The CFPB recently issued a final rule amending Regulation Z thresholds and fee caps in 2020 for several parts of the Truth in Lending Act. Products affected include credit cards, qualified mortgages and loans subject to the Home Ownership and Equity Protection Act of 1994.
For open-end consumer credit plans under the Credit Card Accountability Responsibility and Disclosure 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.
Under the regulation, 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 percent 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 percent 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 percent of the total loan amount for a loan amount less than $13,737.
Credit unions are encouraged to read the final rule (opens new window) to see the exact amounts of the changes effective on Jan. 1, 2020.