adminThe LSCU Compliance team shares updates for credit unions to be aware of as we reach year end. Every year, the CFPB, IRS, Federal Reserve and other entities update annual thresholds. Thresholds are typically tied to consumer price indexes to account for inflation. Throughout the coming weeks, InfoSight will be updating its content with the appropriate changes, please make sure you stay vigilant on these changes and the impact they could have on your policy and procedures. The first such change, Reserve Requirements – Regulation D, has already been updated in the Accounts Channel.
- FRB – Reserve Requirements
- Higher-Priced Mortgage Loan Appraisal Exemption Limit
- CFPB – Credit Card Safe Harbor Fees
- CFPB – High Cost Mortgage Points and Fee Limits
- CFPB – Qualified Mortgage Points and Fee Limits
- IRS – Health Savings Accounts (HSA) Contribution Limits
- CFPB – Consumer Leasing
- CFPB – Asset Size Exemption Threshold (Escrow for HPMLs)
- CFPB – HMDA Asset Size Exemption Threshold
Below are the changes you need to be aware of:
Regulation Z – Appraisals for HPMLs Exemption Threshold was adjusted. HPMLs under this threshold are not required to have an appraisal conducted under the rules. The loan amount was unchanged for 2021 and remains at $27,500.
Regulation Z – Credit Card Annual Adjustments Each year the safe harbor fees for a first violation penalty fee and subsequent violations for credit cards are adjusted. Both remain unchanged for 2021 and will be $29 and $40, respectively.
Regulation Z – High Cost Mortgage Loan Fee Threshold In order for credit unions to determine if they are originating a high cost mortgage, points and fees need to be below certain thresholds. These are adjusted annually. Effective on January 1, 2021 a transaction is high-cost if its points and fees exceed:
- 5% of the total loan amount for a loan greater than or equal to $22,052.
- 8% of the total loan amount or $1,103 (whichever is less) for a loan amount less than $22,052.
Regulation Z – Qualified Mortgage Thresholds Under the ability to repay rules, credit unions are provided with a safe harbor if they originate a qualified mortgage. Among other criteria, the loan is considered a qualified mortgage if the loans points and fees are below certain thresholds. Those thresholds are adjusted annually.
Effective on January 1, 2021:
| Loan Amount | Points & Fees Limit |
| $110,260 or more | 3% |
| $66,156 – $110,260 | $3,308 |
| $22,052 – $66,155 | 5% |
| $13,783 – $22,051 | $1,103 |
| Less than $13,783 | 8% |
IRS – Health Savings Accounts (HSA) Contribution Limits These limits are adjusted by the IRS annually. Credit unions should ensure contributions to HSAs do not exceed these limits. Effective on January 1, 2021 contributions must be no more than $3,600 for an individual plan and $7,200 for a family plan. This is a $50 and $100 increase, respectively.
Regulation M – Consumer Leasing The threshold for determining if a contract is considered a consumer lease is adjusted annually. The amount will remain unchanged from the prior year for 2021 at $58,300.
Still waiting on 2021 Guidance on Reg Z & Reg C
Regulation Z – Asset Size Exemption Threshold change for credit unions that qualify for an exemption to the requirement for establishing an escrow account for higher-priced mortgage loans (HPMLs). This asset size threshold was $2.202 billion for 2020, but we do not yet have the new threshold for 2021. This change usually gets published the last week of December. Credit unions under this asset size and who meet other criteria, may be exempt from this requirement.
Regulation C – Home Mortgage Disclosure Act Asset Size Exemption Threshold was $47 million for 2020 and we have not received the threshold amount for 2021. This change typically gets published the last week of December. Credit unions are exempt from the HMDA reporting requirements if they have assets below this threshold.
Please contact compliance@lscu.coop if you have any questions.
