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Offering Table of Nesptah

Offering Table of Nesptah


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Offering Table of Nesptah - History

IF THE LOAN APPLICATION DATE IS BEFORE OCTOBER 1, 2009 AND THE ACTION TAKEN DATE IS BEFORE JANUARY 1, 2010 USE THE OLD CALCULATOR.

About the Rate Spread Calculator

The rate spread calculator generates the spread between the Annual Percentage Rate (APR) and a survey-based estimate of APRs currently offered on prime mortgage loans of a comparable type utilizing the “Average Prime Offer Rates- Fixed” and “Average Prime Offer Rates- Adjustable” tables, action taken, amortization type, lock-in date, APR, fixed term (loan maturity) or variable term (initial fixed-rate period), and lien status. Rate spread is a calculated field and is NOT simply the APR on the loan application. The reporting requirement applies to originations of: home purchase loans, dwelling-secured home improvement loans, and refinancings.

Data Requirements for the Rate Spread Calculator

The calculator requires several components to successfully generate a rate spread for HMDA reporting. The required data include the action taken (provided), amortization type, lock-in date, annual percentage rate, fixed term (loan maturity) or variable term (initial fixed-rate period) and lien status.

  • Action Taken
    • The Rate Spread is reported on originated loans only, therefore, any action on the application or loan, other than an origination (Action Taken = 1), will result in a rate spread equal to 'NA'. 'NA' should be entered in the rate spread field on the LAR reporting form for any action other than “loan originated”.
    • Amortization Type
      • Amortization type must be selected. Only one option can be chosen. Based on this selection, the calculator logic will determine whether the fixed or adjustable table should be referenced to perform the calculation
      • Lock-In Date
        • Lenders are required to compare the APR on a loan at consummation with the corresponding ‘rate’ from the applicable ‘Average Prime Offer Rates” table. All loans locking from Monday through the following Sunday would use the APR posted on the previous Thursday. For example, for the week of Monday through Sunday, October 12-18, 2009, new average prime offer rates would be posted on the FFIEC’s web site on Friday, October 9, but they would be dated and effective October 12. Loans that are locked in on October 9 through 11, including loans locked in on October 9 after the benchmarks dated October 12 have been posted, would be compared to the average prime offer rates for comparable transactions dated October 5 (assuming the loan application was made on or after October 1). Dates entered prior to January 3, 2000 or after the current date (today’s date) will produce a validity error. For consistency’s sake, lenders may not apply new benchmarks before the Monday following publication, even if their systems are capable of applying the new benchmarks earlier.
        • If an interest rate is set pursuant to a "lock-in" agreement between the lender and the borrower, then the date on which the agreement fixes the interest rate is the date the rate was set. If a rate is re-set after a lock-in agreement is executed (for example, because the borrower exercises a float-down option or the agreement expires), then the relevant date is the date the rate is re-set for the final time before closing. If no lock-in agreement is executed, then the relevant date is the date on which the institution sets the rate for the final time before closing.
        • The lock-in date should be in mm/dd/ccyy format. The lock-in date cannot be earlier than January 3, 2000 or after the current published rate (current date) on the “Average Prime Offer Rates” tables.
        • Annual Percentage Rate (APR)
          • APR should be entered in percentage format and data entered should be in the range 00.00 to 99.99%. For example, an APR of 4.875% should be entered 04.88, including all leading and trailing zeros. If the figure is more than two decimal places, round the figure or truncate the digits beyond two decimal places.
          • Fixed term (loan maturity) or Variable term (initial fixed-rate period)
            • The loan term has a different meaning depending on whether the loan is fixed- or variable- rate. For a fixed-rate loan, the term is the loan’s maturity (i.e. the period until the last payment will be due under the loan contract. For a variable-rate loan, the term is the initial, fixed-rate period (i.e. the period until the first schedule rate reset).
            • The loan term, should be entered in years using whole numbers between 1 and 50. Terms consisting of a whole number of years and a fraction of a year should be rounded to a whole number according to the following rule: a fractional year of .5 or less should be rounded to the lower term, and a fractional year greater than .5 should be rounded to the higher term. There is an exception for a loan term shorter than six months, which should be rounded to 1.
            • If the amortization period of a loan is longer than the term of the loan – i.e., because the loan has a balloon feature- the lender should use the term when selecting the applicable yield. For example, in the case of a five-year loan that has a balloon payment because the payments are amortized over 30 years, the term of five years must be used.
            • In an Adjustable Rate Mortgage (ARM) situation, there may be a long period to maturity and a feature whereby the rate adjusts at a much earlier time -- for example, five years. In that case, as explained above, the term is the initial, fixed-rate period, not the full term to maturity. For example, a 5/30 ARM that is amortized over 30 years should use 5 as the loan term,with the initial rate fixed for the first five years.
            • If an obligation is payable on demand, the creditor shall make the disclosures based on an assumed maturity of 1 year. If an alternate maturity length is stated in the legal obligation between the parties, the maturity shall be based on that length.
            • Lien Status
              • Lenders are required to report lien status for loans they originate and applications that do not result in an origination. Lien status is determined by reference to the best information readily available to the lender at the time final action is taken and to the lender's own procedures.
              • Indicate the lien status for loans that you originate and for applications that do not result in an origination by using one of the following codes:
                • 1- Secured by a first lien
                • 2- Secured by a subordinate lien
                • 3- Not secured by a lien
                • 4- Not applicable (purchased loan)

                Rate Spread Equal to 'NA'

                A rate spread equal to 'NA' is a result of one or more data parameters that do not meet the specifications for reporting the rate spread. Data parameters that will result in a rate spread equal to 'NA' are listed below.

                • The Rate Spread is reported on originated loans only, therefore, any action on the application or loan, other than an origination (Action Taken = 1) will result in a rate spread equal to 'NA'.
                • If the loan is not subject to Regulation Z, or is a home improvement loan that is not dwelling-secured, or is a loan that you purchased, enter 'NA'.
                • If the lien status equals 1 and the rate spread calculated is less than 1.5 percentage points, the result will be a rate spread equal to 'NA'.If the lien status equals 2 and the rate spread calculated is less than 3.5 percentage points, the result will be a rate spread equal to 'NA'.
                • If the lien status is equal to 1 or 2 and the rate spread calculated is equal to or greater than 99.99%, the result will be a rate spread equal to NA.
                • If the lien status equals 3, not secured by a lien, the result will be a rate spread equal to 'NA'.
                • The lien status code of 4 is used to identify purchased loans on the LAR reporting form. The rate spread is NOT calculated for purchased loans and will therefore result in a rate spread equal to 'NA'.
                • The rate spread is not calculated on Home Equity Lines of Credit (HELOCs). If the institution chooses to report HELOCs, the rate spread should be equal to 'NA'.

                Frequently Asked Questions (FAQs)

                • What is the difference in the NEW Rate Spread Calculator versus the OLD Rate Spread Calculator and how do I know which one to use?
                  • The NEW Rate Spread Calculator generates the spread between the Annual Percentage Rate (APR) and a survey-based estimate of APRs currently offered on prime mortgage loans of a comparable type utilizing the “Average Prime Offer Rates- Fixed” and “Average Prime Offer Rates- Adjustable” tables, action taken, amortization type, lock-in date, APR, term, and lien status.
                  • OLD Rate Spread Calculator generates the spread between the Annual Percentage Rate (APR) and the comparable treasury security utilizing the "Treasury Securities of Comparable Maturity under Regulation C" table, action taken, lock-in date, APR, term, and lien status.
                  • The main differences in the two calculators are the tables referenced for determining the rate spread, the additional amortization type field, and the frequency of the table updates.
                  • The NEW Rate Spread Calculator should be used when the LOAN APPLICATION DATE IS ON OR AFTER OCTOBER 1, 2009 OR THE LOAN CLOSED ON OR AFTER JANUARY 1, 2010.
                  • The OLD Rate Spread Calculator should be used when the LOAN APPLICATION DATE IS BEFORE OCTOBER 1, 2009 AND THE LOAN CLOSED BEFORE JANUARY 1, 2010.
                  • Rate Spread is a calculated field and is NOT simply the APR on the loan application. Rate Spread and HOEPA are two separate fields on the HMDA LAR with two separate calculations. The rate spread web site should be used only for calculating the rate spread.
                  • HOEPA covers loans secured by the borrower’s principal residence, with certain limited exceptions, BASED ON RATES OR FEES ABOVE CERTAIN THRESHOLDS OR ‘TRIGGERS’. HOEPA has an APR trigger and a points and fees trigger.
                  • It is Monday but the table does not seem to have been updated for the current week. How do I view/update my “Average Prime Offer Rates” tables to reflect the most current week’s rates?
                    • If it is Monday and you cannot view or download the most current week’s rates, you may have to clear the "cache" on your web browser.
                      • For example, Internet Explorer users should press the Refresh button or use the menu options View, Refresh while holding down the "Ctrl" key on your keyboard. This will refresh the current web page stored in your cache with the latest content on the web page.
                      • If Refresh fails to display the updated page, you can clear your Internet Explorer cache by following the appropriate procedure below. This will delete all the files that are currently stored in your cache.
                        • For Internet Explorer version 4.0:
                          • On the View menu of your Internet Explorer toolbar, click Internet Options.
                          • Click the General tab.
                          • In the Temporary Internet files area, click Delete Files, then click OK.
                          • Click OK to close Internet Options.
                          • On the Tools menu of your Internet Explorer toolbar, click Internet Options.
                          • Click the General tab.
                          • In the Temporary Internet files area, click Delete Files, then click OK.
                          • Click OK to close Internet Options.
                          • When I submitted my data for calculation I received the message "Invalid Parameters", what does this mean?
                            • Data elements entered into the Amortization Type, Lock-In Date, APR, fixed term (loan maturity) or variable term (initial fixed-rate period) and/or Lien Status field do not meet the requirements for that field. If this is the case, a red text error message will appear to the right of the field indicating the error. OR
                            • The “Average Prime Offer Rates” tables are updated and posted to the FFIEC web site every Thursday afternoon however, the new benchmarks will be dated and effective the following Monday. The “most recently available” average prime offer rates are those most recently effective as of the date the loan's rate is set. The current date is the maximum date permitted to calculate the rate spread. Any date after the current date will result in an “invalid parameter” and error warning.
                            • What term should be used when the amortization period is longer than the term?
                              • If the amortization period of a fixed-rate loan is longer than the term of the loan – i.e., because the loan has a balloon feature- the lender should use the term when calculating the rate spread. For example, in the case of a fixed-rate loan that has a five-year term to maturity and a balloon payment because the payments are amortized over 30 years, the term of five years must be used.
                              • In an Adjustable Rate Mortgage (ARM) situation, there may be a long period to maturity and a feature whereby the rate adjusts at a much earlier time -- for example, five years. In that case, as explained above, the term is the initial, fixed-rate period, not the full term to maturity. For example, a 5/30 ARM that is amortized over 30 years must use 5 as the loan term, with the initial rate fixed for the first five years.
                              • What term should a lender use to find the average prime offer rate for a comparable transaction when the loan’s term to maturity (or, for an adjustable-rate loan, the initial fixed-rate period) is not in whole years?
                                • The lender should use the number of whole years closest to the actual term if the actual term is exactly halfway between two whole years, the lender should use the shorter of the two. For example, for a loan term of 10 years and three months, enter in the rate spread calculator (or choose the column of the appropriate average prime offer rate table corresponding to) 10 years for a loan term of 10 years and nine months, enter (or choose the column for) 11 years for a loan term of 10 years and six months, enter (or choose the column for) 10 years. If a loan term includes an odd number of days, in addition to an odd number of months, the lender first should round to the nearest whole month, again rounding down if the number of odd days is exactly halfway between two months.
                                • Do I need to manually locate the ‘rate’ on the applicable “Average Prime Offer Rates” table to use the single or batch rate spread calculator?
                                  • No. When utilizing the single or batch rate spread calculator, the user does not need to manually determine the applicable 'rate'. The single and batch rate spread calculators utilize the amortization type, lock-in date, APR, term, and lien status entered by the user to determine the applicable yield for the rate spread calculation.
                                  • An institution will use the download and save feature of the “Average Prime Offer Rates” when utilizing the FFIEC HMDA Data Entry Software or an in-house rate spread calculation program. After successfully downloading the tables, the institution can Import the tables into the HMDA software for rate spread calculations. The “Average Prime Offer Rates” tables must be downloaded each week to ensure the applicable rates are being utilized for the rate spread calculation.
                                  • How do I use the "Average Prime Offer Rates” Table using the ASCII comma delimited text file format?
                                    • Microsoft Excel
                                      • The ASCII comma delimited text file format allows the "Average Prime Offer Rates” tables to be easily retrieved into a variety of applications, but is best viewed within one that will allow the user to easily manipulate data that is in columnar format. Microsoft Excel is an example of such an application. If you have Microsoft Excel installed on your computer, the "Average Prime Offer Rates” tables will open in Microsoft Excel by default.
                                      • Column 'A' represents the 'Effective Date'. Columns 'B' through 'AY' represent the loan term.
                                      • To find the applicable rate, identify the relevant date (the effective dates listed correspond to the Monday after posting and are effective until the next posting takes effect) in the left-hand column, Column 'A', and navigate across the row until the rate corresponding to the term of the loan has been reached. Loan terms are arrayed across the top, in Columns 'B' through 'AY'.
                                      • If you don't have access to a spreadsheet application such as Microsoft Excel, you can also retrieve the "Average Prime Offer Rates” tables in an ASCII text-editing or word-processing application. However, these two application types cannot easily format the width of the data columns and will require a significant amount of manual reformatting to properly view the data.
                                      • When I view or print the ASCII comma delimited file using Microsoft Excel, some of the fields in Column 'A' show '#####'. What do I do?
                                        • When viewing the rate tables in ASCII comma delimited format using Microsoft Excel and the tables show the following characters in column A, "#####", the user must extend the width of the column. To extend the width of the column, complete the following steps
                                          • Select any cell in column 'A'.
                                          • Choose 'Format' on the top menu bar
                                          • Choose 'Column'
                                          • Choose 'Width'
                                          • Set 'Width' to 18.
                                          • Can I download the Rate Spread Calculator?
                                            • No. The FFIEC HMDA rate spread web site does not offer the capability to download the rate spread calculator. The HMDA Data Entry Software provides installation capability for the rate spread calculator as a component of the software however, the rate tables must be downloaded each week and imported into the software for the calculator to reference the applicable rates.
                                            • Can I import my loan application information into the rate spread calculator to retrieve a rate spread?
                                              • No. The FFIEC HMDA rate spread calculator does not offer the capability to import loan application data. The HMDA Data Entry Software “Batch Rate Spread Calculator” located under the utilities menu provides the ability to import loan application data that meets the HMDA file specifications provided in the software Help files.

                                              “Average Prime Offer Rates- Fixed” Table

                                              The "Average Prime Offer Rates-Fixed" table is provided by the FFIEC for use in compliance with Regulation C (HMDA) and Regulation Z (TILA/HOEPA) amendments for loans with a fixed amortization effective October 1, 2009 and forward. The Average Prime Offer Rates-Fixed table is available in ASCII comma delimited format to view, print or download.

                                              The average prime offer rates posted in the fixed table represent derived and estimated rates. The term ‘rates’ will be used consistently to represent the APRs in the “Average Prime Offer Rates” tables.

                                              “Average Prime Offer Rates- Adjustable” Table

                                              The "Average Prime Offer Rates-Adjustable" table is provided by the FFIEC for use in compliance with Regulation C (HMDA) and Regulation Z (TILA/HOEPA) amendments for loans with an adjustable amortization effective October 1, 2009 and forward. The Average Prime Offer Rates-Adjustable table is available in ASCII comma delimited format to view, print or download.

                                              The average prime offer rates posted in the adjustable table represent derived and estimated rates. The term ‘rates’ will be used consistently to represent the APRs in the “Average Prime Offer Rates” tables.

                                              Updating the “Average Prime Offer Rates” Tables

                                              The “Average Prime Offer Rates” tables will be updated and posted to the FFIEC web site every Thursday afternoon however, the new benchmarks will be dated and effective the following Monday. The “most recently available” average prime offer rates are those most recently effective as of the date the loan’s rate is set.

                                              There will be NO revisions to the “Average Prime Offer Rates” tables unless there is an error in a rate that is listed on one of the tables. If a revision to either table is necessary based on inaccurate information, a footnote will be placed on the FFIEC Rate Spread web site noting the date, time and nature of the update. A lender that determines the rate spread for a loan using an inaccurate rate contained in either table before the table is revised to correct the rate is not required to make a new determination for that loan after the revision has been made.

                                              The “Average Prime Offer Rates” tables posted on this web site are a convenient source of rate data for calculating the rate spread for HMDA reporting purposes. Regulation C permits institutions to use the “Average Prime Offer Rates” contained in these tables instead of calculating their own rates by following the methodology statement below.

                                              Methodology for Determining “Average Prime Offer Rates”

                                              The calculation of average prime offer rates is based on survey data for four hypothetical mortgage products (the four products): (1) 30-year fixed-rate (2) 15-year fixed-rate (3) five-year variable-rate and (4) one-year variable-rate [1] . The survey collects data for a hypothetical, “best quality,” 80% loan-to-value, first-lien loan. Both the five-year and one-year variable-rate products adjust to an index based on the one-year Treasury rate plus a margin and adjust annually after the initial, fixed-rate period. The Consumer Financial Protection Bureau (Bureau) makes available on the FFIEC website (https://www.ffiec.gov/ratespread/mortgagerates.htm) the survey data used to calculate APORs. This Methodology first describes all the steps necessary to calculate average prime offer rates and then provides a numerical example illustrating each step with the data from the week of May 19, 2008.

                                              The survey collects nationwide average offer prices each week. For each loan type the average commitment loan rate and points are reported, with the points expressed as percentages of the initial loan balance. For the fixed-rate products, the commitment rate is the contract rate on the loan for the variable-rate products, it is the initial contract rate. For the variable-rate products, the average margin is also reported.

                                              The survey data are used to compute an annual percentage rate (APR) for the 30- and 15-year fixed-rate products. For the two variable-rate products, a weekly estimate of the fully-indexed rate (the sum of the index and margin) is calculated as the margin (collected in the applicable survey) plus the current one-year Treasury rate, which is estimated as the average of the close-of-business, one-year Treasury rates for Monday, Tuesday, and Wednesday of the survey week. If Treasury rate data are available for fewer than three days, only yields for the available days are used for the average. Survey data on the initial interest rate and points, and the estimated fully indexed rate, are used to compute a composite APR for the one- and five-year variable-rate mortgage products. See Regulation Z official commentary, 12 CFR part 1026, Supp. I, comment 17(c)(1)-10 (creditors to compute a composite APR where initial rate on variable-rate transaction not determined by reference to index and margin).

                                              In computing the APR for the four products, a fully amortizing loan is assumed, with monthly compounding. A two-percentage-point cap on the annual interest rate adjustments is assumed for the variable-rate products. For the four products, the APR is calculated using the actuarial method, pursuant to appendix J to Regulation Z. A payment schedule is used that assumes equal monthly payments (even if this entails fractions of cents), assumes each payment due date to be the 1st of the month regardless of the calendar day on which it falls, treats all months as having 30 days, and ignores the occurrence of leap years. See 12 CFR 1026.17(c)(3). The APR calculation also assumes no irregular first period or per diem interest collected.

                                              The survey data cover fixed-rate loans with terms to maturity of 15 and 30 years and variable-rate mortgages with initial, fixed-rate periods of one and five years. The Bureau uses interpolation techniques to estimate APRs for ten additional products (two-, three-, seven-, and ten-year variable-rate loans and one-, two-, three-, five-, seven-, and ten-year fixed-rate loans) to use along with the four directly surveyed products.

                                              The Treasury Department makes available yields on its securities with terms to maturity of, among others, one, two, three, five, seven, and ten years (see http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml). The Bureau uses these data to estimate APRs for two-, three-, seven-, and ten-year variable-rate mortgages. These additional variable-rate products are assumed to have the same terms and features as the surveyed one- and five-year variable-rate products other than the length of the initial, fixed-rate period.

                                              The margin and points for the two- and three-year variable-rate products are estimated as weighted averages of the margins and points of the one-year and five-year variable-rate products. For the two-year variable-rate loan the weights are 3/4 for the one-year variable-rate and 1/4 for the five-year variable-rate. For the three-year variable-rate product, the weights are 1/2 each for the one-year and the five-year variable rate. For the seven- and ten-year variable-rate products, because they fall outside of the range between the one- and five-year surveyed variable-rate products, the margin and points of the five-year variable-rate product reported in the survey are used instead of calculating a weighted average.

                                              The initial interest rate for each of the interpolated variable-rate products is estimated by a two-step process. First, “Treasury spreads” are computed for the two- and three-year variable-rate loans as the weighted averages of the spreads between the initial interest rates on the one- and five-year surveyed variable-rate products and the one- and five-year Treasury yields, respectively. The weights used are the same as those used in the calculation of margins and points. For seven- and ten-year variable-rate loans, because they fall outside of the range between the one- and five-year surveyed variable-rate products, the spread between the initial interest rate on the five-year variable-rate product and the five-year Treasury yield is used as the Treasury spread instead of calculating a weighted average. The second step is to add the appropriate Treasury spread to the Treasury yield for the appropriate initial, fixed-rate period. All Treasury yields used in this two-step process are the Monday-Wednesday close-of-business averages, as described above. Thus, for example, for the two-year variable-rate product the estimated, two-year Treasury spread is added to the average two-year Treasury rate, and for the ten-year variable-rate product the five-year Treasury spread is added to the average ten-year Treasury rate.

                                              Thus estimated, the initial rates, margins, and points are used to calculate a fully-indexed rate and ultimately an APR for the two-, three-, seven-, and ten-year variable-rate products. To estimate APRs for one-, two-, three-, five-, seven-, and ten-year fixed-rate loans, respectively, the Bureau uses the initial interest rates and points, but not the fully-indexed rates, of the one-, two-, three-, five-, seven-, and ten-year variable-rate loan products calculated above.

                                              For any loan for which an APR of the same term to maturity or initial, fixed-rate period, as applicable, (collectively, for purposes of this paragraph, “term”) is not included among the 14 products derived or estimated from the survey data by the calculations above, the comparable transaction is identified by the following assignment rules: For a loan with a shorter term than the shortest applicable term for which an APR is derived or estimated above, the APR of the shortest term is used. For a loan with a longer term than the longest applicable term for which an APR is derived or estimated above, the APR of the longest term is used. For all other loans, the APR of the applicable term closest to the loan’s term is used if the loan is exactly halfway between two terms, the shorter of the two is used. For example: For a loan with a term of eight years, the applicable (fixed-rate or variable-rate) seven-year APR is used with a term of six months, the applicable one-year APR is used with a term of nine years, the applicable ten-year APR is used with a term of 11 years, the applicable ten-year APR is used and with a term of four years, the applicable three-year APR is used. For a fixed-rate loan with a term of 16 years, the 15-year fixed-rate APR is used and with a term of 35 years, the 30-year fixed-rate APR is used.

                                              The four APRs derived directly from data for the four products, the ten additional APRs estimated from survey data in the manner described above, and the APRs determined by the foregoing assignment rules are the average prime offer rates for their respective comparable transactions. The survey data needed for the above calculations generally are available on the FFIEC’s website on Thursday of each week. APRs representing average prime offer rates derived, estimated, or determined as above are posted in tables on the FFIEC Web site the following day. Those average prime offer rates are effective beginning the following Monday and until the next posting takes effect.

                                              The week of May 19 through 25, 2008 is used to illustrate the average prime offer rate calculation Methodology. On Thursday May 15, the following survey data reflecting national mortgage rate averages for the three day period May 12 through May 14 (each variable is expressed in percentage points) were released:

                                              30-year fixed-rate:
                                              Contract rate 6.01
                                              Points 0.6
                                              15-year fixed-rate:
                                              Contract rate 5.60
                                              Points 0.5
                                              Five-year variable-rate:
                                              Initial rate 5.57
                                              Points 0.6
                                              Margin 2.75
                                              One-year variable-rate:
                                              Initial rate 5.18
                                              Points 0.7
                                              Margin 2.75

                                              The survey contract rate and points for the 30-year and 15-year fixed-rate mortgages are used to compute APRs for these two products:

                                              30-year fixed-rate 6.07
                                              15-year fixed-rate 5.68

                                              As a preliminary step in calculating APRs for the one-year and five-year variable-rate products, average close-of-business Treasury yields for the three days in which the survey was conducted are calculated (the three yields summed before dividing by three are the close-of-business yields reported for May 12th, 13th, and 14th):


                                              One-year Treasury (2.01+2.08+2.11)/3=2.07
                                              Two-year Treasury (2.30+2.57+2.53)/3=2.43
                                              Three-year Treasury (2.54+2.70+2.78)/3=2.67
                                              Five-year Treasury (3.00+3.17+3.22)/3=3.13
                                              Seven-year Treasury (3.34+3.49+3.50)/3=3.44
                                              Ten-year Treasury (3.78+3.90+3.92)/3=3.87

                                              The fully-indexed rate for the one-year variable-rate mortgage is calculated as the one-year Treasury yield plus the margin: 2.07+2.75=4.82

                                              Because both variable-rate products in the survey data use the same margin, the fully-indexed rate for the five-year variable-rate mortgage is the same number: 2.07+2.75=4.82 (since each adjusts to the 1-year treasury).

                                              The initial rate, points, and fully-indexed rate are used to compute APRs for the one-year and five-year variable-rate products:

                                              One-year variable-rate 4.91
                                              Five-year variable-rate 5.16

                                              Data for the interpolated two-year and three-year variable-rate mortgages are calculated as weighted averages of the figures for the one- and five-year variable-rates, which are used in conjunction with the yields on the two- and three-year Treasuries as follows:

                                              Two-year variable-rate:
                                              Initial rate [3x(5.18-2.07)+1x(5.57-3.13)]/4+2.43=5.37
                                              Points [3x.7+1x.6]/4=.7
                                              Margin [3x2.75+1x2.75]/4=2.75
                                              Fully-indexed rate 2.07+2.75=4.82
                                              Three-year variable-rate:
                                              Initial rate [2x(5.18-2.07)+2x(5.57-3.13)]/4+2.67=5.45
                                              Points [2x.7+2x.6]/4=.7
                                              Margin [2x2.75+2x2.75]/4=2.75
                                              Fully-indexed rate 2.07+2.75=4.82

                                              The foregoing initial rates, points, margins, and fully-indexed rates are used to calculate APRs for the two- and three-year variable-rate products:

                                              Two-year variable-rate 4.97
                                              Three-year variable-rate 5.03

                                              Data for the seven-year and ten-year variable-rate products are estimated using the survey data for the five-year variable-rate product and yields on the seven- and ten-year Treasuries:

                                              Seven-year variable-rate:
                                              Initial rate (5.57-3.13)+3.44=5.88
                                              Points =.6
                                              Margin =2.75
                                              Fully-indexed rate 2.07+2.75=4.82
                                              Ten-year variable-rate:
                                              Initial rate (5.57-3.13)+3.87=6.31
                                              Points =.6
                                              Margin =2.75
                                              Fully-indexed rate 2.07+2.75=4.82

                                              The foregoing initial rates, points, margins, and fully-indexed rates are used to calculate APRs for the seven- and ten-year variable-rate products:

                                              Seven-year variable-rate 5.40
                                              Ten-year variable-rate 5.85

                                              The initial rate and points of the variable-rate mortgages calculated above are used to estimate APRs for fixed-rate products with terms to maturity of ten years or less:

                                              One-year fixed:
                                              Initial rate 5.18
                                              Points .7
                                              APR 6.49
                                              Two-year fixed:
                                              Initial rate 5.37
                                              Points .7
                                              APR 6.06
                                              Three-year fixed:
                                              Initial rate 5.45
                                              Points .7
                                              APR 5.92
                                              Five-year fixed:
                                              Initial rate 5.57
                                              Points .6
                                              APR 5.82
                                              Seven-year fixed:
                                              Initial rate 5.88
                                              Points .6
                                              APR 6.06
                                              Ten-year fixed:
                                              Initial rate 6.31
                                              Points .6
                                              APR 6.44

                                              [1] The “30-year” and “15-year” fixed-rate product designations refer to those products’ terms to maturity. The “one-year” and “five-year” variable-rate product designations, on the other hand, refer to those products’ initial, fixed-rate periods. All variable-rate products discussed in this Methodology have 30-year terms to maturity.

                                              Using the Single Rate Spread Calculator

                                              From the NEW FFIEC Rate Spread Calculator page, enter the following information from the loan application documents:

                                              • Amortization Type
                                              • Lock-In Date
                                              • APR
                                              • Fixed term (loan maturity) or Variable term (initial fixed-rate period)
                                              • Lien Status

                                              If the data entered contains errors or does not meet the required file specifications, an error message to the right of the field will notify the user after choosing 'Submit'. The data must be corrected to calculate a valid rate spread.

                                              Click "Submit" to calculate the rate spread for the loan application data entered.

                                              The rate spread will be calculated and provided on the front page in percentage-point format, four numerical characters and the decimal point or 'NA' if appropriate. The calculated rate spread should be entered on the HMDA LAR, including all leading and trailing zeros. For example, a calculated rate spread of 3.5 percentage points should be entered on the HMDA LAR as 03.50. A rate spread equal to 'NA' should be entered as 'NA', left justified.

                                              Using the Batch Rate Spread Calculator

                                              From the NEW FFIEC Rate Spread Calculator page, choose the "batch rate spread calculator" link from within the main paragraph.

                                              Enter the following information from the loan application documents for a maximum of 10 loans at one time:

                                              • Amortization Type
                                              • Lock-In Date
                                              • APR
                                              • Fixed term (loan maturity) or Variable term (initial fixed-rate period)
                                              • Lien Status

                                              If the data entered contains errors or does not meet the required file specifications, an error message below the field will notify the user after clicking the "Submit" button.

                                              Click "Submit" to calculate the rate spread for the loan application data entered.

                                              The rate spread will not be calculated for data containing errors in formatting or data that do not meet the file specifications. The data must be corrected and the user must "Submit" the data again to receive a valid rate spread.

                                              The rate spread will be calculated and provided in the Rate Spread box following Lien Status. The rate spread will be provided in percentage-point format, four numerical characters and the decimal point or 'NA' if appropriate. The calculated rate spread for each Record ID should be entered on the HMDA LAR, including all leading and trailing zeros. For example, a calculated rate spread of 3.5 percentage points should be entered on the HMDA LAR as 03.50. A rate spread equal to 'NA' should be entered as 'NA', left justified.

                                              Contact HMDA Processing Staff

                                              If you have a question regarding the rate spread calculator, HMDA reporting or cannot locate a particular item of interest, please email [email protected]

                                              Your comments and suggestions regarding this website are greatly appreciated.

                                              Maintained by the FFIEC. For suggestions regarding this site, Contact Us.
                                              Last Modified: 09/19/2016


                                              McDonald&aposs grew thanks to its &aposSpeedee Service System&apos

                                              The brothers closed their doors for three months and overhauled their business as a self-service restaurant where customers placed their orders at the windows. They fired their 20 carhops and ditched their silverware and plates for paper wrappings and cups so that they no longer needed a dishwasher. According to Love, they simplified their menu to just nine items—hamburgers, cheeseburgers, three soft drink flavors in one 12-ounce size, milk, coffee, potato chips and pie.

                                              “Our whole concept was based on speed, lower prices and volume,” Richard McDonald said. Taking a cue from Henry Ford’s assembly-line production of automobiles, the McDonald brothers developed the “Speedee Service System” and mechanized the kitchen of their roadside burger shack. Each of its 12-person crew specialized in specific tasks, and much of the food was preassembled. This allowed McDonald’s to prepare its food quickly𠅊nd even ahead of the time—when an order was placed. All hamburgers were served with ketchup, mustard, onions and two pickles, and any customers who wanted food prepared their way would have to wait. 

                                              WATCH: Season 1 of The Food That Built America without signing in now.

                                              The original McDonald&aposs restaurant, featuring a ten item menu built around a 15 cent hamburger, in San Bernadino, California, circa 1955.

                                              “You make a point of offering a choice and you’re dead,” Richard McDonald told The Chicago Tribune in 1985. “The speed’s gone.”

                                              According to Love, the first customer at the newly reopened McDonald’s was a 9-year-old girl ordering a bag of hamburgers. The retooled restaurant struggled at first, though, and fired carhops heckled the brothers. Once McDonald’s replaced potato chips with french fries and introduced triple-thick milkshakes, however, the business began to take off with families and businessmen drawn by the cheap, 15-cent hamburgers and a low-cost menu.


                                              Premium features, affordable price. A universal mobile surgical table for high-quality care.


                                              History

                                              The Apparel Industry
                                              The term sweatshop was first used in the nineteenth century to describe sewing factories where the conditions were hot, crowded and airless—and the workers were paid a pittance for 16-hour days. Public awareness of sweatshops is not new. New York’s Triangle Shirtwaist Factory Fire of 1911, which killed 146 workers, mostly young women, over half of them Jewish immigrants, sparked calls for reform. Exactly a century later, the Rana Plaza collapse in Bangladesh killed more than 1,100 workers—and raised new calls for reform.

                                              Yet people still work long, underpaid hours in deplorable conditions in thousands of factories. Workers (predominantly women) in the global garment industry are often poor, young, uneducated and disenfranchised. They are sometimes taken advantage of, discriminated against, denied the right to unionize, harassed, threatened and cheated. Labor laws (and enforcement) can be lax, and working conditions can be unsafe and unhealthy.

                                              This is not to say that sewing is universally difficult work or that all factories are sweatshops. For 200 years, garment sewing has been an entry-level occupation in industrializing countries, often providing local women their first independent income. Many factories produce clothing under safe, healthy and humane working conditions and pay legal, if low, wages, but they are the exception rather than the rule.

                                              Patagonia&rsquos Place in the Industry
                                              Our own employees—the nearly two thousand people who work directly for us in our offices, stores and distribution center—are paid fairly and enjoy good benefits, including generous health care, subsidized child care (in Ventura and Reno), flexible work schedules and paid time off for environmental internships. Many employees share our values, care about quality and are active in environmental and community causes. Turnover is in the single digits, and on average, we receive a couple hundred résumés each month.

                                              Like most clothing companies, we do not make our own products, nor do we own any of the factories that do. We design, test, market and sell Patagonia gear. These are our areas of strength. We pay other companies that have the technical expertise and equipment to produce the fabrics and do the actual cutting and sewing. This arrangement poses special challenges for us because we feel responsible for any work.

                                              Patagonia&rsquos Supply Chain
                                              When considering new factories, or evaluating current ones, we take a fourfold vetting approach—one that considers social and environmental practices equally with quality standards and business requirements like financial stability, adequate capacity and fair pricing.

                                              Our Social/Environmental Responsibility (SER) team can veto a decision to work with a new factory (as can, as always, our Quality team). This practice is rare in the apparel business and keeps us out of factories that don’t share our social and environmental values. We have also trained our Sourcing and Supply Planning teams in responsible purchasing practices to minimize any negative impact on the factory workers and the environment that could result from our business decisions. Our Sourcing and Quality staff work closely with our SER team and hold a joint weekly meeting to make supply chain decisions.

                                              1973 to 1990:
                                              We try to work with factories that share our values of quality and integrity. Our belief is that “you can’t make good products in a bad factory.” We work with clean, well-run factories that have skilled, experienced workers and a low turnover rate.

                                              1990:
                                              As we grow, we recognize the need to test these assumptions and begin to formalize our contractor review process. In 1990 we ask our contract managers and Quality team to begin reviewing the factories they visit, in terms of product quality and of working conditions. We make the decision not to work with any factory we can’t visit.

                                              1991:
                                              We unveil a “contractor relationship assessment” at our first supplier conference, to which we invite representatives from every factory in our supply chain. The assessment is a scorecard kept with each factory to rate its performance in different areas. We ask factory managers to do the same. If we give a factory a low mark in one area and the factory scores itself higher, the difference becomes the subject of conversation and focus. Our approach is informal, but our demands for high quality largely keep us on the responsible side of social compliance.

                                              Mid-1990s:
                                              We begin contracting with third-party auditors to visit and assess potential new factories. Though audits are but a snapshot in time, they do give an idea of a factory’s working conditions and management systems. They’re also a good way to initiate discussions about change.

                                              1996:
                                              A human-rights organization reveals that Walmart sells Kathie Lee Gifford clothing made under license by a Honduran sweatshop employing 13- and 14-year-old girls who work 20-hour days for 31 cents an hour. The work originally had been contracted to a reputable US manufacturer. But to meet strong sales demand, that factory subcontracted the work to another business that in turn subcontracted to the Honduran factory.

                                              After a public outcry, Kathie Lee Gifford, to her credit, joined the anti-sweatshop movement. Both Gifford and Patagonia were invited to take part in President Clinton’s “No Sweat Initiative.” As a result of what we learned, we created a more formal process for our company and became founding members of the Fair Labor Association (FLA), an independent multi-stakeholder verification and training organization that audits our factories.

                                              Early 2000s:
                                              After these several steps forward, we take a step back when we begin sourcing products in new factories that can produce them at a lower cost. The number of factories we work with balloons, and some of these subcontract work to other factories we know nothing about. We lose track of whom we do business with and what working conditions are like in many of our factories. For a while we drop out of the FLA.

                                              2002:
                                              We hire a manager of Social Responsibility to monitor social compliance throughout our supply chain and begin to work again with the FLA. We educate Patagonia employees about factory workplace issues to help them understand how their actions can unwittingly cause factory workers to suffer longer workweeks, hurry-up pressure and greater stress.

                                              Late 2000s:
                                              We expand our brand collaboration efforts in auditing, special engagements (with local third-party experts to help solve specific problems within a factory) and information sharing. Three of our cut-and-sew suppliers (with a total of eight factories) are now FLA members (and thus are held to the same high membership standards Patagonia must meet). We work more closely with our factories and become more familiar with their supply chain. To strengthen individual relationships and increase transparency within our supply chain, we reduce the number of primary factories we work with by 50 percent.

                                              2007:
                                              We launch The Footprint Chronicles®, which traces the social and environmental impact of our products.
                                              We ask Verité, an international nonprofit social-auditing, training and capacity-building organization, to train the 75 employees who visit our suppliers’ factories to fully understand Patagonia’s Workplace Code of Conduct. We conduct internal refresher sessions annually for both new and seasoned employees.

                                              2010:
                                              We elevate the Social Responsibility Manager position to a high-level director of Social and Environmental Responsibility. This integrates social and environmental work at the factory level.

                                              We identify all subcontractors and now audit close to 100 percent of our cut-and-sew factories, including subcontractor locations.

                                              Patagonia helps gather the top leaders in the apparel industry, nongovernmental organizations, academia and the US Environmental Protection Agency for an inaugural meeting to determine the feasibility of working together to create an index of social and environmental performance. As of 2015, there will be more than 100 members of the Sustainable Apparel Coalition, which represents a third of all clothing and footwear sold on the planet. The coalition’s aim: “An apparel industry that produces no unnecessary environmental harm and has a positive impact on the people and communities associated with its activities.”

                                              2011:
                                              We begin auditing raw-materials suppliers in December. We implement a new, cutting-edge human-trafficking detection tool. We hold our first internal training on human trafficking in the supply chain to all our product supply-chain staff.

                                              We launch our California Transparency in Supply Chains disclosure late in 2011.

                                              We launch our formalized Responsible Purchasing Practices per the Fair Labor Association requirements of our Sourcing team.

                                              2012:
                                              Our audits of raw-materials suppliers reveal that labor brokers charge foreign migrant workers from Asian countries up to $7,000 to get a job in Taiwanese fabric mills that supply Patagonia. We deem this an unacceptable practice that can lead workers into debt bondage and forced labor. We make a commitment to working with our suppliers to eliminate this practice in our supply chain. We set out to hire experienced staff to oversee this work.

                                              In an effort to understand the social and environmental impacts of our supply chain, we launch a revised and even more transparent Footprint Chronicles website.

                                              As a founding member of the FLA, we participate in multi-stakeholder discussions on the living wage. Patagonia leadership sees living wage as a company priority and as a result we begin looking at Fair Trade as a first step to getting money to workers.

                                              2013:
                                              Early in the year, we publish our revised Code of Conduct, which is reviewed and approved by the FLA. This document outlines responsible practices for our supply chain, including a living-wage component. Additionally, we implement policies to consider the living-wage rate in our costing formulas. These efforts are part of short-, medium- and long-term strategies to address living wages in our supply chain, beginning with our apparel assembly factories.

                                              Our partnership with Fair Trade USA® is one of our first steps on the journey toward living wages. We don’t own any apparel assembly factories that make our products, so we have limited control over how much workers receive. Through Fair Trade, we can supplement workers’ wages and provide them with tangible benefits that improve their lives. We pay a premium for every Patagonia item that carries the Fair Trade Certified™ label. That extra money goes directly to the workers at the factory, and they decide how to spend it. In each factory, a democratically elected Fair Trade worker committee decides how the funds will be used. We begin working with Fair Trade USA to certify our first factory this year.

                                              In a proactive effort to encourage and strengthen our factories’ ability to manage fire safety, we join and provide seed funding for the FLA’s Fire Safety Initiative. This global program trains workers and factory management to actively promote fire safety and recognize hazards and eliminate them without delay or the need to seek management approval.

                                              2014:
                                              Partnering with Verité, dedicated to ensuring people around the world work under safe, fair and legal conditions–we develop robust standards to protect migrant workers and new auditing protocol and tools to monitor their treatment, and we begin communicating our expectations to our supply chain starting in Taiwan.

                                              Within the FLA, we engage in a multi-stakeholder consultation process along with Civil Society Organizations (CSOs), US universities and apparel and footwear brands to formulate the FLA’s Fair Compensation Workplan, the FLA’s vision for how to achieve living wages in apparel and footwear assembly factories. In anticipation of the workplan, we create an internal Fair Wage Taskforce, a cross-departmental team tasked with supporting the FLA and figuring out the company’s pathway to achieving living wages in our supply chain.

                                              Building on the FLA’s Fire Safety Initiative, two of our team members and six of our apparel assembly factories begin an intensive training period to become master trainers, with the goal of cascading training throughout our apparel assembly factories over the next years.

                                              Our first facility officially becomes Fair Trade Certified, and we begin selling Fair Trade Certified™ sewn apparel in the fall. We start small, with only ten women’s sportswear styles sewn by Pratibha Syntex in India, but begin working with several other factories in different countries to expand the program.

                                              2015:
                                              We commission Verité to conduct in-depth migrant-worker assessments of our suppliers in Taiwan. As we learn the extent of the problem, we begin working on key strategies over the next several years with the goal to bring system-wide change. This includes engaging with the Taiwanese government’s Ministry of Labor, raising awareness by going public with the issues we face and our approach to dealing with them and building collaborations with peer companies to start an industry movement.

                                              We continue to grow the Fair Trade program outside India, certifying factories in Colombia, Mexico, Thailand, the US and Sri Lanka. We also release a short video about the program to educate consumers about the benefits of Fair Trade Certified clothing.

                                              Since joining the FLA’s Fire Safety Initiative in 2013, we’ve invested considerable time and resources in preparing to roll it out to our apparel assembly factories. Two of our employees in the field and representatives from six of our apparel assembly factories complete a training course led by the FLA. With a solid foundation in place, we prepare to scale the training program in the next year.

                                              The FLA’s Fair Compensation Workplan is released, which we adopt as our roadmap for achieving living wages in our apparel assembly supply chain. Importantly, the FLA aligns with the Global Living Wage Coalition’s definition of a living wage, which is “the remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including provision for unexpected events.”

                                              The workplan is divided into three phases that are meant to guide and organize FLA member companies so they move forward in unison. The first phase is called “Taking Stock” and is meant to gather detailed wage data from suppliers that demonstrates what apparel workers are earning. The second phase is called “Learning and Planning” and is dedicated to comparing worker wage data against living-wage benchmarks in order to prioritize efforts and compose strategies for improving wages. The third phase is called “Making Change” and focuses on implementing projects in collaboration with suppliers in order to raise wages over time.

                                              The workplan is used by our CEO to set an internal living-wage goal for us to work toward: reach living wages by 2025 with our apparel assembly factories. We share this internal goal with the FLA, which, combined with what we write on our website about our living-wage aspirations, leads them to acknowledge us as a leading company in their Fair Compensation Workplan.

                                              With our internal goal and the FLA workplan in effect, our Fair Wage Taskforce kicks into high gear by planning how we will generate the wage data, strategies, and avenues for industry collaboration needed to effect widespread sustainable wage improvements.

                                              Toward the end of 2015, we start thinking about the connection between agriculture and apparel. We begin learning about a new concept called “regenerative agriculture,” which prioritizes soil health while encompassing high standards for animal welfare and worker fairness. Regenerative agricultural practices have been shown to enable soil to sequester carbon, so we begin to learn more about the connection between regenerative agriculture and climate change.

                                              2016:
                                              Now equipped with two master trainers, we train two other members of our team and begin rolling out the training throughout our apparel assembly factories, bringing the total number of trained factories to 18. Each factory is now able to cascade the training throughout the workforce, and in each subsequent year we plan for tens of thousands of workers to receive regular and easily digestible training on fire safety.

                                              We begin our work with FLA members to devise the best method for gathering and analyzing wage data for our apparel assembly factories. A tool is released that is shared with a few FLA brands to test in the field. Over the course of the year, we pilot this tool with 10 of our apparel assembly factories.

                                              At the same time, the FLA begins collecting living-wage benchmarks, which will allow us to gauge the gap between what workers earn and what is considered a living wage.

                                              In the fall, Patagonia drafts its first internal white paper on “regenerative agriculture” to determine what the term means to us. We also utilize our second annual case competition with the Haas School of Business at UC Berkeley to seek answers for the question, “How can Patagonia scale regenerative agricultural practices to combat climate change?”

                                              2017:
                                              Our suppliers in Taiwan make significant improvements to working conditions for migrant workers, however, we find that fully eliminating recruitment fees remains a challenge. To put the focus squarely on this issue, we develop a detailed “Road Map to No Fees by 2020,” which outlines key deliverables for our suppliers and Patagonia to complete over the next 28 months to ensure workers hired after January 2020 never pay for their jobs.

                                              In 2017, we train an additional 11 factories in comprehensive fire safety, bringing the total number of trained factories to 29 and the total number of trained workers to more than 13,000.

                                              We continue working with the FLA to take stock of wages earned in our supply chain by completing our pilot of gathering wages for 10 apparel assembly factories. We discover that collecting wage data is enormously difficult and the data that we have managed to collect has not given us enough of the information we need to determine which factories deserve immediate attention to narrow the gap between current and living wages.

                                              To understand which of Patagonia’s apparel assembly factories deserve immediate attention to narrow the gap between current wages and a living wage, we ask MIT students in the Sustainable Business Lab—a course offered through the university’s business school—to help us find an easier way to gather wage data across a large supply chain, and they develop a model for streamlined collection.

                                              The results are shared with the FLA, and it is decided that the FLA will form a Practitioners Working Group to improve the wage data collection tool. Patagonia joins this Working Group and over the course of the year an improved tool is created that we agree to test.

                                              In late 2017 the FLA reaccredits Patagonia and publishes a report on its labor compliance program. Noted in the report are Patagonia’s strengths, including our commitment from top management to improve working conditions not only at facilities manufacturing for Patagonia, but also through deeper tiers of the supply chain the company’s strong engagement with civil society to address issues facing migrant workers, pursue living wages and ensure workers have a voice in their workplaces and our collaborative fourfold approach to purchasing, whereby the Sourcing, Quality, Environmental and Social Responsibility teams have an equal say in where and how to source products.

                                              We continue to grow the Fair Trade program, expanding into China, El Salvador and Vietnam and exploring new product types outside sportswear—including wetsuits and technical clothing.

                                              In 2017, we engage further with regenerative agriculture and form a group of experts to explore the possibility of creating a holistic farm-level certification program that would encompass regenerative organic agriculture as well as high bar standards for animal-welfare and social fairness. In the fall, we release a first draft of the framework for the “Regenerative Organic Certification (ROC)” for comment, along with key partners, including the Rodale Institute, Dr. Bronner’s, Compassion in World Farming, Textile Exchange, Demeter International, Fair World Project, Grain Place Foods and White Oak Pastures. ROC is a holistic agriculture certification encompassing pasture-based animal welfare, fairness for farmers and workers and robust requirements for soil health and land management. By the end of the year, we come together with our partner organizations to form a new nonprofit organization, called the “Regenerative Organic Alliance,” to own and manage the ROC.

                                              2018:
                                              Patagonia becomes a signatory to the Responsible Recruitment pledge drawn up by the Fair Labor Association and American Apparel and Footwear Association, which is a public commitment to ensure no workers pay for their jobs.

                                              In 2018, we train an additional 15 factories in fire safety, bringing the total number of trained factories to 44. This year, these factories train an additional 65,000 workers, bringing the total number of trained workers in our apparel assembly supply chain to 80,000.

                                              Early in the year we pilot the FLA’s improved wage data collection tool with 10 apparel assembly factories. The pilots go well, and after analyzing the results, we use them within the Practitioners Working Group to refine the tool to its final state.

                                              Before rolling out the new and improved tool to our apparel assembly factories, we schedule interactive training webinars with our apparel suppliers and 100 percent of our apparel assembly factories attend. In this webinar we officially launch our living-wage program with our suppliers, define the living wage, show the importance of the living wage, communicate our strategy for achieving living wage, discuss next steps and our program timeline and answer questions and receive feedback.

                                              After the official launch of our program with our suppliers, we then finish collecting wage data. With this data in tow, we once again enlist the help of the MIT Sustainable Business Lab to help us analyze the data. They create an incredible tool for us that incorporates the detailed wage data we’ve gathered from our apparel assembly factories as well as the living-wage benchmarks that the FLA has supplied.

                                              The MIT project also provides a few new frameworks for data analysis, including comparing worker wages at the country level to show our geographic priorities, comparing wages per factory against our production percentage in order to show our business priorities and breaking down worker compensation into its component parts in order to help us understand what our factory partners can prioritize in order to increase wages.

                                              This analysis gives us the first indication of where we are in relation to achieving living wages at our apparel suppliers. The good news is we’re in better shape than we thought, and we share the results of our initial analysis in the 2018 Environmental and Social Initiatives Booklet, where we state that on average our apparel assembly factories pay 81 percent of the living wage.

                                              In 2018, we change our mission statement to “We’re in business to save our home planet” and shift our focus to solutions including doubling down on regenerative agriculture as a way to reverse climate change.

                                              In February, Patagonia hosts its first Regenerative Organic Fiber Summit, moderated by LaRhea Pepper of Textile Exchange, an NGO focused on sustainable fibers. The summit brings together four of our key organic cotton suppliers from all over the world to discuss the barriers to growth of the organic cotton sector and to explore the possibilities of using regenerative organic practices in cotton production.

                                              In March, the Regenerative Organic Alliance (ROA) officially launch the Regenerative Organic Certification (ROC) at Expo West (the largest natural products trade show). NSF International is selected to manage the ROC certification program and together with the ROA, they launch a global pilot to test and refine the ROC frameworks with 22 brands, farmers, ranches and vineyards. As part of that pilot, we launch projects with two of our key organic cotton suppliers in India to test out the regenerative practices with more than 150 smallholder organic cotton farmers in India.

                                              2019:
                                              Throughout 2019, we work side-by-side with each of our suppliers in Taiwan to help them build recruitment and employment systems that protect migrant workers from paying fees for their jobs. This is in support of our goal to eliminate all fees in our supply chain by 2020. In 2020 and beyond, we will be continuously monitoring our suppliers to ensure that their recruitment systems remain effective in ensuring workers are not paying to obtain or keep their jobs.

                                              This year we train an additional 9 factories in fire safety, bringing the total number of trained factories to 54. These factories train an additional 70,000 workers, bringing the total number of trained workers in our apparel assembly supply chain to 150,000.

                                              We also try out a new approach to gather qualitative information on the success of this training program by surveying workers in four factories in China that were among the first factories to receive training from us. The results are encouraging: 5,884 workers participated in the survey 98 percent report that their knowledge of fire safety has improved 99 percent report that their workplace’s fire safety culture has improved 97 percent feel more confident to take the initiative to report fire safety hazards, and likewise report that they feel able to refuse to work without penalty if they perceive the workplace to be unsafe.

                                              Overall, we feel that the survey is an effective means of gauging the impact of the fire safety training on workers in our apparel assembly factories and is something we’d like to continue in the years to come. As a tool for increasing worker involvement in workplace health and safety, the survey results show how the FLA’s Fire Safety Initiative has increased the engagement and confidence of workers in the fire safety culture of their workplaces.

                                              In 2019, we update our analysis of living wages in our apparel assembly supply chain and can report that on average our suppliers pay 88 percent of the living wage. This analysis is helpful, but we want to engage in more public communication, and so we once again enlist the MIT Sustainable Business Lab to advise us on the most effective way to go about this. They conclude that we should focus first on our customers to harness their buying power for good, and second on industry peers to share what has worked for us so that we can move together in unison. This helps us plan for the content we aim to make public in 2020.

                                              Additionally, this year we begin planning pilots for how to work in partnership with our apparel assembly suppliers to increase worker wages without jeopardizing the competitiveness of these factories. One or two pilots will take place each year, and the results will be shared with the FLA to create a helpful forum for participating brands to work together toward a common goal.

                                              In 2019, we celebrate five years of our partnership with Fair Trade USA. As part of that celebration, we launch a Fair Trade product pop-up in NYC with other Fair Trade brands such as West Elm and Kroger. We work with Fair Trade certified factories in nine countries, impacting more than 66,000 workers. Approximately 70 percent of our products in Spring and Fall 2019 are made at Fair Trade certified factories—a huge increase since we started in 2014 with 10 styles at one factory in India.

                                              In 2019, our organic cotton partners in India continue to scale the ROC pilots, expanding from more than 150 farmers to more than 550. They begin to see benefits from the regenerative organic practices on the ground and engage with the ROA to provide feedback on the ROC framework during the pilot period.

                                              We guarantee everything we make.

                                              Because we know prioritizing durability results in consuming less energy, wasting less water and creating less trash.


                                              Use of Average Prime Offer Rate in Mortgages

                                              A mortgage loan, secured by primary residence, is considered a higher priced mortgage loan (HPML) if the APR of the loan is higher than the APOR by a certain percentage. This is based on the type of the loan as below:

                                              1. First Lien Mortgages : The loan will be considered an HPML if the APR is 1.5% or more higher than the APOR.
                                              2. Non-Conforming/Jumbo Loans : The loan will be considered an HPML if the APR is 2.5% or more higher than the APOR.
                                              3. Subordinate Lien Mortgages : The loan will be considered an HPML if the APR is 3.5% or more higher than the APOR.
                                              Type of Loan Loan is an HPML if
                                              First Lien
                                              Mortgage
                                              APOR – APR → 1.5%
                                              Non-Conforming
                                              Loan
                                              APOR – APR → 2.5%
                                              Subordinate Lien
                                              mortgage
                                              APOR – APR → 3.5%

                                              HPMLs are subject to additional appraisal and escrow requirements under Regulation Z (12 CFR 1026.35)


                                              Social Security

                                              A: The Social Security Act was signed by FDR on 8/14/35. Taxes were collected for the first time in January 1937 and the first one-time, lump-sum payments were made that same month. Regular ongoing monthly benefits started in January 1940.


                                              Q2: What is the origin of the term "Social Security?"

                                              A: The term was first used in the U.S. by Abraham Epstein in connection with his group, the American Association for Social Security. Originally, the Social Security Act of 1935 was named the Economic Security Act, but this title was changed during Congressional consideration of the bill. (The full story has been recounted by Professor Edwin Witte who was present at the event.)


                                              Q3: When did Medicare start?

                                              A: Medicare was passed into law on July 30, 1965 but beneficiaries were first able to sign-up for the program on July 1, 1966.

                                              Q4: Is it true that Social Security was originally just a retirement program?

                                              A: Yes. Under the 1935 law, what we now think of as Social Security only paid retirement benefits to the primary worker. A 1939 change in the law added survivors benefits and benefits for the retiree's spouse and children. In 1956 disability benefits were added.

                                              Keep in mind, however, that the Social Security Act itself was much broader than just the program which today we commonly describe as "Social Security." The original 1935 law contained the first national unemployment compensation program, aid to the states for various health and welfare programs, and the Aid to Dependent Children program. (Full text of the 1935 law.)

                                              Q5: Is it true that members of Congress do not have to pay into Social Security?

                                              A: No, it is not true. All members of Congress, the President and Vice President, Federal judges, and most political appointees, were covered under the Social Security program starting in January 1984. They pay into the system just like everyone else. Thus all members of Congress, no matter how long they have been in office, have been paying into the Social Security system since January 1984.

                                              (Prior to this time, most Federal government workers and officials were participants in the Civil Service Retirement System (CSRS) which came into being in 1920--15 years before the Social Security system was formed. For this reason, historically, Federal employees were not participants in the Social Security system.)

                                              Employees of the three branches of the federal government, were also covered starting in January 1984, under the 1983 law--but with some special transition rules.

                                              1) Executive and judicial branch employees hired before January 1, 1984 were given a one-time irrevocable choice of whether to switch to Social Security or stay under the old CSRS. (Rehired employees--other than rehired annuitants--are treated like new employees if their break-in-service was more than a year.)

                                              2) Employees of the legislative branch who were not participating in the CSRS system were mandatorily covered, regardless of when their service began. Those who were in the CSRS system were given the same one-time choice as employees in the executive and judicial branches.

                                              3) All federal employees hired on or after January 1, 1984 are mandatorily covered under Social Security--the CSRS system is not an option for them.

                                              So there are still some Federal employees, those first hired prior to January 1984, who are not participants in the Social Security system. All other Federal government employees participate in Social Security like everyone else.

                                              This change was part of the 1983 Amendments to Social Security. You can find a summary of the 1983 amendments elsewhere on this site.


                                              Q6: Is is true that the age of 65 was chosen as the retirement age for Social Security because the Germans used 65 in their system, and the Germans used age 65 because their Chancellor, Otto von Bismarck, was 65 at the time they developed their system?

                                              A: No, it is not true. Generally, age 65 was chosen to conform to contemporary practice during the 1930s. (See more detailed explanation.)


                                              Q7: Is it true that life expectancy was less than 65 back in 1935, so the Social Security program was designed in such a way that people would not live long enough to collect benefits?

                                              A: Not really. Life expectancy at birth was less than 65, but this is a misleading measure. A more appropriate measure is life expectancy after attainment of adulthood, which shows that most Americans could expect to live to age 65 once they survived childhood. (See more detailed explanation.)


                                              Q8: When did COLAs (cost-of-living allowances) start?

                                              A: COLAs were first paid in 1975 as a result of a 1972 law. Prior to this, benefits were increased irregularly by special acts of Congress.

                                              Q9: What information is available from Social Security records to help in genealogical research?

                                              A: You might want to start by checking out the Social Security Death Index which is available online from a variety of commercial services (usually the search is free). The Death Index contains a listing of persons who had a Social Security number, who are deceased, and whose death was reported to the Social Security Administration. (The information in the Death Index for people who died prior to 1962 is sketchy since SSA's death information was not automated before that date. Death information for persons who died before 1962 is generally only in the Death Index if the death was actually reported to SSA after 1962, even though the death occurred prior to that year.)

                                              If you find a person in the Death Index you will learn the date of birth and Social Security Number for that person. (The Social Security Death Index is not published by SSA for public use, but is made available by commercial entities using information from SSA records. We do not offer support of these commercial products nor can we answer questions about the material in the Death Index.)

                                              Other records potentially available from SSA include the Application for a Social Security Number (form SS-5). To obtain any information from SSA you will need to file a Freedom of Information Act (FOIA) request.


                                              Q10: Does Social Security have any lists of the most common names in use in the U.S.?

                                              A: Yes, based on the applications for Social Security cards, SSA's Office of the Actuary has done a series of special studies of the most common names.

                                              Q11: Where do I get more information about the Social Security program as it exists today?

                                              Q12: Who was the first person to get Social Security benefits?

                                              A: A fellow named Ernest Ackerman got a payment for 17 cents in January 1937. This was a one-time, lump-sum pay-out--which was the only form of benefits paid during the start-up period January 1937 through December 1939.


                                              Q13: If Ernest Ackerman only received a single lump-sum payment, who was the first person to received ongoing monthly benefits?

                                              A: A woman named Ida May Fuller , from Ludlow, Vermont was the first recipient of monthly Social Security benefits.


                                              Q14: How many people, annually, have received Social Security payments?

                                              A: This history is available as a detailed table. (Payment history table)

                                              Q15: What is the "notch"?

                                              A: In 1972 a technical error was introduced in the law which resulted in beneficiaries getting a double adjustment for inflation. In 1977 Congress acted to correct the error. Instead of making the correction immediate, they phased it in over a five year period (this is the notch period). This phase-in period was defined as affecting those people born in 1917-1921. Individuals in the notch generally receive higher benefits than those born after the notch, although they receive lower benefits than those born in the period prior to the notch when the error was in effect.

                                              Q16: Where can I find the history of the tax rates over the years and the amount of earnings subject to Social Security taxes?

                                              A: The history of the tax rates is available as an Adobe PDF file. (Tax rate table). There is also a table showing the maximum amount of Social Security taxes that could have been paid since the program began.

                                              There are also tables showing the minimum and maximum Social Security benefit for a retired worker who retires at age 62 and one who retires at age 65.

                                              Also, there is a table showing the number of workers paying into Social Security each year. (Covered workers table) And also a table showing the ratio of covered workers to beneficiaries. (Ratio table)

                                              Q17: What does FICA mean and why are Social Security taxes called FICA contributions?

                                              A: Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). The payroll taxes are sometimes even called "FICA taxes." In the original 1935 law the benefit provisions were in Title II of the Act and the taxing provisions were in a separate title, Title VIII. As part of the 1939 Amendments, the Title VIII taxing provisions were taken out of the Social Security Act and placed in the Internal Revenue Code. Since it wouldn't make any sense to call this new section of the Internal Revenue Code "Title VIII," it was renamed the "Federal Insurance Contributions Act." So FICA is nothing more than the tax provisions of the Social Security Act, as they appear in the Internal Revenue Code.

                                              Q18: Is there any significance to the numbers assigned in the Social Security Number?

                                              A: Yes. Originally, the first three digits are assigned by the geographical region in which the person was residing at the time he/she obtained a number. Generally, numbers were assigned beginning in the northeast and moving westward. So people on the east coast have the lowest numbers and those on the west coast have the highest numbers. The remaining six digits in the number are more or less randomly assigned and were organized to facilitate the early manual bookkeeping operations associated with the creation of Social Security in the 1930s.

                                              Beginning on June 25, 2011, the SSA implemented a new assignment methodology for Social Security Numbers. The project is a forward looking initiative of the Social Security Administration (SSA) to help protect the integrity of the SSN by establishing a new randomized assignment methodology. SSN Randomization will also extend the longevity of the nine-digit SSN nationwide.

                                              For more information on the randomization of Social Security Numbers, please visit this website:


                                              Q19: How many Social Security numbers have been issued since the program started?

                                              A: Social Security numbers were first issued in November 1936. To date, 453.7 million different numbers have been issued.


                                              Q20: Are Social Security numbers reused after a person dies?

                                              A: No. We do not reassign a Social Security number (SSN) after the number holder's death. Even though we have issued over 453 million SSNs so far, and we assign about 5 and one-half million new numbers a year, the current numbering system will provide us with enough new numbers for several generations into the future with no changes in the numbering system.


                                              Q21: When did Social Security cards bear the legend "NOT FOR IDENTIFICATION"?

                                              A: The first Social Security cards were issued starting in 1936, they did not have this legend. Beginning with the sixth design version of the card, issued starting in 1946, SSA added a legend to the bottom of the card reading "FOR SOCIAL SECURITY PURPOSES -- NOT FOR IDENTIFICATION." This legend was removed as part of the design changes for the 18th version of the card, issued beginning in 1972. The legend has not been on any new cards issued since 1972.

                                              Q22: Does the Social Security Number contain a code indicating the racial group to which the cardholder belongs?

                                              A: No. This is a myth. The Social Security Number does contain a segment (the two middle numbers) known as "the group number." But this refers only to the numerical groups 01-99. It has nothing to do with race. (See more detailed explanation.)Financing


                                              Q23: Has Social Security ever been financed by general tax revenues?

                                              A: Not to any significant extent. (See detailed explanation.)

                                              Q24: How much has Social Security paid out since it started?

                                              A: From 1937 (when the first payments were made) through 2009 the Social Security program has expended $11.3 trillion.

                                              Q25: How much has Social Security taken in taxes and other income since it started?

                                              A: From 1937 (when taxes were first collected) through 2009 the Social Security program has received $13.8 trillion in income.

                                              Q26: Has Social Security always taken in more money each year than it needed to pay benefits?

                                              A: No. So far there have been 11 years in which the Social Security program did not take enough in FICA taxes to pay the current year's benefits. During these years, Trust Fund bonds in the amount of about $24 billion made up the difference. (See detailed Table.)

                                              Q27: Do the Social Security Trust Funds earn interest?

                                              A: Yes they do. By law, the assets of the Social Security program must be invested in securities guaranteed as to both principal and interest. The Trust Funds hold a mix of short-term and long-term government bonds. The Trust Funds can hold both regular Treasury securities and "special obligation" securities issued only to federal trust funds. In practice, most of the securities in the Social Security Trust Funds are of the "special obligation" type. (See additional explanation from SSA's Office of the Actuary.)

                                              The Trust Funds earn interest which is set at the average market yield on long-term Treasury securities. Interest earnings on the invested assets of the combined OASI and DI Trust Funds were $55.5 billion in calendar year 1999. This represented an effective annual interest rate of 6.9 percent.

                                              The Trust Funds have earned interest in every year since the program began. More detailed information on the Trust Fund investments can be found in the Annual Report of the Social Security Trustees and on the Actuary's webpages concerning the Investment Transactions and Investment Holdings of the Trust Funds.

                                              Q28: Did President Franklin Roosevelt make a set of promises about Social Security, which have now been violated?

                                              A: This question generally refers to a set of misinformation that is propagated over the Internet (usually via email) from time to time. (See a detailed explanation here.)

                                              Q29: I have seen a set of questions and answers on the Internet concerning who started the taxing of Social Security benefits, and questions like that. Are the answers given correct?


                                              Checking Account Rates

                                              With checking accounts, the interest rates tend to be lower. That’s generally fine because most people don’t keep a lot of money in a checking account. Any extra money one has should be moved over to a high-yield savings product. That being said, many banks do offer interest checking accounts. Here it’s critical to consider fees, which are more common than on savings and money market accounts.

                                              Finally, if you know of other bank accounts or deals we should include in our list, please leave a comment below.


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                                              Results [ ]

                                              Josephine [ ]

                                              As ordered, Isthmus Goodson now resides in an allied Lord's tower cell, attended by polite but hooded servants. Claims against him seem dubious, but there is no denying that he was stocked to supply a significant force, should one have come calling.

                                              Josephine

                                              A note from the Inquisition apothecary:

                                              Interesting times, Inquisitor. Though it was not the final action I was hoping for, I thank you for this interjection. I look forward to ensuring the health and effectiveness of the Inquisition for as long as needed.

                                              Elan Ve'Mal

                                              Leliana [ ]

                                              Isthmus Goodson is dead. As you ordered.

                                              Leliana

                                              A note from the Inquisition apothecary:

                                              Interesting times, Inquisitor. I appreciate the finality with which you address potential problems, and I assure you that this action was both for my interests and for yours. Although I promise yours are far loftier, far more deserving, and will retain my full attention for as long as needed.

                                              Elan Ve'mal

                                              Cullen [ ]

                                              Our soldiers allowed Isthmus Goodson to leave his holdings before they razed his fields. There were reportedly several oddly colored clouds that choked a flock of birds. While there is no sign that Isthmus intended to supply an enemy, he had the means to do so.

                                              Cullen

                                              A note from the Inquisition apothecary:

                                              Interesting times, Inquisitor. Though it was not the final action I was hoping for, I thank you for this interjection. I look forward to ensuring the health and effectiveness of the Inquisition for as long as needed.

                                              Elan Ve'Mal


                                              Watch the video: The Tomb Of Osiris??? (May 2022).