As in previous years, the Consumer Financial Protection Bureau (“CFPB”) has updated a couple of the dollar amounts specified in various parts of Federal Regulation Z (12 CFR Pt. 1026), which amounts are required to be adjusted annually for inflation. These amounts include the “Reg Z Threshold Amount” and the “Higher-Risk HPML” amount.
Under 12 CFR 1026.3(b)(1), “an extension of credit in which the amount of credit extended exceeds the applicable threshold amount or in which there is an express written commitment to extend credit in excess of the applicable threshold amount” is generally exempt from Regulation Z. The “threshold amount” is described in the Official Staff Commentary and, for 2022, has been adjusted from $58,300 to $61,000 (see 12 CFR Pt. 1026, Supp. I, Paragraph 3[b] – 3. xiii; ).
While this exemption does not apply to an extension of credit “secured by any real property, or by personal property used or expected to be used as the principal dwelling of the consumer” (12 CFR § 1026.3[b][i][A]), the “threshold amount” is used by some states as a criterion for determining whether a disclosure should print for loans of certain amounts.
For example, Iowa Code Ann. § 537.3208 requires a specific disclosure to be provided to a cosigner in connection with a “consumer credit transaction”, which is defined to include a consumer loan, with the definition of “consumer loan” excluding a loan with an amount financed which is equal to (or less than) the “threshold amount” – which is further defined to be the same as the “threshold amount” under Regulation Z (see Ibid. § 537.1301, , & ). In other words, this particular disclosure does not need to be provided in connection with a loan where the amount financed is equal to (or less than) the “threshold amount.”
We use “Loan Amount Less Than or Equal to Reg Z Threshold Amount” (FI 81938) for these types of circumstances (e.g., as a print trigger for our “IA Notice to Cosigners” disclosure [Cx1022]). We are modifying the global field value mappings for this field to replace all instances of conditions which contain the value “58300” with the value “61000”, to reflect the 2022 “threshold amount”.
Similarly, we use “Higher-Risk HPML” (FI 67269) to determine whether a loan is a “higher-risk mortgage” (a special type of higher-priced mortgage loan, referred to is a “HRM-HPML”) or not. The criteria for determining whether a loan is an HRM-HPML or not is set forth under 12 CFR § 1026.35(c)(2), which includes another “threshold amount” under Subsection 35(c)(2)(ii). For 2022, this amount has been increased from $27,200 to $28,500 (see 12 CFR Pt. 1026, Supp. I, Paragraph 35[c][ii] – 3.viii; (2022)
We are updating the global value mappings for FI 67269 to replace the value of “27200” in one condition to “28500”, to reflect the 2022 “(HRM-HPML) threshold amount”.
These changes are currently on ConformX Stage servers for testing purposes and will be moved to ConformX Production servers to take effect on January 1, 2022. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.