Agencies Set 2020 Thresholds on Consumer Credit Transactions
November 1, 2019
The Consumer Financial Protection Bureau (CFPB) and Federal Reserve Board have posted the dollar thresholds in Regulation Z (Truth-in-Lending) and Regulation M (Consumer Leasing) that will apply when determining exempt consumer credit and lease transactions in 2020.
According to the agencies, the thresholds are adjusted annually based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If there is no annual percentage increase in the CPI-W, the Federal Reserve Board and the Bureau will not adjust this exemption threshold from the prior year.
Based on the annual percentage increase in the CPI-W as of June 1, 2019, the exemptions will apply on consumer credit transactions and consumer leases of $58,300 or less in 2020. However, private education loans and loans secured by real property–including mortgages–are subject to the Truth-in-Lending Act regardless of the amount of the loan.
Separately, the CFPB and the Federal Reserve were joined by the Office of the Comptroller of the Currency in announcing the threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans during 2020 will increase from $26,700 to $27,200. The threshold amount will be effective Jan. 1, 2020, and is based on the annual percentage increase in the CPI-W as of June 1, 2019.
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