant regulatory action’’ under
Executive Order 12866; (2) is not a
‘‘significant rule’’ under DOT
Regulatory Policies and Procedures (44
FR 11034; February 26, 1979); and (3)
does not warrant preparation of a
Regulatory Evaluation as the anticipated
impact is so minimal. Since this is a
routine matter that only affects air traffic
procedures and air navigation, it is
certified that this rule, when
promulgated, does not have a significant
economic impact on a substantial
number of small entities under the
criteria of the Regulatory Flexibility Act.
Environmental Review
The FAA has determined that this
action qualifies for categorical exclusion
under the National Environmental
Policy Act in accordance with FAA
Order 1050.1F, ‘‘Environmental
Impacts: Policies and Procedures,’’
paragraph 5–6.5a. This airspace action
is not expected to cause any potentially
significant environmental impacts, and
no extraordinary circumstances exist
that warrant preparation of an
environmental assessment.
Lists of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference,
Navigation (air).

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