Credit unions advised: Higher Reg Z thresholds, fee caps go into effect Jan. 1

Credit unions are on notice by their federal regulator that the consumer financial protection agency has issued a final rule adjusting 2020 thresholds and fee caps under parts of the Truth in Lending Act (TILA, Regulation Z), according to a notice sent to federally insured credit unions Tuesday.

The National Credit Union Administration (NCUA) advised credit unions that the final rule adopted by the Consumer Financial Protection Bureau (CFPB) Aug. 1 amends Reg Z thresholds and fee caps in 2020 for several parts of TILA. Products affected, the agency said, include credit cards, qualified mortgages, and loans under the Home Ownership and Equity Protection Act of 1994.

The credit union regulator noted that, for credit card accounts under the Credit Card Accountability Responsibility and Disclosure Act, CFPB increased by $1 the amount for the safe harbor for both first violation and subsequent violation penalty fees.

“The amendments raise the loan amount trigger for HOEPA coverage,” NCUA wrote. “They also increase the maximum points and fees thresholds under the qualified mortgage and HOEPA provisions. The qualified mortgage thresholds are tiered according to loan size.”

CFPB set on Aug. 1 the Reg Z dollar-amount triggers as of Jan. 1 are set as:

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.

CFPB Announces Adjusted 2020 TILA Fees and Thresholds

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