CFPB ADJUSTS REGULATION Z THRESHOLDS

On July 21, 2020 the Consumer Financial Protection Bureau (CFPB) began the annual process of updating regulatory thresholds by publishing a final rule revising certain dollar amounts in Regulation Z, based on the annual percentage change reflected in the Consumer Price Index (CPI) in effect on June 1, 2020.

  • For open-end consumer credit plans under the CARD Act amendments to TILA ( 1026.52(b)(1)(ii)(A) and (B)), the adjusted dollar amount in 2021 for the safe harbor for a first violation penalty fee will remain unchanged at $29 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will also remain unchanged at $40.
  • For HOEPA loans ( 1026.32(a)(1)(ii)),
    • The adjusted total loan amount threshold for high-cost mortgages in 2021 will be $22,052.
    • The adjusted points-and-fees dollar trigger in 2021 will be $1,103.
  • For qualified mortgages (43(e)(3)(i)), the maximum thresholds for total points and fees in 2021 will be
    • 3 percent of the total loan amount for a loan greater than or equal to $110,260;
    • $3,308 for a loan amount greater than or equal to $66,156 but less than $110,260;
    • 5 percent of the total loan amount for a loan greater than or equal to $22,052 but less than $66,156;
    • $1,103 for a loan amount greater than or equal to $13,783 but less than $22,052; and
    • 8 percent of the total loan amount for a loan amount less than $13,783.

The final rule is available for download.

The new thresholds will be effective January 1, 2021.

To view our lending threshold chart click here.

Leave a Reply

Your email address will not be published. Required fields are marked *