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Lots of Regulation Z Updates

Based on the 0.1% increase in the Consumer Price Index (CPI-W) in effect on June 1, 2020, the Consumer Financial Protection Bureau (CFPB) released a number of new triggering thresholds which go into effect on January 1, 2021. They include:

  • The minimum interest charge disclosure threshold of $1.00 under the CARD Act will remain unchanged. (1026.6(b)(2)(iii) and 1026.60(b)(3))
  • The adjusted dollar amount for the penalty fees safe harbor under the CARD Act is $29 for a first late payment and $40 for each subsequent violation within the following six months. (1026.52(b)(1)(ii))

Additional changes affected the HOEPA threshold amounts found under 1026.32 based on the 0.3% increase in the Consumer Price Index (CPI-U) in effect on June 1, 2020.

  • For HOEPA loans, the adjusted total loan amount threshold is $22,052. (1026.32(a)(1)(ii)(A))
  • The adjusted statutory fee trigger for HOPEA loans is $1,103. (1026.32(a)(1)(ii)(B))

The Qualified Mortgage (1026.43(e)(3)) rules have revised thresholds, too. For the purpose of the creditor’s determination of a consumer’s ability to repay a transaction secured by a dwelling, a covered transaction is not a qualified mortgage unless the transaction’s total points and fees do not exceed:

  • 3 percent of the total loan amount for a loan greater than or equal to $110,260.
  • $3,308 for a loan amount greater than or equal to $66,156 but less than $110,260.
  • 5 percent of the total loan amount for a loan greater than or equal to $22,052 but less than $66,156.
  • $1,103 for a loan amount greater than or equal to $13,783 but less than $22,052.
  • 8 percent of the total loan amount for a loan amount less than $13,783.

All these thresholds shown above are effective starting on January 1, 2021.

TCA is your source for regulatory information and A Better Way. Contact us at [email protected] or at (800) 934-7347 if you have any questions.

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