CFPB Publishes Final Rule Amending Various Annual Dollar Threshold Adjustments

CFPB Agency Rule-Making & Guidance

On September 21, the CFPB issued a final rule amending certain dollar thresholds for provisions implementing amendments in Regulation Z, which implements the Truth in Lending Act (TILA), under the CARD Act, HOEPA, and ATR/QM. The CFPB is required to adjust based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2015. For 2016, the minimum interest charge disclosure threshold will remain unchanged. Permissible penalty amounts will remain $27 for the first late payment; however, for each subsequent violation within the following six months, the allowed penalty amount will decrease from $38 to $37. Similarly, the CFPB is adjusting the combined points and fees trigger-threshold for compliance with HOEPA to $1,017. Lastly, to satisfy the underwriting requirements under the ATR/QM rule, a covered transaction will not be considered a QM unless the combined points and fees do not exceed 3 percent of the total loan amount for a loan greater than or equal to $101,749; $3,052 for a loan amount greater than or equal to $61,050 but less than $101,749; 5 percent of the total loan amount for a loan greater than or equal to $20,350 but less than $61,050; $1,017 for a loan amount greater than or equal to $12,719 but less than $20,350; and 8 percent of the total loan amount for a loan amount less than $12,719.

The rule becomes effective on January 1, 2016.