Reg Z, M exemption thresholds increased to $58,300 for consumer credit, leases in 2020

Dollar thresholds have been set at $58,300 for determining exempt consumer credit and lease transactions in 2020 under rule changes issued jointly by the Federal Reserve and the Consumer Financial Protection Bureau (CFPB) and slated for publication Wednesday in the Federal Register.

The new thresholds, effective Jan. 1, are up about 1.9% from the 2019 level of $57,200.\

The thresholds extend the protections of Regulation Z (Truth in LendingAct) and Regulation M (Consumer Leasing Act) to consumer credit and leases that fall underneath them. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) requires that the thresholds be adjusted annually.

Under Dodd-Frank, the consumer credit and lease threshold adjustments under Regs Z and M are based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The $1,100 threshold increases for 2020 are based on the CPI-W in effect on June 1, 2019, which was reported on May 10, 2019.

Both notices point out that private education loans and loans secured by real property or by personal property that is the consumer’s principal dwelling are covered by TILA regardless of the loan amount.

Truth in Lending (Regulation Z)

Consumer Leasing (Regulation M)

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