Truth in Lending (Regulation Z) Annual Threshold Adjustments (Credit Cards, HOEPA, and Qualified Mortgages), 43503-43508 [2018-18209]
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Federal Register / Vol. 83, No. 166 / Monday, August 27, 2018 / Rules and Regulations
persons were invited to attend the
meetings and participate in Committee
deliberations on all issues. Like all
Committee meetings, the March 15,
2018, meeting was a public meeting and
all entities, both large and small, were
able to express views on this issue.
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35), the Order’s information
collection requirements have been
previously approved by the OMB and
assigned OMB No. 0581–0178,
Vegetable and Specialty Crops. No
changes in those requirements are
necessary as a result of this action.
Should any changes become necessary,
they would be submitted to OMB for
approval.
This rule imposes no additional
reporting or recordkeeping requirements
on either small or large Colorado potato
handlers. As with all Federal marketing
order programs, reports and forms are
periodically reviewed to reduce
information requirements and
duplication by industry and public
sector agencies. As mentioned in the
initial regulatory flexibility analysis,
USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this final rule.
AMS is committed to complying with
the E-Government Act, to promote the
use of the internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
A proposed rule concerning this
action was published in the Federal
Register on May 24, 2018 (83 FR 24045).
A copy of the proposed rule was
provided to the handlers by the
Committee. Finally, the proposal was
made available through the internet by
USDA and the Office of the Federal
Register. A 30-day comment period
ending June 25, 2018, was provided for
interested persons to respond to the
proposal. No comments were received.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
rules-regulations/moa/small-businesses.
Any questions about the compliance
guide should be sent to Richard Lower
at the previously mentioned address in
the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant
material presented, including the
information and recommendation
submitted by the Committee and other
available information, it is hereby found
that this rule will tend to effectuate the
declared policy of the Act.
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List of Subjects in 7 CFR Part 948
Marketing agreements, Potatoes,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 948 is amended as
follows:
PART 948—IRISH POTATOES GROWN
IN COLORADO
1. The authority citation for 7 CFR
part 948 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
2. Section 948.216 is revised to read
as follows:
■
§ 948.216
Assessment rate.
On and after September 1, 2018, an
assessment rate of $0.006 per
hundredweight is established for
Colorado Area No. 2 potatoes.
Dated: August 22, 2018
Bruce Summers,
Administrator, Agricultural Marketing
Service.
[FR Doc. 2018–18560 Filed 8–24–18; 8:45 am]
BILLING CODE 3410–02–P
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
Truth in Lending (Regulation Z) Annual
Threshold Adjustments (Credit Cards,
HOEPA, and Qualified Mortgages)
Bureau of Consumer Financial
Protection.
ACTION: Final rule; official
interpretation.
AGENCY:
SUMMARY: The Bureau of Consumer
Financial Protection (Bureau) is issuing
this final rule amending the regulation
text and official interpretations for
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
TILA and amendments to TILA,
including 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). The
Bureau is adjusting these amounts,
where appropriate, based on the annual
percentage change reflected in the
Consumer Price Index (CPI) in effect on
June 1, 2018.
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This final rule is effective
January 1, 2019.
DATES:
FOR FURTHER INFORMATION CONTACT:
Monique Chenault, Paralegal, and
Shelley Thompson, Counsel, Office of
Regulations, at (202) 435–7700. If you
require this document in an alternative
electronic format, please contact CFPB_
Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION: The
Bureau is amending the regulation 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 CPI as published by the Bureau
of Labor Statistics (BLS). Specifically,
for open-end consumer credit plans
under TILA, the threshold that triggers
requirements to disclose minimum
interest charges will remain unchanged
at $1.00 in 2019. For open-end
consumer credit plans under the CARD
Act amendments to TILA, the adjusted
dollar amount in 2019 for the safe
harbor for a first violation penalty fee
will increase by $1 to $28 and the
adjusted dollar amount for the safe
harbor for a subsequent violation
penalty fee will increase by $1 to $39.
For HOEPA loans, the adjusted total
loan amount threshold for high-cost
mortgages in 2019 will be $21,549. The
adjusted points-and-fees dollar trigger
for high-cost mortgages in 2019 will be
$1,077. For qualified mortgages, which
receive certain protections from liability
under the ability-to-repay rule, the
maximum thresholds for total points
and fees in 2019 will be 3 percent of the
total loan amount for a loan greater than
or equal to $107,747; $3,232 for a loan
amount greater than or equal to $64,648
but less than $107,747; 5 percent of the
total loan amount for a loan greater than
or equal to $21,549 but less than
$64,648; $1,077 for a loan amount
greater than or equal to $13,468 but less
than $21,549; and 8 percent of the total
loan amount for a loan amount less than
$13,468.
I. Background
A. Credit Card Annual Adjustments
Minimum Interest Charge Disclosure
Thresholds
Sections 1026.6(b)(2)(iii) and
1026.60(b)(3) of Regulation Z implement
sections 127(a)(3) and 127(c)(1)(A)(ii)(II)
of TILA. Sections 1026.6(b)(2)(iii) and
1026.60(b)(3) require the disclosure of
any minimum interest charge exceeding
$1.00 that could be imposed during a
billing cycle and provide that, for openend consumer credit plans, the
minimum interest charge thresholds
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will be re-calculated annually using the
CPI that was in effect on the preceding
June 1; the Bureau uses the Consumer
Price Index for Urban Wage Earners and
Clerical Workers (CPI–W) for this
adjustment. 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 change on June 1; adjustments are
reported in the middle of the month.
This adjustment analysis is based on the
CPI–W index in effect on June 1, 2018,
which was reported by BLS on May 10,
2018, and reflects the percentage change
from April 2017 to April 2018. The CPI–
W is a subset of the Consumer Price
Index for All Urban Consumers (CPI–U)
index and represents approximately 29
percent of the U.S. population. The
adjustment analysis accounts for a 2.6
percent increase in the CPI–W from
April 2017 to April 2018. 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 the
Bureau is therefore not amending
§§ 1026.6(b)(2)(iii) and 1026.60(b)(3).
Safe Harbor Penalty Fees
Section 1026.52(b)(1)(ii)(A) and (B) of
Regulation Z implements section 149(e)
of TILA, established by the CARD Act.1
Section 1026.52(b)(1)(ii)(D) provides
that the safe harbor provision, which
establishes the permissible penalty fee
thresholds in § 1026.52(b)(1)(ii)(A) and
(B), will be re-calculated annually using
the CPI that was in effect on the
preceding June 1; the Bureau uses the
CPI–W for this adjustment. 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. The 2019
adjustment analysis is based on the CPI–
W index in effect on June 1, 2018,
which was reported by BLS on May 10,
1 Credit Card Accountability Responsibility and
Disclosure Act of 2009, Public Law 111–24, 123
Stat. 1734 (2009).
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2018, and reflects the percentage change
from April 2017 to April 2018. The
adjustment to the permissible fee
thresholds being adopted here reflects a
2.6 percent increase in the CPI–W from
April 2017 to April 2018 and is rounded
to the nearest $1 increment.
B. HOEPA Annual Threshold
Adjustments
Section 1026.32(a)(1)(ii) of Regulation
Z implements section 1431 of the DoddFrank Act,2 which amended the HOEPA
points-and-fees coverage test. 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 depends on whether the total loan
amount is for $20,000 or more, or for
less than $20,000. Section
1026.32(a)(1)(ii) provides that this
threshold amount be recalculated
annually using the CPI index in effect
on June 1; the Bureau uses the CPI–U for
this adjustment. The CPI–U is based on
all urban consumers and represents
approximately 93 percent of the U.S.
population. The 2019 adjustment is
based on the CPI–U index in effect on
June 1, which was reported by BLS on
May 10, 2018, and reflects the
percentage change from April 2017 to
April 2018. The adjustment to the
$20,000 figure being adopted here
reflects a 2.5 percent increase in the
CPI–U index for this period and is
rounded to whole dollars for ease of
compliance.
Under § 1026.32(a)(1)(ii)(B) the
HOEPA points-and-fees dollar trigger is
$1,000. Section 1026.32(a)(1)(ii)(B)
provides that this threshold amount will
be recalculated annually using the CPI
index in effect on June 1; the Bureau
uses the CPI–U for this adjustment. The
2019 adjustment is based on the CPI–U
index in effect on June 1, 2018, which
was reported by BLS on May 10, 2018,
and reflects the percentage change from
April 2017 to April 2018. The
adjustment to the $1,000 figure being
adopted here reflects a 2.5 percent
increase in the CPI–U index for this
period and is rounded to whole dollars
for ease of compliance.
C. Qualified Mortgages Annual
Threshold Adjustments
The Bureau’s Regulation Z
implements sections 1411 and 1412 of
the Dodd-Frank Act, which generally
require creditors to make a reasonable,
good-faith determination of a
consumer’s ability to repay any
2 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010).
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consumer credit transaction secured by
a dwelling and establishes certain
protections from liability under this
requirement for qualified mortgages.
Under § 1026.43(e)(3)(i), a covered
transaction is not a qualified mortgage if
the transaction’s total 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; or 8 percent of the total
loan amount for loans less than $12,500.
Section 1026.43(e)(3)(ii) provides that
the limits and loan amounts in
§ 1026.43(e)(3)(i) are recalculated
annually for inflation using the CPI–U
index in effect on June 1. The 2019
adjustment is based on the CPI–U index
in effect on June 1, 2018, which was
reported by BLS on May 10, 2018, and
reflects the percentage change from
April 2017 to April 2018. The
adjustment to the 2018 figures being
adopted here reflects a 2.5 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. Credit Card Annual Adjustments
Minimum Interest Charge Disclosure
Thresholds—§§ 1026.6(b)(2)(iii) and
1026.60(b)(3)
The minimum interest charge
amounts for §§ 1026.6(b)(2)(iii) and
1026.60(b)(3) will remain unchanged at
$1.00 for the year 2019. Accordingly,
the Bureau is not amending these
sections of Regulation Z.
Safe Harbor Penalty Fees—
§ 1026.52(b)(1)(ii)(A) and (B)
Effective January 1, 2019, the
permissible fee threshold amounts
increased by $1 and are $28 for
§ 1026.52(b)(1)(ii)(A) and $39 for
§ 1026.52(b)(1)(ii)(B). Accordingly, the
Bureau is revising § 1026.52(b)(1)(ii)(A)
and (B) to state that the fee imposed for
violating the terms or other
requirements of an account shall not
exceed $28 and $39 respectively. The
Bureau is also 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, 2019, for purposes
of determining under § 1026.32(a)(1)(ii)
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the points-and-fees coverage test under
HOEPA to which a transaction is
subject, the total loan amount threshold
is $21,549, and the adjusted points-andfees dollar trigger under
§ 1026.32(a)(1)(ii)(B) is $1,077. When
the total loan amount for a transaction
is $21,549 or more, and the points-andfees 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
$21,549, and the points-and-fees
amount exceeds the lesser of the
adjusted points-and-fees dollar trigger of
$1,077 or 8 percent of the total loan
amount, the transaction is a high-cost
mortgage. The Bureau is amending
comments 32(a)(1)(ii)–1 and –3, which
list the adjustments for each year, to
reflect for 2019 the new loan amount
dollar threshold and the new pointsand-fees dollar trigger, respectively.
C. Qualified Mortgages Annual
Threshold Adjustments
Effective January 1, 2019, 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 $107,747; $3,232 for a loan
amount greater than or equal to $64,648
but less than $107,747; 5 percent of the
total loan amount for loans greater than
or equal to $21,549 but less than
$64,648; $1,077 for a loan amount
greater than or equal to $13,468 but less
than $21,549; or 8 percent of the total
loan amount for loans less than $13,468.
The Bureau is amending comment
43(e)(3)(ii)–1, which lists the
adjustments for each year, to reflect the
new dollar threshold amounts for 2019.
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III. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure
Act, 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)(A) and
(B) in subpart G is amended and
comments 32(a)(1)(ii)–1.v and –3.v,
43(e)(3)(ii)–1.v, and 52(b)(1)(ii)–2.i.F in
Supplement I are added to update the
exemption thresholds. The amendments
in this final rule are technical and nondiscretionary, as they merely apply the
method previously established in
Regulation Z for determining
adjustments to the thresholds. For these
reasons, the Bureau has determined that
publishing a notice of proposed
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rulemaking and providing opportunity
for public comment are unnecessary.
The amendments therefore are adopted
in final form.
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 part 1320), the Bureau reviewed
this final rule. No collections of
information pursuant to the Paperwork
Reduction Act are contained in the final
rule.
D. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Bureau
will submit a report containing this rule
and other required information to the
United States Senate, the United States
House of Representatives, and the
Comptroller General of the United
States prior to the rule taking effect. The
Office of Information and Regulatory
Affairs (OIRA) has designated this rule
as not a ‘‘major rule’’ as defined by 5
U.S.C. 804(2).
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)
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. Amend § 1026.52 by revising
paragraphs (b)(1)(ii)(A) and (B) to read
as follows:
■
§ 1026.52
*
Limitations on fees.
*
*
(b) * * *
(1) * * *
(ii) * * *
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(A) $28
(B) $39 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. In Supplement I to Part 1026:
■ a. Under Section 1026.32—
Requirements for High-Cost Mortgages,
Paragraph 32(a)(1)(ii) is revised.
■ b. Under Section 1026.43—Minimum
Standards for Transactions Secured by
a Dwelling, Paragraph 43(e)(3)(ii) is
revised.
■ c. Under Section 1026.52—
Limitations on Fees, 52(b)(1)(ii) Safe
harbors is revised.
The revisions read as follows:
SUPPLEMENT I TO PART 1026—OFFICIAL
INTERPRETATIONS
*
*
*
*
*
Section 1026.32—Requirements for High-Cost
Mortgages
*
*
*
*
*
Paragraph 32(a)(1)(ii).
1. Annual adjustment of $1,000 amount.
The $1,000 figure in § 1026.32(a)(1)(ii)(B) is
adjusted annually on January 1 by the annual
percentage change in the CPI that was in
effect on the preceding June 1. The Bureau
will publish adjustments after the June
figures become available each year.
i. For 2015, $1,020, reflecting a 2 percent
increase in the CPI–U from June 2013 to June
2014, rounded to the nearest whole dollar.
ii. For 2016, $1,017, reflecting a .2 percent
decrease in the CPI–U from June 2014 to June
2015, rounded to the nearest whole dollar.
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.
iv. For 2018, $1,052, reflecting a 2.2
percent increase in the CPI–U from June 2016
to June 2017, rounded to the nearest whole
dollar.
v. For 2019, $1,077, reflecting a 2.5 percent
increase in the CPI–U from June 2017 to June
2018, rounded to the nearest whole dollar.
2. Historical adjustment of $400 amount.
Prior to January 10, 2014, a mortgage loan
was covered by § 1026.32 if the total points
and fees payable by the consumer at or before
loan consummation exceeded the greater of
$400 or 8 percent of the total loan amount.
The $400 figure was adjusted annually on
January 1 by the annual percentage change in
the CPI that was in effect on the preceding
June 1, as follows:
i. For 1996, $412, reflecting a 3.00 percent
increase in the CPI–U from June 1994 to June
1995, rounded to the nearest whole dollar.
ii. For 1997, $424, reflecting a 2.9 percent
increase in the CPI–U from June 1995 to June
1996, rounded to the nearest whole dollar.
iii. For 1998, $435, reflecting a 2.5 percent
increase in the CPI–U from June 1996 to June
1997, rounded to the nearest whole dollar.
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iv. For 1999, $441, reflecting a 1.4 percent
increase in the CPI–U from June 1997 to June
1998, rounded to the nearest whole dollar.
v. For 2000, $451, reflecting a 2.3 percent
increase in the CPI–U from June 1998 to June
1999, rounded to the nearest whole dollar.
vi. For 2001, $465, reflecting a 3.1 percent
increase in the CPI–U from June 1999 to June
2000, rounded to the nearest whole dollar.
vii. For 2002, $480, reflecting a 3.27
percent increase in the CPI–U from June 2000
to June 2001, rounded to the nearest whole
dollar.
viii. For 2003, $488, reflecting a 1.64
percent increase in the CPI–U from June 2001
to June 2002, rounded to the nearest whole
dollar.
ix. For 2004, $499, reflecting a 2.22 percent
increase in the CPI–U from June 2002 to June
2003, rounded to the nearest whole dollar.
x. For 2005, $510, reflecting a 2.29 percent
increase in the CPI–U from June 2003 to June
2004, rounded to the nearest whole dollar.
xi. For 2006, $528, reflecting a 3.51 percent
increase in the CPI–U from June 2004 to June
2005, rounded to the nearest whole dollar.
xii. For 2007, $547, reflecting a 3.55
percent increase in the CPI–U from June 2005
to June 2006, rounded to the nearest whole
dollar.
xiii. For 2008, $561, reflecting a 2.56
percent increase in the CPI–U from June 2006
to June 2007, rounded to the nearest whole
dollar.
xiv. For 2009, $583, reflecting a 3.94
percent increase in the CPI–U from June 2007
to June 2008, rounded to the nearest whole
dollar.
xv. For 2010, $579, reflecting a 0.74
percent decrease in the CPI–U from June
2008 to June 2009, rounded to the nearest
whole dollar.
xvi. For 2011, $592, reflecting a 2.2 percent
increase in the CPI–U from June 2009 to June
2010, rounded to the nearest whole dollar.
xvii. For 2012, $611, reflecting a 3.2
percent increase in the CPI–U from June 2010
to June 2011, rounded to the nearest whole
dollar.
xviii. For 2013, $625, reflecting a 2.3
percent increase in the CPI–U from June 2011
to June 2012, rounded to the nearest whole
dollar.
xix. For 2014, $632, reflecting a 1.1 percent
increase in the CPI–U from June 2012 to June
2013, rounded to the nearest whole dollar.
3. Applicable threshold. For purposes of
§ 1026.32(a)(1)(ii), a creditor must determine
the applicable points and fees threshold
based on the face amount of the note (or, in
the case of an open-end credit plan, the
credit limit for the plan when the account is
opened). However, the creditor must apply
the allowable points and fees percentage to
the ‘‘total loan amount,’’ as defined in
§ 1026.32(b)(4). For closed-end credit
transactions, the total loan amount may be
different than the face amount of the note.
The $20,000 amount in § 1026.32(a)(1)(ii)(A)
and (B) is adjusted annually on January 1 by
the annual percentage change in the CPI that
was in effect on the preceding June 1.
i. For 2015, $20,391, reflecting a 2 percent
increase in the CPI–U from June 2013 to June
2014, rounded to the nearest whole dollar.
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ii. For 2016, $20,350, reflecting a .2 percent
decrease in the CPI–U from June 2014 to June
2015, rounded to the nearest whole dollar.
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.
iv. For 2018, $21,032, reflecting a 2.2
percent increase in the CPI–U from June 2016
to June 2017, rounded to the nearest whole
dollar.
v. For 2019, $21,549, reflecting a 2.5
percent increase in the CPI–U from June 2017
to June 2018, rounded to the nearest whole
dollar.
*
*
*
*
*
Section 1026.43—Minimum Standards for
Transactions Secured by a Dwelling
*
*
*
*
*
Paragraph 43(e)(3)(ii).
1. Annual adjustment for inflation. The
dollar amounts, including the loan amounts,
in § 1026.43(e)(3)(i) will be adjusted annually
on January 1 by the annual percentage
change in the CPI–U that was in effect on the
preceding June 1. The Bureau will publish
adjustments after the June figures become
available each year.
i. For 2015, reflecting a 2 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 $101,953: 3 percent of the total loan
amount;
B. For a loan amount greater than or equal
to $61,172 but less than $101,953: $3,059;
C. For a loan amount greater than or equal
to $20,391 but less than $61,172: 5 percent
of the total loan amount;
D. For a loan amount greater than or equal
to $12,744 but less than $20,391; $1,020;
E. For a loan amount less than $12,744: 8
percent of the total loan amount.
ii. For 2016, reflecting a .2 percent decrease
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 $101,749: 3 percent of the total loan
amount;
B. For a loan amount greater than or equal
to $61,050 but less than $101,749: $3,052;
C. For a loan amount greater than or equal
to $20,350 but less than $61,050: 5 percent
of the total loan amount;
D. For a loan amount greater than or equal
to $12,719 but less than $20,350; $1,017;
E. For a loan amount less than $12,719: 8
percent of the total loan amount.
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;
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D. For a loan amount greater than or equal
to $12,862 but less than $20,579: $1,029;
E. For a loan amount less than $12,862: 8
percent of the total loan amount.
iv. For 2018, reflecting a 2.2 percent
increase in the CPI–U that was reported on
the preceding June 1, a covered transaction
is not a qualified mortgage unless the
transaction’s total points and fees do not
exceed:
A. For a loan amount greater than or equal
to $105,158: 3 percent of the total loan
amount;
B. For a loan amount greater than or equal
to $63,095 but less than $105,158: $3,155;
C. For a loan amount greater than or equal
to $21,032 but less than $63,095: 5 percent
of the total loan amount;
D. For a loan amount greater than or equal
to $13,145 but less than $21,032: $1,052;
E. For a loan amount less than $13,145: 8
percent of the total loan amount.
v. For 2019, reflecting a 2.5 percent
increase in the CPI–U that was reported on
the preceding June 1, a covered transaction
is not a qualified mortgage unless the
transaction’s total points and fees do not
exceed:
A. For a loan amount greater than or equal
to $107,747: 3 percent of the total loan
amount;
B. For a loan amount greater than or equal
to $64,648 but less than $107,747: $3,232;
C. For a loan amount greater than or equal
to $21,549 but less than $64,648: 5 percent
of the total loan amount;
D. For a loan amount greater than or equal
to $13,468 but less than $21,549: $1,077;
E. For a loan amount less than $13,468: 8
percent of the total loan amount.
*
*
*
*
*
Section 1026.52—Limitations on Fees
*
*
*
*
*
52(b)(1)(ii) Safe harbors
1. Multiple violations of same type. i. Same
billing cycle or next six billing cycles. A card
issuer cannot impose a fee for a violation
pursuant to § 1026.52(b)(1)(ii)(B) unless a fee
has previously been imposed for the same
type of violation pursuant to
§ 1026.52(b)(1)(ii)(A). Once a fee has been
imposed for a violation pursuant to
§ 1026.52(b)(1)(ii)(A), the card issuer may
impose a fee pursuant to § 1026.52(b)(1)(ii)(B)
for any subsequent violation of the same type
until that type of violation has not occurred
for a period of six consecutive complete
billing cycles. A fee has been imposed for
purposes of § 1026.52(b)(1)(ii) even if the
card issuer waives or rebates all or part of the
fee.
A. Late payments. For purposes of
§ 1026.52(b)(1)(ii), a late payment occurs
during the billing cycle in which the
payment may first be treated as late
consistent with the requirements of this part
and the terms or other requirements of the
account.
B. Returned payments. For purposes of
§ 1026.52(b)(1)(ii), a returned payment occurs
during the billing cycle in which the
payment is returned to the card issuer.
C. Transactions that exceed the credit
limit. For purposes of § 1026.52(b)(1)(ii), a
transaction that exceeds the credit limit for
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an account occurs during the billing cycle in
which the transaction occurs or is authorized
by the card issuer.
D. Declined access checks. For purposes of
§ 1026.52(b)(1)(ii), a check that accesses a
credit card account is declined during the
billing cycle in which the card issuer
declines payment on the check.
ii. Relationship to §§ 1026.52(b)(2)(ii) and
1026.56(j)(1). If multiple violations are based
on the same event or transaction such that
§ 1026.52(b)(2)(ii) prohibits the card issuer
from imposing more than one fee, the event
or transaction constitutes a single violation
for purposes of § 1026.52(b)(1)(ii).
Furthermore, consistent with
§ 1026.56(j)(1)(i), no more than one violation
for exceeding an account’s credit limit can
occur during a single billing cycle for
purposes of § 1026.52(b)(1)(ii). However,
§ 1026.52(b)(2)(ii) does not prohibit a card
issuer from imposing fees for exceeding the
credit limit in consecutive billing cycles
based on the same over-the-limit transaction
to the extent permitted by § 1026.56(j)(1). In
these circumstances, the second and third
over-the-limit fees permitted by
§ 1026.56(j)(1) may be imposed pursuant to
§ 1026.52(b)(1)(ii)(B). See comment
52(b)(2)(ii)–1.
iii. Examples. The following examples
illustrate the application of
§ 1026.52(b)(1)(ii)(A) and (b)(1)(ii)(B) with
respect to credit card accounts under an
open-end (not home-secured) consumer
credit plan that are not charge card accounts.
For purposes of these examples, assume that
the billing cycles for the account begin on the
first day of the month and end on the last day
of the month and that the payment due date
for the account is the twenty-fifth day of the
month.
A. Violations of same type (late payments).
A required minimum periodic payment of
$50 is due on March 25. On March 26, a late
payment has occurred because no payment
has been received. Accordingly, consistent
with § 1026.52(b)(1)(ii)(A), the card issuer
imposes a $25 late payment fee on March 26.
In order for the card issuer to impose a $35
late payment fee pursuant to
§ 1026.52(b)(1)(ii)(B), a second late payment
must occur during the April, May, June, July,
August, or September billing cycles.
1. The card issuer does not receive any
payment during the March billing cycle. A
required minimum periodic payment of $100
is due on April 25. On April 20, the card
issuer receives a $50 payment. No further
payment is received during the April billing
cycle. Accordingly, consistent with
§ 1026.52(b)(1)(ii)(B), the card issuer may
impose a $35 late payment fee on April 26.
Furthermore, the card issuer may impose a
$35 late payment fee for any late payment
that occurs during the May, June, July,
August, September, or October billing cycles.
2. Same facts as in paragraph A above. On
March 30, the card issuer receives a $50
payment and the required minimum periodic
payments for the April, May, June, July,
August, and September billing cycles are
received on or before the payment due date.
A required minimum periodic payment of
$60 is due on October 25. On October 26, a
late payment has occurred because the
VerDate Sep<11>2014
16:25 Aug 24, 2018
Jkt 244001
required minimum periodic payment due on
October 25 has not been received. However,
because this late payment did not occur
during the six billing cycles following the
March billing cycle, § 1026.52(b)(1)(ii) only
permits the card issuer to impose a late
payment fee of $25.
B. Violations of different types (late
payment and over the credit limit). The credit
limit for an account is $1,000. Consistent
with § 1026.56, the consumer has
affirmatively consented to the payment of
transactions that exceed the credit limit. A
required minimum periodic payment of $30
is due on August 25. On August 26, a late
payment has occurred because no payment
has been received. Accordingly, consistent
with § 1026.52(b)(1)(ii)(A), the card issuer
imposes a $25 late payment fee on August 26.
On August 30, the card issuer receives a $30
payment. On September 10, a transaction
causes the account balance to increase to
$1,150, which exceeds the account’s $1,000
credit limit. On September 11, a second
transaction increases the account balance to
$1,350. On September 23, the card issuer
receives the $50 required minimum periodic
payment due on September 25, which
reduces the account balance to $1,300. On
September 30, the card issuer imposes a $25
over-the-limit fee, consistent with
§ 1026.52(b)(1)(ii)(A). On October 26, a late
payment has occurred because the $60
required minimum periodic payment due on
October 25 has not been received.
Accordingly, consistent with
§ 1026.52(b)(1)(ii)(B), the card issuer imposes
a $35 late payment fee on October 26.
C. Violations of different types (late
payment and returned payment). A required
minimum periodic payment of $50 is due on
July 25. On July 26, a late payment has
occurred because no payment has been
received. Accordingly, consistent with
§ 1026.52(b)(1)(ii)(A), the card issuer imposes
a $25 late payment fee on July 26. On July
30, the card issuer receives a $50 payment.
A required minimum periodic payment of
$50 is due on August 25. On August 24, a
$50 payment is received. On August 27, the
$50 payment is returned to the card issuer for
insufficient funds. In these circumstances,
§ 1026.52(b)(2)(ii) permits the card issuer to
impose either a late payment fee or a
returned payment fee but not both because
the late payment and the returned payment
result from the same event or transaction.
Accordingly, for purposes of
§ 1026.52(b)(1)(ii), the event or transaction
constitutes a single violation. However, if the
card issuer imposes a late payment fee,
§ 1026.52(b)(1)(ii)(B) permits the issuer to
impose a fee of $35 because the late payment
occurred during the six billing cycles
following the July billing cycle. In contrast,
if the card issuer imposes a returned payment
fee, the amount of the fee may be no more
than $25 pursuant to § 1026.52(b)(1)(ii)(A).
2. Adjustments based on Consumer Price
Index. For purposes of § 1026.52(b)(1)(ii)(A)
and (b)(1)(ii)(B), the Bureau shall calculate
each year price level adjusted amounts using
the Consumer Price Index in effect on June
1 of that year. When the cumulative change
in the adjusted minimum value derived from
applying the annual Consumer Price level to
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43507
the current amounts in § 1026.52(b)(1)(ii)(A)
and (b)(1)(ii)(B) has risen by a whole dollar,
those amounts will be increased by $1.00.
Similarly, when the cumulative change in the
adjusted minimum value derived from
applying the annual Consumer Price level to
the current amounts in § 1026.52(b)(1)(ii)(A)
and (b)(1)(ii)(B) has decreased by a whole
dollar, those amounts will be decreased by
$1.00. The Bureau will publish adjustments
to the amounts in § 1026.52(b)(1)(ii)(A) and
(b)(1)(ii)(B).
i. Historical thresholds.
A. Card issuers were permitted to impose
a fee for violating the terms of an agreement
if the fee did not exceed $25 under
§ 1026.52(b)(1)(ii)(A) and $35 under
§ 1026.52(b)(1)(ii)(B), through December 31,
2013.
B. Card issuers were permitted to impose
a fee for violating the terms of an agreement
if the fee did not exceed $26 under
§ 1026.52(b)(1)(ii)(A) and $37 under
§ 1026.52(b)(1)(ii)(B), through December 31,
2014.
C. 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) and $38 under
§ 1026.52(b)(1)(ii)(B), through December 31,
2015.
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.
E. 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) and $38 under
§ 1026.52(b)(1)(ii)(B), through December 31,
2017.
F. 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) and $38 under
§ 1026.52(b)(1)(ii)(B), through December 31,
2018.
3. Delinquent balance for charge card
accounts. Section 1026.52(b)(1)(ii)(C)
provides that, when a charge card issuer that
requires payment of outstanding balances in
full at the end of each billing cycle has not
received the required payment for two or
more consecutive billing cycles, the card
issuer may impose a late payment fee that
does not exceed three percent of the
delinquent balance. For purposes of
§ 1026.52(b)(1)(ii)(C), the delinquent balance
is any previously billed amount that remains
unpaid at the time the late payment fee is
imposed pursuant to § 1026.52(b)(1)(ii)(C).
Consistent with § 1026.52(b)(2)(ii), a charge
card issuer that imposes a fee pursuant to
§ 1026.52(b)(1)(ii)(C) with respect to a late
payment may not impose a fee pursuant to
§ 1026.52(b)(1)(ii)(B) with respect to the same
late payment. The following examples
illustrate the application of
§ 1026.52(b)(1)(ii)(C):
i. Assume that a charge card issuer requires
payment of outstanding balances in full at
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the end of each billing cycle and that the
billing cycles for the account begin on the
first day of the month and end on the last day
of the month. At the end of the June billing
cycle, the account has a balance of $1,000.
On July 5, the card issuer provides a periodic
statement disclosing the $1,000 balance
consistent with § 1026.7. During the July
billing cycle, the account is used for $300 in
transactions, increasing the balance to
$1,300. At the end of the July billing cycle,
no payment has been received and the card
issuer imposes a $25 late payment fee
consistent with § 1026.52(b)(1)(ii)(A). On
August 5, the card issuer provides a periodic
statement disclosing the $1,325 balance
consistent with § 1026.7. During the August
billing cycle, the account is used for $200 in
transactions, increasing the balance to
$1,525. At the end of the August billing
cycle, no payment has been received.
Consistent with § 1026.52(b)(1)(ii)(C), the
card issuer may impose a late payment fee of
$40, which is 3% of the $1,325 balance that
was due at the end of the August billing
cycle. Section 1026.52(b)(1)(ii)(C) does not
permit the card issuer to include the $200 in
transactions that occurred during the August
billing cycle.
ii. Same facts as above except that, on
August 25, a $100 payment is received.
Consistent with § 1026.52(b)(1)(ii)(C), the
card issuer may impose a late payment fee of
$37, which is 3% of the unpaid portion of
the $1,325 balance that was due at the end
of the August billing cycle ($1,225).
iii. Same facts as in paragraph A above
except that, on August 25, a $200 payment
is received. Consistent with
§ 1026.52(b)(1)(ii)(C), the card issuer may
impose a late payment fee of $34, which is
3% of the unpaid portion of the $1,325
balance that was due at the end of the August
billing cycle ($1,125). In the alternative, the
card issuer may impose a late payment fee of
$35 consistent with § 1026.52(b)(1)(ii)(B).
However, § 1026.52(b)(2)(ii) prohibits the
card issuer from imposing both fees.
SUMMARY: This action modifies the
restricted airspace at the Townsend
Bombing Range, GA (Range), by
expanding the lateral limits of R–3007A
to allow construction of additional
targets and impact areas. The
modification is needed so that precision
guided munitions (PGM) can be used on
the range. The changes are completely
contained within the existing outer
boundaries of the R–3007 complex.
DATES: Effective date 0901 UTC,
November 8, 2018.
FOR FURTHER INFORMATION CONTACT: Paul
Gallant, Airspace Policy Group, Office
of Airspace Services, Federal Aviation
Administration, 800 Independence
Avenue SW, Washington, DC 20591;
telephone: (202) 267–8783.
SUPPLEMENTARY INFORMATION:
*
The FAA published a notice of
proposed rulemaking for Docket No.
FAA–2015–3338 in the Federal Register
(80 FR 60573; October 7, 2015), to
expand the lateral limits of restricted
area R–3007A, Townsend, GA.
Interested parties were invited to
participate in this rulemaking effort by
submitting written comments on the
proposal. The comment period closed
November 23, 2015. One comment was
received from a member of the public.
*
*
*
*
Dated: August 16, 2018.
Mick Mulvaney,
Acting Director, Bureau of Consumer
Financial Protection.
[FR Doc. 2018–18209 Filed 8–24–18; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
[Docket No. FAA–2015–3338; Airspace
Docket No. 15–ASO–7]
amozie on DSK3GDR082PROD with RULES
RIN 2120–AA66
Modification and Establishment of
Restricted Areas; Townsend, GA
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
16:25 Aug 24, 2018
The FAA’s authority to issue rules
regarding aviation safety is found in
Title 49 of the United States Code.
Subtitle I, Section 106 describes the
authority of the FAA Administrator.
Subtitle VII, Aviation Programs,
describes in more detail the scope of the
agency’s authority. This rulemaking is
promulgated under the authority
described in Subtitle VII, Part A,
Subpart I, Section 40103. Under that
section, the FAA is charged with
prescribing regulations to assign the use
of the airspace necessary to ensure the
safety of aircraft and the efficient use of
airspace. This regulation is within the
scope of that authority as it modifies
restricted airspace to accommodate
military training requirements.
History
Discussion of Comment
14 CFR Part 73
VerDate Sep<11>2014
Authority for This Rulemaking
Jkt 244001
The commenter suggested that the
floor of the proposed R–3007E be
lowered from 100 feet above ground
level (AGL); to the surface in order to
allow the opportunity to add more
targets in the future. To designate the
surface as the floor of a restricted area,
the proponent must own, or otherwise
control, the underlying land. The
expansion of R–3007A, which extends
to the surface, encompasses land
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purchased by the proponent for that
purpose. R–3007E is outside the land
purchase area, therefore it is not
possible to lower the floor below 100
feet AGL at this time.
Differences From NPRM
The NPRM contained an error in the
15th coordinate listed for R–3007A. The
longitude for that point was listed as
‘‘91°36′32″ W.’’ The correct point is
‘‘81°36′32″ W.’’
The NPRM listed the ‘‘Air National
Guard (ANG), Savannah Combat
Readiness Training Center (CRTC),’’ as
the using agency in the description of
R–3007E. Since the publication of the
NPRM, using agency responsibilities for
the Range were transferred from the
ANG to the U.S. Marine Corps (USMC).
On June 28, 2017, the FAA published in
the Federal Register a final rule that
changed the using agency for the
restricted areas to the USMC, Marine
Corps Air Station Beaufort, SC (82 FR
29229), Docket No. FAA–2017–0585.
The USMC has assumed responsibility
for management and operation of the
Townsend Range. This change is
reflected in the description of R–3007E,
below.
The Rule
The FAA is amending 14 CFR part 73
to expand restricted area R–3007A by
merging the part of R–3007C that
overlies a land parcel acquired by the
U.S. Marine Corps into R–3007A. The
floor of R–3007C is 100 feet AGL. By
adding the airspace over this land parcel
into R–3007A, the restricted area floor
in that area will be lowered from 100
feet AGL down to ground level. The
small slice of restricted airspace, with a
100-foot AGL floor, between the east
boundary of the expanded R–3007A,
and the west boundary of R–3007B, is
redesignated as R–3007E. R–3007E
extends from 100 feet AGL up to, but
not including, 13,000 feet MSL.
Minor corrections are made to several
boundary coordinates for R–3007B, R–
3007C, and R–3007D to match the
current National Hydrology Dataset that
defines the Altamaha River boundary
where that river forms the boundary of
the restricted areas.
This rule provides the additional
ground-level restricted airspace needed
for the construction of targets and
impact areas so that PGM can safely be
employed at the Range.
Regulatory Notices and Analyses
The FAA has determined that this
regulation only involves an established
body of technical regulations for which
frequent and routine amendments are
necessary to keep them operationally
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]]>Agencies
[Federal Register Volume 83, Number 166 (Monday, August 27, 2018)]
[Rules and Regulations]
[Pages 43503-43508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18209]
=======================================================================
-----------------------------------------------------------------------
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1026
Truth in Lending (Regulation Z) Annual Threshold Adjustments
(Credit Cards, HOEPA, and Qualified Mortgages)
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 regulation text and official
interpretations for 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
TILA and amendments to TILA, including 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). The Bureau is adjusting these amounts, where appropriate, based
on the annual percentage change reflected in the Consumer Price Index
(CPI) in effect on June 1, 2018.
DATES: This final rule is effective January 1, 2019.
FOR FURTHER INFORMATION CONTACT: Monique Chenault, Paralegal, and
Shelley Thompson, Counsel, Office of Regulations, at (202) 435-7700. If
you require this document in an alternative electronic format, please
contact [email protected].
SUPPLEMENTARY INFORMATION: The Bureau is amending the regulation 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 CPI as published
by the Bureau of Labor Statistics (BLS). Specifically, for open-end
consumer credit plans under TILA, the threshold that triggers
requirements to disclose minimum interest charges will remain unchanged
at $1.00 in 2019. For open-end consumer credit plans under the CARD Act
amendments to TILA, the adjusted dollar amount in 2019 for the safe
harbor for a first violation penalty fee will increase by $1 to $28 and
the adjusted dollar amount for the safe harbor for a subsequent
violation penalty fee will increase by $1 to $39. For HOEPA loans, the
adjusted total loan amount threshold for high-cost mortgages in 2019
will be $21,549. The adjusted points-and-fees dollar trigger for high-
cost mortgages in 2019 will be $1,077. For qualified mortgages, which
receive certain protections from liability under the ability-to-repay
rule, the maximum thresholds for total points and fees in 2019 will be
3 percent of the total loan amount for a loan greater than or equal to
$107,747; $3,232 for a loan amount greater than or equal to $64,648 but
less than $107,747; 5 percent of the total loan amount for a loan
greater than or equal to $21,549 but less than $64,648; $1,077 for a
loan amount greater than or equal to $13,468 but less than $21,549; and
8 percent of the total loan amount for a loan amount less than $13,468.
I. Background
A. Credit Card Annual Adjustments
Minimum Interest Charge Disclosure Thresholds
Sections 1026.6(b)(2)(iii) and 1026.60(b)(3) of Regulation Z
implement sections 127(a)(3) and 127(c)(1)(A)(ii)(II) of TILA. Sections
1026.6(b)(2)(iii) and 1026.60(b)(3) require the disclosure of any
minimum interest charge exceeding $1.00 that could be imposed during a
billing cycle and provide that, for open-end consumer credit plans, the
minimum interest charge thresholds
[[Page 43504]]
will be re-calculated annually using the CPI that was in effect on the
preceding June 1; the Bureau uses the Consumer Price Index for Urban
Wage Earners and Clerical Workers (CPI-W) for this adjustment. 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 analysis is based on the CPI-W
index in effect on June 1, 2018, which was reported by BLS on May 10,
2018, and reflects the percentage change from April 2017 to April 2018.
The CPI-W is a subset of the Consumer Price Index for All Urban
Consumers (CPI-U) index and represents approximately 29 percent of the
U.S. population. The adjustment analysis accounts for a 2.6 percent
increase in the CPI-W from April 2017 to April 2018. 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 the Bureau is
therefore not amending Sec. Sec. 1026.6(b)(2)(iii) and 1026.60(b)(3).
Safe Harbor Penalty Fees
Section 1026.52(b)(1)(ii)(A) and (B) of Regulation Z implements
section 149(e) of TILA, established by the CARD Act.\1\ Section
1026.52(b)(1)(ii)(D) provides that the safe harbor provision, which
establishes the permissible penalty fee thresholds in Sec.
1026.52(b)(1)(ii)(A) and (B), will be re-calculated annually using the
CPI that was in effect on the preceding June 1; the Bureau uses the
CPI-W for this adjustment. 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. The 2019 adjustment
analysis is based on the CPI-W index in effect on June 1, 2018, which
was reported by BLS on May 10, 2018, and reflects the percentage change
from April 2017 to April 2018. The adjustment to the permissible fee
thresholds being adopted here reflects a 2.6 percent increase in the
CPI-W from April 2017 to April 2018 and is rounded to the nearest $1
increment.
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\1\ Credit Card Accountability Responsibility and Disclosure Act
of 2009, Public Law 111-24, 123 Stat. 1734 (2009).
---------------------------------------------------------------------------
B. HOEPA Annual Threshold Adjustments
Section 1026.32(a)(1)(ii) of Regulation Z implements section 1431
of the Dodd-Frank Act,\2\ which amended the HOEPA points-and-fees
coverage test. 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 depends
on whether the total loan amount is for $20,000 or more, or for less
than $20,000. Section 1026.32(a)(1)(ii) provides that this threshold
amount be recalculated annually using the CPI index in effect on June
1; the Bureau uses the CPI-U for this adjustment. The CPI-U is based on
all urban consumers and represents approximately 93 percent of the U.S.
population. The 2019 adjustment is based on the CPI-U index in effect
on June 1, which was reported by BLS on May 10, 2018, and reflects the
percentage change from April 2017 to April 2018. The adjustment to the
$20,000 figure being adopted here reflects a 2.5 percent increase in
the CPI-U index for this period and is rounded to whole dollars for
ease of compliance.
---------------------------------------------------------------------------
\2\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, 124 Stat. 1376 (2010).
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Under Sec. 1026.32(a)(1)(ii)(B) the HOEPA points-and-fees dollar
trigger is $1,000. Section 1026.32(a)(1)(ii)(B) provides that this
threshold amount will be recalculated annually using the CPI index in
effect on June 1; the Bureau uses the CPI-U for this adjustment. The
2019 adjustment is based on the CPI-U index in effect on June 1, 2018,
which was reported by BLS on May 10, 2018, and reflects the percentage
change from April 2017 to April 2018. The adjustment to the $1,000
figure being adopted here reflects a 2.5 percent increase in the CPI-U
index for this period and is rounded to whole dollars for ease of
compliance.
C. Qualified Mortgages Annual Threshold Adjustments
The Bureau's Regulation Z implements sections 1411 and 1412 of the
Dodd-Frank Act, which generally require creditors to make a reasonable,
good-faith determination of a consumer's ability to repay any consumer
credit transaction secured by a dwelling and establishes certain
protections from liability under this requirement for qualified
mortgages. Under Sec. 1026.43(e)(3)(i), a covered transaction is not a
qualified mortgage if the transaction's total 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; or 8 percent of the total loan amount for loans less than
$12,500. Section 1026.43(e)(3)(ii) provides that the limits and loan
amounts in Sec. 1026.43(e)(3)(i) are recalculated annually for
inflation using the CPI-U index in effect on June 1. The 2019
adjustment is based on the CPI-U index in effect on June 1, 2018, which
was reported by BLS on May 10, 2018, and reflects the percentage change
from April 2017 to April 2018. The adjustment to the 2018 figures being
adopted here reflects a 2.5 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. Credit Card 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 at $1.00 for
the year 2019. Accordingly, the Bureau is not amending these sections
of Regulation Z.
Safe Harbor Penalty Fees--Sec. 1026.52(b)(1)(ii)(A) and (B)
Effective January 1, 2019, the permissible fee threshold amounts
increased by $1 and are $28 for Sec. 1026.52(b)(1)(ii)(A) and $39 for
Sec. 1026.52(b)(1)(ii)(B). Accordingly, the Bureau is revising Sec.
1026.52(b)(1)(ii)(A) and (B) to state that the fee imposed for
violating the terms or other requirements of an account shall not
exceed $28 and $39 respectively. The Bureau is also 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, 2019, for purposes of determining under Sec.
1026.32(a)(1)(ii)
[[Page 43505]]
the points-and-fees coverage test under HOEPA to which a transaction is
subject, the total loan amount threshold is $21,549, and the adjusted
points-and-fees dollar trigger under Sec. 1026.32(a)(1)(ii)(B) is
$1,077. When the total loan amount for a transaction is $21,549 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 $21,549, and the points-and-
fees amount exceeds the lesser of the adjusted points-and-fees dollar
trigger of $1,077 or 8 percent of the total loan amount, the
transaction is a high-cost mortgage. The Bureau is amending comments
32(a)(1)(ii)-1 and -3, which list the adjustments for each year, to
reflect for 2019 the new loan amount dollar threshold and the new
points-and-fees dollar trigger, respectively.
C. Qualified Mortgages Annual Threshold Adjustments
Effective January 1, 2019, 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 $107,747; $3,232 for a loan amount
greater than or equal to $64,648 but less than $107,747; 5 percent of
the total loan amount for loans greater than or equal to $21,549 but
less than $64,648; $1,077 for a loan amount greater than or equal to
$13,468 but less than $21,549; or 8 percent of the total loan amount
for loans less than $13,468. The Bureau is amending comment
43(e)(3)(ii)-1, which lists the adjustments for each year, to reflect
the new dollar threshold amounts for 2019.
III. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure Act, 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)(A) and (B) in subpart G is
amended and comments 32(a)(1)(ii)-1.v and -3.v, 43(e)(3)(ii)-1.v, and
52(b)(1)(ii)-2.i.F in Supplement I are added to update the exemption
thresholds. The amendments in this final rule are technical and non-
discretionary, as they merely apply the method previously established
in Regulation Z for determining adjustments to the thresholds. For
these reasons, the Bureau has determined that publishing a notice of
proposed rulemaking and providing opportunity for public comment are
unnecessary. The amendments therefore are adopted in final form.
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 part 1320), the Bureau reviewed this final rule. No
collections of information pursuant to the Paperwork Reduction Act are
contained in the final rule.
D. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Bureau will submit a report containing this rule and other required
information to the United States Senate, the United States House of
Representatives, and the Comptroller General of the United States prior
to the rule taking effect. The Office of Information and Regulatory
Affairs (OIRA) has designated this rule as not a ``major rule'' as
defined by 5 U.S.C. 804(2).
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. Amend Sec. 1026.52 by revising paragraphs (b)(1)(ii)(A) and (B) to
read as follows:
Sec. 1026.52 Limitations on fees.
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(A) $28
(B) $39 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. In Supplement I to Part 1026:
0
a. Under Section 1026.32--Requirements for High-Cost Mortgages,
Paragraph 32(a)(1)(ii) is revised.
0
b. Under Section 1026.43--Minimum Standards for Transactions Secured by
a Dwelling, Paragraph 43(e)(3)(ii) is revised.
0
c. Under Section 1026.52--Limitations on Fees, 52(b)(1)(ii) Safe
harbors is revised.
The revisions read as follows:
SUPPLEMENT I TO PART 1026--OFFICIAL INTERPRETATIONS
* * * * *
Section 1026.32--Requirements for High-Cost Mortgages
* * * * *
Paragraph 32(a)(1)(ii).
1. Annual adjustment of $1,000 amount. The $1,000 figure in
Sec. 1026.32(a)(1)(ii)(B) is adjusted annually on January 1 by the
annual percentage change in the CPI that was in effect on the
preceding June 1. The Bureau will publish adjustments after the June
figures become available each year.
i. For 2015, $1,020, reflecting a 2 percent increase in the CPI-
U from June 2013 to June 2014, rounded to the nearest whole dollar.
ii. For 2016, $1,017, reflecting a .2 percent decrease in the
CPI-U from June 2014 to June 2015, rounded to the nearest whole
dollar.
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.
iv. For 2018, $1,052, reflecting a 2.2 percent increase in the
CPI-U from June 2016 to June 2017, rounded to the nearest whole
dollar.
v. For 2019, $1,077, reflecting a 2.5 percent increase in the
CPI-U from June 2017 to June 2018, rounded to the nearest whole
dollar.
2. Historical adjustment of $400 amount. Prior to January 10,
2014, a mortgage loan was covered by Sec. 1026.32 if the total
points and fees payable by the consumer at or before loan
consummation exceeded the greater of $400 or 8 percent of the total
loan amount. The $400 figure was adjusted annually on January 1 by
the annual percentage change in the CPI that was in effect on the
preceding June 1, as follows:
i. For 1996, $412, reflecting a 3.00 percent increase in the
CPI-U from June 1994 to June 1995, rounded to the nearest whole
dollar.
ii. For 1997, $424, reflecting a 2.9 percent increase in the
CPI-U from June 1995 to June 1996, rounded to the nearest whole
dollar.
iii. For 1998, $435, reflecting a 2.5 percent increase in the
CPI-U from June 1996 to June 1997, rounded to the nearest whole
dollar.
[[Page 43506]]
iv. For 1999, $441, reflecting a 1.4 percent increase in the
CPI-U from June 1997 to June 1998, rounded to the nearest whole
dollar.
v. For 2000, $451, reflecting a 2.3 percent increase in the CPI-
U from June 1998 to June 1999, rounded to the nearest whole dollar.
vi. For 2001, $465, reflecting a 3.1 percent increase in the
CPI-U from June 1999 to June 2000, rounded to the nearest whole
dollar.
vii. For 2002, $480, reflecting a 3.27 percent increase in the
CPI-U from June 2000 to June 2001, rounded to the nearest whole
dollar.
viii. For 2003, $488, reflecting a 1.64 percent increase in the
CPI-U from June 2001 to June 2002, rounded to the nearest whole
dollar.
ix. For 2004, $499, reflecting a 2.22 percent increase in the
CPI-U from June 2002 to June 2003, rounded to the nearest whole
dollar.
x. For 2005, $510, reflecting a 2.29 percent increase in the
CPI-U from June 2003 to June 2004, rounded to the nearest whole
dollar.
xi. For 2006, $528, reflecting a 3.51 percent increase in the
CPI-U from June 2004 to June 2005, rounded to the nearest whole
dollar.
xii. For 2007, $547, reflecting a 3.55 percent increase in the
CPI-U from June 2005 to June 2006, rounded to the nearest whole
dollar.
xiii. For 2008, $561, reflecting a 2.56 percent increase in the
CPI-U from June 2006 to June 2007, rounded to the nearest whole
dollar.
xiv. For 2009, $583, reflecting a 3.94 percent increase in the
CPI-U from June 2007 to June 2008, rounded to the nearest whole
dollar.
xv. For 2010, $579, reflecting a 0.74 percent decrease in the
CPI-U from June 2008 to June 2009, rounded to the nearest whole
dollar.
xvi. For 2011, $592, reflecting a 2.2 percent increase in the
CPI-U from June 2009 to June 2010, rounded to the nearest whole
dollar.
xvii. For 2012, $611, reflecting a 3.2 percent increase in the
CPI-U from June 2010 to June 2011, rounded to the nearest whole
dollar.
xviii. For 2013, $625, reflecting a 2.3 percent increase in the
CPI-U from June 2011 to June 2012, rounded to the nearest whole
dollar.
xix. For 2014, $632, reflecting a 1.1 percent increase in the
CPI-U from June 2012 to June 2013, rounded to the nearest whole
dollar.
3. Applicable threshold. For purposes of Sec.
1026.32(a)(1)(ii), a creditor must determine the applicable points
and fees threshold based on the face amount of the note (or, in the
case of an open-end credit plan, the credit limit for the plan when
the account is opened). However, the creditor must apply the
allowable points and fees percentage to the ``total loan amount,''
as defined in Sec. 1026.32(b)(4). For closed-end credit
transactions, the total loan amount may be different than the face
amount of the note. The $20,000 amount in Sec. 1026.32(a)(1)(ii)(A)
and (B) is adjusted annually on January 1 by the annual percentage
change in the CPI that was in effect on the preceding June 1.
i. For 2015, $20,391, reflecting a 2 percent increase in the
CPI-U from June 2013 to June 2014, rounded to the nearest whole
dollar.
ii. For 2016, $20,350, reflecting a .2 percent decrease in the
CPI-U from June 2014 to June 2015, rounded to the nearest whole
dollar.
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.
iv. For 2018, $21,032, reflecting a 2.2 percent increase in the
CPI-U from June 2016 to June 2017, rounded to the nearest whole
dollar.
v. For 2019, $21,549, reflecting a 2.5 percent increase in the
CPI-U from June 2017 to June 2018, rounded to the nearest whole
dollar.
* * * * *
Section 1026.43--Minimum Standards for Transactions Secured by a
Dwelling
* * * * *
Paragraph 43(e)(3)(ii).
1. Annual adjustment for inflation. The dollar amounts,
including the loan amounts, in Sec. 1026.43(e)(3)(i) will be
adjusted annually on January 1 by the annual percentage change in
the CPI-U that was in effect on the preceding June 1. The Bureau
will publish adjustments after the June figures become available
each year.
i. For 2015, reflecting a 2 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 $101,953: 3
percent of the total loan amount;
B. For a loan amount greater than or equal to $61,172 but less
than $101,953: $3,059;
C. For a loan amount greater than or equal to $20,391 but less
than $61,172: 5 percent of the total loan amount;
D. For a loan amount greater than or equal to $12,744 but less
than $20,391; $1,020;
E. For a loan amount less than $12,744: 8 percent of the total
loan amount.
ii. For 2016, reflecting a .2 percent decrease 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 $101,749: 3
percent of the total loan amount;
B. For a loan amount greater than or equal to $61,050 but less
than $101,749: $3,052;
C. For a loan amount greater than or equal to $20,350 but less
than $61,050: 5 percent of the total loan amount;
D. For a loan amount greater than or equal to $12,719 but less
than $20,350; $1,017;
E. For a loan amount less than $12,719: 8 percent of the total
loan amount.
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. For a loan amount less than $12,862: 8 percent of the total
loan amount.
iv. For 2018, reflecting a 2.2 percent increase in the CPI-U
that was reported on the preceding June 1, a covered transaction is
not a qualified mortgage unless the transaction's total points and
fees do not exceed:
A. For a loan amount greater than or equal to $105,158: 3
percent of the total loan amount;
B. For a loan amount greater than or equal to $63,095 but less
than $105,158: $3,155;
C. For a loan amount greater than or equal to $21,032 but less
than $63,095: 5 percent of the total loan amount;
D. For a loan amount greater than or equal to $13,145 but less
than $21,032: $1,052;
E. For a loan amount less than $13,145: 8 percent of the total
loan amount.
v. For 2019, reflecting a 2.5 percent increase in the CPI-U that
was reported on the preceding June 1, a covered transaction is not a
qualified mortgage unless the transaction's total points and fees do
not exceed:
A. For a loan amount greater than or equal to $107,747: 3
percent of the total loan amount;
B. For a loan amount greater than or equal to $64,648 but less
than $107,747: $3,232;
C. For a loan amount greater than or equal to $21,549 but less
than $64,648: 5 percent of the total loan amount;
D. For a loan amount greater than or equal to $13,468 but less
than $21,549: $1,077;
E. For a loan amount less than $13,468: 8 percent of the total
loan amount.
* * * * *
Section 1026.52--Limitations on Fees
* * * * *
52(b)(1)(ii) Safe harbors
1. Multiple violations of same type. i. Same billing cycle or
next six billing cycles. A card issuer cannot impose a fee for a
violation pursuant to Sec. 1026.52(b)(1)(ii)(B) unless a fee has
previously been imposed for the same type of violation pursuant to
Sec. 1026.52(b)(1)(ii)(A). Once a fee has been imposed for a
violation pursuant to Sec. 1026.52(b)(1)(ii)(A), the card issuer
may impose a fee pursuant to Sec. 1026.52(b)(1)(ii)(B) for any
subsequent violation of the same type until that type of violation
has not occurred for a period of six consecutive complete billing
cycles. A fee has been imposed for purposes of Sec.
1026.52(b)(1)(ii) even if the card issuer waives or rebates all or
part of the fee.
A. Late payments. For purposes of Sec. 1026.52(b)(1)(ii), a
late payment occurs during the billing cycle in which the payment
may first be treated as late consistent with the requirements of
this part and the terms or other requirements of the account.
B. Returned payments. For purposes of Sec. 1026.52(b)(1)(ii), a
returned payment occurs during the billing cycle in which the
payment is returned to the card issuer.
C. Transactions that exceed the credit limit. For purposes of
Sec. 1026.52(b)(1)(ii), a transaction that exceeds the credit limit
for
[[Page 43507]]
an account occurs during the billing cycle in which the transaction
occurs or is authorized by the card issuer.
D. Declined access checks. For purposes of Sec.
1026.52(b)(1)(ii), a check that accesses a credit card account is
declined during the billing cycle in which the card issuer declines
payment on the check.
ii. Relationship to Sec. Sec. 1026.52(b)(2)(ii) and
1026.56(j)(1). If multiple violations are based on the same event or
transaction such that Sec. 1026.52(b)(2)(ii) prohibits the card
issuer from imposing more than one fee, the event or transaction
constitutes a single violation for purposes of Sec.
1026.52(b)(1)(ii). Furthermore, consistent with Sec.
1026.56(j)(1)(i), no more than one violation for exceeding an
account's credit limit can occur during a single billing cycle for
purposes of Sec. 1026.52(b)(1)(ii). However, Sec.
1026.52(b)(2)(ii) does not prohibit a card issuer from imposing fees
for exceeding the credit limit in consecutive billing cycles based
on the same over-the-limit transaction to the extent permitted by
Sec. 1026.56(j)(1). In these circumstances, the second and third
over-the-limit fees permitted by Sec. 1026.56(j)(1) may be imposed
pursuant to Sec. 1026.52(b)(1)(ii)(B). See comment 52(b)(2)(ii)-1.
iii. Examples. The following examples illustrate the application
of Sec. 1026.52(b)(1)(ii)(A) and (b)(1)(ii)(B) with respect to
credit card accounts under an open-end (not home-secured) consumer
credit plan that are not charge card accounts. For purposes of these
examples, assume that the billing cycles for the account begin on
the first day of the month and end on the last day of the month and
that the payment due date for the account is the twenty-fifth day of
the month.
A. Violations of same type (late payments). A required minimum
periodic payment of $50 is due on March 25. On March 26, a late
payment has occurred because no payment has been received.
Accordingly, consistent with Sec. 1026.52(b)(1)(ii)(A), the card
issuer imposes a $25 late payment fee on March 26. In order for the
card issuer to impose a $35 late payment fee pursuant to Sec.
1026.52(b)(1)(ii)(B), a second late payment must occur during the
April, May, June, July, August, or September billing cycles.
1. The card issuer does not receive any payment during the March
billing cycle. A required minimum periodic payment of $100 is due on
April 25. On April 20, the card issuer receives a $50 payment. No
further payment is received during the April billing cycle.
Accordingly, consistent with Sec. 1026.52(b)(1)(ii)(B), the card
issuer may impose a $35 late payment fee on April 26. Furthermore,
the card issuer may impose a $35 late payment fee for any late
payment that occurs during the May, June, July, August, September,
or October billing cycles.
2. Same facts as in paragraph A above. On March 30, the card
issuer receives a $50 payment and the required minimum periodic
payments for the April, May, June, July, August, and September
billing cycles are received on or before the payment due date. A
required minimum periodic payment of $60 is due on October 25. On
October 26, a late payment has occurred because the required minimum
periodic payment due on October 25 has not been received. However,
because this late payment did not occur during the six billing
cycles following the March billing cycle, Sec. 1026.52(b)(1)(ii)
only permits the card issuer to impose a late payment fee of $25.
B. Violations of different types (late payment and over the
credit limit). The credit limit for an account is $1,000. Consistent
with Sec. 1026.56, the consumer has affirmatively consented to the
payment of transactions that exceed the credit limit. A required
minimum periodic payment of $30 is due on August 25. On August 26, a
late payment has occurred because no payment has been received.
Accordingly, consistent with Sec. 1026.52(b)(1)(ii)(A), the card
issuer imposes a $25 late payment fee on August 26. On August 30,
the card issuer receives a $30 payment. On September 10, a
transaction causes the account balance to increase to $1,150, which
exceeds the account's $1,000 credit limit. On September 11, a second
transaction increases the account balance to $1,350. On September
23, the card issuer receives the $50 required minimum periodic
payment due on September 25, which reduces the account balance to
$1,300. On September 30, the card issuer imposes a $25 over-the-
limit fee, consistent with Sec. 1026.52(b)(1)(ii)(A). On October
26, a late payment has occurred because the $60 required minimum
periodic payment due on October 25 has not been received.
Accordingly, consistent with Sec. 1026.52(b)(1)(ii)(B), the card
issuer imposes a $35 late payment fee on October 26.
C. Violations of different types (late payment and returned
payment). A required minimum periodic payment of $50 is due on July
25. On July 26, a late payment has occurred because no payment has
been received. Accordingly, consistent with Sec.
1026.52(b)(1)(ii)(A), the card issuer imposes a $25 late payment fee
on July 26. On July 30, the card issuer receives a $50 payment. A
required minimum periodic payment of $50 is due on August 25. On
August 24, a $50 payment is received. On August 27, the $50 payment
is returned to the card issuer for insufficient funds. In these
circumstances, Sec. 1026.52(b)(2)(ii) permits the card issuer to
impose either a late payment fee or a returned payment fee but not
both because the late payment and the returned payment result from
the same event or transaction. Accordingly, for purposes of Sec.
1026.52(b)(1)(ii), the event or transaction constitutes a single
violation. However, if the card issuer imposes a late payment fee,
Sec. 1026.52(b)(1)(ii)(B) permits the issuer to impose a fee of $35
because the late payment occurred during the six billing cycles
following the July billing cycle. In contrast, if the card issuer
imposes a returned payment fee, the amount of the fee may be no more
than $25 pursuant to Sec. 1026.52(b)(1)(ii)(A).
2. Adjustments based on Consumer Price Index. For purposes of
Sec. 1026.52(b)(1)(ii)(A) and (b)(1)(ii)(B), the Bureau shall
calculate each year price level adjusted amounts using the Consumer
Price Index in effect on June 1 of that year. When the cumulative
change in the adjusted minimum value derived from applying the
annual Consumer Price level to the current amounts in Sec.
1026.52(b)(1)(ii)(A) and (b)(1)(ii)(B) has risen by a whole dollar,
those amounts will be increased by $1.00. Similarly, when the
cumulative change in the adjusted minimum value derived from
applying the annual Consumer Price level to the current amounts in
Sec. 1026.52(b)(1)(ii)(A) and (b)(1)(ii)(B) has decreased by a
whole dollar, those amounts will be decreased by $1.00. The Bureau
will publish adjustments to the amounts in Sec.
1026.52(b)(1)(ii)(A) and (b)(1)(ii)(B).
i. Historical thresholds.
A. Card issuers were permitted to impose a fee for violating the
terms of an agreement if the fee did not exceed $25 under Sec.
1026.52(b)(1)(ii)(A) and $35 under Sec. 1026.52(b)(1)(ii)(B),
through December 31, 2013.
B. Card issuers were permitted to impose a fee for violating the
terms of an agreement if the fee did not exceed $26 under Sec.
1026.52(b)(1)(ii)(A) and $37 under Sec. 1026.52(b)(1)(ii)(B),
through December 31, 2014.
C. 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) and $38 under Sec. 1026.52(b)(1)(ii)(B),
through December 31, 2015.
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.
E. 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) and $38 under Sec. 1026.52(b)(1)(ii)(B),
through December 31, 2017.
F. 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) and $38 under Sec. 1026.52(b)(1)(ii)(B),
through December 31, 2018.
3. Delinquent balance for charge card accounts. Section
1026.52(b)(1)(ii)(C) provides that, when a charge card issuer that
requires payment of outstanding balances in full at the end of each
billing cycle has not received the required payment for two or more
consecutive billing cycles, the card issuer may impose a late
payment fee that does not exceed three percent of the delinquent
balance. For purposes of Sec. 1026.52(b)(1)(ii)(C), the delinquent
balance is any previously billed amount that remains unpaid at the
time the late payment fee is imposed pursuant to Sec.
1026.52(b)(1)(ii)(C). Consistent with Sec. 1026.52(b)(2)(ii), a
charge card issuer that imposes a fee pursuant to Sec.
1026.52(b)(1)(ii)(C) with respect to a late payment may not impose a
fee pursuant to Sec. 1026.52(b)(1)(ii)(B) with respect to the same
late payment. The following examples illustrate the application of
Sec. 1026.52(b)(1)(ii)(C):
i. Assume that a charge card issuer requires payment of
outstanding balances in full at
[[Page 43508]]
the end of each billing cycle and that the billing cycles for the
account begin on the first day of the month and end on the last day
of the month. At the end of the June billing cycle, the account has
a balance of $1,000. On July 5, the card issuer provides a periodic
statement disclosing the $1,000 balance consistent with Sec.
1026.7. During the July billing cycle, the account is used for $300
in transactions, increasing the balance to $1,300. At the end of the
July billing cycle, no payment has been received and the card issuer
imposes a $25 late payment fee consistent with Sec.
1026.52(b)(1)(ii)(A). On August 5, the card issuer provides a
periodic statement disclosing the $1,325 balance consistent with
Sec. 1026.7. During the August billing cycle, the account is used
for $200 in transactions, increasing the balance to $1,525. At the
end of the August billing cycle, no payment has been received.
Consistent with Sec. 1026.52(b)(1)(ii)(C), the card issuer may
impose a late payment fee of $40, which is 3% of the $1,325 balance
that was due at the end of the August billing cycle. Section
1026.52(b)(1)(ii)(C) does not permit the card issuer to include the
$200 in transactions that occurred during the August billing cycle.
ii. Same facts as above except that, on August 25, a $100
payment is received. Consistent with Sec. 1026.52(b)(1)(ii)(C), the
card issuer may impose a late payment fee of $37, which is 3% of the
unpaid portion of the $1,325 balance that was due at the end of the
August billing cycle ($1,225).
iii. Same facts as in paragraph A above except that, on August
25, a $200 payment is received. Consistent with Sec.
1026.52(b)(1)(ii)(C), the card issuer may impose a late payment fee
of $34, which is 3% of the unpaid portion of the $1,325 balance that
was due at the end of the August billing cycle ($1,125). In the
alternative, the card issuer may impose a late payment fee of $35
consistent with Sec. 1026.52(b)(1)(ii)(B). However, Sec.
1026.52(b)(2)(ii) prohibits the card issuer from imposing both fees.
* * * * *
Dated: August 16, 2018.
Mick Mulvaney,
Acting Director, Bureau of Consumer Financial Protection.
[FR Doc. 2018-18209 Filed 8-24-18; 8:45 am]
BILLING CODE 4810-AM-P
