Truth in Lending (Regulation Z) Annual Threshold Adjustments (CARD Act, HOEPA and ATR/QM), 41418-41422 [2016-14782]
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Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Rules and Regulations
(ii) Subject to a Congressional
subpoena or relates to an ongoing
investigation by Congress, the United
States Government Accountability
Office, or the Corporation’s Inspector
General; or
(iii) An inherited record that the
Corporation has determined is necessary
for a present or reasonably foreseeable
future evidentiary need of the
Corporation or the public.
(2) Examples. Examples of inherited
records include, without limitation:
Correspondence; tax forms, accounting
forms, and related work papers; internal
audits; inventories; board of directors or
committee meeting minutes; personnel
files and employee benefits information;
general ledger and financial reports;
financial data; litigation files; loan
documents including records relating to
intercompany debt; contracts and
agreements to which the covered
financial company was a party;
customer accounts and transactions;
qualified financial contracts and related
information; and reports or other
records of subsidiaries or affiliates of the
covered financial company that were
provided to the covered financial
company.
(3) Transfer of an inherited record to
an acquirer of assets or liabilities of a
covered financial company. If the
Corporation transfers an inherited
record of a covered financial company
to a third party (including a bridge
financial company) in connection with
the acquisition of assets or liabilities of
the covered financial company by such
third party, the record retention
requirements of 12 U.S.C. 5390(a)(16)(D)
and paragraph (c)(1) of this section shall
be satisfied if the third party agrees, in
writing, that:
(i) It will maintain the inherited
record for at least six years from the date
of the appointment of the Corporation as
receiver for the covered financial
company unless otherwise notified in
writing by the Corporation; and
(ii) Prior to destruction of such
inherited record it will provide the
Corporation with notice and the
opportunity to cause the inherited
record to be returned to the Corporation.
(d) Receivership records—(1)
Retention schedule for receivership
records. (i) A receivership record shall
be retained indefinitely to the extent
that there is a present or reasonably
foreseeable future evidentiary or
historical need for such receivership
record.
(ii) A receivership record that is
subject to a litigation hold imposed by
the Corporation, is subject to a
Congressional subpoena, or relates to an
ongoing investigation by Congress, the
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United States Government
Accountability Office, or the
Corporation’s Office of Inspector
General shall be retained pursuant to
the conditions of such hold, subpoena,
or investigation.
(iii) In no event shall a receivership
record be retained by the Corporation
for a period of less than six years
following the termination of the
receivership to which it relates.
(2) Not included in receivership
records. Receivership records do not
include inherited records.
(3) Examples. Examples of
receivership records include, without
limitation: Correspondence; tax forms,
accounting forms and related work
papers; inventories; contracts and other
information relating to the management
and disposition of the assets of the
covered financial company;
documentary material relating to the
appointment of the Corporation as
receiver; administrative records and
other information relating to
administrative proceedings; pleadings
and similar documents in civil
litigation, criminal restitution, forfeiture
litigation, and all other litigation matters
in which the Corporation as receiver is
a party; the charter and formation
documents of a bridge financial
company; contracts, other documents,
and information relating to the role of
the Corporation as receiver in
overseeing the operations of the bridge
financial company; reports or other
records of the bridge financial company
and its subsidiaries or affiliates that
were provided to the Corporation as
receiver; and documentary material
relating to the administration,
determination, and payment of claims
by the Corporation as receiver.
(e) General provisions. With respect to
any documentary material described in
paragraphs (c) and (d) of this section,
the following applies:
(1) Impact on discoverability,
admissibility, or release; compliance
with court orders. The Corporation’s
determination that documentary
material must be maintained pursuant
to 12 U.S.C. 5390(a)(16)(D) and this
section shall not bear on the
discoverability or admissibility of such
documentary material in any court,
tribunal, or other adjudicative
proceeding nor on whether such
documentary material is subject to
release under the Freedom of
Information Act, 5 U.S.C. 552, the
Privacy Act of 1974, 5 U.S.C. 552a, or
any other law. The Corporation shall
comply with any applicable court order
concerning mandatory retention or
destruction of any documentary
material subject to this section.
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(2) Exclusions. Documentary material
is not an inherited record nor a
receivership record and is not subject to
the record retention requirements of
section 12 U.S.C. 5390(a)(16)(D) and this
section if it is:
(i) A duplicate copy of retained
documentary material, reference
material, a draft of a document that is
superseded by later drafts or revisions,
documentary material provided to the
Corporation by other parties in
concluded litigation for which all
appeals have expired, transitory
information including routine system
messages and system-generated log files,
notes and other material of a personal
nature, or other documentary material
not routinely maintained under the
standard record retention policies and
procedures of the Corporation;
(ii) Documentary material generated
or maintained by a bridge financial
company, or by a subsidiary or affiliate
of a covered financial company, that
was not provided to the covered
financial company or to the Corporation
as receiver; or
(iii) Non-publicly available
confidential supervisory information or
operating or condition reports prepared
by, on behalf of, or at the requirement
of any agency responsible for the
regulation or supervision of financial
companies or their subsidiaries.
(f) Policies and procedures. The
Corporation may establish policies and
procedures with respect to the retention
of inherited records and receivership
records that are consistent with this
section.
Dated at Washington, DC, this 21st day of
June, 2016.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2016–15020 Filed 6–24–16; 8:45 am]
BILLING CODE 6714–01–P
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Parts 1026
Truth in Lending (Regulation Z) Annual
Threshold Adjustments (CARD Act,
HOEPA and ATR/QM)
Bureau of Consumer Financial
Protection.
ACTION: Final rule; official
interpretation.
AGENCY:
The Bureau of Consumer
Financial Protection (Bureau) is issuing
this final rule amending the regulatory
text and official interpretations for
SUMMARY:
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Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Rules and Regulations
Regulation Z, which implements the
Truth in Lending Act (TILA). The
Bureau is required to calculate annually
the dollar amounts for several
provisions in Regulation Z; this final
rule revises, as applicable, 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), and the DoddFrank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act). In
addition to adjusting these amounts,
where appropriate, based on the annual
percentage change reflected in the
Consumer Price Index in effect on June
1, 2016, the Bureau is correcting a
calculation error pertaining to the 2016
subsequent violation penalty safe harbor
fee.
DATES: This final rule is effective
January 1, 2017, except for the
amendment to § 1026.52(b)(1)(ii)(B)
which is effective on June 27, 2016.
FOR FURTHER INFORMATION CONTACT:
Jaclyn Maier, Counsel, Office of
Regulations, Consumer Financial
Protection Bureau, 1700 G Street NW.,
Washington, DC 20552 at (202) 435–
7700.
SUPPLEMENTARY INFORMATION: The
Bureau is amending the regulatory text
and official interpretations for
Regulation Z, which implements TILA,
to update the dollar amounts of various
thresholds that are adjusted annually
based on the annual percentage change
in the Consumer Price Index.
Specifically, for open-end consumer
credit plans under the CARD Act, the
threshold that triggers requirements to
disclose minimum interest charges will
remain unchanged in 2017. The
adjusted dollar amount for the safe
harbor for a first violation penalty fee
will remain unchanged at $27 in 2017;
the adjusted dollar amount for the safe
harbor for a subsequent violation
penalty fee will remain unchanged in
2017 from the corrected amount of $38
applicable in 2016, as discussed in this
notice. For HOEPA loans, the adjusted
total loan amount threshold for highcost mortgages in 2017 will be $20,579.
The adjusted points and fees dollar
trigger for high-cost mortgages will be
$1,029. For the general rule to
determine consumers’ ability to repay
mortgage loans, the maximum threshold
for total points and fees for qualified
mortgages in 2017 will be 3 percent of
the total loan amount for a loan greater
than or equal to $102,894; $3,087 for a
loan amount greater than or equal to
$61,737 but less than $102,894; 5
percent of the total loan amount for a
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loan greater than or equal to $20,579 but
less than $61,737; $1,029 for a loan
amount greater than or equal to $12,862
but less than $20,579; and 8 percent of
the total loan amount for a loan amount
less than $12,862.
I. Background
A. CARD Act Annual Adjustments
In 2010, the Board of Governors of the
Federal Reserve System (Board)
published amendments to Regulation Z
implementing the CARD Act, which
amended TILA. Public Law 111–24, 123
Stat. 1734 (2009). Pursuant to the CARD
Act, the Board’s Regulation Z
amendments established new
requirements with respect to open-end
consumer credit plans, including
requirements for the disclosure of
minimum interest charge amounts and
the establishment of a safe harbor
provision allowing card issuers to
impose penalty fees for violating
account terms without violating the
restrictions on penalty fees established
by the CARD Act. See 75 FR 7658, 7799
(Feb. 22, 2010) and 75 FR 37526, 37527
(June 29, 2010). The final rule issued by
the Board required that these thresholds
be calculated annually using the
Consumer Price Index as published by
the Bureau of Labor Statistics (BLS).1
Minimum Interest Charge Disclosure
Thresholds
Sections 1026.6(b)(2)(iii) and
1026.60(b)(3) of the Bureau’s Regulation
Z provide that the minimum interest
charge thresholds will be re-calculated
annually using the Consumer Price
Index for Urban Wage Earners and
Clerical Workers (CPI–W) that was in
effect on the preceding June 1. When the
cumulative change in the adjusted
minimum value derived from applying
the annual CPI–W level to the current
amounts in §§ 1026.6(b)(2)(iii) and
1026.60(b)(3) has risen by a whole
dollar, the minimum interest charge
amounts set forth in the regulation will
be increased by $1.00. The BLS
publishes consumer-based indices
monthly, but does not report a CPI
1 The responsibility for promulgating rules under
TILA was generally transferred from the Board to
the Bureau effective July 21, 2011. The Bureau
restated Regulation Z on December 22, 2011, and
on April 28, 2016, adopted as final the December
22, 2011, notice as subsequently amended. See 76
FR 79768 (Dec. 22, 2011) and 81 FR 25323 (April
28, 2016), respectively. The Bureau’s Regulation Z
is located at 12 CFR part 1026. See sections 1061
and 1100A of the Dodd-Frank Act, Public Law 111–
203, 124 Stat. 1376 (2010). Section 1029 of the
Dodd-Frank Act excludes from this transfer of
authority, subject to certain exceptions, any
rulemaking authority over a motor vehicle dealer
that is predominantly engaged in the sale and
servicing of motor vehicles, the leasing and
servicing of motor vehicles, or both.
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change on June 1; adjustments are
reported in the middle of the month.
This adjustment is based on the CPI–W
index in effect on June 1, 2016, which
was reported on May 17, 2016, and
reflects the percentage change from
April 2015 to April 2016. The CPI–W is
a subset of the CPI–U index (based on
all urban consumers) and represents
approximately 28 percent of the U.S.
population. The adjustment accounts for
a 0.8 percent increase in the CPI–W
from April 2015 to April 2016. This
increase in the CPI–W when applied to
the current amounts in
§§ 1026.6(b)(2)(iii) and 1026.60(b)(3) did
not trigger an increase in the minimum
interest charge threshold of at least
$1.00, and therefore the Bureau is not
amending §§ 1026.6(b)(2)(iii) and
1026.60(b)(3).
Penalty Fees Safe Harbor
The Bureau’s Regulation Z provides
that the safe harbor provision which
establishes the permissible fee
thresholds in § 1026.52(b)(1)(ii)(A) and
(B) will be re-calculated annually using
the CPI–W that was in effect on the
preceding June 1. The BLS publishes
consumer-based indices monthly, but
does not report a CPI change on June 1;
adjustments are reported in the middle
of the month. On September 21, 2015,
the Bureau published an adjustment,
effective January 1, 2016, based on the
CPI–W index in effect on June 1, 2015,
which was reported on May 22, 2015.
The CPI–W is a subset of the CPI–U
index (based on all urban consumers)
and represents approximately 28
percent of the U.S. population. When
the cumulative change in the adjusted
value derived from applying the annual
CPI–W level to the current amounts in
§ 1026.52(b)(1)(ii)(A) and (B) has risen
by a whole dollar, those amounts will be
increased by $1.00. Similarly, when the
cumulative change in the adjusted value
derived from applying the annual CPI–
W level to the current amounts in
§ 1026.52(b)(1)(ii)(A) and (B) has
decreased by a whole dollar, those
amounts will be decreased by $1.00. See
comment 52(b)(1)(ii)–2.
In the September 21, 2015, notice, 80
FR 56895, the subsequent violation
penalty safe harbor fee amount in
§ 1026.52(b)(1)(ii)(B) was miscalculated,
as it did not fully account for situations
in which the CPI–W decreased, as
occurred in 2015. The published
subsequent violation penalty safe harbor
fee amount was $37. Effective
immediately, the Bureau is amending
§ 1026.52(b)(1)(ii)(B) to reflect the
correct subsequent violation penalty
safe harbor fee amount of $38.
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The 2017 adjustment is based on the
CPI–W index in effect on June 1, 2016,
which was reported on May 17, 2016,
and reflects the percentage change from
April 2015 to April 2016. The 0.8
percent increase in the CPI–W from
April 2015 to April 2016 did not trigger
an increase in the first violation penalty
safe harbor fee of $27 or the corrected
subsequent violation penalty safe harbor
fee of $38, and therefore, the Bureau is
not further amending
§ 1026.52(b)(1)(ii)(A) and (B) for the
2017 calendar year.
B. HOEPA Annual Threshold
Adjustments
On January 10, 2013, the Bureau
issued a final rule pursuant to, inter
alia, section 1431 of the Dodd-Frank
Act, which revised the loan amount
threshold for HOEPA loans. 78 FR 6856
(Jan. 31, 2013) (2013 HOEPA Final
Rule). The 2013 HOEPA Final Rule
adjusted the dollar amount threshold to
$20,000. Under § 1026.32(a)(1)(ii)(A)
and (B), when determining whether a
transaction is a high-cost mortgage, the
determination of the applicable points
and fees coverage test is based upon
whether the total loan amount is for
$20,000 or more, or less than $20,000.
The HOEPA 2013 Final Rule provides
that this threshold amount be
recalculated annually and the Bureau
uses the Consumer Price Index for All
Urban Consumers (CPI–U) index, as
published by the BLS, as the index for
adjusting the $20,000 figure. The CPI–U
is based on all urban consumers and
represents approximately 88 percent of
the U.S. population. The BLS publishes
consumer-based indices monthly, but
does not report a CPI change on June 1;
adjustments are reported in the middle
of each month. The adjustment to the
CPI–U index reported by BLS on May
17, 2016, was the CPI–U index in effect
on June 1, and reflects the percentage
change from April 2015 to April 2016.
The adjustment to the $20,000 figure
being adopted here reflects a 1.1 percent
increase in the CPI–U index for this
period and is rounded to whole dollars
for ease of compliance.
Pursuant to section 1431 of the Dodd
Frank Act and § 1026.32(a)(1)(ii)(B) as
amended by the 2013 HOEPA Final
Rule, implementation of the 2013
HOEPA Final Rule also changed the
HOEPA points and fees dollar trigger to
$1,000. The HOEPA 2013 Final Rule
provides that this threshold amount will
be recalculated annually and the Bureau
uses the CPI–U index, as published by
the BLS, as the index for adjusting the
$1,000 figure. The adjustment to the
CPI–U index reported by BLS on May
17, 2016, was the CPI–U index in effect
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on June 1, and reflects the percentage
change from April 2015 to April 2016.
The adjustment to the $1,000 figure
being adopted here reflects a 1.1 percent
increase in the CPI–U index for this
period and is rounded to whole dollars
for ease of compliance.
II. Adjustment and Commentary
Revision
C. Ability To Repay and Qualified
Mortgages Annual Threshold
Adjustments
The minimum interest charge
amounts for §§ 1026.6(b)(2)(iii) and
1026.60(b)(3) will remain unchanged for
the year 2017. Accordingly, the Bureau
is not amending these sections.
On January 10, 2013, the Bureau
issued a final rule pursuant to, inter
alia, sections 1411 and 1412 of the
Dodd-Frank Act, which implemented
laws requiring mortgage lenders to
determine consumers’ ability to repay
mortgage loans before extending them
credit. 78 FR 6407 (Jan. 31, 2013) (2013
ATR/QM Final Rule). The 2013 ATR/
QM Final Rule established the points
and fees limits that a loan must not
exceed in order to satisfy the
requirements for a qualified mortgage.
Specifically, a covered transaction is not
a qualified mortgage if the transaction’s
points and fees exceed 3 percent of the
total loan amount for a loan amount
greater than or equal to $100,000; $3,000
for a loan amount greater than or equal
to $60,000 but less than $100,000; 5
percent of the total loan amount for
loans greater than or equal to $20,000
but less than $60,000; $1,000 for a loan
amount greater than or equal to $12,500
but less than $20,000; and 8 percent of
the total loan amount for loans less than
$12,500. The 2013 ATR/QM Final Rule
provides that the limits and loan
amounts in § 1026.43(e)(3)(i) be
recalculated annually for inflation and
the Bureau uses the Consumer Price
Index for All Urban Consumers (CPI–U)
index, as published by the BLS, as the
index for adjusting the figures. The CPI–
U is based on all urban consumers and
represents approximately 88 percent of
the U.S. population. The BLS publishes
consumer-based indices monthly, but
does not report a CPI change on June 1;
adjustments are reported in the middle
of each month. The adjustment to the
CPI–U index reported by BLS on May
17, 2016, was the CPI–U index in effect
on June 1, and reflects the percentage
change from April 2015 to April 2016.
The adjustment to the 2016 figures
being adopted here reflects a 1.1 percent
increase in the CPI–U index for this
period and is rounded to whole dollars
for ease of compliance.
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A. CARD Act Annual Adjustments
Minimum Interest Charge Disclosure
Thresholds—§§ 1026.6(b)(2)(iii) and
1026.60(b)(3)
Penalty Fees Safe Harbor—
§ 1026.52(b)(1)(ii)(A) and (B)
As discussed above, effective
immediately, the permissible safe
harbor fee amount in
§ 1026.52(b)(1)(ii)(B) is $38.
Accordingly, the Bureau is revising
§ 1026.52(b)(1)(ii)(B) to reflect the
corrected subsequent violation penalty
safe harbor fee amount of $38.
Effective January 1, 2017, the
permissible safe harbor fee amounts are
$27 for § 1026.52(b)(1)(ii)(A) and $38 for
§ 1026.52(b)(1)(ii)(B). These amounts
did not change based on the increase in
CPI–W from April 2015 to April 2016.
Thus, they remain the same as the 2016
amount for § 1026.52(b)(1)(ii)(A) and the
2016 amount corrected in this notice for
§ 1026.52(b)(1)(ii)(B). The Bureau is
amending comment 52(b)(1)(ii)–2.i to
preserve a list of the historical
thresholds for this provision.
B. HOEPA Annual Threshold
Adjustment—Comments 32(a)(1)(ii)–1
and –3
Effective January 1, 2017, for purposes
of determining under § 1026.32(a)(1)(ii)
the points and fees coverage test under
HOEPA to which a transaction is
subject, the total loan amount threshold
is $20,579, and the adjusted points and
fees dollar trigger under
§ 1026.32(a)(1)(ii)(B) is $1,029. When
the total loan amount for a transaction
is $20,579 or more, and the points and
fees amount exceeds 5 percent of the
total loan amount, the transaction is a
high-cost mortgage. When the total loan
amount for a transaction is less than
$20,579, and the points and fees amount
exceeds the lesser of the adjusted points
and fees dollar trigger of $1,029 or 8
percent of the total loan amount, the
transaction is a high-cost mortgage.
Comments 32(a)(1)(ii)–1 and –3, which
list the adjustments for each year, are
amended to reflect for 2017 the new
dollar threshold amount and the new
points and fees dollar trigger,
respectively.
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C. Ability To Repay and Qualified
Mortgages Annual Threshold
Adjustments
Effective January 1, 2017, for purposes
of determining whether a covered
transaction is a qualified mortgage
under § 1026.43(e), a covered
transaction is not a qualified mortgage
if, pursuant to § 1026.43(e)(3), the
transaction’s total points and fees
exceed 3 percent of the total loan
amount for a loan amount greater than
or equal to $102,894; $3,087 for a loan
amount greater than or equal to $61,737
but less than $102,894; 5 percent of the
total loan amount for loans greater than
or equal to $20,579 but less than
$61,737; $1,029 for a loan amount
greater than or equal to $12,862 but less
than $20,579; and 8 percent of the total
loan amount for loans less than $12,862.
Comment 43(e)(3)(ii)–1, which lists the
adjustments for each year, is amended
to reflect the new dollar threshold
amounts for 2017.
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III. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure
Act (APA), notice and opportunity for
public comment are not required if the
Bureau finds that notice and public
comment are impracticable,
unnecessary, or contrary to the public
interest. 5 U.S.C. 553(b)(B). Pursuant to
this final rule, in Regulation Z,
§ 1026.52(b)(1)(ii)(B) in subpart E is
amended and comments 32(a)(1)(ii)–
1.iii and –3.iii, 43(e)(3)(ii)–1.iii, and
52(b)(1)(ii)–2.i.D in supplement I are
added to update the exemption
thresholds. Comments 32(a)(1)(ii)–1.iii
and –3.iii, 43(e)(3)(ii)–1.iii, and
52(b)(1)(ii)–2.1.D added by this final
rule are technical and nondiscretionary, and they merely apply the
method previously established in
Regulation Z for determining
adjustments to the thresholds. The
amendment to § 1026.52(b)(1)(ii)(B)
merely applies a necessary correction to
address an inadvertent calculation error
for the 2016 safe harbor fee. For these
reasons, the Bureau has determined that
publishing a notice of proposed
rulemaking and providing opportunity
for public comment are unnecessary.
Therefore, the amendments are adopted
in final form. The Bureau also finds that
there is good cause for making the
technical calculation correction to the
safe harbor fee amount in
§ 1026.52(b)(1)(ii)(B) in this final rule
effective immediately upon publication
in the Federal Register. 5 U.S.C. 553(d).
This portion of the final rule does not
establish any new requirements;
instead, it corrects an inadvertent error
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in the September 21, 2015, notice, 80 FR
56895, regarding the subsequent
violation penalty safe harbor fee.
Making the rule effective immediately
will allow the correct amount to be used
upon publication.
B. Regulatory Flexibility Act
Because no notice of proposed
rulemaking is required, the Regulatory
Flexibility Act does not require an
initial or final regulatory flexibility
analysis. 5 U.S.C. 603(a), 604(a).
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Paragraph 32(a)(1)(ii), paragraphs 1.iii
and 3.iii are added.
■ b. Under Section 1026.43—Minimum
Standards for Transactions Secured by
a Dwelling, under 43(e)—Qualified
mortgages, under Paragraph 43(e)(3)(ii),
paragraph 1.iii is added.
■ c. Under Section 1026.52—
Limitations on Fees, under 52(b)—
Limitations on penalty fees, under
52(b)(1)(ii)—Safe harbors, paragraph
2.i.D is added.
The additions read as follows:
C. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3506;
5 CFR 1320), the Bureau reviewed this
final rule. No collections of information
pursuant to the Paperwork Reduction
Act are contained in the final rule.
SUPPLEMENT I TO PART 1026—
OFFICIAL INTERPRETATIONS
List of Subjects in 12 CFR Part 1026
Advertising, Consumer protection,
Credit, Credit unions, Mortgages,
National banks, Reporting and
recordkeeping requirements, Savings
associations, Truth in lending.
Section 1026.32—Requirements for
Certain Closed-End Home Mortgages
32(a) Coverage.
Paragraph (a)(1).
*
*
*
*
*
Paragraph 32(a)(1)(ii).
1. * * *
iii. For 2017, $1,029, reflecting a 1.1
percent increase in the CPI–U from June
2015 to June 2016, rounded to the
nearest whole dollar.
*
*
*
*
*
3. * * *
iii. For 2017, $20,579, reflecting a 1.1
percent increase in the CPI–U from June
2015 to June 2016, rounded to the
nearest whole dollar.
*
*
*
*
*
Authority and Issuance
For the reasons set forth in the
preamble, the Bureau amends
Regulation Z, 12 CFR part 1026, as set
forth below:
PART 1026—TRUTH IN LENDING
(REGULATION Z)
1. The authority citation for part 1026
continues to read as follows:
■
Authority: 12 U.S.C. 2601, 2603–2605,
2607, 2609, 2617, 3353, 5511, 5512, 5532,
5581; 15 U.S.C. 1601 et seq.
Subpart G—Special Rules Applicable
to Credit Card Accounts and Open End
Credit Offered to College Students
2. Effective on June 27, 2016,
§ 1026.52(b)(1)(ii)(B) is revised to read
as follows:
■
§ 1026.52
Limitation on fees.
*
*
*
*
*
(b) * * *
(1) * * *
(ii) * * *
(B) $38 if the card issuer previously
imposed a fee pursuant to paragraph
(b)(1)(ii)(A) of this section for a violation
of the same type that occurred during
the same billing cycle or one of the next
six billing cycles; or
*
*
*
*
*
■ 3. Effective on January 1, 2017, in
Supplement I to Part 1026—Official
Interpretations:
■ a. Under Section 1026.32—
Requirements for High-Cost Mortgages,
under 32(a)—Coverage, under
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
*
*
*
*
*
Subpart E—Special Rules for Certain
Home Mortgage Transactions
*
*
*
*
*
Section 1026.43—Minimum Standards
for Transactions Secured by a Dwelling
*
*
*
*
*
43(e) Qualified mortgages.
*
*
*
*
*
43(e)(3) Limits on points and fees for
qualified mortgages.
*
*
*
*
*
Paragraph 43(e)(3)(ii).
1. * * *
iii. For 2017, reflecting a 1.1 percent
increase in the CPI–U that was reported
on the preceding June 1, a covered
transaction is not a qualified mortgage
unless the transactions total points and
fees do not exceed:
A. For a loan amount greater than or
equal to $102,894: 3 percent of the total
loan amount;
B. For a loan amount greater than or
equal to $61,737 but less than $102,894:
$3,087;
C. For a loan amount greater than or
equal to $20,579 but less than $61,737:
5 percent of the total loan amount;
D. For a loan amount greater than or
equal to $12,862 but less than $20,579:
$1,029;
E:\FR\FM\27JNR1.SGM
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Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Rules and Regulations
E. Sloan, Counsel, Legal Division, (703)
562–6137.
E. For a loan amount less than
$12,862: 8 percent of the total loan
amount.
*
*
*
*
*
SUPPLEMENTARY INFORMATION
I. Background
Subpart G—Special Rules Applicable
to Credit Card Accounts and Open-End
Credit Offered to College Students
Section 1026.52—Limitations on Fees
*
*
*
*
*
52(b) Limitations on penalty fees.
*
*
*
*
*
52(b)(1) General rule.
*
*
*
*
*
52(b)(1)(ii) Safe harbors.
*
*
*
*
*
2. * * *
i. * * *
D. Card issuers were permitted to
impose a fee for violating the terms of
an agreement if the fee did not exceed
$27 under § 1026.52(b)(1)(ii)(A), through
December 31, 2016. Card issuers were
permitted to impose a fee for violating
the terms of an agreement if the fee did
not exceed $37 under
§ 1026.52(b)(1)(ii)(B), through June 26,
2016, and $38 under
§ 1026.52(b)(1)(ii)(B) from June 27, 2016
through December 31, 2016.
*
*
*
*
*
Dated: June 14, 2016.
Richard Cordray
Director, Bureau of Consumer Financial
Protection.
[FR Doc. 2016–14782 Filed 6–24–16; 8:45 am]
BILLING CODE 4810–AM–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 360
RIN 3064–AE38
Treatment of Financial Assets
Transferred in Connection With a
Securitization or Participation
Federal Deposit Insurance
Corporation (‘‘FDIC’’).
ACTION: Final rule.
AGENCY:
The FDIC is revising a
provision of its Securitization Safe
Harbor Rule, which relates to the
treatment of financial assets transferred
in connection with a securitization or
participation, in order to clarify a
requirement as to loss mitigation by
servicers of residential mortgage loans.
DATES: Effective July 27, 2016.
FOR FURTHER INFORMATION CONTACT:
George H. Williamson, Manager,
Division of Resolutions and
Receiverships, (571) 858–8199. Phillip
Lhorne on DSK30JT082PROD with RULES
SUMMARY:
VerDate Sep<11>2014
15:06 Jun 24, 2016
Jkt 238001
The FDIC, in its regulation codified at
12 CFR 360.6 (the ‘‘Securitization Safe
Harbor Rule’’), set forth criteria under
which, in its capacity as receiver or
conservator of an insured depository
institution, it will not, in the exercise of
its authority to repudiate contracts,
recover or reclaim financial assets
transferred in connection with
securitization transactions. Asset
transfers that, under the Securitization
Safe Harbor Rule, are not subject to
recovery or reclamation through the
exercise of the FDIC’s repudiation
authority include those that pertain to
certain grandfathered transactions, such
as, for example, asset transfers made
prior to December 31, 2010 that satisfied
the conditions (except for the legal
isolation condition addressed by the
Securitization Safe Harbor Rule) for sale
accounting treatment under generally
accepted accounting principles
(‘‘GAAP’’) in effect for reporting periods
prior to November 15, 2009 and that
pertain to a securitization transaction
that satisfied certain other requirements.
In addition, the Securitization Safe
Harbor Rule provides that asset transfers
that are not grandfathered, but that
satisfy the conditions (except for the
legal isolation condition addressed by
the Securitization Safe Harbor Rule) for
sale accounting treatment under GAAP
in effect for reporting periods after
November 15, 2009 and that pertain to
a securitization transaction that satisfies
all other conditions of the Securitization
Safe Harbor Rule (such asset transfers,
together with grandfathered asset
transfers, are referred to collectively as
Safe Harbor Transfers) will not be
subject to FDIC recovery or reclamation
actions through the exercise of the
FDIC’s repudiation authority. For any
securitization transaction in respect of
which transfers of financial assets do
not qualify as Safe Harbor Transfers but
which transaction satisfies all of its
other requirements, the Securitization
Safe Harbor Rule provides that, in the
event the FDIC as receiver or
conservator remains in monetary default
for a specified period under a
securitization due to its failure to pay or
apply collections or repudiates the
securitization asset transfer agreement
and does not pay damages within a
specified period, certain remedies can
be exercised on an expedited basis.
Paragraph (b)(3)(ii) of the
Securitization Safe Harbor Rule sets
forth conditions relating to the servicing
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
of residential mortgage loans. This
paragraph includes a condition that the
securitization documents must require
that the servicer commence action to
mitigate losses no later than ninety days
after an asset first becomes delinquent
unless all delinquencies on such asset
have been cured.
In January, 2013, the Consumer
Financial Protection Bureau (‘‘CFPB’’)
adopted mortgage loan servicing
requirements that became effective on
January 10, 2014. One of the
requirements, set forth in Subpart C to
Regulation X, at 12 CFR 1024.41, in
general prohibits a servicer from
commencing a foreclosure unless the
borrower’s mortgage loan obligation is
more than 120 days delinquent. This
section of Regulation X also provides
additional rules that, among other
things, require a lender to further delay
foreclosure if the borrower submits a
loss mitigation application before the
lender has commenced the foreclosure
process and requires a lender to delay
a foreclosure for which it has
commenced the foreclosure process if a
borrower has submitted a complete loss
mitigation application more than 37
days before a foreclosure sale.1
II. The Proposed Rule
While the Securitization Safe Harbor
Rule does not define what constitutes
action to mitigate losses, the preamble
to the notice of proposed rulemaking
that accompanied an earlier amendment
to the Securitization Safe Harbor Rule
stated, ‘‘action to mitigate losses may
include contact with the borrower or
other steps designed to return the asset
to regular payments, but does not
require initiation of foreclosure or other
formal enforcement proceedings.’’ 2
Accordingly, it should be unlikely that
the 90-day loss mitigation requirement
of the Securitization Safe Harbor Rule
would conflict with the foreclosure
commencement delays mandated by the
CFPB under Regulation X. However, as
there may be circumstances where
commencement of foreclosure is the
only available and reasonable loss
mitigation action, the FDIC recently
issued a notice of proposed rulemaking
(the ‘‘NPR’’) to amend the Securitization
Safe Harbor Rule to clarify that the
documents governing a securitization
transaction need not require an action
prohibited by Regulation X in order to
satisfy the loss mitigation conditions for
safe harbor. The NPR was published in
the Federal Register on November 25,
2015 with a 60-day comment period.3
1 See
12 CFR 1024.41(f) and (g).
FR 27471, 27479 (May 17, 2010).
3 80 FR 73680 (November 25, 2015).
2 75
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]]>Agencies
[Federal Register Volume 81, Number 123 (Monday, June 27, 2016)]
[Rules and Regulations]
[Pages 41418-41422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14782]
=======================================================================
-----------------------------------------------------------------------
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Parts 1026
Truth in Lending (Regulation Z) Annual Threshold Adjustments
(CARD Act, HOEPA and ATR/QM)
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule; official interpretation.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
issuing this final rule amending the regulatory text and official
interpretations for
[[Page 41419]]
Regulation Z, which implements the Truth in Lending Act (TILA). The
Bureau is required to calculate annually the dollar amounts for several
provisions in Regulation Z; this final rule revises, as applicable, 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), and the Dodd-Frank Wall Street Reform and Consumer Protection
Act (Dodd-Frank Act). In addition to adjusting these amounts, where
appropriate, based on the annual percentage change reflected in the
Consumer Price Index in effect on June 1, 2016, the Bureau is
correcting a calculation error pertaining to the 2016 subsequent
violation penalty safe harbor fee.
DATES: This final rule is effective January 1, 2017, except for the
amendment to Sec. 1026.52(b)(1)(ii)(B) which is effective on June 27,
2016.
FOR FURTHER INFORMATION CONTACT: Jaclyn Maier, Counsel, Office of
Regulations, Consumer Financial Protection Bureau, 1700 G Street NW.,
Washington, DC 20552 at (202) 435-7700.
SUPPLEMENTARY INFORMATION: The Bureau is amending the regulatory text
and official interpretations for Regulation Z, which implements TILA,
to update the dollar amounts of various thresholds that are adjusted
annually based on the annual percentage change in the Consumer Price
Index. Specifically, for open-end consumer credit plans under the CARD
Act, the threshold that triggers requirements to disclose minimum
interest charges will remain unchanged in 2017. The adjusted dollar
amount for the safe harbor for a first violation penalty fee will
remain unchanged at $27 in 2017; the adjusted dollar amount for the
safe harbor for a subsequent violation penalty fee will remain
unchanged in 2017 from the corrected amount of $38 applicable in 2016,
as discussed in this notice. For HOEPA loans, the adjusted total loan
amount threshold for high-cost mortgages in 2017 will be $20,579. The
adjusted points and fees dollar trigger for high-cost mortgages will be
$1,029. For the general rule to determine consumers' ability to repay
mortgage loans, the maximum threshold for total points and fees for
qualified mortgages in 2017 will be 3 percent of the total loan amount
for a loan greater than or equal to $102,894; $3,087 for a loan amount
greater than or equal to $61,737 but less than $102,894; 5 percent of
the total loan amount for a loan greater than or equal to $20,579 but
less than $61,737; $1,029 for a loan amount greater than or equal to
$12,862 but less than $20,579; and 8 percent of the total loan amount
for a loan amount less than $12,862.
I. Background
A. CARD Act Annual Adjustments
In 2010, the Board of Governors of the Federal Reserve System
(Board) published amendments to Regulation Z implementing the CARD Act,
which amended TILA. Public Law 111-24, 123 Stat. 1734 (2009). Pursuant
to the CARD Act, the Board's Regulation Z amendments established new
requirements with respect to open-end consumer credit plans, including
requirements for the disclosure of minimum interest charge amounts and
the establishment of a safe harbor provision allowing card issuers to
impose penalty fees for violating account terms without violating the
restrictions on penalty fees established by the CARD Act. See 75 FR
7658, 7799 (Feb. 22, 2010) and 75 FR 37526, 37527 (June 29, 2010). The
final rule issued by the Board required that these thresholds be
calculated annually using the Consumer Price Index as published by the
Bureau of Labor Statistics (BLS).\1\
---------------------------------------------------------------------------
\1\ The responsibility for promulgating rules under TILA was
generally transferred from the Board to the Bureau effective July
21, 2011. The Bureau restated Regulation Z on December 22, 2011, and
on April 28, 2016, adopted as final the December 22, 2011, notice as
subsequently amended. See 76 FR 79768 (Dec. 22, 2011) and 81 FR
25323 (April 28, 2016), respectively. The Bureau's Regulation Z is
located at 12 CFR part 1026. See sections 1061 and 1100A of the
Dodd-Frank Act, Public Law 111-203, 124 Stat. 1376 (2010). Section
1029 of the Dodd-Frank Act excludes from this transfer of authority,
subject to certain exceptions, any rulemaking authority over a motor
vehicle dealer that is predominantly engaged in the sale and
servicing of motor vehicles, the leasing and servicing of motor
vehicles, or both.
---------------------------------------------------------------------------
Minimum Interest Charge Disclosure Thresholds
Sections 1026.6(b)(2)(iii) and 1026.60(b)(3) of the Bureau's
Regulation Z provide that the minimum interest charge thresholds will
be re-calculated annually using the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W) that was in effect on the
preceding June 1. When the cumulative change in the adjusted minimum
value derived from applying the annual CPI-W level to the current
amounts in Sec. Sec. 1026.6(b)(2)(iii) and 1026.60(b)(3) has risen by
a whole dollar, the minimum interest charge amounts set forth in the
regulation will be increased by $1.00. The BLS publishes consumer-based
indices monthly, but does not report a CPI change on June 1;
adjustments are reported in the middle of the month. This adjustment is
based on the CPI-W index in effect on June 1, 2016, which was reported
on May 17, 2016, and reflects the percentage change from April 2015 to
April 2016. The CPI-W is a subset of the CPI-U index (based on all
urban consumers) and represents approximately 28 percent of the U.S.
population. The adjustment accounts for a 0.8 percent increase in the
CPI-W from April 2015 to April 2016. This increase in the CPI-W when
applied to the current amounts in Sec. Sec. 1026.6(b)(2)(iii) and
1026.60(b)(3) did not trigger an increase in the minimum interest
charge threshold of at least $1.00, and therefore the Bureau is not
amending Sec. Sec. 1026.6(b)(2)(iii) and 1026.60(b)(3).
Penalty Fees Safe Harbor
The Bureau's Regulation Z provides that the safe harbor provision
which establishes the permissible fee thresholds in Sec.
1026.52(b)(1)(ii)(A) and (B) will be re-calculated annually using the
CPI-W that was in effect on the preceding June 1. The BLS publishes
consumer-based indices monthly, but does not report a CPI change on
June 1; adjustments are reported in the middle of the month. On
September 21, 2015, the Bureau published an adjustment, effective
January 1, 2016, based on the CPI-W index in effect on June 1, 2015,
which was reported on May 22, 2015. The CPI-W is a subset of the CPI-U
index (based on all urban consumers) and represents approximately 28
percent of the U.S. population. When the cumulative change in the
adjusted value derived from applying the annual CPI-W level to the
current amounts in Sec. 1026.52(b)(1)(ii)(A) and (B) has risen by a
whole dollar, those amounts will be increased by $1.00. Similarly, when
the cumulative change in the adjusted value derived from applying the
annual CPI-W level to the current amounts in Sec. 1026.52(b)(1)(ii)(A)
and (B) has decreased by a whole dollar, those amounts will be
decreased by $1.00. See comment 52(b)(1)(ii)-2.
In the September 21, 2015, notice, 80 FR 56895, the subsequent
violation penalty safe harbor fee amount in Sec. 1026.52(b)(1)(ii)(B)
was miscalculated, as it did not fully account for situations in which
the CPI-W decreased, as occurred in 2015. The published subsequent
violation penalty safe harbor fee amount was $37. Effective
immediately, the Bureau is amending Sec. 1026.52(b)(1)(ii)(B) to
reflect the correct subsequent violation penalty safe harbor fee amount
of $38.
[[Page 41420]]
The 2017 adjustment is based on the CPI-W index in effect on June
1, 2016, which was reported on May 17, 2016, and reflects the
percentage change from April 2015 to April 2016. The 0.8 percent
increase in the CPI-W from April 2015 to April 2016 did not trigger an
increase in the first violation penalty safe harbor fee of $27 or the
corrected subsequent violation penalty safe harbor fee of $38, and
therefore, the Bureau is not further amending Sec.
1026.52(b)(1)(ii)(A) and (B) for the 2017 calendar year.
B. HOEPA Annual Threshold Adjustments
On January 10, 2013, the Bureau issued a final rule pursuant to,
inter alia, section 1431 of the Dodd-Frank Act, which revised the loan
amount threshold for HOEPA loans. 78 FR 6856 (Jan. 31, 2013) (2013
HOEPA Final Rule). The 2013 HOEPA Final Rule adjusted the dollar amount
threshold to $20,000. Under Sec. 1026.32(a)(1)(ii)(A) and (B), when
determining whether a transaction is a high-cost mortgage, the
determination of the applicable points and fees coverage test is based
upon whether the total loan amount is for $20,000 or more, or less than
$20,000. The HOEPA 2013 Final Rule provides that this threshold amount
be recalculated annually and the Bureau uses the Consumer Price Index
for All Urban Consumers (CPI-U) index, as published by the BLS, as the
index for adjusting the $20,000 figure. The CPI-U is based on all urban
consumers and represents approximately 88 percent of the U.S.
population. The BLS publishes consumer-based indices monthly, but does
not report a CPI change on June 1; adjustments are reported in the
middle of each month. The adjustment to the CPI-U index reported by BLS
on May 17, 2016, was the CPI-U index in effect on June 1, and reflects
the percentage change from April 2015 to April 2016. The adjustment to
the $20,000 figure being adopted here reflects a 1.1 percent increase
in the CPI-U index for this period and is rounded to whole dollars for
ease of compliance.
Pursuant to section 1431 of the Dodd Frank Act and Sec.
1026.32(a)(1)(ii)(B) as amended by the 2013 HOEPA Final Rule,
implementation of the 2013 HOEPA Final Rule also changed the HOEPA
points and fees dollar trigger to $1,000. The HOEPA 2013 Final Rule
provides that this threshold amount will be recalculated annually and
the Bureau uses the CPI-U index, as published by the BLS, as the index
for adjusting the $1,000 figure. The adjustment to the CPI-U index
reported by BLS on May 17, 2016, was the CPI-U index in effect on June
1, and reflects the percentage change from April 2015 to April 2016.
The adjustment to the $1,000 figure being adopted here reflects a 1.1
percent increase in the CPI-U index for this period and is rounded to
whole dollars for ease of compliance.
C. Ability To Repay and Qualified Mortgages Annual Threshold
Adjustments
On January 10, 2013, the Bureau issued a final rule pursuant to,
inter alia, sections 1411 and 1412 of the Dodd-Frank Act, which
implemented laws requiring mortgage lenders to determine consumers'
ability to repay mortgage loans before extending them credit. 78 FR
6407 (Jan. 31, 2013) (2013 ATR/QM Final Rule). The 2013 ATR/QM Final
Rule established the points and fees limits that a loan must not exceed
in order to satisfy the requirements for a qualified mortgage.
Specifically, a covered transaction is not a qualified mortgage if the
transaction's points and fees exceed 3 percent of the total loan amount
for a loan amount greater than or equal to $100,000; $3,000 for a loan
amount greater than or equal to $60,000 but less than $100,000; 5
percent of the total loan amount for loans greater than or equal to
$20,000 but less than $60,000; $1,000 for a loan amount greater than or
equal to $12,500 but less than $20,000; and 8 percent of the total loan
amount for loans less than $12,500. The 2013 ATR/QM Final Rule provides
that the limits and loan amounts in Sec. 1026.43(e)(3)(i) be
recalculated annually for inflation and the Bureau uses the Consumer
Price Index for All Urban Consumers (CPI-U) index, as published by the
BLS, as the index for adjusting the figures. The CPI-U is based on all
urban consumers and represents approximately 88 percent of the U.S.
population. The BLS publishes consumer-based indices monthly, but does
not report a CPI change on June 1; adjustments are reported in the
middle of each month. The adjustment to the CPI-U index reported by BLS
on May 17, 2016, was the CPI-U index in effect on June 1, and reflects
the percentage change from April 2015 to April 2016. The adjustment to
the 2016 figures being adopted here reflects a 1.1 percent increase in
the CPI-U index for this period and is rounded to whole dollars for
ease of compliance.
II. Adjustment and Commentary Revision
A. CARD Act Annual Adjustments
Minimum Interest Charge Disclosure Thresholds--Sec. Sec.
1026.6(b)(2)(iii) and 1026.60(b)(3)
The minimum interest charge amounts for Sec. Sec.
1026.6(b)(2)(iii) and 1026.60(b)(3) will remain unchanged for the year
2017. Accordingly, the Bureau is not amending these sections.
Penalty Fees Safe Harbor--Sec. 1026.52(b)(1)(ii)(A) and (B)
As discussed above, effective immediately, the permissible safe
harbor fee amount in Sec. 1026.52(b)(1)(ii)(B) is $38. Accordingly,
the Bureau is revising Sec. 1026.52(b)(1)(ii)(B) to reflect the
corrected subsequent violation penalty safe harbor fee amount of $38.
Effective January 1, 2017, the permissible safe harbor fee amounts
are $27 for Sec. 1026.52(b)(1)(ii)(A) and $38 for Sec.
1026.52(b)(1)(ii)(B). These amounts did not change based on the
increase in CPI-W from April 2015 to April 2016. Thus, they remain the
same as the 2016 amount for Sec. 1026.52(b)(1)(ii)(A) and the 2016
amount corrected in this notice for Sec. 1026.52(b)(1)(ii)(B). The
Bureau is amending comment 52(b)(1)(ii)-2.i to preserve a list of the
historical thresholds for this provision.
B. HOEPA Annual Threshold Adjustment--Comments 32(a)(1)(ii)-1 and -3
Effective January 1, 2017, for purposes of determining under Sec.
1026.32(a)(1)(ii) the points and fees coverage test under HOEPA to
which a transaction is subject, the total loan amount threshold is
$20,579, and the adjusted points and fees dollar trigger under Sec.
1026.32(a)(1)(ii)(B) is $1,029. When the total loan amount for a
transaction is $20,579 or more, and the points and fees amount exceeds
5 percent of the total loan amount, the transaction is a high-cost
mortgage. When the total loan amount for a transaction is less than
$20,579, and the points and fees amount exceeds the lesser of the
adjusted points and fees dollar trigger of $1,029 or 8 percent of the
total loan amount, the transaction is a high-cost mortgage. Comments
32(a)(1)(ii)-1 and -3, which list the adjustments for each year, are
amended to reflect for 2017 the new dollar threshold amount and the new
points and fees dollar trigger, respectively.
[[Page 41421]]
C. Ability To Repay and Qualified Mortgages Annual Threshold
Adjustments
Effective January 1, 2017, for purposes of determining whether a
covered transaction is a qualified mortgage under Sec. 1026.43(e), a
covered transaction is not a qualified mortgage if, pursuant to Sec.
1026.43(e)(3), the transaction's total points and fees exceed 3 percent
of the total loan amount for a loan amount greater than or equal to
$102,894; $3,087 for a loan amount greater than or equal to $61,737 but
less than $102,894; 5 percent of the total loan amount for loans
greater than or equal to $20,579 but less than $61,737; $1,029 for a
loan amount greater than or equal to $12,862 but less than $20,579; and
8 percent of the total loan amount for loans less than $12,862. Comment
43(e)(3)(ii)-1, which lists the adjustments for each year, is amended
to reflect the new dollar threshold amounts for 2017.
III. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure Act (APA), notice and
opportunity for public comment are not required if the Bureau finds
that notice and public comment are impracticable, unnecessary, or
contrary to the public interest. 5 U.S.C. 553(b)(B). Pursuant to this
final rule, in Regulation Z, Sec. 1026.52(b)(1)(ii)(B) in subpart E is
amended and comments 32(a)(1)(ii)-1.iii and -3.iii, 43(e)(3)(ii)-1.iii,
and 52(b)(1)(ii)-2.i.D in supplement I are added to update the
exemption thresholds. Comments 32(a)(1)(ii)-1.iii and -3.iii,
43(e)(3)(ii)-1.iii, and 52(b)(1)(ii)-2.1.D added by this final rule are
technical and non-discretionary, and they merely apply the method
previously established in Regulation Z for determining adjustments to
the thresholds. The amendment to Sec. 1026.52(b)(1)(ii)(B) merely
applies a necessary correction to address an inadvertent calculation
error for the 2016 safe harbor fee. For these reasons, the Bureau has
determined that publishing a notice of proposed rulemaking and
providing opportunity for public comment are unnecessary. Therefore,
the amendments are adopted in final form. The Bureau also finds that
there is good cause for making the technical calculation correction to
the safe harbor fee amount in Sec. 1026.52(b)(1)(ii)(B) in this final
rule effective immediately upon publication in the Federal Register. 5
U.S.C. 553(d). This portion of the final rule does not establish any
new requirements; instead, it corrects an inadvertent error in the
September 21, 2015, notice, 80 FR 56895, regarding the subsequent
violation penalty safe harbor fee. Making the rule effective
immediately will allow the correct amount to be used upon publication.
B. Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not require an initial or final
regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a).
C. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3506; 5 CFR 1320), the Bureau reviewed this final rule. No collections
of information pursuant to the Paperwork Reduction Act are contained in
the final rule.
List of Subjects in 12 CFR Part 1026
Advertising, Consumer protection, Credit, Credit unions, Mortgages,
National banks, Reporting and recordkeeping requirements, Savings
associations, Truth in lending.
Authority and Issuance
For the reasons set forth in the preamble, the Bureau amends
Regulation Z, 12 CFR part 1026, as set forth below:
PART 1026--TRUTH IN LENDING (REGULATION Z)
0
1. The authority citation for part 1026 continues to read as follows:
Authority: 12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353,
5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq.
Subpart G--Special Rules Applicable to Credit Card Accounts and
Open End Credit Offered to College Students
0
2. Effective on June 27, 2016, Sec. 1026.52(b)(1)(ii)(B) is revised to
read as follows:
Sec. 1026.52 Limitation on fees.
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(B) $38 if the card issuer previously imposed a fee pursuant to
paragraph (b)(1)(ii)(A) of this section for a violation of the same
type that occurred during the same billing cycle or one of the next six
billing cycles; or
* * * * *
0
3. Effective on January 1, 2017, in Supplement I to Part 1026--Official
Interpretations:
0
a. Under Section 1026.32--Requirements for High-Cost Mortgages, under
32(a)--Coverage, under Paragraph 32(a)(1)(ii), paragraphs 1.iii and
3.iii are added.
0
b. Under Section 1026.43--Minimum Standards for Transactions Secured by
a Dwelling, under 43(e)--Qualified mortgages, under Paragraph
43(e)(3)(ii), paragraph 1.iii is added.
0
c. Under Section 1026.52--Limitations on Fees, under 52(b)--Limitations
on penalty fees, under 52(b)(1)(ii)--Safe harbors, paragraph 2.i.D is
added.
The additions read as follows:
SUPPLEMENT I TO PART 1026--OFFICIAL INTERPRETATIONS
* * * * *
Subpart E--Special Rules for Certain Home Mortgage Transactions
* * * * *
Section 1026.32--Requirements for Certain Closed-End Home Mortgages
32(a) Coverage.
Paragraph (a)(1).
* * * * *
Paragraph 32(a)(1)(ii).
1. * * *
iii. For 2017, $1,029, reflecting a 1.1 percent increase in the
CPI-U from June 2015 to June 2016, rounded to the nearest whole dollar.
* * * * *
3. * * *
iii. For 2017, $20,579, reflecting a 1.1 percent increase in the
CPI-U from June 2015 to June 2016, rounded to the nearest whole dollar.
* * * * *
Section 1026.43--Minimum Standards for Transactions Secured by a
Dwelling
* * * * *
43(e) Qualified mortgages.
* * * * *
43(e)(3) Limits on points and fees for qualified mortgages.
* * * * *
Paragraph 43(e)(3)(ii).
1. * * *
iii. For 2017, reflecting a 1.1 percent increase in the CPI-U that
was reported on the preceding June 1, a covered transaction is not a
qualified mortgage unless the transactions total points and fees do not
exceed:
A. For a loan amount greater than or equal to $102,894: 3 percent
of the total loan amount;
B. For a loan amount greater than or equal to $61,737 but less than
$102,894: $3,087;
C. For a loan amount greater than or equal to $20,579 but less than
$61,737: 5 percent of the total loan amount;
D. For a loan amount greater than or equal to $12,862 but less than
$20,579: $1,029;
[[Page 41422]]
E. For a loan amount less than $12,862: 8 percent of the total loan
amount.
* * * * *
Subpart G--Special Rules Applicable to Credit Card Accounts and
Open-End Credit Offered to College Students
Section 1026.52--Limitations on Fees
* * * * *
52(b) Limitations on penalty fees.
* * * * *
52(b)(1) General rule.
* * * * *
52(b)(1)(ii) Safe harbors.
* * * * *
2. * * *
i. * * *
D. Card issuers were permitted to impose a fee for violating the
terms of an agreement if the fee did not exceed $27 under Sec.
1026.52(b)(1)(ii)(A), through December 31, 2016. Card issuers were
permitted to impose a fee for violating the terms of an agreement if
the fee did not exceed $37 under Sec. 1026.52(b)(1)(ii)(B), through
June 26, 2016, and $38 under Sec. 1026.52(b)(1)(ii)(B) from June 27,
2016 through December 31, 2016.
* * * * *
Dated: June 14, 2016.
Richard Cordray
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2016-14782 Filed 6-24-16; 8:45 am]
BILLING CODE 4810-AM-P
