Regs Z, M exemption caps to rise

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June 15, 2011 – A new $50,000 cap on consumer loans and leases subject to the Federal Reserve’s Regulations Z and M kicks in July 21, and it’s set to rise by $1,800 Jan. 1 based on a recent analysis of growth in the Consumer Price Index.

Today, the protections of Regs Z and M – these implement the Truth in Lending Act and Consumer Leasing Act – apply to consumer loan and lease transactions involving up to $25,000. The Dodd-Frank Act pushes that to $50,000 as of July 21 and requires annual adjustments based on year-over-year growth in the CPI as of June 1. This is the basis for the increase to $51,800 that applies beginning next Jan. 1.

The Fed notes that private education loans and loans secured by real property, including mortgages, are subject to truth-in-lending Reg Z rules regardless of loan amount.