CFPB, OCC and Federal Reserve raise thresholds for TILA standards

The Consumer Financial Protection Bureau (CFPB) on Monday announced its joint rulemaking with the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC) to determine new cutoff thresholds for oversight of loans under the Truth in Lending Act (TILA).

The agencies announced four total instances of new rulemaking. The first is a collaboration between CFPB, the Fed Board and OCC, increasing the threshold 4.5% from $31,000 to $32,400 for exempting loans from special appraisal requirements under the TILA Higher Priced Mortgage Loan Appraisal rule.

“The Dodd-Frank Act added special appraisal requirements for higher-priced mortgage loans, including that creditors obtain a written appraisal based on a physical visit to the interior of the home before making a higher-priced mortgage loan,” the CFPB explained.

“The rules implementing these requirements contain an exemption for loans of $25,000 or less, adjusted annually to reflect [Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)] increases,” the Bureau added.

The second and third adjustments are between the CFPB and the Fed Board only. They “adjust the thresholds in Regulation Z and Regulation M for determining the exempt consumer credit transactions under TILA and the exempt consumer lease transactions under the Consumer Leasing Act,” CFPB said in an announcement.

For Regulations Z and M, the exemption threshold for both will increase from $66,400 to $69,500, an increase of roughly 4.6%. Both changes are effective Jan. 1, 2024.

The fourth and final adjustment is specific to the CFPB, and adjusts “the maximum amount consumer reporting agencies may charge consumers for making a file disclosure to a consumer” under the Fair Credit Reporting Act (FCRA).

Under this adjustment, the ceiling on allowable charges under the relevant section of FCRA will increase to $15.50 in 2024, or $1 more than the 2023 figure.

“By law, the agencies are required to adjust the thresholds annually based on the annual percentage increase in [CPI-W],” CFPB said in an announcement. “Transactions at or below the thresholds are subject to the protections of the regulations.”

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