WASHINGTON– The Federal Reserve and the CFPB have announced the new dollar thresholds used to determine whether certain consumer credit and lease transactions in 2022 are exempt from Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing).
By law, the agencies noted they are required to adjust the thresholds annually based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W. Transactions at or below the thresholds are subject to the protections of the regulations.
Based on the annual percentage increase in the CPI-W as of June 1, 2021, the protections of Regulations Z and M generally will apply to consumer credit transactions and consumer leases of $61,000 or less in 2022 the agencies said. However, private education loans and loans secured by real property (such as mortgages) are subject to Regulation Z regardless of the amount of the loan.
Small Loan Exemption for Higher-Priced Mortgages
In addition, the Federal Reserve, the CFPB and the Office of the Comptroller of the Currency have announced that the 2022 threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans will increase from $27,200 to $28,500.
The threshold amount will be effective Jan. 1, 2022, and is based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W, as of June 1, 2021.
The agencies noted Dodd-Frank Act added special appraisal requirements for higher-priced mortgage loans, including that creditors obtain a written appraisal based on a physical visit to the interior of the home before making a higher-priced mortgage loan. The rules implementing these requirements contain an exemption for loans of $25,000 or less, adjusted annually to reflect CPI-W increases.