Part Of The Text Of Dodd-Frank, Nibble 2

Here's another bit of Federal Regulatory paper shreddings for you to consume. Section 120 of 1,256 from HR 4173. It's not fully represented in the Code of Federal Regulations.

SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVITIES OR PRACTICES FOR FINANCIAL STABILITY PURPOSES.

(a) In General- The Council may provide for more stringent regulation of a financial activity by issuing recommendations to the primary financial regulatory agencies to apply new or heightened standards and safeguards, including standards enumerated in section 115, for a financial activity or practice conducted by bank holding companies or nonbank financial companies under their respective jurisdictions, if the Council determines that the conduct, scope, nature, size, scale, concentration, or interconnectedness of such activity or practice could create or increase the risk of significant liquidity, credit, or other problems spreading among bank holding companies and nonbank financial companies, financial markets of the United States, or low-income, minority, or underserved communities.

Note that this mammoth mound of munchings isn't found word-for-word in the Code of Federal Regulations (CFR). It does, however, modify parts of the CFR as noted by the First Tuesday Journal. Of course, the notation in that site is necessarily miniscule. The true glory of these things is their size. While many people look at the CFR and think, "My, what a lot of hamster nests that could make!", they're missing out on all the other Federal regulations not captured in the CFR. Enough to create hamster nests for every hamster in the world!

For example, note the term "minority" in the excerpted paragraph. In Section 342 of H. R. 4173, we learn what this means.

(3) MINORITY- The term ‘minority’ has the same meaning as in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note).

You might think you could find it by doing a Google search on the term, "section 1204(c)", but you'd be wrong. If you do that, you get mounds and mounds and mounds of more paper to shred! The country is full of regulations and many of them have sections 1204(c)! There are state regulations, county regulations, health and safety codes, zoning ordnances, all with 1,203 sections before this one and gallons of sections after!

Don't be fooled when you search. You might think you've found it here, but you haven't. If you look there, you'll find that Section 1204 is, in fact, this:

SEC. 1204. ADJUSTABLE RATE MORTGAGE CAPS.

(a) IN GENERAL.--Any adjustable rate mortgage loan originated by a creditor shall include a limitation on the maximum interest rate that may apply during the term of the mortgage loan.

(b) REGULATIONS.--The Board of Governors of the Federal Reserve System shall prescribe regulations to carry out the purposes of this section.

(c) ENFORCEMENT.--Any violation of this section shall be treated as a violation of the Truth in Lending Act and shall be subject to administrative enforcement under section 108 or civil damages under section 130 of such Act, or both.

(d) DEFINITIONS.--For the purpose of this section--

(1) the term "creditor" means a person who regularly extends credit for personal, family, or household purposes; and

(2) the term "adjustable rate mortgage loan" means any loan secured by a lien on a one- to four-family dwelling unit, including a condominium unit, cooperative housing unit, or mobile home, where the loan is made pursuant to an agreement under which the creditor may, from time to time, adjust the rate of interest.

(e) EFFECTIVE DATE.--This section shall take effect upon the expiration of 120 days after the date of enactment of this Act.

Are you starting to see how wonderful this all is? We hamsters need paper to shred and the government gives and gives and gives! We've found mountains of regulatory nesting materials and we still haven't found the definition of "minority"! Let's cap this off by doing a tighter search.

Here's the text of H.R.1278 where the definition is found. Well, it's not actually the text, it's just a set of hyperlinks to the hundreds of sections where the text might be found. Here's the section we're looking for, 1204.

(3) MINORITY- The term `minority' means any Black American, Native American, Hispanic American, or Asian American.

There. That was easy, wasn't it? Clear and concise and simple to follow. And there's more just like it. Lots more.