The Final Rule

The Consumer Financial Protection Bureau released the final ruling for TILA annual threshold adjustments Wednesday revising the dollar amounts for regulations that fall under Regulation Z. The Bureau is required to calculate the dollar amounts every year and is adjusting the totals based on the annual percentage change reflected in the Consumer Price Index.

Implemented from sections 1411 and 1412 of the Dodd-Frank Act, which according to the Final Rule, “generally requires creditors to make a reasonable, good faith determination of a consumer’s ability to repay,” a covered transaction is not a qualified mortgage if the transaction’s points and fees exceed 3 percent of the total loan amount for a loan amount greater than or equal to $100,000.

For a loan amount greater than or equal to $60,000, but less than $100,000 the transaction points and fees cannot exceed $3,000. For loans greater than or equal to $20,000, but less than $60,000, it must be 5 percent of the total loan amount. The threshold is $1,000 for a loan amount greater than or equal to $12,500, but less than $20,000, and for loan amounts less than $12,500, it must not exceed 8 percent of the total loan amount.

Also updated in the final rule were the Credit Card Accountability Responsibility and Disclosure Act penalty fee safe harbor and Home Ownership and Equity Protection Act loans. According to the Final Rule, the threshold that initiates the requirement to report minimum interest charges will stay the same in 2018 at $1.

For additional information, click here or contact Jaclyn Maier, Counsel, Office of Regulations, Consumer Financial Protection Bureau, 1700 G St. NW., Washington, DC 20552 at 202.435.7700.

The final rule goes into effect January 1, 2018.