regulation z

New Threshold Amounts for 2020 under Regulation Z CARD Act, HOEPA and QM Sections

Based on the 1.9% increase in the Consumer Price Index in effect on June 1, 2019, the Consumer Financial Protection Bureau (CFPB) released a number of new thresholds which go into effect on January 1, 2020. 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))

Additionally, these changes affected the HOEPA threshold amounts found under 1026.32.

  • For HOEPA loans, the adjusted total loan amount threshold is $21,980. (1026.32(a)(1)(ii)(A))
  • The adjusted statutory fee trigger for HOPEA loans is $1,099. (1026.32(a)(1)(ii)(B))

The Qualified Mortgage (1026.43(e)(3)) rules are revised thresholds as well. 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 $109,898
  • $3,297 for a loan amount greater than or equal to $65,939 but less than $109,898
  • 5 percent of the total loan amount for a loan greater than or equal to $21,980 but less than $65,939
  • $1,099 for a loan amount greater than or equal to $13,737 but less than $21,980
  • 8 percent of the total loan amount for a loan amount less than $13,737

All the thresholds shown above are effective starting on January 1, 2020.

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