CFPB Announces Threshold Adjustments Under TILA (Regulation Z)
- Source: consumerfinance.gov
Takeaway:
The Consumer Financial Protection Bureau (CFPB) is required to annually calculate the dollar amounts of several provisions of the Truth in Lending Act (TILA) / Regulation Z. The CFPB’s 2023 adjustments have been announced and include several adjustments that may impact financial institutions and require updates to processes, policies, and procedures. Treliant’s team of regulatory and business process professionals can quickly assist financial institutions with identifying the impact of these changes and updating systems, processes, and documentation accordingly.
Highlights:
On September 18, 2023, the CFPB published its final rule review of dollar amounts for certain provisions implementing TILA and amendments to TILA impacting HOEPA loans and qualified mortgages. The adjustments are applicable January 1, 2024, consistent with relevant statutory or regulatory provisions.
The following table summarizes the adjustments and whether there are changes (highlighted) between 2023 and 2024:
| Product or Service | Sub Product or Service | 2023 Loan Amounts | 2024 Loan Amounts | Requirement | 2023 Threshold | 2024 Threshold | Change? |
| Open-end consumer credit plans | Disclosure of minimum interest charges | $1.00 | $1.00 | No | |||
| HOEPA Loans | Total loan amount for high-cost mortgages | $24,866 | $26,092 | Yes | |||
| High-cost Mortgages | Adjusted points-and-fees dollar trigger | $1,243 | $1,305 | Yes | |||
| Qualified Mortgages (QMs) | 1st lien covered transaction | > Or = $124,331 | > Or = $130,461 | General QM loan definition (1026.43(e)(2)) – spread between the APR and APOR | 2.25 or more percentage points | 2.25 or more percentage points | Yes |
| 1st lien covered transaction | > Or = $74,599 and < $124,331 | > or = $78,277 and < $130,461 | 3.5 or more percentage points | 3.5 or more percentage points | Yes | ||
| 1st lien covered transaction | Less than $74,599 | Less than $78,277 | 6.5 or more percentage points | 6.5 or more percentage points | Yes | ||
| 1st lien covered transaction secured by a manufactured home | Less than $124,331 | Less than $130,461 | 6.5 or more percentage points | 6.5 or more percentage points | |||
| Subordinate lien covered transaction | Greater than or equal to $74,599 | Greater than or equal to $78,277 | 3.5 or more percentage points | 3.5 or more percentage points | Yes | ||
| Subordinate lien covered transaction | Less than $74,599 | Less than $78,277 | 6.5 or more percentage points | 6.5 or more percentage points | Yes | ||
| Qualified Mortgages (QMs) | > Or = $124,331 | > Or = $130,461 | Threshold for total points and fees | 3% | 3% | Yes | |
| Loans > or = $74,599 and < $124,331 | Loans > or = $78,277 and < $130,461 | $3,730 | $3,914 | Yes | |||
| Loans > or = $24,866 and < $74,599 | Loans > or = $26,092 and < $78,277 | 5% | 5% | Yes | |||
| Loans > or = $15,541 and < $24,866 | Loans > or = $16,308 and < $26,092 | $1,243 | $1,305 | Yes | |||
| Loans less than $15,541 | Loans less than $16,308 | 8% | 8% | Yes |
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