TILA thresholds updated for ATR/QM

Aug. 15, 2014 – CFPB announced a final rule setting annual adjustments for certain thresholds under Regulation Z provisions implementing the Home Ownership and Equity Protection Act and the ability-to-repay/qualified mortgage rule.

The final rule left the minimum interest charge disclosure thresholds under the Credit Card Accountability Responsibility and Disclosure Act unchanged for 2015.

Under Reg Z, the final rule amends the safe harbor threshold amounts for credit card penalty fees. Effective January 1, 2015, the adjusted dollar amount for the penalty fees safe harbor is $27. The safe harbor for each subsequent violation within the following six months is $38. For HOEPA loans, the adjusted total loan amount threshold is $20,391, effective on Jan. 1, 2015. Also effective that day, the adjusted statutory fee trigger for HOEPA loans will be $1,020.

Finally, under the ability-to-repay/qualified mortgage rule, the CFPB adjusted thresholds connected to determining if a consumer can repay a transaction secured by a dwelling. According to the final rule, the transaction is not considered a QM in 2015 unless the total points and fees do not exceed:

  • 3 percent of the total loan amount for a loan greater than or equal to $101,953, or $3,059 for a loan amount greater than or equal to $61,172 but less than $101,953;
  • 5 percent of the total loan amount for a loan greater than or equal to $20,391 but less than $61,172, or $1,020 for a loan amount greater than or equal to $12,744 but less than $20,391; and
  • 8 percent of the total loan amount for a loan amount less than $12,744.

 

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