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 “Truth in Lending (Regulation Z) Threshold Adjustment” and the “Higher-Priced Mortgage Loans Exemption Threshold Adjustment”.
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 2024, it has been adjusted from $66,400 to $69,500.
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][1][i][A]), the “threshold amount” is used by some states as the criteria 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. In other words, this particular disclosure needs to be provided in connection with a loan where the amount financed is equal to (or less than) the “threshold amount.”
Docutech uses “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 Cx1022 – IA Notice to Cosigners). The global field value mappings for Fl 81938 have been updated to replace all instances of conditions which contain the value “66400” with the value “69500” to reflect the 2024 “Reg Z threshold amount”.
Similarly, Docutech uses “Higher-Risk HPML” (FI 67269) to determine whether a loan is or isn’t a “higher-risk mortgage” (a special type of higher-priced mortgage loan, referred to as an “HRM-HPML”). The criteria for determining whether or not a loan is an HRM-HPML is set forth under 12 CFR § 1026.35(c)(2), which includes another “threshold amount” under Subsection 35(c)(2)(ii). For 2024, this amount has been increased from $31,000 to $32,400.
The global field value mappings for FI 67269 have been updated to replace all instances of conditions which contain the value “31000” with the value “32400” to reflect the 2024 “HRM-HPML threshold amount”.
These changes are available for testing on Stage servers and will take effect on January 1, 2024. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
COM-3987