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CFPB, Fed Board increase exemption thresholds for TILA, Consumer Lending Act

The Federal Reserve Board and Consumer Financial Protection Bureau announced increases to thresholds that exempt consumer credit and lease transactions from protections under the Truth in Lending Act and Consumer Leasing Act last week.

Under Dodd-Frank, regulators are required to adjust the thresholds every year by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers. The increases reflect the annual percentage increase in the index as of June and will take effect Jan. 1.

Consumer credit transactions and consumer leases of $53,000 or less will be covered by the protections of both TILA and CLA. Private education loans and mortgage loans, however, are still subject to TILA protections regardless of the loan amount.

While Dodd-Frank shifted TILA and CLA rule-making to the Consumer Financial Protection Bureau, the Fed Board still has the authority to issue rules pertaining to motor vehicle dealers, so the agencies announced the threshold adjustments jointly.

The CFPB is also required to separately adjust the dollar threshold under the Home Ownership and Equity Protection Act of 1994 that offers certain protections for certain home mortgages. In accordance with the increase in the consumer price index, the HOEPA fee trigger will rise to $625 for 2013.

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