On October 30, 2019, the Consumer Financial Protection Bureau issued three joint final rules amending the Regulation Z and Regulation M thresholds for exempting certain consumer transactions in 2020.1 Products affected include higher-priced mortgage loans, consumer credit transactions and consumer leases.
The Dodd-Frank Wall Street Reform and Consumer Protection Act amended the Truth in Lending Act by requiring rules for appraisals on principal residences securing higher-priced loans and by increasing the threshold for exempt consumer credit transactions. The Dodd-Frank Act also amended the Consumer Leasing Act by increasing the threshold for exempt consumer leases. These thresholds are adjusted annually for inflation. Regulation Z implements the Truth in Lending Act and Regulation M implements the Consumer Leasing Act.
The first rule increases the Regulation Z threshold for exempting higher-priced mortgage loans from the special appraisal requirements to $27,200. This adjustment becomes effective January 1, 2020.
To read more about the higher-priced mortgage loans exemption threshold, credit unions should go to the Federal Register.
The second and third rules increase the thresholds in Regulation Z and Regulation M to $58,300, for exempting consumer credit transactions from Truth in Lending Act and consumer leases from the Consumer Leasing Act. These adjustments become effective January 1, 2020.
Credit unions can read more about the Truth in Lending Act consumer credit exemption threshold at https://www.federalregister.gov/documents/2019/10/30/2019-21557/truth-in-lending-regulation-z, and the Consumer Leasing Act lease exemption threshold at https://www.federalregister.gov/documents/2019/10/30/2019-21554/consumer-leasing-regulation-m.
Additional Information
Credit unions can find more information about the affected products on the NCUA’s Consumer Compliance Regulatory Resources page.
Please contact the Office of Consumer Financial Protection at 703.518.1140 or by email at ComplianceMail@ncua.gov if you have questions. You can also contact your NCUA regional office or your state supervisory authority.
Footnotes
1 The CFPB issued the three final rules jointly with other financial regulators, who retain authority to set some or all of the thresholds for certain institutions. Those regulators adopted the same threshold amounts as CFPB. The CFPB has sole authority to set these thresholds for credit unions.