United States

CFPB Regulation Z thresholds effective Jan. 1, 2018


The Consumer Financial Protection Bureau (CFPB) is required to calculate annually the dollar amounts for several provisions in Regulation Z, which implements the Truth In Lending Act (TILA) and affects provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), Homeowner’s Equity Protection Act (HOEPA), and the Dodd-Frank Act. In late August 2017, the CFPB issued revised thresholds for these sections effective Jan. 1, 2018.

Under the CARD Act, the safe harbor for credit card penalty fees remains unchanged at $27 for a first late payment and $38 for subsequent late payments. Under HOEPA, the classification of high-cost loans on the basis of total points and fees charged in connection with the loan will increase slightly for both the adjusted loan threshold and fee trigger, such that a loan will be considered high cost if the total points and fees exceed 5 percent of the loan amount for loans greater than $21,032; or for loans less than $21,032, the lesser of 8 percent of the loan amount or $1,052. Under Dodd-Frank, one of the ways an originator can meet ability to repay rules is by originating qualified mortgage (QM) loans. To qualify as a QM, a transaction must not exceed a set limitation on the points and fees charged in connection with the loan. Effective Jan. 1, points and fees are limited by total loan amount to 3 percent for loans greater than $105,158; $3,155 for loans between $63,095 and $105,158; 5 percent for loans between $21,032 and $63,095; $1,052 for loans between $13,145 and $21,032; and 8 percent for loans of less than $13,145. The full final rule can be found here.