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Federal Register / Vol. 86, No. 30 / Wednesday, February 17, 2021 / Rules and Regulations consumers. An escrow account established after consummation for a distressed consumer does not count for purposes of 1026.35b2iiiD.
Distressed consumers are consumers who are working with the creditor or servicer to attempt to bring the loan into a current status through a modification, deferral, or other accommodation to the consumer. A creditor, together with its affiliates, that establishes escrow accounts after consummation as a regular business practice, regardless of whether consumers are in distress, does not qualify for the exception described in 1026.35b2iiiD2.
Paragraph 35b2iv.
1. Requirements for rural or underserved status. An area is considered to be rural or underserved during a calendar year for purposes of 1026.35b2iiiA if it satisfies either the definition for rural or the definition for underserved in 1026.35b2iv. A
creditors extensions of covered transactions, as defined by 1026.43b1, secured by first liens on properties located in such areas are considered in determining whether the creditor satisfies the condition in 1026.35b2iiiA. See comment 35b2iii1.
i. Under 1026.35b2ivA, an area is rural during a calendar year if it is:
A county that is neither in a metropolitan statistical area nor in a micropolitan statistical area that is adjacent to a metropolitan statistical area; or a census block that is not in an urban area, as defined by the U.S.
Census Bureau using the latest decennial census of the United States.
Metropolitan statistical areas and micropolitan statistical areas are defined by the Office of Management and Budget and applied under currently applicable Urban Influence Codes UICs, established by the United States Department of Agricultures Economic Research Service USDAERS. For purposes of 1026.35b2ivA1, adjacent has the meaning applied by the USDAERS in determining a countys UIC; as so applied, adjacent entails a county not only being physically contiguous with a metropolitan statistical area but also meeting certain minimum population commuting patterns. A county is a rural area under 1026.35b2ivA1 if the USDA
ERS categorizes the county under UIC 4, 6, 7, 8, 9, 10, 11, or 12. Descriptions of UICs are available on the USDAERS
website at http www.ers.usda.gov/
data-products/urban-influence-codes/
documentation.aspx. A county for which there is no currently applicable
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UIC because the county has been created since the USDAERS last categorized counties is a rural area only if all counties from which the new countys land was taken are themselves rural under currently applicable UICs.
ii. Under 1026.35b2ivB, an area is underserved during a calendar year if, according to Home Mortgage Disclosure Act HMDA data for the preceding calendar year, it is a county in which no more than two creditors extended covered transactions, as defined in 1026.43b1, secured by first liens, five or more times on properties in the county. Specifically, a county is an underserved area if, in the applicable calendar years public HMDA aggregate dataset, no more than two creditors have reported five or more first-lien covered transactions, with HMDA geocoding that places the properties in that county.
iii. A. Each calendar year, the Bureau applies the underserved area test and the rural area test to each county in the United States. If a county satisfies either test, the Bureau will include the county on a list of counties that are rural or underserved as defined by 1026.35b2ivA1 or 1026.35b2ivB for a particular calendar year, even if the county contains census blocks that are designated by the Census Bureau as urban. To facilitate compliance with appraisal requirements in 1026.35c, the Bureau also creates a list of those counties that are rural under the Bureaus definition without regard to whether the counties are underserved.
To the extent that U.S. territories are treated by the Census Bureau as counties and are neither metropolitan statistical areas nor micropolitan statistical areas adjacent to metropolitan statistical areas, such territories will be included on these lists as rural areas in their entireties. The Bureau will post on its public website the applicable lists for each calendar year by the end of that year to assist creditors in ascertaining the availability to them of the exemption during the following year.
Any county that the Bureau includes on these lists of counties that are rural or underserved under the Bureaus definitions for a particular year is deemed to qualify as a rural or underserved area for that calendar year for purposes of 1026.35b2iv, even if the county contains census blocks that are designated by the Census Bureau as urban. A property located in such a listed county is deemed to be located in a rural or underserved area, even if the census block in which the property is located is designated as urban.

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B. A property is deemed to be in a rural or underserved area according to the definitions in 1026.35b2iv during a particular calendar year if it is identified as such by an automated tool provided on the Bureaus public website. A printout or electronic copy from the automated tool provided on the Bureaus public website designating a particular property as being in a rural or underserved area may be used as evidence of compliance that a property is in a rural or underserved area, as defined in 1026.35b2ivA
and B, for purposes of the record retention requirements in 1026.25.
C. The U.S. Census Bureau may provide on its public website an automated address search tool that specifically indicates if a property is located in an urban area for purposes of the Census Bureaus most recent delineation of urban areas. For any calendar year that began after the date on which the Census Bureau announced its most recent delineation of urban areas, a property is deemed to be in a rural area if the search results provided for the property by any such automated address search tool available on the Census Bureaus public website do not designate the property as being in an urban area. A printout or electronic copy from such an automated address search tool available on the Census Bureaus public website designating a particular property as not being in an urban area may be used as evidence of compliance that the property is in a rural area, as defined in 1026.35b2ivA, for purposes of the record retention requirements in 1026.25.
D. For a given calendar year, a property qualifies for a safe harbor if any of the enumerated safe harbors affirms that the property is in a rural or underserved area or not in an urban area. For example, the Census Bureaus automated address search tool may indicate a property is in an urban area, but the Bureaus rural or underserved counties list indicates the property is in a rural or underserved county. The property in this example is in a rural or underserved area because it qualifies under the safe harbor for the rural or underserved counties list. The lists of counties posted on the Bureaus public website, the automated tool on its public website, and the automated address search tool available on the Census Bureaus public website, are not the exclusive means by which a creditor can demonstrate that a property is in a rural or underserved area as defined in 1026.35b2ivA and B. However, creditors are required to retain evidence of compliance in accordance
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