Regulatory changes

Fed, CFPB raise dollar exemption threshold under TILA, CLA

126px-US-FederalReserveSystem-Seal.svg_3The Federal Reserve and CFPB announced on Wednesday that they would raise the dollar thresholds for consumer credit and lease transactions exempt from Truth in Lending and Consumer Leasing provisions.

The changes, which will take effect on Jan. 1, are intended to reflect the annual increase in the CPI as of June 1, consistent with amendments to the regulations mandated by the 2010 Dodd-Frank Act.

As a result of the changes, protection under TILA and CLA will generally apply to consumer credit and lease transactions of $53,500 or less next year—an increase of $500 from last year. Private education loans and loans secured by property are still subject to TILA, regardless of the loan amount.

TILA—or Regulation Z—implements parts of the Dodd-Frank Act that address rate adjustment for adjustable-rate mortgages, statements for residential mortgages, crediting of mortgage payments and responses to requests for payoff amounts. The rule also amends current regulations governing the scope, content and timing of disclosures regarding interest rate adjustments.

CLA—or Regulation M—applies the consumer leasing provisions included in TILA.  The rule was originally part of TILA and was implemented by Regulation Z, but when the rule was revised in 1981, Regulation M was issued along with other provisions that require disclosure of leasing terms.The Federal Reserve and CFPB announced on Wednesday that they would raise the dollar thresholds for consumer credit and lease transactions exempt from Truth in Lending and Consumer Leasing provisions.

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