United States

More 2016 threshold and fee adjustments


Keep in mind the following fee and threshold changes for 2016:

Regulation Z and M exemption adjustment: As required by the Dodd-Frank Act amendment to the Truth in Lending Act (TILA) and the Consumer Leasing Act (CLA), the exemption threshold for consumer credit transactions remains unchanged at $54,600 effective Jan. 1, 2016. This adjustment is based on the annual percentage increase of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) index as of June 1, 2015. Therefore, the TILA and CLA protections will continue to apply to consumer credit transactions and consumer leases of $54,600 or less starting Jan. 1, 2016. However, private education loans, loans secured by real property (such as mortgages) and loans secured by personal property used or expected to be used as the consumer’s principal dwelling are subject to TILA, regardless of the amount of the loan. The Federal Register notices can be found here and here.

HPML appraisal exemption threshold: In January 2013, amendments to TILA required by the Dodd-Frank Act added special appraisal requirements for higher-priced mortgage loans (HPMLs). Among the exemptions from the HPML appraisal rules is an exemption for transactions of $25,000 or less to be adjusted Jan. 1 of each year based on any annual increase in the CPI-W that was in effect as of the preceding June 1. Increases are rounded to the nearest $100. Effective Jan. 1, 2016, the exemption threshold amount remains unchanged at $25,500. As a result, appraisals for loan requests of $25,500 or less will not be required to meet the HPML appraisal requirements. View The Federal Register Notice.

Regulation D’s low reserve tranche adjustment and the reserve requirement exemption amount adjustment: These amounts are used in the calculation of reserve requirements of depository institutions. Adjustments are based on growth in net transaction accounts and total reservable liabilities, respectively, at all depository institutions between June 30, 2014, and June 30, 2015. The Federal Reserve press release indicates that for net transaction accounts in 2016, the first $14.5 million will be exempt from reserve requirements. A 3 percent reserve ratio will be assessed on net transaction accounts over $15.2 million up to and including $110.2 million. A 10 percent reserve ratio will be assessed on net transaction accounts in excess of $110.2 million. The press release also states, “The new low reserve tranche and reserve requirement exemption amount will apply to the 14-day reserve maintenance period that begins Jan. 21, 2016. For depository institutions that report deposit data weekly, this maintenance period corresponds to the 14-day computation period that began Tuesday, Dec. 22, 2015. For depository institutions that report deposit data quarterly, this maintenance period corresponds to the seven-day period that began Tuesday, Dec. 15, 2015.” Refer to the Federal Reserve press release found here for more details.