The CFPB has issued a final rule to adjust certain dollar amounts for rules in Regulation Z and Regulation M. The adjustments are effective January 1, 2015.
Regulation Z and Regulation M Exemption Threshold
- The exemption threshold for both Regulation Z and Regulation M was increased to $54,600 (12 CFR 1026.3(b)). Consumer credit and leases over the threshold amount are exempt, except that consumer mortgage loans and private education loans are not covered by the exemption.
Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act)
- The minimum interest charge disclosure thresholds did not change (12 CFR 1026.6(b)(2)(iii) and 1026.60(b)(3)).
- The penalty fees safe harbor was increased to $27 for a first late payment and to $38 for subsequent violations within the following six months (12 CFR 1026.52(b)(1)(ii)(A) and (B)).
Home Ownership and Equity Protection Act of 1994 (HOEPA)
- For HOEPA loans, the adjusted total loan amount threshold was increased from $20,000 to $20,391, and the statutory fee trigger was increased from $1,000 to $1,020 (12 CFR 1026.32(a)(1)(ii)(A) and (B)).
Dodd-Frank Wall Street Reform and Consumer Protection Act
- The CFPB modified the points and fees thresholds for determining whether a covered transaction is a qualified mortgage under the Ability-to-Repay (APR) rule. (Official Interpretations, 12 CFR 1026.43, Paragraph 43(e)(3)(ii), Comment 1). For qualified mortgage (QM) treatment, a transaction’s total points and fees cannot exceed:
- 3% of the total loan amount for a loan greater than or equal to $101,953
- $3,059 for a loan amount greater than or equal to $61,172 but less than $101,953
- 5% of the total loan amount greater than or equal to $20,391 but less than $61,172
- $1,020 for a loan amount greater than or equal to $12,744 but less than $20,391
- 8% of the total loan amount for loans less than $12,744