Agencies Announce Annual Threshold Adjustments Under TILA, CLA, and FCRA
Several federal agencies recently announced – effective January 1, 2024 – annual adjustments to various regulatory thresholds involving, among other things, higher-priced mortgage loans (HPMLs), HOEPA loans, and qualified mortgages (QMs).
The CFPB, Federal Reserve Board (FRB), and OCC announced the annual adjustment to the smaller loan exemption threshold, which exempts loans under the threshold from the special appraisal requirements for HPMLs under TILA. The exemption threshold is adjusted each year based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which increased 4.6 percent from April 2022 to April 2023.
Effective January 1, 2024, the exemption threshold for HPMLs will increase from $31,000 to $32,400.
Additionally, the CFPB and FRB amended TILA’s implementing regulation, Regulation Z, and the Consumer Leasing Act’s (CLA) implementing regulation, Regulation M, to reflect the annual adjusted threshold for exempt transactions under TILA and the CLA. These thresholds are also based on the 4.6 percent increase in CPI-W from April 2022 to April 2023.
Effective January 1, 2024, the threshold amount for exempt consumer credit transactions under Regulation Z and exempt consumer leases under Regulation M will increase from $66,400 to $69,500.
The CFPB also recently announced annual adjustments to various additional thresholds in Regulation Z, based on applicable consumer price index increases. Effective January 1, 2024, certain thresholds in Regulation Z will be increased, including: (i) for HOEPA loans, increases to the adjusted total loan amount threshold ($26,092) and adjusted points-and-fees dollar trigger ($1,305) for high-cost mortgages; (ii) for general QMs, increases to the maximum thresholds for the spread between annual percentage rate (APR) and average prime offer rate (APOR) for covered first-lien loans (e.g., 2.25 or more percentage points for a covered first-lien loan greater than or equal to $130,461), certain covered first-lien loans secured by a manufactured home, and covered subordinate-lien loans; and (iii) for all QMs, increases to the thresholds for total points and fees (e.g., 3 percent of the total loan amount for a loan greater than or equal to $130,461).
Further, the CFPB announced the annual adjustment to the maximum allowable charge that a consumer reporting agency may charge a consumer for file disclosures under FCRA, when applicable. The maximum allowable charge is adjusted annually based on a proportional increase in the Consumer Price Index for All Urban Consumers (CPI-U), and rounded to the nearest $0.50. The CPI-U increased 90.936 percent from September 1997 to September 2023.
Effective January 1, 2024, the maximum allowable charge for a file disclosure will be $15.50, up $1 from 2023.
