DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Parts 214, 1000, and 1003 [Docket No. FR-6322-F-02] RIN 2502-AJ64 Certification of Tribal Housing Counselors AGENCY: Office of the Assistant Secretary for Housing – Federal Housing Commissioner, U.S. Department of Housing and Urban Development (HUD); Office of the Assistant Secretary for Public and Indian Housing, HUD. ACTION: Final rule. SUMMARY: HUD’s Housing Counseling Program provides counseling to individuals seeking information about financing, maintaining, renting, or owning a home. Established by the DoddFrank Wall Street Reform and Consumer Protection Act, entities and individual counselors that participate in the Housing Counseling Program are required to be certified by HUD as competent to provide counseling services. In 2016, HUD implemented such housing counselor certification requirements for most HUD programs but agreed to conduct consultation with Tribes before implementing them for Tribes. On January 26, 2023, HUD published a proposed rule that provides an alternative regulatory standard for the counselor certification that accounts for the unique status of Tribal land and housing programs in Indian country and recognizes the importance of Tribal expertise. After consulting with Tribes and considering public comments received in response to the proposed rule, this final rule adopts the proposed rule with minor changes. DATES: Effective [INSERT DATE 30 DAYS FROM DATE OF PUBLICATION IN THE FEDERAL REGISTER]. FOR FURTHER INFORMATION CONTACT: David Valdez, Office of Housing Counseling, Office of Housing, Department of Housing and Urban Development, 1331 Lamar St. Suite 550, Houston, TX 77002; telephone number 713-718-3178 (this is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. SUPPLEMENTARY INFORMATION: I. Background Established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111–203, 124 Stat. 1376, approved July 21, 2010) (Dodd-Frank), HUD's Office of Housing Counseling (OHC) provides support to a nation-wide network of HUD-certified counseling agencies and State Housing Finance Agencies that provide counseling to individuals seeking information about financing, maintaining, renting, or owning a home. In addition to establishing the OHC, Dodd-Frank directed HUD to issue regulations necessary to carry out the testing and certification of housing counselors in HUD programs. On December 14, 2016, HUD published a final rule implementing these requirements for most HUD programs (81 FR 90632). In recognition of HUD’s government-to-government relationship with Tribal governments, and HUD’s Tribal Consultation policy, HUD conducted Tribal consultation before implementing requirements for Tribes, Tribally designated housing entities (TDHEs), and other Tribal entities. On December 18, 2020, HUD published a Dear Tribal Leader Letter to inform Tribal leaders about the Housing Counselor Certification Final Rule and that the Department would be soliciting their feedback through Tribal consultation.1 Subsequently, HUD hosted two virtual Tribal consultation sessions and six listening sessions to gather input on the potential implications of the Tribal Housing Certification requirements. HUD then published a proposed rule implementing testing and certification requirements for housing counselors for employees of Tribes, TDHEs, and other Tribal entities conducting housing counseling required or provided in connection with the Indian Housing Available at: https://www.hud.gov/sites/dfiles/PIH/documents/DTL12.17.20_Housing_Counseling.pdf. Block Grant (IHBG) and Indian Community Development Block Grant (ICDBG) programs on January 26, 2023 (88 FR 4923) (the proposed rule). The proposed rule proposed codifying a housing counselor certification requirement by adding a new subpart F to 24 CFR part 214 that would apply only for the IHBG and ICDBG programs. To provide counseling for those programs, an individual could become a “HUDcertified housing counselor†by working for a participating agency and meeting all requirements of part 214, including passing a housing counselor certification examination under § 214.103(n) or by working for an Indian Tribe, TDHE, or other Tribal entity, and passing a housing counselor certification exam under the new § 214.600(c). This new Tribal certification exam would consider the unique status of Tribal trust land, mortgaging Tribal trust land, and account for the distinct framework of nondiscrimination requirements as they apply to Tribes and Tribal recipients of IHBG and ICDBG funds at 24 CFR 1000.12 and 1003.601. II. This Final Rule After considering comments received from the public through the Federal Register as well as through consultation with Tribes during three consultation sessions and six listening sessions, HUD promulgates this final rule. The final rule adopts the proposed rule with three minor changes. First, instead of revising the definition of HUD certified housing counselor in 24 CFR 214.3, HUD is adding a definition for HUD-certified Tribal housing counselor. This change is being made to clearly distinguish between the two types of counselors and does not alter the substantive requirements for certification approval. Second, HUD is clarifying in 24 CFR 214.600(d) that an Indian Tribe, TDHE, or other Tribal entity must be a participating agency in order for an individual working for one, who also meets the requirements under 24 CFR 214.103(n), to provide housing counseling in connection with programs other than IHBG and ICDBG. Third, HUD is adding paragraph (e) to 24 CFR 214.600 to establish a 4-year transition period to allow Tribal grantees sufficient time to ensure that housing counselors can be certified while also establishing the alternative Tribal regulatory scheme previously outlined in the proposed rule. HUD appreciates the public comments received in response to its January 26, 2023, proposed rule, thanks all Tribal stakeholders for their invaluable feedback during the rulemaking process, and looks forward to engaging more as HUD works to develop a Tribal certification exam. III. Public Comments HUD received 16 distinct comments from Tribes, individuals, housing counseling providers, Indian Housing Authorities, and advocacy groups through the Federal Register as well as additional comments through the third Tribal consultation. This section includes a summary of the significant issues raised by the public comments that HUD received in response to its proposed rule and through the third Tribal Consultation. Support for the Proposed Rule Several commenters provided general support for the proposed rule and noted that it respected Tribal sovereignty and accounted for the unique nature of Tribes. One commenter noted that housing is a significant need in Tribal communities and housing counseling is often unavailable to Tribal members. Some commenters supported HUD for working with Tribal officials and including their input. One commenter noted that they appreciated HUD’s approach as Tribal consultation is a prerequisite for implementing any rules that affect Tribal programs or communities. Several commenters supported specific aspects of the proposed rule. One commenter noted that the proposed rule simplified the eligibility and certification process. Another commenter supported HUD’s proposal to allow TDHEs to participate in HUD’s Housing Counseling Program. Commenters stated the proposed rule would make it more feasible for TDHEs to comply with the requirements than those that apply more broadly in HUD’s counseling regulations. Several commenters in the third Tribal consultation suggested that HUD convene a Tribal advisory committee to oversee the implementation of the rule. HUD Response: HUD appreciates the commenters’ support and feedback. This final rule provides an alternative regulatory standard that complies with the statutory requirements of Dodd-Frank and recognizes the unique status of Tribal land and housing programs in Indian country. HUD agrees with the commenters that recommended working with a Tribal advisory committee to advise HUD on the implementation of this final rule. In this case, HUD intends to work with two existing federal advisory committees, HUD’s Tribal Intergovernmental Advisory Committee and the Housing Counseling Federal Advisory Committee (HCFAC) in soliciting advice regarding implementing this rule. Opposition to the Proposed Rule Several commenters stated that the proposed rule is not deferential to the Tribal right of self-determination and does not recognize Tribal sovereignty and the unique challenges Tribes face. Commenters stated that the proposed rule should allow Tribes to account for their differing cultures, economic conditions, customs, resources, and geography. Some commenters also stated that they did not feel the proposed rule was responsive enough to the feedback provided during listening sessions and encouraged further consultation between HUD and Tribal communities to ensure accessible, culturally-informed, and relevant housing counseling services. Commenters recommended that HUD engage more with Tribes in designing a process and a program that reimagines HUD’s current Housing Counseling Program to better recognize Tribal expertise and acknowledge Tribal self-determination. One commenter stated that the Native American Housing Assistance and Self-Determination Act of 1996, as amended (NAHASDA) (25 U.S.C. 4101), already allows IHBG grant funds to be used to pay for housing counseling services and does not require an examination process. Another commenter noted that neither NAHASDA nor the ICDBG program mandate housing counseling. Commenters stated that the proposed rule may make it difficult for Tribal entities to run housing programs and ultimately decrease access to housing counseling. A commenter said Tribal housing counselors would have to take and pass a rigorous examination with content that did not include questions related to Tribal housing issues. Another commenter stated that the proposed rule would undermine the decades of work put in to improve Tribal counseling organizations and essentially nullify the capacity that has been built. Some commenters stated that the proposed rule would have the effect of diminishing the services provided to Tribal members, as it could limit the ability of Tribes to use the IHBG program, or other programs that have a counseling requirement. Commenters noted the proposed rule could be especially burdensome for small and rural Tribal entities and reduce access to housing counseling in these communities. One commenter noted the costs would be passed on to homebuyers. Another commenter noted the proposed rule did not take into consideration ways to provide more housing counseling services and only focused on additional regulatory compliance. One commenter recommended an abbreviated version of the Housing Counseling Plan be embedded in the NAHADSA Annual Indian Housing Plan. Another commenter suggested HUD allow existing staff of Tribes, TDHEs and other Tribal entities to constitute a housing counseling organization in § 214.600. One commenter noted that Tribes already have housing counseling programs that better fit their needs. HUD Response: HUD recognizes the unique challenges in Indian Country and understands that commenters have concerns about how this new requirement will be implemented. HUD is required to implement Dodd-Frank and the statutory requirement that counseling provided under, or in connection with, IHBG and ICDBG be carried out by certified counselors. However, in doing so, HUD is committed to implementing the counselor certification for IHBG and ICDBG in a manner that respects Tribal sovereignty and the right of self-determination and which addresses the substantial feedback provided by Tribes. HUD, through a contractor, will develop the Tribal housing counselor certification training, online study guide, and examination and to host the website. HUD will ensure the exam content is appropriately tailored while considering and balancing compliance with statutory requirements, the unique status of trust land, mortgaging tribal trust land, and respect for Tribal sovereignty and self-determination. When developing the examination, HUD may seek to engage with Tribes, TDHEs and other Tribal entities to gather their input in designing an exam that recognizes Tribal expertise and acknowledges Tribal self-determination. Through this rule, HUD addressed the concern that the rule could be especially burdensome for small and rural Tribal entities. Specifically, HUD is establishing an alternative regulatory standard for Tribes and will allow employees of Indian Tribes, TDHEs, and other Tribal entities to become certified housing counselors if they pass the certification examination under § 214.600(c) without the requirement that they also work for an approved housing counseling agency. To further minimize burden for all Tribes, including small and rural Tribal entities, HUD will also provide access to existing free study material and free study material that accounts for any tailored exam components that it develops in collaboration with Tribes, TDHEs, and other Tribal entities. Finally, HUD is establishing a 4-year transition period to ensure that Tribes have enough lead time to ensure staff are properly prepared to complete and pass the certification exam. Through all these actions, it is HUD’s hope that the result will be the appropriate implementation of Dodd-Frank in a manner that considers the unique status of Tribes and ensures that Tribes are able to get all housing counselors certified in a timely manner. Certification Exam Several commenters proposed ways to make the proposed rule more deferential to Tribes’ unique needs. Commenters noted that Tribes, TDHEs and Community Development Funding Institutions (CDFI) have already created housing counseling programs that fit the unique needs of Tribes. Commenters suggested that HUD should recognize certifications from Native American housing counselor certification curricula that many Tribal housing entities already use. Some commenters suggested that HUD incorporate existing curricula or adopt certifications from the National American Indian Housing Council (NAIHC), NeighborWorks, Oweesta, etc. Several commenters suggested in the third Tribal consultation that HUD use existing curricula and examinations, including Pathways Home: A Native Homeownership Guide, to satisfy the statutory requirement for a certification examination that addresses the six core competency areas. Several commenters suggested HUD establish an advisory committee comprised of representatives from Tribal entities and stakeholders who could advise HUD on how to devise culturally relevant criteria and exam content for Tribal-specific HUD counselor certification requirements. Some commenters expressed concern about applying the current housing counselor standards to Tribal entities. Some commenters requested HUD allow Tribes to determine the content for inclusion in the relevant exam curriculum. One commenter noted that if HUD created a certification process rooted in Tribal expertise and Tribal self-determination, HUD could expand this certification process for all HUD-funded Tribal programs. Some commenters requested HUD change certification requirements because staff in Tribal governments are often divided between ownership and rental programs and may have difficulty passing the exam. Commenters also asked HUD to adjust the certification requirements to align more closely with the rental counseling needs of TDHEs, Tribes, and Tribal CDFIs. One commenter requested clarification about what the “fair housing laws and rules†competency requirement at § 214.600(c)(1)(iv) will include in the certification exam based on the limited application of certain Fair Housing requirements for Tribes and Tribal grantees. Another commenter asked HUD what measures HUD is taking to ensure certification covers the unique status of all Tribal communities. Commenters also asked whether the certification standards would be the same for TDHEs as other HUD-approved housing counseling agencies. One commenter proposed that the cost of certification should be less than $100 and should be clearly disclosed by HUD. One commenter in the third Tribal consultation expressed confusion over the need for the § 214.103(n) examination or the forthcoming certification examination under § 214.600(c) or both exams to be certified to counsel within IHBG or ICDBG programs. HUD Response: While commenters suggested HUD establish an advisory committee comprised of representatives from Tribal entities and stakeholders to advise HUD regarding designing culturally relevant criteria and exam content for Tribal-specific HUD counselor certification, HUD has decided against establishing such an advisory committee. In reviewing this comment, HUD recognized that requirements of the Federal Advisory Committee Act (5 U.S.C. Chapter 10) would limit its ability to fully engage Tribes in the development of the certification examination. Additionally, it has typically not been the Department’s procedure to establish an advisory committee for the purpose suggested by the commenter and the Department has other means of soliciting public input. As discussed in this preamble, HUD is fully committed to soliciting the advice and recommendation of Tribes in the development of the examination. HUD recognizes the certification exam codified at § 214.103(n) does not assess knowledge of the unique property and administrative requirements that apply to trust land and other restricted Tribal lands. For example, the housing counselor certification exam codified at § 214.103(n) does not reflect the unique way that civil rights requirements apply to Tribes and other Tribal grantees under HUD’s IHBG and ICDBG programs under 24 CFR 1000.12 and 1003.601. While there are exemptions from certain fair housing and civil rights laws and requirements for tribes and TDHEs when administering specific HUD funds, individuals and families do have certain civil rights protections and continue to be able to assert fair housing and nondiscrimination claims, including against other parties that may be involved such as lenders, or private landlords. Identifying what civil rights protections can be asserted and against whom they can asserted is a nuanced and fact-based analysis. Given this, HUD plans to develop a Tribal certification exam that is appropriately tailored and that will ensure that housing counselors can appropriately counsel families about their rights. HUD appreciates the comment recommending that it incorporate existing curricula or adopt certifications from the NAIHC, NeighborWorks, Oweesta, or Pathways Home to satisfy the statutory requirement for a certification examination that addresses the six core competency areas. While HUD cannot accept these alternate curricula to fulfill the certification requirements of Dodd-Frank, HUD has reviewed this material and will use it to inform the development of the HUD examination. The statute does not allow for these alternative curricula to substitute for an exam created by HUD and its contractor. To clarify the understanding of the commenter regarding whether a housing counselor would need to be certified under § 214.103(n), § 214.600(c), or both exams to be certified to counsel within IHBG or ICDBG programs, housing counseling provided under or in connection with IHBG or ICDBG programs must be conducted by a HUD certified counselor who has passed either the § 214.103(n) examination or the certification examination under § 214.600(c). The counselor can choose to take one or both exams to meet the certification examination requirement. Training Material Some commenters asked HUD to consider implementing Dodd-Frank-compliant, culturally relevant training based on existing counseling programs that Tribal housing programs have used and that would build skills and competency in staff. One commenter pointed out that Tribes, TDHEs, and Tribal CDFIs have already spent resources on training. Another commenter asked for organizations that manage Tribally focused counseling training to be updated on examination and curricula requirements. One commenter asked HUD to include information about Federal Indian Law in any trainings. Commenters also requested that HUD increase access to training resources, including making trainings available to TDHEs immediately, stating that training resources to prepare for certification are only available to HUD-certified counselors. HUD Response: HUD agrees with the commenters and will provide access to existing free study material and free study material that accounts for any tailored exam components that it develops in collaboration with Tribes, TDHEs, and other Tribal entities, to implement this final rule. HUD may solicit Tribal input by providing drafts of study materials developed for the exam prior to public release to consider feedback. The rule also provides a four-year transition period after the effective date of this final rule or 30 days after HUD makes the Tribal certification examination available, whichever is later for individual counselors to be certified. HUD will publish a document in the Federal Register to announce the start of testing and the certification requirement. HUD will use this time to make these resources available in addition to taking other steps to ensure that Tribes can meet the certification requirements once they go into effect. Funding and Resources Several commenters asked whether funding would be provided for hiring Tribal housing counselors, especially for small Tribes and TDHEs. One commenter asked whether TDHEs would be eligible for HUD funding that is currently earmarked for HUD-approved housing counseling agencies and whether this would lead to an increase in overall program funding. Commenters requested that HUD make funding available to allow Tribes to hire the necessary staff, or to give money to Tribes, TDHEs, Tribal entities, or Tribal CDFIs for housing counseling activities, such as the certification examination. One commenter asked HUD to modify subpart F of the proposed rule to allow grants to support Tribal housing counselors certified under subpart F if statutory or regulatory barriers to Tribal eligibility are removed. Some commenters expressed concerns that HUD’s proposed requirements would put a strain on Tribal resources. Commenters noted that Tribal governments manage a variety of programs, and adding additional requirements could add to their administrative burdens. One commenter pointed out that Tribes, TDHEs, and Native CDFIs have already spent resources on other similar trainings. Another commenter stated that HUD had understated the impacts of the proposed rule, both regarding fiscal cost and time and capacity constraints. Commenters noted the proposed rule could cause hiring and retention challenges for Tribal entities. One commenter noted that counselor turnover, which is already a challenge in non-Native American communities, would be a problem for many organizations. This commenter emphasized the unique human capital challenges faced by small, geographically dispersed communities. Another commenter noted requiring counselors to be certified at the time of hiring could cause difficulties in recruiting staff and could limit the Tribal populations’ eligibility for employment. The commenter noted that they currently provide on-the-job training for employees after they are onboarded and recommended that the proposed rule allow a grace period of six months for new hires pursuing a counselor position. Another commenter asked HUD to consider whether the HUD-certified counselor had to be employed by a HUD-approved housing counseling agency, Tribe, TDHE, or other Tribal entity, or whether a Tribal entity could be allowed to contract out counseling activities. Commenters noted many Tribes hire consultants or seek virtual counseling services from other providers. Several commenters in the third Tribal consultation expressed concern over a lack of technical assistance available to those that do choose to join HUD’s Housing Counseling Program. HUD Response: HUD does not have appropriated funding or authority under Section 106 to provide Indian Tribes with the direct grant assistance suggested by commenters. HUD understands, however, that funding is currently available to qualified nonprofit 501(c)organizations and state and local governmental entities including Indian Housing Authorities considered state or local housing agencies under State law. HUD also recognizes that costs will be incurred by Tribes, TDHEs, and Tribal organizations because of the written examination requirement. In the past, HUD presented the examination in the most cost-efficient way feasible and offered both online and in-person examinations at a low cost. In addition, HUD has offered free study materials for individuals to use in preparation for the examination. HUD disagrees that it understated implementation costs in the proposed rule. HUD examined and studied the costs related to the development of and preparation for a housing counselor certification examination in connection with its 2016 final rule implementing certification requirements for most HUD programs. HUD has drawn from these insights to implement this final rule in a way that minimizes costs and burden. To further minimize costs and support implementation of Tribal housing certification, HUD will provide dedicated staff and training for this new requirement and will host a webpage for Tribes, TDHEs, and Tribal organizations that includes free study materials, training curriculum, and other resources to support the transition to this new requirement. Reporting and Compliance Commenters noted concerns that the proposed rule would increase reporting and compliance costs for Tribal entities. One commenter stated that the proposed rule would require significant additional resources and technical assistance to develop the required infrastructure for reporting and compliance. Some commenters suggested changes to the proposed rule to mitigate this increase in cost. A few commenters suggested that there be no penalty for TDHEs that do not have certified HUD counselors on staff, but rather a TDHE should be able to explain how they provide counseling services by referral or partnerships. One commenter suggested removing some of the reporting and compliance aspects of the HUD Housing Counseling Program and instead embedding reporting and compliance within the established NAHASDA Indian Housing Plan and Annual Performance Report. The commenter suggested including the Quarterly HUD 9902 form as an attachment to that report and eliminating the HUD 9910 or consolidating it into monitoring and counseling tracking in existing software if additional funding was provided to adapt this software. HUD Response: HUD agrees with commenters that the submission of HUD forms, when applicable, should be consolidated to reduce existing reporting burdens. However, the final rule imposes no new reporting burdens because Tribes, TDHEs and other Tribal entities conducting housing counseling provided under or in connection solely with IHBG and/or ICDBG are not subject to subparts A through E of 24 CFR part 214, including the requirement to counsel at least 30 clients within a 12-month period. Tribes, TDHEs and other Tribal entities remain subject to the reporting requirements under IHBG and ICDBG and are exempt from compulsory participation in HUD’s Housing Counseling Program unless the entities also provide counseling under or in connection with certain other HUD programs. Eligibility and Applicability Commenters proposed changes to the proposed rule’s applicability in § 214.300(a)(8), which contains counseling service requirements for rental housing programs. Specifically, the commenters noted that many Tribes and TDHEs have separate rental and homebuyer programs, or primarily deal with rental housing, so the certification should not apply to tenant services staff and rental department staff. Commenters noted the proposed rule change applies to IHBG and ICDBG and recommended that a counselor who is certified as working for a Tribe, TDHE or other Tribal entity should be able to provide counseling to people outside of these programs. One commenter requested clarification on whether a counselor that works for a Tribal entity will also need to work for a HUD-approved housing counseling agency. Another commenter asked how a TDHE could become a HUD-approved housing counseling agency and whether a TDHE could partner with a national intermediary without 501(c)(3) status. One commenter in the third Tribal consultation encouraged HUD to allow Tribes, TDHEs and other Tribal Entities to be deemed HUD-approved upon partnering with a HUD-approved organization. HUD Response: For those not participating in HUD’s Housing Counseling Program, HUD encourages partnerships with other HUD-approved housing counseling agencies, Tribes, TDHEs, and other Tribal entities (e.g., a HUD-approved Native CDFI) with a certified housing counselor on staff to improve community access to housing counseling services. HUD encourages partnerships that best meet the needs of Tribal communities, as determined by those communities. This final rule exempts Tribes, TDHEs, and other Tribal entities from compulsory participation in HUD's Housing Counseling Program unless the entities also provide counseling under or in connection with other HUD programs (programs other than IHBG and ICDBG). If an individual working for an Indian tribe, TDHE, or other Tribal entity provides housing counseling for HUD programs other than ICDBG and IHBG, that individual is required to comply with the existing housing counselor certification requirement of 24 CFR 214.103(n) (i.e., pass the examination and work for a HUD-approved housing counseling agency). Timeline for Implementation Some commenters expressed concern over how quickly Tribes would have to come into compliance with the proposed rule. The commenters questioned whether a three-year transition period, as proposed in the proposed rule, would be enough time to address planning and training needs. One commenter noted that HUD-approved Housing Counseling Agencies were given four years to comply with testing requirements and Tribal entities should be given at least the same amount of time. One commenter stated that a counselor who is already certified should have the same time frame to take any additional exams that are created out of this proposed rule as someone who currently holds no certification. HUD Response: HUD agrees and will provide for an additional 12 months to comply with Tribal certification requirements, consistent with the time afforded to HUD-approved housing counseling agencies and counselors complying with the requirements of 24 CFR 214.103(n). The Tribal certification examination is not yet available, but HUD will issue updates in the Federal Register or other means regarding the Tribal certification exam release date as the testing development phase progresses and the implementation date nears. IV. Findings and Certifications Regulatory Review – Executive Orders 12866, 13563, and 14094 Under E.O. 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant and, therefore, subject to review by the Office of Management and Budget (OMB) in accordance with the requirements of the order. E.O. 13563 (Improving Regulations and Regulatory Review) directs Executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.†E.O. 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies are to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. E.O. 14094 (Modernizing Regulatory Review) amends section 3(f) of E.O. 12866, among other things. This final rule brings HUD’s IHBG and ICDBG Programs into compliance with statutory requirements added by Dodd-Frank and required by other HUD programs since 2016. This final rule provides a streamlined compliance option consistent with the statutory requirement and responsive to Tribal consultation. This rule was determined not to be a “significant regulatory action†as defined in section 3(f) of Executive Order 12866 as amended by Executive Order 14094 and is not an economically significant regulatory action and therefore was not subject to OMB review. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule would not have a significant economic impact on a substantial number of small entities. HUD has determined that this rule will not have a significant economic impact on all entities, including small entities. As discussed in the preamble, this final rule revises the Housing Counseling Program to require that counselors providing counseling funded under or in connection with IHBG or ICDBG be certified. Tribes, TDHEs and other Tribal entities conducting housing counseling provided under or in connection solely with IHBG and/or ICDBG are not subject to subparts A through E of 24 CFR part 214. By not being subject to these subparts, these entities avoid the bulk of compliance costs, allowing them to allocate the savings toward addressing the unique needs of their communities. Further, the requirement for individual counselors to be certified provides a four-year transition period after the effective date of this final rule. This four-year period provides ample notice of the need to be skilled in the required areas. HUD will also provide access to existing free study material that accounts for any tailored exam components that it develops, reducing costs associated with training and compliance. For these reasons, the undersigned certifies that this rule would not have a significant economic impact on a substantial number of small entities. Environmental Impact This rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction; or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321). Executive Order 13132, Federalism E.O. 13132 (entitled “Federalismâ€) prohibits an agency from publishing any rule that has federalism implications if the rule either: (1) imposes substantial direct compliance costs on State and local governments and is not required by statute, or (2) preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Order. This rule does not have federalism implications and would not impose substantial direct compliance costs on State and local governments nor preempts State law within the meaning of the Order. Paperwork Reduction Act The information collection requirements contained in this final rule have been submitted to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless the collection displays a valid control number. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments, and on the private sector. This rule does not impose any Federal mandates on any State, local, or Tribal governments, or on the private sector, within the meaning of UMRA. List of Subjects 24 CFR Part 214 Administrative practice and procedure, Loan program-housing and community development, Organization and functions (government agencies), Reporting and record-keeping requirements. 24 CFR Part 1000 Aged, Community development block grants, Grant programs—housing and community development, Grant programs—Indians, Indians, Individuals with disabilities, Low and moderate income housing, Public housing, Reporting and recordkeeping. 24 CFR Part 1003 Alaska, Community development block grants, Grant programs—housing and community development, Indians, Reporting and recordkeeping requirements. Accordingly, for the reasons stated in the preamble, HUD amends 24 CFR parts 214, 1000, and 1003 as follows: PART 214—HOUSING COUNSELING PROGRAM 1. The authority citation for part 214 continues to read as follows: Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 3535(d). 2. In § 214.3, add the definitions for “HUD-certified tribal housing counselor†and “Tribally designated housing entity†in alphabetical order to read as follows: § 214.3 Definitions. * * * * * HUD-certified Tribal housing counselor. A housing counselor who has passed the HUD Certification examination as described in subpart F of this part, works for an Indian Tribe, Tribally designated housing entity (TDHE), or other Tribal entity, and is certified by HUD as competent to provide housing counseling services pursuant to subpart F of this part. * * * * * Tribally designated housing entity. See definition at 25 U.S.C. 4103. * * * * * 3. Add subpart F to read as follows: Subpart F – Certification of Tribal Housing Counselors Sec. 214.600 Tribal housing counselor certification. 214.601 [Reserved] Subpart F – Certification of Tribal Housing Counselors § 214.600 Tribal housing counselor certification. (a) This subpart applies only to housing counseling required under or provided in connection with the Indian Housing Block Grant (IHBG) program or the Indian Community Development Block Grant (ICDBG) program. Indian Tribes, tribally designated housing entities (TDHEs), and other tribal entities funding housing counseling required under or provided in connection with IHBG or ICDBG programs shall not be subject to the requirements of this part, except as otherwise provided in this subpart. (b) Housing counseling required under or provided in connection with IHBG or ICDBG programs must be provided by a HUD-certified housing counselor or a HUD-certified Tribal housing counselor. (c) HUD will certify an individual housing counselor to provide housing counseling required under or provided in connection with IHBG or ICDBG programs upon verification that the person: (1) Passes a standardized written examination to demonstrate competency in each of the following areas: (i) Financial management; (ii) Property maintenance; (iii) Responsibilities of homeownership and tenancy; (iv) Fair housing laws and requirements; (v) Housing affordability; and (vi) Avoidance of, and response to, rental or mortgage delinquency and avoidance of eviction or mortgage default; and (2) Works for an Indian Tribe, TDHE, or other Tribal entity. (d) To provide housing counseling required under or provided in connection with HUD programs other than the IHBG and ICDBG programs, an individual working for an Indian Tribe, TDHE, or other Tribal entity must meet the housing counseling certification requirement under § 214.103(n), including the standardized written examination required under § 214.103(n)(2), and the Indian Tribe, TDHE, or other Tribal entity must be a participating agency). (e) Entities and individuals providing housing counseling under this subpart must be certified by the Office of Housing Counseling by 48 months from the effective date of this rule or 30 days after HUD makes the Tribal certification examination available, whichever is later. HUD will publish a document in the Federal Register to announce the start of the testing and certification requirement. § 214.601 [Reserved] PART 1000 - NATIVE AMERICAN HOUSING ACTIVITIES 4. The authority citation for part 1000 continues to read as follows: Authority: 25 U.S.C. 4101 et seq.; 42 U.S.C. 3535(d). 5. Add § 1000.66 to subpart A to read as follows: § 1000.66 Housing counseling. Housing counseling, as defined in 24 CFR 5.100, that is required under or provided in connection with IHBG funds must be carried out in accordance with 24 CFR 5.111. Housing counseling conducted in connection with the IHBG program may only be conducted by individuals who are HUD-certified in accordance with 24 CFR part 214, subpart F. PART 1003 – COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND ALASKA NATIVE VILLAGES 6. The authority citation for part 1003 continues to read as follows: Authority: 42 U.S.C. 3535(d) and 5301 et seq. 7. Add § 1003.609 to subpart G to read as follows: § 1003.609 Housing counseling. Housing counseling, as defined in 24 CFR 5.100, that is funded with or provided in connection with ICDBG funds must be carried out in accordance with 24 CFR 5.111. Housing counseling conducted in connection with the ICDBG program may only be conducted by individuals who are HUD-certified in accordance with 24 CFR part 214, subpart F. Julia Gordon Federal Housing Commissioner, Office of the Assistant Secretary for Housing [BILLING CODE 4210-67] [FR Doc. 2024-12777 Filed: 6/11/2024 8:45 am; Publication Date: 6/12/2024]