Compliance Blog

Sep 25, 2015

CFPB Issues Regulation Z Annual Threshold Adjustments; Fed Adopts Same-Day ACH Processing; A Penny for Your Thoughts

Written by Victoria Daka, Regulatory Compliance Counsel

The CFPB is required to annually adjust certain threshold amounts within various provisions of Regulation Z based on inflation. While it's not the most exciting task, it has to be done. That said, on September 21, 2015, the bureau published a final rule implementing a few of these adjustments under the CARD Act, HOEPA, TILA, and the Dodd-Frank Act. The rule modifies the credit card penalty fee safe harbor, the HOEPA total loan amount and fee trigger thresholds, and the loan amounts for specific points and fees limits under Regulation Z's qualified mortgage rule. These amounts are adjusted, where appropriate, based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2015. The following will outline the adjustments of several provisions in Regulation Z, effective January 1, 2016. However, the minimum interest charge disclosure thresholds will remain unchanged in 2016.

Card Act Under section 1026.52(b), fees on credit card accounts must generally be based on costs, but the rule contains safe harbor amounts that are considered compliant. The new safe harbor for a member's first late payment will be $27 and $37 for subsequent late payments within the same six month period. Credit unions should note that while the first late payment fee remains unchanged, subsequent payments within the six month period decreased by $1 dollar to $37.

HOEPA  Under section 1026.32(a), for purposes of determining the total loan amount threshold that determines whether a transaction is a high cost mortgage when the points and fees are either 5 percent or 8 percent is $20,350. This is an decrease from the current $20,391 figure. Additionally, for purposes of determining whether a consumer credit transaction that is secured by a consumer's principal dwelling and is not otherwise exempt is covered by 1026.32 a loan is covered if the points and fees exceed $1,017 or 8 percent of the total loan amount, whichever is lower. This is a decrease from the current $1,020 figure.

TILA  Under section 1026.43(e)(3), for purposes of determining whether a covered transaction is a qualified mortgage, a covered transaction is qualified when: the transaction's total points and fees do not exceed 3 percent of the total loan amount for a loan amount greater than or equal to $101,749; $3,052 for a loan amount greater than or equal to $61,050 but less than $101,749; 5 percent of the total loan amount for loans greater than or equal to $20,350 but less than $61,050; $1,017 for a loan amount greater than or equal to $12,719 but less than $20,350, and 8 percent of the total loan amount for loans less than $12,719. Credit unions should note that these are all increases from the current figures.

The CFPB's final rule can be found here.


Fed Adopts Same-Day ACH Processing

On September 23, 2015, the Federal Reserve Board approved the NACHA mandatory same-day automated clearinghouse processing rules adopted in May. Same day transactions will begin to phase in starting September 2016. The new rule requires receiving depository financial institutions (RDFIs) to participate in the service and originating depository financial institutions (ODFIs) to pay a fee to RDFIs for each same-day ACH forward transaction,

The Board's Federal Register notice can be viewed here. For more information on NACHA's same-day ACH, check out this blog post.


A Penny for Your Thoughts

Back when I was new to compliance, I wish there had been a compliance officer 101 type of resource. There are so many regulations that compliance officers need to be aware of, including -- TILA/RESPA Integrated Disclosures, Regulation B, Regulation CC, Regulation D, Regulation DD, Regulation E, Regulation J, Regulation P, Regulation V, Regulation X, Regulation Z, and UDAAP -- just to name a few. Oh yea, and then there is the E-SIGN Act, too! You can't forget about those electronic disclosures.  With all of these regulations, how do they all work in tandem? And then there are policies, which ones require board approval?

Whether you're new to compliance and share my rookie-days sentiments, or are a seasoned compliance officer, we're working on a new electronic resource to help you navigate your way through the regulatory-compliance land of credit unions.

My question to you what did you use when you were brand new to compliance? Or are you still looking for that perfect resource to help you with your day-to-day compliance needs?