TILA dollar-amount triggers for penalties, disclosures set for 2020

The dollar-amount thresholds that trigger various penalty and disclosure requirements under Regulation Z, implementing the Truth in Lending Act (TILA), have been adjusted effective Jan. 1, 2020, by the Consumer Financial Protection Bureau (CFPB) through a final rule and official interpretation published in Thursday’s Federal Register.

The final rule revises, as applicable, the dollar amounts for provisions implementing TILA and amendments to TILA, including under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Home Ownership and Equity Protection Act of 1994 (HOEPA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

Any adjustments in the amounts effective next January are based on the annual percentage change reflected in the Consumer Price Index (CPI) in effect on June 1, 2019.

The Reg Z dollar-amount triggers as of Jan. 1 are set as follows:

Open-end consumer credit plans under TILA
The threshold that triggers requirements to disclose minimum interest charges will remain unchanged at $1 in 2020.

Open-end consumer credit plans under the CARD Act amendments to TILA
The adjusted dollar amount for the safe harbor for a first violation penalty fee will rise $1 to $29. The adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will rise $1 to $40.

HOEPA loans
The adjusted total loan amount threshold for high-cost mortgages in 2020 will rise to $21,980 (up from $21,549). The adjusted points-and-fees dollar trigger for high-cost mortgages in 2020 will be $1,099 (up from $1,077).

Qualified mortgages
Loans in the QM category provide creditors with certain protections from liability under the ability-to-repay (ATR) rule. The maximum thresholds for total points and fees in 2020 will increase to:

  • 3% of the total loan amount for a loan greater than or equal to $109,898;
  • $3,297 for a loan amount greater than or equal to $65,939 but less than $109,898;
  • 5% of the total loan amount for a loan greater than or equal to $21,980 but less than $65,939;
  • $1,099 for a loan amount greater than or equal to $13,737 but less than $21,980; and
  • 8% of the total loan amount for a loan amount less than $13,737.

RR: Reg thresholds for mortgage and credit card disclosures, fees revised for 2019 (Aug. 24, 2018)

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