Dear Boards of Directors and Chief Executive Officers:
Last month, the Consumer Financial Protection Bureau (CFPB) issued annual adjustments for three exemption thresholds under the Truth in Lending Act (TILA or Regulation Z) and the Consumer Leasing Act (CLA or Regulation M). 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 2022 thresholds, effective on January 1, 2022, will increase from the 2021 thresholds.
The CFPB also issued an annual adjustment to the maximum amount credit bureaus may charge consumers for making a file disclosure to a consumer under the Fair Credit Reporting Act (FCRA or Regulation V). The 2022 ceiling, effective on January 1, 2022, will increase from the 2021 ceiling.
Appraisals for Higher-Priced Mortgage Loans Exemption Threshold
The exemption threshold for 2022 will increase to $28,500 from $27,200 based on the annual increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in effect as of June 1, 2021. The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (the Federal Reserve Board), and the CFPB 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 Federal Reserve Board, the CFPB, the Federal Deposit Insurance Corporation, 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 in the Federal Register (opens new window).
Consumer Credit and Consumer Lease Exemption Thresholds
The exemption threshold for 2022 will increase to $61,000 from $58,300 based on the annual percentage increase in the CPI-W in effect as of June 1, 2021. The Federal Reserve Board and the CFPB finalized amendments to the official interpretations to the agencies’ regulations that implement TILA and the Consumer Leasing Act. The Dodd-Frank Wall Street Reform and Consumer Protection 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 in the Federal Register here (opens new window) and here (opens new window), respectively.
Credit Bureau Consumer Report Fee Ceiling
The ceiling on maximum allowable charges for 2022 will increase to $13.50 from $13.00, based proportionally on changes in the Consumer Price Index for all urban consumers. Section 612(f)(1)(A) of the FCRA provides that a consumer reporting agency may charge a consumer a reasonable amount for making a disclosure to the consumer of the information in their file — commonly referred to as a credit report — pursuant to section 609 of the FCRA.
The ceiling does not affect the amount a credit union may charge its members or potential members, directly or indirectly, for obtaining a credit report in the normal course of business.1 Such cost is expected to be accurately represented in all advertising, disclosures, or agreements, whether presented orally or in written form.
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.
Todd M. Harper
1 A federal credit union may, consistent with NCUA regulations, other federal law, and its contractual obligations, determine the types of fees or charges and other matters affecting the opening, maintaining and closing of a share, share draft or share certificate account. 12 C.F.R. 701.35(c). A federal credit union’s loans and lines of credit (including credit cards) to members are regulated by 12 C.F.R. 701.21. Applicability of state law concerning charges imposed in credit transactions should be determined according to the preemption standards of the relevant federal law and regulations. 12 C.F.R. 701.21(b)(3).