United States

CFPB issues final rule on annual threshold adjustments

AML AND COMPLIANCE NEWS  | 

Final rule includes revision dollar amounts for provisions implementing TILA and amendments to TILA

The CFPB has issued a final rule amending the official interpretations for Regulation Z. The Bureau is required to calculate annually the dollar amounts for several provisions in Regulation Z. This final rule revises dollar amounts for provisions implementing TILA and amendments to TILA included under the CARD Act, HOEPA and Dodd-Frank Act. The adjustments of these amounts are based on the annual percentage change reflected in the Consumer Price Index in effect June 1, 2019. 

Under the CARD Act amendments to TILA, the adjusted dollar amount in 2020 for the safe harbor for a first violation penalty fee will increase by $1 to $29 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will increase by $1 to $40. For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2020 will be $21,980. The adjusted points-and-fees dollar trigger for high-cost mortgages in 2020 will be $1,099. For qualified mortgages, which provide creditors with certain protections from liability under the Ability-to-Repay Rule, the maximum thresholds for total points and fees in 2020 will be 3% 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% 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; and 8% of the total loan amount for a loan amount less than $13,737.

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