Fed and CFPB Raise Dollar Thresholds for Lending, Leasing Rules

The Federal Reserve Board and the Consumer Financial Protection Bureau (CFPB) have raised the dollar thresholds for applicability of Truth in Lending and Consumer Leasing rules.

In 2024, Truth in Lending (Regulation Z) and Consumer Leasing (Regulation M) rules will generally apply to consumer credit transactions and consumer leases of $69,500 or less, the regulators said in a Monday (Nov. 13) press release.

This change has been made due to the requirement that the agencies adjust the thresholds each year based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), according to the release. Transactions at or below the thresholds are covered by the regulations.

The latest annual adjustments follow the annual percentage increase in the CPI-W as of June 1, the release said.

“Based on the annual percentage increase in the CPI-W as of June 1, 2023, the exemption threshold will increase from $66,400 to $69,500, effective Jan. 1, 2024,” the agencies said in a final rules released Friday for Regulation Z and Regulation M.

The agencies added in the press release: “However, private education loans and loans secured by real property, such as mortgages, are subject to Regulation Z (Truth in Lending) regardless of the amount of the loan.”

In an earlier development around the Truth in Lending Act, the CFPB said in a March 28 preemption determination that states’ disclosure laws covering lending to businesses are not inconsistent with or preempted by the federal Truth in Lending Act.

The Federal Truth in Lending Act covers consumers not businesses. At the state level, New York, California, Utah and Virginia have enacted disclosure laws that cover lenders’ commercial financing transactions with businesses.

The CFPB’s preemption determination announced in March came after an industry trade association asked the agency in 2022 to determine whether New York’s commercial financing disclosure law is preempted by the Truth in Lending Act.

“After analyzing public comments on its preliminary determination, the CFPB affirms there is no conflict because the state laws extend disclosure protections to businesses and entrepreneurs that seek commercial financing,” the agency said at the time.