Based on the 4.7% increase in the Consumer Price Index (CPI-W) in effect on June 1, 2021, the Consumer Financial Protection Bureau (CFPB) released a number of new thresholds which go into effect on January 1, 2022. They include:
- The minimum interest charge disclosure threshold of $1.00 under the CARD Act will remain unchanged. (1026.6(b)(2)(iii) and 1026.60(b)(3))
- The adjusted dollar amount for the penalty fees safe harbor under the CARD Act is increasing to $30 for a first late payment (up from $29 in 2021) and $41 for each subsequent violation within the following six months (up from $40 in 2021). (1026.52(b)(1)(ii))
Additionally, these changes affected the HOEPA threshold amounts found under 1026.32 based on the 4.2% increase in the Consumer Price Index (CPI-U) in effect on June 1, 2021.
- For HOEPA loans, the adjusted total loan amount threshold is $22,969. (1026.32(a)(1)(ii)(A))
- The adjusted statutory fee trigger for HOEPA loans is $1,148. (1026.32(a)(1)(ii)(B))
The Qualified Mortgage (1026.43(e)(3)) rules have revised thresholds as well. For the purpose of the creditor’s determination of a consumer’s ability to repay a transaction secured by a dwelling, a covered transaction is not a qualified mortgage unless the transaction’s total points and fees do not exceed:
- 3 percent of the total loan amount for a loan greater than or equal to $114,847
- $3,445 for a loan amount greater than or equal to $68,908 but less than $114,847
- 5 percent of the total loan amount for a loan greater than or equal to $22,969 but less than $68,908
- $1,148 for a loan amount greater than or equal to $14,356 but less than $22,969
- 8 percent of the total loan amount for a loan amount less than $14,356
Effective now and mandatory in October 2022, a spread between the APR and APOR is replacing the 43% DTI requirements under Appendix Q for determining a Qualified Mortgage under the General QM definition (1026.43(e)(2)(vi)). That spread cannot exceed the percentages defined in the regulation and be considered General QM. The thresholds for 2022 are:
- 2.25 or more percentage points for a first lien covered transaction with a loan amount greater than or equal to $114,847;
- 3.5 or more percentage points for a first lien covered transaction with a loan amount greater than or equal to $68,908 but less than $114,847;
- 6.5 or more percentage points for a first lien covered transaction with a loan amount less than $68,908;
- 6.5 or more percentage points for a first lien covered transaction secured by a manufactured home with a loan amount less than $114,847;
- 3.5 or more percentage points for a subordinate-lien covered transaction with a loan amount greater than or equal to $68,908; or
- 6.5 or more percentage points for a subordinate-lien covered transaction with a loan amount less than $68,908.
All the thresholds shown above are effective starting on January 1, 2022.
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