The Consumer Financial Protection Bureau (CFPB) has made its Truth in Lending (TILA or Regulation Z) annual thresholds adjustments.
The bureau is required to calculate the dollar amounts for several provisions in Regulation Z annually, such as those in the Credit Card Accountability and Disclosure Act of 2009, the Homeownership and Equity Protection Act of 1994 (HOEPA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The most recent adjustment was based on the annual percentage change reflected in the Consumer Price Index in effect June 1, 2021.
Credit card and open-end consumer credit plans saw a change in their safe harbor penalty fees. For open-end consumer credit plans under the CARD Act amendments to TILA (§ 1026.52(b)(1)(ii)(A)), the adjusted dollar amount for the safe harbor for a first violation penalty fee will increase to $30 for the year 2022. The adjusted dollar amount for the safe harbor for a subsequent violation penalty fee (§ 1026.52(b)(1)(ii)(B)) will increase to $41 for the year 2022. The minimum interest charge disclosure threshold, currently $1, will remain unchanged for the coming year.
HOEPA changes include an increase in the total loan amount threshold for high-cost mortgages ($22,969 for 2022, up from $22,052 in 2021) and an adjustment in the points and fees dollar triggers for high-cost mortgages, from $1,103 in 2021 to $1,148 in 2022.
Qualified mortgages and the maximum threshold to determine the consumers’ ability to repay mortgage loans saw multiple adjustments pursuant to Regulation Z provisions. These thresholds and the adjusted dollar amounts dependent on the size of the loan are:
- Three percent of total loan amount for loan amount greater than $100,000. The amount for 2022 must greater than or equal to $114,847, an increase from $110,260 in 2021.
- Three thousand dollars for loan amount greater than or equal to $60,000 but less than $100,000. The amount for 2022 is $3,445 for loans greater than or equal to $68,908 but less than $114,847, compared with $3,308 for loans greater than or equal to $66,156 but less than $110,260 in 2021.
- Five percent of total loan amount for loans greater than or equal to $20,000 but less than $60,000. The amount for 2022 is 5 percent for loans greater than or equal to $22,969 but less than $68,908, compared with 5 percent for loans greater than or equal to $22,052 but less than $66,156 in 2021.
- One thousand dollars for loan amount greater than or equal to $12,500 but less than $20,000. The amount for 2022 $1,148 for loans greater than or equal to $14,356 but less than $22,969, compared with $1,103 for loans greater than or equal to $13,783 but less than $22,052 in 2021.
- Eight percent of total loan amount for loans less than $12,500. The amount for 2022 is 8 percent for loans less than $14,356, compared with 8 percent for loans less than $13,783 in 2021.
These have been published in the Federal Register and will go into effect Jan. 1, 2022.