Dear Boards of Directors and Chief Executive Officers:
On November 2, 2021, the Consumer Financial Protection Bureau (CFPB) published its Truth in Lending (Regulation Z) Annual Threshold Adjustments (Credit Cards, HOEPA, and Qualified Mortgages) Final Rule in the Federal Register (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. We encourage you to read the NCUA's exit link policies. (opens new page).) .1 The CFPB is required to calculate the dollar amounts for several provisions in Regulation Z each year.2 These include provisions in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Home Ownership and Equity Protection Act of 1994 (HOEPA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).
The CFPB has adjusted the dollar amounts, where appropriate, based on the annual percentage change reflected in the Consumer Price Index (CPI) in effect June 1, 2021. The adjusted thresholds will go into effect January 1, 2022.
The annual threshold adjustments are as follows:
- Credit Card/Open-end Annual Adjustments
- Minimum Interest Charge Disclosure Thresholds (§§ 1026.6(b)(2)(iii) and 1026.60(b)(3)): For all open-end consumer credit plans under the Truth in Lending Act (TILA), the threshold that triggers requirements to disclose minimum interest charges will remain unchanged at $1.00 for the year 2022.
- Safe Harbor Penalty Fees (§ 1026.52(b)(1)(ii)(A) and (B) and Comment 52(b)(1)(ii)-2.i): For open-end consumer credit plans under the CARD Act amendments to TILA (§ 1026.52(b)(1)(ii)(A)), the adjusted dollar amount for the safe harbor for a first violation penalty fee will increase to $30 for the year 2022. The adjusted dollar amount for the safe harbor for a subsequent violation penalty fee (§ 1026.52(b)(1)(ii)(B)) will increase to $41 for the year 2022.
- HOEPA (§ 1026.32(a)(1)(ii) and Comments 32(a)(1)(ii)-1 and -3): For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages for the year 2022 will be $22,969, an increase from $22,052 in 2021. The adjusted points and fees dollar trigger for high-cost mortgages (§ 1026.32(a)(1)(ii)(B)) for the year 2022 will be $1,148, an increase from $1,103 in 2021.
- Qualified Mortgages (§ 1026.43(e) and Comment 43(e)(3)(ii)-1): To determine consumers’ ability to repay mortgage loans, the maximum thresholds for total points and fees for qualified mortgages in 2022 will be:
|Regulation Z Provision||2022 Amounts||2021 Amounts|
|3% of total loan amount for loan amount greater than $100,000||Greater than or equal to $114,847||Greater than or equal to $110,260|
|$3,000 for loan amount greater than or equal to $60,000 but less than $100,000||$3,445 for loans greater than or equal to $68,908 but less than $114,847||$3,308 for loans greater than or equal to $66,156 but less than $110,260|
|5% of total loan amount for loans greater than or equal to $20,000 but less than $60,000||5% for loans greater than or equal to $22,969 but less than $68,908||5% for loans greater than or equal to $22,052 but less than $66,156|
|$1,000 for loan amount greater than or equal to $12,500 but less than $20,000||$1,148 for loans greater than or equal to $14,356 but less than $22,969||$1,103 for loans greater than or equal to $13,783 but less than $22,052|
|8% of total loan amount for loans less than $12,500||8% for loans less than $14,356||8% for loans less than $13,783|
If you have questions about the information in this regulatory alert, please contact the NCUA’s Office of Consumer Financial Protection at 703.518.1140 or ComplianceMail@ncua.gov. You can also contact your NCUA regional office or your state supervisory authority.
Todd M. Harper