NEWS: Every year, the CFPB adjusts the exemption thresholds for three of its lending rules, and those thresholds are increasing for 2024:
HPML appraisals: The threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans (HPMLs) will increase to $32,400, effective Jan. 1, 2024 (up from $31,000 in 2023). The CFPB adjusts this exemption threshold annually, based on the annual percentage change in the Consumer Price Index. Loans below that amount are exempt from the HPML requirements for (1) interior appraisals and copies for applicants, and (2) second appraisals on “flipped” HPMLs.
For details, see The League’s ii Release No. B068 – Higher-Priced Mortgage Loans.
Reg. Z. The CFPB’s Truth in Lending rules (Reg. Z) generally apply to credit extended primarily for personal, family, or household (not business or agricultural) purposes unless:
- The loan is to an organization (corporation, partnership, association, union, etc.); or
- The loan is over a certain dollar threshold.
The CFPB has announced that the dollar threshold will increase to $69,500, effective Jan. 1, 2024 (up from $66,400 in 2023). Although consumer credit transactions above that threshold are generally exempt, loans secured by real property or by personal property used or expected to be used as the principal dwelling of a consumer and private education loans are covered by TILA regardless of the loan amount. The CFPB adjusts this exemption threshold annually, based on the annual percentage change in the Consumer Price Index.
For details, see The League’s ii Release No. B001 – Scope of Lending Laws.Reg. M. Automobile leasing is subject to Reg. M (Consumer Leasing) rather than Reg. Z (Truth in Lending). Reg. M applies to a “lease for the use of personal property by a natural person primarily for personal, family, or household purposes, for a period exceeding four months and for a total contractual obligation not exceeding” a certain dollar threshold. The CFPB announced that the threshold will increase to $69,500, effective Jan. 1, 2024 (up from $66,400 in 2023). The CFPB adjusts this exemption threshold annually, based on the annual percentage change in the Consumer Price Index. Reg. M applies “whether or not the lessee has the option to purchase or otherwise becomes the owner of the property at the expiration of the lease.”
For details, see The League’s ii Release No. B006 – Automobile Leasing.