---
kind: "section"
citation: "12 C.F.R. § 1003.3"
title: "12"
number: "1003.3"
heading: "Exempt institutions and excluded and partially exempt transactions."
url: "https://uscodex.org/cfr/12/1003.3"
---

# §1003.3. Exempt institutions and excluded and partially exempt transactions.

- (a) **Exemption based on state law.**
  - (1) A state-chartered or state-licensed financial institution is exempt from the requirements of this part if the Bureau determines that the institution is subject to a state disclosure law that contains requirements substantially similar to those imposed by this part and that contains adequate provisions for enforcement.
  - (2) Any state, state-chartered or state-licensed financial institution, or association of such institutions, may apply to the Bureau for an exemption under [paragraph (a)](#a) of this section.
  - (3) An institution that is exempt under [paragraph (a)](#a) of this section shall use the disclosure form required by its state law and shall submit the data required by that law to its state supervisory agency for purposes of aggregation.
- (b) **Loss of exemption.** An institution losing a state-law exemption under [paragraph (a)](#a) of this section shall comply with this part beginning with the calendar year following the year for which it last reported loan data under the state disclosure law.
- (c) **Excluded transactions.** The requirements of this part do not apply to:
  - (1) A closed-end mortgage loan or open-end line of credit originated or purchased by a financial institution acting in a fiduciary capacity;
  - (2) A closed-end mortgage loan or open-end line of credit secured by a lien on unimproved land;
  - (3) Temporary financing;
  - (4) The purchase of an interest in a pool of closed-end mortgage loans or open-end lines of credit;
  - (5) The purchase solely of the right to service closed-end mortgage loans or open-end lines of credit;
  - (6) The purchase of closed-end mortgage loans or open-end lines of credit as part of a merger or acquisition, or as part of the acquisition of all of the assets and liabilities of a branch office as defined in [§ 1003.2(c)](/cfr/12/1003.2.md?p=c);
  - (7) A closed-end mortgage loan or open-end line of credit, or an application for a closed-end mortgage loan or open-end line of credit, for which the total dollar amount is less than $500;
  - (8) The purchase of a partial interest in a closed-end mortgage loan or open-end line of credit;
  - (9) A closed-end mortgage loan or open-end line of credit used primarily for agricultural purposes;
  - (10) A closed-end mortgage loan or open-end line of credit that is or will be made primarily for a business or commercial purpose, unless the closed-end mortgage loan or open-end line of credit is a home improvement loan under [§ 1003.2(i)](/cfr/12/1003.2.md?p=i), a home purchase loan under [§ 1003.2(j)](/cfr/12/1003.2.md?p=j), or a refinancing under [§ 1003.2(p)](/cfr/12/1003.2.md?p=p);
  - (11) A closed-end mortgage loan, if the financial institution originated fewer than 25 closed-end mortgage loans in either of the two preceding calendar years; a financial institution may collect, record, report, and disclose information, as described in §§ [1003.4](/cfr/12/1003.4.md) and [1003.5](/cfr/12/1003.5.md), for such an excluded closed-end mortgage loan as though it were a covered loan, provided that the financial institution complies with such requirements for all applications for closed-end mortgage loans that it receives, closed-end mortgage loans that it originates, and closed-end mortgage loans that it purchases that otherwise would have been covered loans during the calendar year during which final action is taken on the excluded closed-end mortgage loan;
  - (12) An open-end line of credit, if the financial institution originated fewer than 200 open-end lines of credit in either of the two preceding calendar years; a financial institution may collect, record, report, and disclose information, as described in §§ [1003.4](/cfr/12/1003.4.md) and [1003.5](/cfr/12/1003.5.md), for such an excluded open-end line of credit as though it were a covered loan, provided that the financial institution complies with such requirements for all applications for open-end lines of credit that it receives, open-end lines of credit that it originates, and open-end lines of credit that it purchases that otherwise would have been covered loans during the calendar year during which final action is taken on the excluded open-end line of credit; or
  - (13) A transaction that provided or, in the case of an application, proposed to provide new funds to the applicant or borrower in advance of being consolidated in a New York State consolidation, extension, and modification agreement classified as a supplemental mortgage under New York Tax Law [section 255](/cfr/12/255.md); the transaction is excluded only if final action on the consolidation was taken in the same calendar year as final action on the new funds transaction.
- (d) **Partially exempt transactions.**
  - (1) **For purposes of this paragraph (d), the following definitions apply—**
    - (i) Insured credit union means an insured credit union as defined in section 101 of the Federal Credit Union Act ([12 U.S.C. 1752](/usc/12/1752.md)).
    - (ii) Insured depository institution means an insured depository institution as defined in section 3 of the Federal Deposit Insurance Act ([12 U.S.C. 1813](/usc/12/1813.md)).
    - (iii) Optional data means the data identified in § [1003.4(a)(1)(i)](/cfr/12/1003.4.md?p=a-1-i), [(a)(9)(i)](/cfr/12/1003.4.md?p=a-9-i), and [(a)(12)](/cfr/12/1003.4.md?p=a-a-12), [(15) through (30)](/cfr/12/1003.4.md?p=a-a-15..a-a-30), and [(32) through (38)](/cfr/12/1003.4.md?p=a-a-32..a-a-38).
    - (iv) Partially exempt transaction means a covered loan or application that is partially exempt under paragraph [(d)(2)](#d-2) or [(3)](#d-3) of this section.
  - (2) Except as provided in [paragraph (d)(6)](#d-6) of this section, an insured depository institution or insured credit union that, in each of the two preceding calendar years, originated fewer than 500 closed-end mortgage loans that are not excluded from this part pursuant to [paragraphs (c)(1) through (10)](#c-1..c-10) or [paragraph (c)(13)](#c-13) of this section is not required to collect, record, or report optional data as defined in [paragraph (d)(1)(iii)](#d-1-iii) of this section for applications for closed-end mortgage loans that it receives, closed-end mortgage loans that it originates, and closed-end mortgage loans that it purchases.
  - (3) Except as provided in [paragraph (d)(6)](#d-6) of this section, an insured depository institution or insured credit union that, in each of the two preceding calendar years, originated fewer than 500 open-end lines of credit that are not excluded from this part pursuant to [paragraphs (c)(1) through (10)](#c-1..c-10) of this section is not required to collect, record, or report optional data as defined in [paragraph (d)(1)(iii)](#d-1-iii) of this section for applications for open-end lines of credit that it receives, open-end lines of credit that it originates, and open-end lines of credit that it purchases.
  - (4) A financial institution eligible for a partial exemption under paragraph [(d)(2)](#d-2) or [(3)](#d-3) of this section may collect, record, and report optional data as defined in [paragraph (d)(1)(iii)](#d-1-iii) of this section for a partially exempt transaction as though the institution were required to do so, provided that:
    - (i) If the institution reports the street address, city name, or Zip Code for the property securing a covered loan, or in the case of an application, proposed to secure a covered loan pursuant to [§ 1003.4(a)(9)(i)](/cfr/12/1003.4.md?p=a-9-i), it reports all data that would be required by [§ 1003.4(a)(9)(i)](/cfr/12/1003.4.md?p=a-9-i) if the transaction were not partially exempt;
    - (ii) If the institution reports any data for the transaction pursuant to § [1003.4(a)(15)](/cfr/12/1003.4.md?p=a-15), [(16)](/cfr/12/1003.4.md?p=a-16), [(17)](/cfr/12/1003.4.md?p=a-17), [(27)](/cfr/12/1003.4.md?p=a-27), [(33)](/cfr/12/1003.4.md?p=a-33), or [(35)](/cfr/12/1003.4.md?p=a-35), it reports all data that would be required by § [1003.4(a)(15)](/cfr/12/1003.4.md?p=a-15), [(16)](/cfr/12/1003.4.md?p=a-16), [(17)](/cfr/12/1003.4.md?p=a-17), [(27)](/cfr/12/1003.4.md?p=a-27), [(33)](/cfr/12/1003.4.md?p=a-33), or [(35)](/cfr/12/1003.4.md?p=a-35), respectively, if the transaction were not partially exempt.
  - (5) If, pursuant to paragraph [(d)(2)](#d-2) or [(3)](#d-3) of this section, a financial institution does not report a universal loan identifier (ULI) pursuant to [§ 1003.4(a)(1)(i)](/cfr/12/1003.4.md?p=a-1-i) for an application for a covered loan that it receives, a covered loan that it originates, or a covered loan that it purchases, the financial institution shall assign and report a non-universal loan identifier (NULI). The NULI must be composed of up to 22 characters to identify the covered loan or application, which:
    - (i) May be letters, numerals, or a combination of letters and numerals;
    - (ii) Must be unique within the annual loan/application register in which the covered loan or application is included; and
    - (iii) **Must not include any information that could be used to directly identify the applicant or borrower.**
  - (6) Paragraphs [(d)(2)](#d-2) and [(3)](#d-3) of this section do not apply to an insured depository institution that, as of the preceding December 31, had received a rating of “needs to improve record of meeting community credit needs” during each of its two most recent examinations or a rating of “substantial noncompliance in meeting community credit needs” on its most recent examination under section 807(b)(2) of the Community Reinvestment Act of 1977 ([12 U.S.C. 2906(b)(2)](/usc/12/2906.md?p=b-2)).

## Notes

### Amendments

[76 FR 78468, Dec. 19, 2011, as amended at 80 FR 66309, Oct. 28, 2015; 82 FR 43132, Sept. 13, 2017; 84 FR 57980, Oct. 29, 2019; 85 FR 28404, 28406, May 12, 2020; 87 FR 77981, Dec. 21, 2022]

### Authority

Authority: 12 U.S.C. 2803, 2804, 2805, 5512, 5581.

### Source

Source: 76 FR 78468, Dec. 19, 2011, unless otherwise noted.

### Amendments

[76 FR 78468, Dec. 19, 2011, as amended at 80 FR 66309, Oct. 28, 2015; 82 FR 43132, Sept. 13, 2017; 84 FR 57980, Oct. 29, 2019; 85 FR 28404, 28406, May 12, 2020; 87 FR 77981, Dec. 21, 2022]