Announcements.FEDERAL OPEN MARKET COMMITTEE DIRECTIVE The Federal Open Market Committee decided on January 30, 2002, to keep its target for the federal funds rate Federal Funds Rate The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. unchanged at 1 3/4 percent. Signs that weakness in demand is abating and economic activity is beginning to firm have become more prevalent. With the forces restraining RESTRAINING. Narrowing down, making less extensive; as, a restraining statute, by which the common law is narrowed down or made less extensive in its operation. the economy starting to diminish, and with the long-term prospects for productivity growth remaining favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. and monetary policy accommodative, the outlook for economic recovery has become more promising. The degree of any strength in business capital and household spending, however, is still uncertain. Hence, the Committee continues to believe that, against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future. PUBLICATION OF REVISIONS TO REGULATION C (HMDA HMDA Hexamethylene Diamine (chemistry) HMDA Hitchhiker Motorized Door Assembly HMDA High Mobility DGM Assemblage HMDA Home Mortgage Disclosure Act of 1974 ) The Federal Reserve Board on February 7, 2002, published revisions to its Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The Board approved the revisions at its meeting on January 23, 2002. The amendments take effect for data collection beginning January 1, 2003. In a related action, also approved on January 23, were Board requests for public comment on the appropriate threshold for collecting price data on higher-cost loans; a proposal to require lenders to ask telephone applicants their race, ethnicity, and sex; and a proposal to require lenders to report lien lien, claim or charge held by one party, on property owned by a second party, as security for payment of some debt, obligation, or duty owed by that second party. status for applications and originated loans. Comment is requested by April 12, 2002. AMENDMENTS TO DISCLOSURE REQUIREMENTS OF REGULATION C (HMDA) The Federal Reserve Board approved on January 23, 2002, regulatory changes intended to improve the quality and consistency of data collected on home mortgage loans. The amendments to Regulation 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's reporting requirements, and revise certain regulatory definitions. The amendments take effect for data collection beginning January 1, 2003. The Board also requested public comment with respect to certain items by April 1, 2002. Regulation C requires depository The place where a deposit is placed and kept, e.g., a bank, savings and loan institution, credit union, or trust company. A place where something is deposited or stored as for safekeeping or convenience, e.g., a safety deposit box. and for-profit, nondepository institutions to collect, report, and disclose data about applications for, and originations and purchases of, home mortgage loans and home-improvement loans. Data reported include the type, purpose, and amount of the loan; the race, ethnicity, sex, and income of the loan applicant; and the location of the property. Data collected under Regulation C help the public and regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. enforce fair lending laws and are used to determine whether financial institutions are serving the housing needs of their communities. The changes to Regulation C will facilitate fair lending analysis and enhance understanding of the home mortgage market generally and the subprime market in particular. The Board took into account changes in the home mortgage market, including growth in areas such as subprime lending  This article or section may deal primarily with the U.S. and may not present a worldwide view. and loan preapproval programs. At the same time, the Board has attempted to minimize the increase in the data collection and reporting burden by limiting proposed changes to those most likely to have significant benefit. The final role has the following stipulations: * Requires lenders to report the spread between the annual percentage rate (APR APR See: Annual Percentage Rate ) and the yield on the comparable Treasury security for originated loans with APRs that exceed the yield on the security by a certain threshold. (The Board tentatively set the thresholds at 3 percentage points for first-lien loans and 5 percentage points for subordinate-lien loans and seeks comment on the appropriateness of these particular thresholds.) * Requires lenders to identify loans subject to the Home Ownership and Equity Protection Act. * Conforms the categories for reporting race and ethnicity to government-wide standards established by the Office of Management and Budget The Office of Management and Budget (OMB), formerly the Bureau of the Budget, is an agency of the federal government that evaluates, formulates, and coordinates management procedures and program objectives within and among departments and agencies of the Executive Branch. and, consistent with those standards, 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 initiated through preapproval programs. * Permits, but does not require, lenders to report requests for preapproval that the lender approves but that applicants do not 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 Refinancing An extension and/or increase in amount of existing debt. " and "home-improvement loan" to generate more consistent, accurate, and useful data. * Requires lenders to report whether the loan involves a manufactured home. The Board also seeks comment on requiring lenders to ask telephone applicants their race, ethnicity, and sex (lenders already ask these questions in in-person, mall, and Internet applications) and on requiring lenders to report lien status for applications and originated loans. The Board also adopted a number of clarifying and technical changes, in addition to reorganizing Regulation C to make it easier to use. INTERAGENCY in·ter·a·gen·cy adj. Involving or representing two or more agencies, especially government agencies. RELEASE OF CONSUMER GUIDE ON PRIVACY NOTICES In conjunction with National Consumer Protection Week, several federal agencies released on February 6, 2002, a guide to help consumers make informed choices about whether to allow their personal financial information to be shared. Privacy Choices for Your Personal Financial Information guides consumers through the choices they face as a result of the privacy provisions of the Gramm--Leach-Bliley Act of 1999. The theme for National Consumer Protection Week this year is "Consumer Confidential: The Privacy Story." Federal privacy laws give consumers the right to prevent, or "opt out" of, some sharing of their personal financial information. These laws balance consumers' right to privacy with financial companies' need to provide information for normal business purposes. The consumer information explains the privacy notices that consumers receive from their banks and other financial companies, what choices consumers face, and consumers' right to opt out of information sharing See data conferencing. . The materials encourage consumers to (1) read all privacy notices, (2) get answers to questions from the financial companies that provided the notices, (3) if applicable, decide whether to opt out, and (4) if they want to opt out, follow the instructions in the notice--and if necessary--shop around for a financial institution with the privacy policy they want. The agencies are the Board of Governors of the Federal Reserve System Board of Governors of the Federal Reserve System The managing body of the Federal Reserve System, which sets policies on bank practices and the money supply. , the Commodity Futures Trading Commission The Commodity Futures Trading Commission (CFTC), the federal regulatory agency for futures trading, was established by the Commodity Futures Trading Commission Act of 1974 (88 Stat. 1389; 7 U.S.C.A. 4a), approved October 23, 1974. , the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. , the Federal Trade Commission, the National Credit Union Administration The National Credit Union Administration (NCUA) is responsible for chartering, insuring, supervising, and examining federal credit unions (FCUs) and for administering the National Credit Union Share Insurance Fund. , the Office of the Comptroller of the Currency The Office of the Comptroller of the Currency (or OCC) was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States. , the Office of Thrift Supervision The Office of Thrift Supervision (OTS) was established as a bureau of the Treasury Department in August 1989 as part of a major Reorganization Plan of the thrift regulatory structure mandated by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) (12 U.S.C.A. , and the Securities and Exchange Commission. Single printed copies of the brochure are free and available upon request from the member agencies. The brochure can also be printed from www.consumer.gov or from the agencies' web sites. * Board of Governors of the Federal Reserve System's web site (www.federalreserve.gov/pubs/ privacy) and from Publications Services, Stop 127, Federal Reserve Board, 20th and C Streets, NW, Washington, DC 20551 (202-452-3245). * Commodity Futures Trading Commission's web site (www.cftc.gov/cftc/cftcfinancialprivacy.htm) and from the Office of Public Affairs Those public information, command information, and community relations activities directed toward both the external and internal publics with interest in the Department of Defense. Also called PA. See also command information; community relations; public information. , Three Lafayette Center, 1155 21st Street, NW, Washington, DC 20581 (202-418-5080). * Federal Deposit Insurance Corporation's web site (http://www.fdic.gov/consumers/privacy/ privacychoices/index.html) and from the Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-276-6003 or 202-416-6940). * Federal Trade Commission's web site (http:// www.ftc.gov) and from the Consumer Response Center, Room 130, 600 Pennsylvania Avenue Pennsylvania Avenue is a street in Washington, D.C. joining the White House and the United States Capitol. Called "America's Main Street," it is the location of official parades and processions, as well as protest marches and civilian protests. , NW, Washington, DC 20580 (877-FTC-HELP/ 877-382-4357, toll-free; TDD (Time Division Duplexing) A transmission method that uses only one channel for transmitting and receiving, separating them by different time slots. No guard band is used. Contrast with FDD. See also TDD/TTY. TDD - Telecommunications Device for the Deaf for the hearing impaired: 202-326-2502). * National Credit Union Administration's web site (http://www.ncua.gov) and from the Publications Center, 1775 Duke Street, Alexandria, VA 22314 (703-518-6340). * Office of the Comptroller of the Currency's web site (http://www.occ.treas.gov) and from Communications, Mail Stop 3-2, Office of the Comptroller of the Currency, 250 E Street, SW, Washington, DC 20219 (202-874-4700). * Office of Thrift Supervision's web site (http:// www.ots.treas.gov) and from Publications, Office of Thrift Supervision, 1700 G Street, NW, Washington, DC 20552 (202-906-6410, OTS Publications Hotline). * Securities and Exchange Commission's web site (http://www.sec.gov) and from the Office of Investor Education and Assistance, 450 5th Street, NW, Washington, DC 20549-0213 (fax: 202-942-9634). BOARD DISCOUNT RATE MEETING MINUTES The Federal Reserve Board released on February 8, 2002, the minutes of its discount rate meetings from November 19, 2001, to December 11, 2001. |
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