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Financial Services Law Insights and Observations

CFPB adjusts annual dollar amount thresholds under TILA regulations

Agency Rule-Making & Guidance CFPB TILA CARD Act Credit Cards HOEPA Qualified Mortgage Dodd-Frank

Agency Rule-Making & Guidance

On August 1, the CFPB published in the Federal Register the final rule amending Regulation Z, which implements the Truth in Lending Act (TILA), including as amended by 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’s ability-to-repay and qualified mortgage (ATR/QM) provisions. The CFPB is required to make annual adjustments to dollar amounts in certain provisions in Regulation Z, and has based the adjustments on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2019. The following thresholds will be effective on January 1, 2020:

  • For open-end consumer credit plans under TILA, the threshold for disclosing an interest charge will remain unchanged at $1.00;
  • For open-end consumer credit plans under the CARD Act amendments, the adjusted dollar amount for the safe harbor for a first violation penalty fee will increase from $28 to $29, and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will increase from $39 to $40;
  • For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages will be $21,980, and the adjusted points and fees dollar trigger for high-cost mortgages will be $1,099; and
  • The maximum thresholds for total points and fees for qualified mortgages under the ATR/QM rule will be: (i) 3 percent of the total loan amount for loans greater than or equal to $109,898; (ii) $3,297 for loan amounts greater than or equal to $65,939 but less than $109,898; (iii) 5 percent of the total loan amount for loans greater than or equal to $21,980 but less than $65,939; (iv) $1,099 for loan amounts greater than or equal to $13,737 but less than $21,980; and (v) 8 percent of the total loan amount for loan amounts less than $13,737.
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