Regulations Z, M and HPML Appraisal Thresholds Adjusted for 2019

On November 23, 2018 federal banking agencies released two threshold adjustments for 2019, the Regulation Z and M exemption thresholds and the HPML appraisal threshold.

Regulation Z and M Exemption Threshold: The Board of Governors of the Federal Reserve System (the Board) and the Bureau of Consumer Financial Protection (the Bureau) published final rules amending commentary and interpretations of their regulations which implement the Truth in Lending Act and Consumer Leasing Act, including the Bureau’s Regulations Z and M, which provides an exemption threshold. Under Regulation Z, a consumer credit transaction that exceeds the threshold, or a transaction that has a written commitment to extend credit in excess of the threshold, are exempt from the requirements, unless the extension is secured by any real property or by personal property used or expected to be used as the principal dwelling of the consumer, or is a private education loan. Under Regulation M, leases for which the total contractual obligation are more than the threshold are not covered.

The Regulation Z and M exemption thresholds must be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Based on the annual percentage increase in the CPI-W as of June 1, 2018, the exemption threshold will increase from $55,800 to $57,200 effective January 1, 2019.

The Regulations Z exemption threshold amendment is available here.

The Regulation M exemption threshold amendment is available here.

HPML Appraisal Threshold: The Bureau of Consumer Financial Protection, Office of the Comptroller of the Currency, and Board of Governors of the Federal Reserve System, collectively the Agencies, released updated amendments to the official interpretations for their regulations, including the Bureau’s Regulation Z, that implement section 129H of the Truth in Lending Act (TILA). Section 129H of TILA establishes special appraisal requirements for “higher-priced mortgage loans” or “HPMLs” in the agencies’ regulations; HPML transactions of $25,000 or less are exempt from these special appraisal requirements. This threshold amount is required to be adjusted annually for inflation. Based on the CPI-W in effect as of June 1, 2018, the exemption threshold will increase from $26,000 to $26,700, effective January 1, 2019.

The HPML appraisal threshold amendment is available here.

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See our previous article for information on 2019 adjustments affecting credit card, HOEPA, and qualified mortgage thresholds. And keep up to date on thresholds with our free Lending Threshold Chart.

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