federal reserve note

Regulation Z and Regulation M Dollar Thresholds for 2020

The Federal Reserve Board and the Consumer Financial Protection Bureau jointly issued an increase in the exemption thresholds, which are tied to the Consumer Price Index, for Regulation Z and Regulation M exemptions. Loans or leases at or below the thresholds are subject to the protections of the regulations.

The regulators have released the new index limit for 2020 effective January 1, 2020. The new limit is $58,300 which is up by $1,100 from $57,200 in 2019.

Keep in mind that private education loans and loans secured by real property (such as mortgages) are subject to the Truth in Lending Act, regardless of the loan amount.

Revisit your loan origination systems and training for Bank personnel to ensure they are updated in time to enact the change.

New Threshold Amounts for 2020 under Regulation Z HPML Appraisal Requirements

The Office of the Comptroller of the Currency (OCC), Federal Reserve Bank (FRB) and Consumer Financial Protection Bureau (CFPB) released the revised exemption amount which goes into effect on January 1, 2020 as the threshold for appraisals required for higher-priced mortgage loans (HPML). The limit began at $25,000 and is adjusted annually for inflation. The figure for 2020 is now $27,200, which is a change from the $26,700 in 2019. Loans which may be HPMLs with dollar amounts below this figure would be exempt from the requirement to obtain a written appraisal from a certified or licensed appraiser.

TCA, A Better Way provides you with regulatory information from a compliance professional’s viewpoint. Contact us at (800) 934-7347 or [email protected] if you have any questions!

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