Regulation Z Threshold Adjustments

On October 25, the CFPB has issued its annual Regulation Z threshold adjustments.  This final rule adjusts the dollar amounts for Regulation Z (TILA), including the Credit Card Accountability Responsibility and Disclosure Act (CARD Act), the Home Ownership and Equity Protection Act (HOEPA), and the Dodd-Frank Act.  These Regulation Z threshold adjustments are effective January 1, 2022.

Minimum interest charges for disclosure on open-end consumer credit plans: unchanged at $1.

Credit card late fee caps are increased:

  • First late fee: $30.
  • Subsequent late fee: $41.

For HOEPA loans, thresholds for high-cost mortgages are:

  • Total loan amount will be $22,969.
  • Points and-fees trigger will be $1,148.

First-lien transactions that meet the General QM definition can not have an APR/APOR spread exceeding:

  • 25 percentage points on loans greater than or equal to $114,847;
  • 5 on loans greater than or equal to $68,908 but less than $114,847;
  • 5 on loans less than $68,908; and
  • 5 on manufactured home loans less than $114,847.

For subordinate liens transactions that meet the General QM definition can not have an APR/APOR spread exceeding:

  • 5 percentage points on loans greater than or equal to $68,908; and
  • 5 on loans less than $68,908.

For all categories of QMs, the thresholds for total points and fees will be:

  • 3 percent of the total loan amount for a loan greater than or equal to $114,847;
  • $3,445 ($3,000 in 2021) for a loan amount greater than or equal to $68,908 but less than $114,847;
  • 5 percent of the total loan amount for a loan greater than or equal to $22,969 but less than $68,908;
  • $1,148 ($1,000 in 2021) for a loan amount greater than or equal to $14,356 but less than $22,969;
  • and 8 percent of the total loan amount for a loan amount less than $14,356.

Compliance Services Group offers regulatory auditing and consulting to intuitions of all types.  Learn more on our website.

 

Please be advised that CSG provides financial services compliance audit and consulting services to our clients.  The services that we provide include certain tasks that may be characterized as “law-related services” under Rule 5.7 of the Rules of Professional Conduct governing lawyers.  Since some of our employees are lawyers with an active bar license but are NOT engaged in the private practice of law, that Rule requires us to make disclosures clarifying that the services we perform may be law-related services, but they are not legal services.  Because they are not legal services, those services and our relationship will not be governed by the Rules of Professional Conduct that guide the client-lawyer relationship, such as rules applicable to privileged communications and prohibitions of conflicts of interest.  Notwithstanding this disclaimer, we will continue to govern our relationship with you using reasonable ethical and professional standards that are expected to meet your expectations.

Leave a Reply

Your email address will not be published.