Truth in Lending Dollar Thresholds Will Increase on January 1, 2018

Health insurance, gas, the latest iPhone model—the price of everything increases every year. And so too do consumer credit transaction thresholds.

On August 30th, the Consumer Financial Protection Bureau announced adjustments to dollar amounts for Regulation Z provisions that implement the Truth in Lending Act and its amendments. Laws affected include the Credit Card Accountability Responsibility and Disclosure Act of 2009, the Home Ownership and Equity Protection Act of 1994, and the Dodd–Frank Wall Street Reform and Consumer Protection Act.

Here are the details, via Lexology’s InfoBytes Blog:

For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2018 will increase to $21,032, and the adjusted points and fees dollar trigger for high-cost mortgages in 2018 will be $1,052. To satisfy the underwriting requirements under the ATR/QM rule, the maximum thresholds for total points and fees for qualified mortgages in 2018 will be: (i) 3 percent of the total loan amount for loans greater than or equal to $105,158; (ii) $3,155 for loan amounts greater than or equal to $63,095 but less than $105,158; (iii) 5 percent of the total loan amount for loans greater than or equal to $21,032 but less than $63,095; (iv) $1,052 for loan amounts greater than or equal to $13,145 but less than $21,032; and (v) 8 percent of the total loan amount for loan amounts less than $13,145.

Also of note is what isn’t changing:

  • the minimum interest charge disclosure threshold for open-end consumer credit plans under TILA ($1);
  • for open-end consumer credit plans under the CARD Act amendments, the adjusted dollar amount for the safe harbor for a first violation penalty fee ($27); and
  • the safe harbor threshold for a subsequent violation penalty ($38).

The CFPB makes these adjustments annually in accordance with changes to the Consumer Price Index. The new thresholds go into effect on January 1, 2018.

For more information, click here.

Download this!

Fair Lending Checklist

Download this  checklist to see how well your organization embraces the 4 areas of a sound Compliance Management System (CMS) and if you can survive the compliance scrutiny. 
Get the Checklist >>