CFPB Issues Regulation Z Annual Threshold Adjustments

The CFPB recently announced annual adjustments to dollar amounts of various thresholds under the Truth in Lending Act regulations, specifically the CARD Act, HOEPA, and ATR/QM, that will apply to certain consumer credit transactions. The adjustments are based on the annual percentage change reflected in the Consumer Price Index.

For open-end consumer credit plans under the CARD Act, the threshold that triggers requirements to disclose minimum interest charges will remain unchanged in 2017. However, the CFPB is correcting a calculation error pertaining to the subsequent violation penalty fee of the safe harbor provision from $37 to $38. The adjusted dollar amount for this provision will remain unchanged in 2017 from the corrected amount of $38 applicable in 2016. This revision is effective upon publication in the Federal Register.

For HOEPA loans, the adjusted total amount threshold for high-cost mortgages in 2017 will be $20,579. The adjusted point and fees dollar trigger for high-cost mortgages will be $1,029.

For the general rule to determine consumers’ ability to repay mortgage loans, the maximum threshold for total points and fees for qualified mortgages in 2017 will be 3 percent of the total loan amount for a loan greater than or equal to $102,894; $3,087 for a loan amount greater than or equal to $61,737 but less than $102,894; 5 percent of the total loan amount greater than or equal to $20,579 but less than $61,737; $1,029 for a loan amount greater than or equal to $12,862 but less than $20,579; and 8 percent of the total loan amount for a loan amount less than $12,862.

The final rule is effective January 1, 2017.