This site displays a prototype of a “Web 2.0” version of the daily Federal Register. It is not an official legal edition of the Federal Register, and does not replace the official print version or the official electronic version on GPO’s govinfo.gov.
The documents posted on this site are XML renditions of published Federal Register documents. Each document posted on the site includes a link to the corresponding official PDF file on govinfo.gov. This prototype edition of the daily Federal Register on FederalRegister.gov will remain an unofficial informational resource until the Administrative Committee of the Federal Register (ACFR) issues a regulation granting it official legal status. For complete information about, and access to, our official publications and services, go to About the Federal Register on NARA's archives.gov.
The OFR/GPO partnership is committed to presenting accurate and reliable regulatory information on FederalRegister.gov with the objective of establishing the XML-based Federal Register as an ACFR-sanctioned publication in the future. While every effort has been made to ensure that the material on FederalRegister.gov is accurately displayed, consistent with the official SGML-based PDF version on govinfo.gov, those relying on it for legal research should verify their results against an official edition of the Federal Register. Until the ACFR grants it official status, the XML rendition of the daily Federal Register on FederalRegister.gov does not provide legal notice to the public or judicial notice to the courts.
FederalRegister.gov retrieves relevant information about this document from Regulations.gov to provide users with additional context. This information is not part of the official Federal Register document.
Consumer Financial Protection Bureau.
Notice of availability.
The Consumer Financial Protection Bureau (CFPB) announces the availability of a revised version of its “Methodology for Determining Average Prime Offer Rates,” which describes the data and methodology used to calculate the average prime offer rate (APOR) for purposes of Regulation C and Regulation Z. The methodology statement has been revised to address the imminent unavailability of certain data the CFPB previously relied on to calculate APORs, as a result of a recent decision by Freddie Mac to make changes to its Primary Mortgage Market Survey® (PMMS). The CFPB has identified a suitable temporary alternative source of the relevant data and will begin relying on those data to calculate APORs on or after April 21, 2023.
The revised methodology statement is available on the website of the Federal Financial Institutions Examination Council (FFIEC) at https://ffiec.cfpb.gov/tools/rate-spread.
Waeiz Syed, Senior Counsel, Office of Regulations, at 202-435-7700. If you require this document in an alternative electronic format, please contact CFPB_Accessibility@cfpb.gov.
Average prime offer rates (APORs) are annual percentage rates derived from average interest rates, points, and other loan pricing terms currently offered to consumers by a representative sample of creditors for mortgage loans that have low-risk pricing characteristics. APORs have implications for data reporters under Regulation C, 12 CFR part 1003, and creditors under Regulation Z, 12 CFR part 1026. Regulation C requires covered financial institutions to report, for certain transactions, the difference between a loan's annual percentage rate (APR) and the APOR for a comparable transaction.[1] Under Regulation Z, a loan meets the general qualified mortgage (QM) definition if the APR exceeds the APOR for a comparable transaction by less than the applicable threshold as of the date the interest rate is set.[2] The difference between the APR and APOR also determines whether certain QM definitions provide the creditor with a conclusive or rebuttable presumption of compliance,[3] and whether the creditor must comply with certain provisions for high-cost or higher-priced mortgage loans.[4]
Currently, to calculate APORs, the CFPB uses pricing data from the Freddie Mac Primary Mortgage Market Survey® (PMMS) on three products—30-year fixed-rate mortgage; 15-year fixed-rate mortgage; and five-year variable-rate mortgage—and pricing data from CFPB's own internal survey on one-year variable-rate mortgages. The CFPB calculates APORs on a weekly basis using the methodology set forth in a statement available to the public on the FFIEC's website.
The CFPB is publishing this notice to inform the public that a revised methodology statement is now available. In September 2022, the CFPB learned that Freddie Mac planned to change the public version of PMMS to no longer include points, fees, and adjustable rates data used by the CFPB to construct APORs. To address the imminent unavailability of certain data previously relied on to calculate APORs, the CFPB identified a suitable temporary alternative source of survey data. After evaluating potential sources, the CFPB determined that data from Intercontinental Exchange Mortgage Technology (ICE Mortgage Technology) is currently the most suitable option to replace PMMS. ICE Mortgage Technology provides a data source that has sufficient pricing data for the variables and base products that the CFPB requires to calculate APORs. With this switch over to ICE Mortgage Technology data, the CFPB is transitioning to using additional base products (such as a 20-year fixed-rate mortgage and a 10/6-month ARM) and removing others (such as the 1-year variable-rate mortgage) to ensure there is a firm basis for estimating APORs.[5] Having data for more than two kinds of fixed-rate mortgage products and more than two kinds of variable-rate mortgage products provides a firmer basis for estimating rates across a full range of fixed-rate and variable-rate mortgage products. The CFPB will therefore use the following eight base products to calculate APORs: 30-year fixed-rate mortgage; 20-year fixed-rate mortgage; 15-year fixed-rate mortgage; 10-year fixed-rate mortgage; 10/6-month ARM; ( printed page 24394) 7/6-month ARM; 5/6-month ARM; and 3/6-month ARM.
The CFPB has updated the FFIEC's website to note this change in the source of survey data and published a revised methodology statement that reflects corresponding changes in the methodology. The CFPB will begin using ICE Mortgage Technology data and the revised methodology to calculate APORs on or after April 21, 2023. The CFPB will continue to post the survey data used to calculate APORs on the FFIEC's website every week at https://ffiec.cfpb.gov/tools/rate-spread and will continue to identify the source of the survey data on that web page.
Rohit Chopra,
Director, Consumer Financial Protection Bureau.
3. 12 CFR 1026.43(b)(4) and (e)(1). Under Regulation Z, loans that meet the requirements for “qualified mortgages” obtain either a conclusive or rebuttable presumption of compliance with Regulation Z's requirement to make a reasonable and good faith determination of a consumer's ability to repay any residential mortgage loan.
Back to Citation5. The CFPB considered the typical volume of these products when considering which ones to use when calculating APORs. Having more pricing data for a product will provide more accurate APOR estimates. In addition, because the CFPB will no longer use one-year variable-rate mortgages as a base product to calculate APORs, it will no longer conduct its own internal survey on one-year variable-rate mortgages.
Back to Citation[FR Doc. 2023-08310 Filed 4-19-23; 8:45 am]
BILLING CODE 4810-AM-P