Credit Union Forms: Annual Threshold Adjustments
The CFPB (the Consumer Financial Protection Bureau) issued a final rule that amended the regulatory text and official interpretations for Regulation Z, which implements the Truth in Lending Act (TILA). In particular, the Bureau is required to calculate annually the dollar amounts for several provisions in Regulation Z; and this final rule reviewed the dollar amounts for provisions implementing amendments to TILA under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Home Ownership and Equity Protection Act of 1994 (HOEPA), as well as the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
For the CARD Act, it was determined that for 2016 the minimum interest charge that may be assessed during a billing cycle would remain at the $1.00 amount that is applicable to 2015. However, the adjusted dollar amount for the penalty fees safe harbor applicable to credit cards changed from $27 for a first late payment and $38 for each subsequent violation within the following six months for 2015, to $27 for a first late payment and $37 for each subsequent violation within the following six months beginning in 2016.
For HOEPA Loans, the total loan amount threshold used to determine whether a transaction is a high cost mortgage (when the points and fees are either 5 percent or 8 percent) will be $20,350 and the adjusted statutory fee trigger for HOEPA loans will be $1,017, both of which are effective January 1, 2016.
The ability to repay any qualified mortgages annual threshold adjustments are also effective January 1, 2016. For purposes of determining whether a covered transaction is a qualified mortgage, a covered transaction will not be considered a qualified mortgage unless the transaction’s total points and fees do not exceed: (a) 3 percent of the total loan amount for a loan amount greater than or equal to $101,749; (b) $3,052 for a loan amount greater than or equal to $61,050 but less than $101,749; (c) 5 percent of the total loan amount for loans greater than or equal to $20,350 but less than $61,050; (d) $1,017 for a loan amount greater than or equal to $12,719 but less than $20,350; and (e) 8 percent of the total loan amount for loans less than $12,719.
To read similar articles please visit Oak Tree Business Systems, Inc. Winter 2016 Advantage – A Look Into 2016.
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