FLURRY OF YEAR-END THRESHOLD ADJUSTMENTS

The Consumer Financial Protection Bureau (CFPB) just completed the usual year-end chore of updating various thresholds. The changes are based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for various periods in 2013.

Escrow Exemption for HPMLs – On December 30, 2013 the CFPB amended the official commentary that interprets the requirements of Regulation Z (Truth in Lending) to reflect a change in the asset size threshold for certain creditors to qualify for an exemption to the requirement to establish an escrow account for a higher-priced mortgage loan. The exemption threshold is adjusted to increase to $2.028 billion from $2 billion. Therefore, creditors with assets of $2.028 billion or less as of December 31, 2013, are exempt, if other requirements of Regulation Z also are met, from establishing escrow accounts for higher-priced mortgage loans in 2014.

HMDA Exemptions – On December 30, 2013 the CFPB published a final rule amending the official commentary that interprets the requirements of Regulation C (Home Mortgage Disclosure) to reflect a change in the asset-size exemption threshold for banks, savings associations, and credit unions. The exemption threshold is adjusted to increase to $43 million from $42 million. Therefore, banks, savings associations, and credit unions with assets of $43 million or less as of December 31, 2013, are exempt from collecting data in 2014.

Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) – On December 16, 2013 the CFPB published a final rule amending Regulation Z requirements with respect to open-end consumer credit plans, including requirements for the disclosure of minimum interest charge amounts and the establishment of a safe harbor provision allowing card issuers to impose penalty fees for violating account terms without violating the restrictions on penalty fees established by the CARD Act.

  • The minimum interest charge disclosure thresholds will remain unchanged in 2014.
  • The adjusted dollar amount for the penalty fees safe harbor in 2014 is $26 for a first late payment and $37 for each subsequent violation within the following six months.

Home Ownership and Equity Protection Act of 1994 (HOEPA) – On December 16, 2013 the CFPB published a final rule amending the Regulation Z requirement to comply with the HOEPA requirements if the total points and fees payable by the consumer at consummation exceed the greater of $400 or 8 percent of the total loan amount. The adjusted statutory fee trigger for HOPEA loans is $632, effective January 1, 2014.

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