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Fed and CFPB Increase Reg Z and M Dollar Thresholds for Consumer Transactions

Financial Institutions Law Alert Kathryn A. Kronquist, Michael Hearon

On September 9, 2014, the Federal Reserve Board and the Consumer Financial Protection Bureau ("CFPB") announced increases in the dollar thresholds in Regulation Z and Regulation M for exempt consumer credit and lease transactions. Regulation Z implements the Truth in Lending Act ("TILA") and Regulation M implements the Consumer Leasing Act ("CLA"). The Dodd-Frank Act amended TILA and CLA by requiring annual adjustments to the thresholds based on the annual percentage increase in the consumer price index for urban wage earners and clerical workers. Only those transactions at or below the thresholds are subject to the protections of the regulations.

Based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, TILA and CLA will apply to consumer credit transactions and consumer leases of $54,600 or less in 2015—an increase of $1,100 from 2014. The adjustments to the thresholds will take effect Jan. 1, 2015, and will reflect the annual percentage increase in the consumer price index as of June 1, 2014.

Private education loans and loans secured by real property (such as home mortgage loans) remain subject to TILA regardless of the amount of the loan. The joint announcement between the Federal Reserve and the CFPB is available here.

For more information, please contact Stanley Orszula at (312) 715-5123 / [email protected], Jim Friedman at (414) 277-5735 / [email protected], Kate Kronquist at (202) 372-9519 / [email protected], Jim Kaplan at (312) 715-5028 / [email protected], Lucy Dollens at (317) 399-2815 / [email protected], Kevin Quigley at (602) 229-5433 / [email protected], or your Quarles & Brady attorney.

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