Dear Boards of Directors and Chief Executive Officers:
On December 10, 2020, annual adjustments for three exemption thresholds under the Truth in Lending Act (Regulation Z) and the Consumer Leasing Act (Regulation M) were issued. The thresholds exempt loans from special appraisal requirements for higher-priced mortgage loans and determine exempt consumer credit and lease transactions under Regulation Z and Regulation M. The 2021 thresholds, effective on January 1, 2021, are the same as the 2020 thresholds.
Appraisals for Higher-Priced Mortgage Loans Exemption Threshold
The exemption threshold for 2021 will remain at $27,200 based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in effect as of June 1, 2020. The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Consumer Financial Protection Bureau finalized amendments to the official interpretations for their regulations that implement section 129H of the Truth in Lending Act. Section 129H establishes special appraisal requirements for higher-priced mortgage loans. The OCC, the Board, the CFPB, the FDIC, the NCUA, and the Federal Housing Finance Agency issued joint final rules implementing these requirements, effective January 18, 2014. The agencies’ rules exempted, among other loan types, transactions of $25,000 or less, and required that this loan amount be adjusted annually based on any annual percentage increase in the CPI-W. You can access the annual adjustment on the Federal Register’s website (opens new window).
Consumer Credit and Consumer Lease Exemption Thresholds
The exemption threshold for 2021 will remain at $58,300 based on the CPI-W in effect as of June 1, 2020. The Board and the CFPB finalized amendments to the official interpretations to the agencies’ regulations that implement TILA and the Consumer Leasing Act (CLA). The Dodd- Frank Act amended TILA and the CLA by requiring that the dollar threshold for exempt consumer credit transactions and consumer leases be adjusted annually by the annual percentage increase in the CPI-W. You can access the annual consumer credit and the consumer lease adjustments on the Federal Register’s website here (opens new window) and here (opens new window), respectively.
If you have questions about the information in this Regulatory Alert, please contact the NCUA’s Office of Consumer Financial Protection at 703.518.1140 or ComplianceMail@ncua.gov. You can also contact your NCUA regional office or your state supervisory authority.
Rodney E. Hood