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Federal Register / Vol. 86, No. 102 / Friday, May 28, 2021 / Rules and Regulations
VA understands the concerns of its stakeholders on this issue. VA also remains committed to ensuring veterans timely access to a partial claim payment home retention option. In consideration of the comments received, VA believes the 60-day statutory timeframe under the Congressional Review Act provides time for servicers to implement the final rule without significant impact to veterans. For reasons discussed immediately below, VA also believes the 60-day timeframe will not cause undue harm to veterans.
An internal assessment indicates that approximately half of VA-guaranteed loans in forbearance will reach 360 days of forbearance sometime during the months of May and June of 2021.
However, as discussed above, VA has been a part of the coordinated federal response that extends protections for borrowers with federally backed mortgages.44 For example, certain veterans can now receive COVID19
forbearances that can remain in effect until as late as June 30, 2022.
Additionally, certain veterans who may have already reached the end of their initial periods of forbearance can now receive up to two additional threemonth COVID19 forbearance periods, which can remain in effect until as late as December 31, 2021. Given these additional protections, VA now anticipates that most veterans currently in a COVID19 forbearance will remain in such forbearance until at least late June 2021. VA also expects that most COVID19 forbearance periods will now end in November 2021.
In light of the factors mentioned above, VA believes that allowing a 60day timeframe between the publication date and effective date of this final rule is not impracticable, unnecessary, or contrary to the public interest. 45 VA
notes that certain veterans who will exit forbearance in late June or early July of 2021 will still be able to take advantage of the partial claim option, especially since VA has provided servicers with an additional 30 days for a total of 120
days post-forbearance in which to complete certain actions and request a partial claim. VA has sought to publish this final rule as quickly as possible to 44 See Fact Sheet: Biden Administration Announces Extension of COVID19 Forbearance and Foreclosure Protections for Homeowners, Feb.
16, 2021, https www.whitehouse.gov/briefingroom/statements-releases/2021/02/16/fact-sheetbiden-administration-announces-extension-ofcovid-19-forbearance-and-foreclosure-protectionsfor-homeowners/. See also VA Circular 262104.
Approving Forbearance Requests for Veterans Affected by COVID19, Feb. 16, 2021, https
www.benefits.va.gov/HOMELOANS/documents/
circulars/26_21_04.pdf.
45 See 5 U.S.C. 553bB.

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ensure that the COVIDVAPCP will be effective in time to assist the majority of veterans whose loans are currently in forbearance without sacrificing the time needed to ensure servicers are able to prepare for assisting veterans coming out of forbearance.
Executive Orders 12866 and 13563
Executive Orders 12866 and 13563
direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, and other advantages;
distributive impacts; and equity.
Executive Order 13563 Improving Regulation and Regulatory Review emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. The Office of Information and Regulatory Affairs of the Office of Management and Budget OMB has determined that this rule is a significant regulatory action under Executive Order 12866.
VAs impact analysis can be found as a supporting document at http
www.regulations.gov, usually within 48
hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its Regulatory Impact Analysis RIA are available on VAs website at http www.va.gov/orpm/, by following the link for VA Regulations Published From FY 2004 Through Fiscal Year to Date.
Regulatory Flexibility Act The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act 5 U.S.C. 601612. To assess whether the final rule can be expected to have a significant economic impact on small entities, VA considers the annual cost of the rule for small entities compared to their annual revenue. VA was able to determine the size of 127 out of 151
companies that service VA-guaranteed loans in COVID19 forbearances, where the borrowers could likely receive assistance via a partial claim. VA made this determination using the size standards from the Small Business Administration SBA.46 47 VA used data 46 VA uses data from InfoUSA and Factiva to determine the industry as identified by the primary NAICS code for the active VA-guaranteed loan servicers. For industries where size standards are determined by the average annual revenue, VA
compares the revenue of each servicer in these industries, as reported in InfoUSA and Factiva, to
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from InfoUSA and Factiva two business data providers along with data from the Federal Deposit Insurance Corporation FDIC and the National Credit Union Administration NCUA. Out of the 127
servicers for which VA has sufficient data to determine their size, 36 or 28.35
percent are considered small by SBA
standards. The average annual revenue of those 36 small servicers is $13.04
million.48
To determine the economic burden of the final rule on small entities, VA first compares the average annual costs of the rule that fall on small servicers to the average annual revenue of the small servicers. The costs of the rule come from rule familiarization and the Paperwork Reduction Act PRA costs, which include the costs for servicers to prepare and deliver to the veteran the original note and security instrument, and then deliver the executed note and security instrument to VA. The cost of rule familiarization is $99.90 for each guaranteed loan servicer, including the small servicers. The PRA cost estimates vary across servicers depending on how many COVID19 forbearance loans they service that either meet or could potentially meet COVIDVAPCP
requirements.
As described in the impact analysis, the estimated number of borrowers who will likely meet the requirements for assistance via a partial claim is between 101,132 and 151,812. VA estimates that 15 percent of those loans are serviced by small entities, or between 15,170 and 22,772 loans. Given the total PRA cost for servicers of $36.64 per loan, the total PRA cost to average small servicers is $15,439.49 at the lower bound and $23,176.84 at the upper bound.
The total cost of this rule to average small VA-guaranteed loan servicer ranges from $15,539 $99.90 +
$15,439.49 to $23,277 $99.90 +
$23,176.84, while the average annual revenue to small servicers is $13.04
million. VA generally considers a rule to have a significant economic impact when the total annual cost associated the SBA annual revenue threshold for small businesses. For industries where size standards are determined by assets, VA compares the relevant SBA threshold for small businesses to asset data from the FDIC for servicers with primary NAICS
codes 522110 Commercial Banking and 522120
Savings Institutions, and asset data from the NCUA for lenders with a primary NAICS code of 522130 Credit Unions.
47 U.S. Small Business Administration, SBA
Table of Size Standards, 2019, https
www.sba.gov/sites/default/files/2019-08/SBA%20
Table%20of%20Size%20Standards_Effective%20
Aug%2019%2C%202019_Rev.pdf.
48 VA averages the sales volumes from Factiva for all servicers considered small, including those primarily considered commercial banks, savings institutions, and credit unions.

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