CFPB updates TILA fees, thresholds based on CPI effective in June 2020

On Aug. 1, the Consumer Financial Protection Bureau issued a final rule amending Regulation Z thresholds and fee caps in 2020 for several parts of the Truth in Lending Act (TILA). Products affected include credit cards, qualified mortgages and loans under the Home Ownership and Equity Protection Act (HOEPA) of 1994.

• For credit card accounts under the Credit Card Accountability Responsibility and Disclosure Act, the CFPB increased by $1.00 the amount for the safe harbor for both first violation and subsequent violation penalty fees.
• The amendments raise the loan amount trigger for HOEPA coverage. They also increase the maximum points and fees thresholds under the qualified mortgage and HOEPA provisions. The qualified mortgage thresholds are tiered according to loan size.

Credit unions should read the final rule to see the exact amounts of the changes.

Revised thresholds will be effective Jan. 1, 2020 and include:

• For open-end consumer credit plans under TILA, the threshold that triggers requirements to disclose minimum interest charges will remain unchanged at $1.00 in 2020;
• For open-end consumer credit plans under the CARD Act amendments to TILA, the adjusted dollar amount in 2020 for the safe harbor for a first violation penalty fee will increase by $1 to $29 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will increase by $1 to $40;
• For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2020 will be $21,980. The adjusted points-and-fees dollar trigger for high-cost mortgages in 2020 will be $1,099;
• For qualified mortgages, which provide creditors with certain protections from liability under the Ability-to-Repay Rule, the maximum thresholds for total points and fees in 2020 will be:
  • 3% of the total loan amount for a loan greater than or equal to $109,898;
  • $3,297 for a loan amount greater than or equal to $65,939 but less than $109,898;
  • 5% of the total loan amount for a loan greater than or equal to $21,980 but less than $65,939;
  • $1,099 for a loan amount greater than or equal to $13,737 but less than $21,980; and
  • 8% of the total loan amount for a loan amount less than $13,737.