On October 13, 2022 the Federal Reserve Board and the Consumer Financial Protection Bureau jointly issued an increase in the exemption thresholds for Regulation Z and Regulation M exemptions, which are tied to the Consumer Price Index. Loans or leases at or below the thresholds are subject to the protections of the regulations.
The regulators have released the new index limit for 2023 effective January 1, 2023. The new limit is $66,400 which is a change from the $61,000 figure in 2022.
Keep in mind that private education loans and loans secured by real property (such as mortgages) are subject to the Truth in Lending Act regardless of the loan amount.
Also, the Office of the Comptroller of the Currency (OCC), Federal Reserve Bank (FRB) and Consumer Financial Protection Bureau (CFPB) released the revised exemption amount which goes into effect on January 1, 2023 as the threshold for appraisals required for higher priced mortgage loans (HPML). The limit began at $25,000 and is adjusted annually for inflation. The figure for 2023 was increased to $31,000, which is an increase from the 2022 figure of $28,500. Loans which may be HPML’s with dollar amounts below this figure would be exempt from the requirement to obtain a written appraisal from a certified or licensed appraiser.
Revisit your loan origination systems and training for Bank personnel to ensure they are updated in time to enact the change.
TCA, A Better Way provides you with regulatory information from a compliance professional’s viewpoint. Contact us at (800) 934-7347 or [email protected] if you have any questions!
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