There is no change in the $1 amount triggering minimium interest charge disclosures for open-end consumer credit plans for 2023, but the consumer financial protection agency is raising other amounts that will apply to certain high-cost mortgages and “qualified” mortgages, according to a Federal Register notice Friday.
The changes note that $1 will continue to be the minimum interest charge in an open-end credit plan that will trigger disclosures to consumers under the Truth in Lending Act. For higher-cost loans subject to the Home Ownership and Equity Protection Act (HOEPA), the adjusted total loan amount threshold for high-cost mortgages in 2023 will rise to $24,866 (up from $22,969 in 2022). The adjusted points-and-fees dollar trigger for higher-cost mortgages will rise to $1,243 (up from $1,148 in 2022).
These and other adjustments in the notice are based on the annual percentage change reflected in the Consumer Price Index (CPI) in effect on June 1, 2022.
For qualified mortgages (QMs) under the General QM loan definition, the thresholds for the spread between the annual percentage rate (APR) and the average prime offer rate (APOR) in 2023 will increase to the following:
- 2.25 or more percentage points for a first-lien covered transaction with a loan amount greater than or equal to $124,331;
- 3.5 or more percentage points for a first-lien covered transaction with a loan amount greater than or equal to $74,599 but less than $124,331;
- 6.5 or more percentage points for a first-lien covered transaction with a loan amount less than $74,599;
- 6.5 or more percentage points for a first-lien covered transaction secured by a manufactured home with a loan amount less than $124,331;
- 3.5 or more percentage points for a subordinate-lien covered transaction with a loan amount greater than or equal to $74,599; or
- 6.5 or more percentage points for a subordinate-lien covered transaction with a loan amount less than $74,599.
For all categories of QMs, the thresholds for total points and fees in 2023 are also rising to:
- 3% of the total loan amount for a loan greater than or equal to $124,331;
- $3,730 for a loan amount greater than or equal to $74,599 but less than $124,331;
- 5% of the total loan amount for a loan greater than or equal to $24,866 but less than $74,599;
- $1,243 for a loan amount greater than or equal to $15,541 but less than $24,866; and
- 8% of the total loan amount for a loan amount less than $15,541.