The CFPB has published a final rule regarding various annual adjustments it is required to make under provisions of Regulation Z (TILA) that implement the CARD Act, HOEPA, and the ability to repay/qualified mortgage provisions of Dodd-Frank. The adjustments reflect changes in the Consumer Price Index in effect on June 1, 2016 and will take effect January 1, 2017.
The CARD Act requires the CFPB to calculate annual adjustments of (1) the minimum interest charge threshold that triggers disclosure of the minimum interest charge in credit card applications, solicitations and account opening disclosures, and (2) the fee thresholds for the penalty fees safe harbor. The calculation did not result in a change to the current $1.00 minimum interest charge threshold. The first violation penalty and subsequent violation penalty fees will also remain unchanged at $27 and $38, respectively. However, the latter figure remains “unchanged” because the CFPB corrected its 2016 fee notice, which had erroneously calculated the subsequent violation penalty safe harbor fee as $37. The CFPB is amending the provision to preserve a list of historical thresholds and the corrected figure is effective immediately upon publication in the federal register.
Pursuant to its ability to repay/QM rule, the CFPB must annually adjust the points and fees limits that a loan must not exceed to satisfy the requirements for a QM. The CFPB must also annually adjust the related loan amount limits. In the final rule, the CFPB increased these limits to the following:
- For a loan amount greater than or equal to $102,894 (currently $101,749), points and fees may not exceed 3 percent of the total loan amount
- For a loan amount greater than or equal to $61,737 (currently $61,050) but less than $102,894, points and fees may not exceed $3,087
- For a loan amount greater than or equal to $20,579 (currently $20,350) but less than $61,737, points and fees may not exceed 5 percent of the total loan amount
- For a loan amount greater than or equal to $12,862 (currently $12,719) but less than $20,579, points and fees may not exceed $1,029
- For a loan amount less than $12,862 (currently $12,719), points and fees may not exceed 8 percent of the total loan amount