Dates:
Effective January 1, 2016
Summary:
The CFPB announced the 2016 thresholds for Regulation Z provisions governed by the CARD Act, the Home Ownership and Equity Protection Act and the Dodd-Frank Act.
Recommended Actions:
Credit unions should review the new limits and incorporate them into their policies and procedures.
Detailed Analysis:
CARD Act Annual Adjustments:
The safe harbor penalty fees for credit cards will remain at $27 for a first late payment, and will drop $1 to $37 for each subsequent late payment within six months.
HOEPA Annual Threshold Adjustments:
A loan may be considered a high cost mortgages when the points and fees exceed certain regulatory amounts. The threshold for determining the limit has dropped to $20,350 from $20,391 for 2015. Loans over $20,350 will have a total points and fees limit of 5 percent of the total loan amount, and for loans under $20,350 a limit of $1,017 or 8 percent of the total amount, whichever is lower. This is a decrease from the $1,020 for 2015.
Ability To Repay and Qualified Mortgages Annual Threshold Adjustments:
In order to be a qualified mortgage, the total points and fees must not exceed:
- For a loan amount greater than or equal to $101,749: 3 percent of the total loan amount;
- For a loan amount greater than or equal to $61,050 but less than $101,749: $3,052;
- For a loan amount greater than or equal to $20,350 but less than $61,050: 5 percent of the total loan amount;
- For a loan amount greater than or equal to $12,719 but less than $20,350; $1,017;
- For a loan amount less than $12,719: 8 percent of the total loan amount.
