Compliance Center: CFPB Releases Updated Regulation Z Thresholds
September 28, 2015
September 28, 2015
The Consumer Financial Protection Bureau (CFPB) has released the annual thresholds for several provisions within Regulation Z. These updated thresholds will become effective on January 1, 2016.
The amounts are adjusted every year based on changes to the Consumer Price Index (CPI). The changes are:
- CARD Act penalty fees safe harbor amount in section 1026.52(b)(1)(ii)(A): $27, the same as the previous year;
- CARD Act penalty fees safe harbor amount in section 1026.52(b)(1)(ii)(B): $37, $1 less than the previous year;
- HOEPA total loan amount threshold: $20,350. This amount determines whether a transaction is a high cost mortgage; and
- HOEPA total points and fees dollar trigger amount: $1,017.
The final rule also covers Ability-to-Repay and Qualified Mortgage thresholds, which dictate that a covered transaction is not a qualified mortgage unless the transaction’s total points and fees do not exceed:
- 3% of the total loan amount for a loan amount greater than or equal to $101,749;
- $3,052 for a loan amount greater than or equal to $61,050 but less than $101,749;
- 5% of the total loan amount for loans greater than or equal to $20,350 but less than $61,050;
- $1,017 for a loan amount greater than or equal to $12,719 but less than $20,350; and
- 8% of the total loan amount for loans less than $12,719.
Compliance Question of the Week
Under the new TILA/RESPA Integrated Disclosure rule, are there any dwelling-secured loans that are exempt from the Combined Disclosures rule?
Yes, HELOCs, reverse mortgages, and dwellings not attached to real property are exempt from the combined disclosure requirements (but you must still follow the TILA disclosure requirements laid out for these types of loans).
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Questions? Contact the Compliance Hotline: 1.800.546.4465, email@example.com.
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