Consumer Leasing (Regulation M), 59274-59276 [2018-25396]

Download as PDF 59274 Federal Register / Vol. 83, No. 226 / Friday, November 23, 2018 / Rules and Regulations List of Subjects 12 CFR Part 34 Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in lending. 12 CFR Part 226 Advertising, Appraisal, Appraiser, Consumer protection, Credit, Federal Reserve System, Mortgages, Reporting and recordkeeping requirements, Truth in lending. 12 CFR Part 1026 Advertising, Appraisal, Appraiser, Banking, Banks, 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 OCC amends 12 CFR part 34 as set forth below: PART 34—REAL ESTATE LENDING AND APPRAISALS 1. The authority citation for part 34 continues to read as follows: Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1462a, 1463, 1464, 1465, 1701j–3, 1828(o), 3331 et seq., 5101 et seq., 5412(b)(2)(B) and 15 U.S.C. 1639h. 2. In Appendix C to Subpart G, under Section 34.203—Appraisals for HigherPriced Mortgage Loans, paragraph 34.203(b)(2), paragraph 3.vi is added to read as follows: ■ Appendix C to Subpart G—OCC Interpretations * * * * amozie on DSK3GDR082PROD with RULES * * * * 12 CFR Part 213 * * * * Section 226.43—Appraisals for Higher-Risk Mortgage Loans [Docket No. R–1632] * * RIN 7100–AF24 * BUREAU OF CONSUMER FINANCIAL PROTECTION * * * * * * 3. * * * vi. From January 1, 2019, through December 31, 2019, the threshold amount is $26,700. * * * * * Bureau of Consumer Financial Protection 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) 5. 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. * * Supplement I to Part 1026—Official Interpretations Section 1026.35—Requirements for HigherPriced Mortgage Loans * * * * * * Authority and Issuance For the reasons set forth in the preamble, the Board amends Regulation Z, 12 CFR part 226, as set forth below: VerDate Sep<11>2014 16:13 Nov 21, 2018 Jkt 247001 * * * * * * * * * Paragraph 35(c)(2)(ii) Board of Governors of the Federal Reserve System BILLING CODE 4810–33–P; 6210–01–P; 4810–AM–P * 3. * * * vi. From January 1, 2019, through December 31, 2019, the threshold amount is $26,700. * [FR Doc. 2018–25400 Filed 11–21–18; 8:45 am] FEDERAL RESERVE SYSTEM 6. In Supplement I to part 1026, under Section 1026.35—Requirements for Higher-Priced Mortgage Loans, paragraph 35(c)(2)(ii), paragraph 3.vi is added to read as follows: Paragraph 34.203(b)(2) Dated: November 6, 2018. Joseph M. Otting, Comptroller of the Currency. By order of the Board of Governors of the Federal Reserve System under delegated authority, November 13, 2018. Ann E. Misback, Secretary of the Board. Dated: November 9, 2018. Mick Mulvaney, Acting Director, Bureau of Consumer Financial Protection. Supplement I to Part 226—Official Staff Interpretations ■ * Section 34.203—Appraisals for Higher-Priced Mortgage Loans * 4. In Supplement I to part 226, under Section 226.43—Appraisals for HigherRisk Mortgage Loans, paragraph 43(b)(2), paragraph 3.vi is added to read as follows: ■ Authority and Issuance ■ * Authority: 12 U.S.C. 3806; 15 U.S.C. 1604, 1637(c)(5), 1639(l), and 1639h; Pub. L. 111– 24, section 2, 123 Stat. 1734; Pub. L. 111– 203, 124 Stat. 1376. * Office of the Comptroller of the Currency * 3. The authority citation for part 226 continues to read as follows: ■ Paragraph 43(b)(2) DEPARTMENT OF THE TREASURY * PART 226—TRUTH IN LENDING (REGULATION Z) * * * * 3. * * * vi. From January 1, 2019, through December 31, 2019, the threshold amount is $26,700. * PO 00000 * * Frm 00006 * Fmt 4700 * Sfmt 4700 12 CFR Part 1013 RIN 3170–AA89 Consumer Leasing (Regulation M) Board of Governors of the Federal Reserve System (Board); and Bureau of Consumer Financial Protection (Bureau). ACTION: Final rules, official interpretations and commentary. AGENCY: The Board and the Bureau are finalizing amendments to the official interpretations and commentary for the agencies’ regulations that implement the Consumer Leasing Act (CLA). The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the CLA by requiring that the dollar threshold for exempt consumer leases be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W). If there is no annual percentage increase in the CPI–W, the Board and the Bureau will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, the threshold is calculated by applying the annual percentage change in the CPI–W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI–W had been taken into account. Based on the annual percentage increase in the CPI–W as of June 1, 2018, the exemption threshold will increase from $55,800 to $57,200 effective January 1, 2019. SUMMARY: E:\FR\FM\23NOR1.SGM 23NOR1 Federal Register / Vol. 83, No. 226 / Friday, November 23, 2018 / Rules and Regulations Because the Dodd-Frank Act also requires similar adjustments in the Truth in Lending Act’s threshold for exempt consumer credit transactions, the Board and the Bureau are making similar amendments to each of their respective regulations implementing the Truth in Lending Act elsewhere in this issue of the Federal Register. DATES: This final rule is effective January 1, 2019. FOR FURTHER INFORMATION CONTACT: Board: Vivian W. Wong, Senior Counsel, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452–3667; for users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263–4869. Bureau: Shelley Thompson, Counsel, Office of Regulations, Bureau of Consumer Financial Protection, at (202) 435–7700. SUPPLEMENTARY INFORMATION: I. Background amozie on DSK3GDR082PROD with RULES The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) increased the threshold in the Consumer Leasing Act (CLA) for exempt consumer leases, and the threshold in the Truth in Lending Act (TILA) for exempt consumer credit transactions,1 from $25,000 to $50,000, effective July 21, 2011.2 In addition, the Dodd-Frank Act requires that, on and after December 31, 2011, these thresholds be adjusted annually for inflation by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W), as published by the Bureau of Labor Statistics. In April 2011, the Board issued a final rule amending Regulation M (which implements the CLA) consistent with these provisions of the Dodd-Frank Act, along with a similar final rule amending Regulation Z (which implements TILA) (collectively, the Board Final Threshold Rules).3 Title X of the Dodd-Frank Act transferred rulemaking authority for a number of consumer financial protection laws from the Board to the Bureau, effective July 21, 2011. In connection with this transfer of 1 Although consumer credit transactions above the threshold are generally exempt, loans secured by real property or by personal property used or expected to be used as the principal dwelling of a consumer and private education loans are covered by TILA regardless of the loan amount. See 12 CFR 226.3(b)(1)(i) (Board) and 12 CFR 1026.3(b)(1)(i) (Bureau). 2 Public Law 111–203, section 1100E, 124 Stat. 1376, 2111 (2010). 3 76 FR 18349 (Apr. 4, 2011); 76 FR 18354 (Apr. 4, 2011). VerDate Sep<11>2014 16:13 Nov 21, 2018 Jkt 247001 rulemaking authority, the Bureau issued its own Regulation M implementing the CLA, 12 CFR part 1013, substantially duplicating the Board’s Regulation M.4 Although the Bureau has the authority to issue rules to implement the CLA for most entities, the Board retains authority to issue rules under the CLA for certain motor vehicle dealers covered by section 1029(a) of the DoddFrank Act, and the Board’s Regulation M continues to apply to those entities.5 The Board’s and the Bureau’s regulations,6 and their accompanying commentaries, provide that the exemption threshold will be adjusted annually effective January 1 of each year based on any annual percentage increase in the CPI–W that was in effect on the preceding June 1. They further provide that any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI–W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI–W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900.7 Since 2011, the Board and the Bureau have adjusted the Regulation M exemption threshold annually, in accordance with these rules. On November 30, 2016, the Board and the Bureau published a final rule in the Federal Register to memorialize the calculation method used by the agencies each year to adjust the exemption 4 See 76 FR 78500 (Dec. 19, 2011); 81 FR 25323 (April 28, 2016). 5 Section 1029(a) of the Dodd-Frank Act states: ‘‘Except as permitted in subsection (b), the Bureau may not exercise any rulemaking, supervisory, enforcement, or any other 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.’’ 12 U.S.C. 5519(a). Section 1029(b) of the DoddFrank Act states: ‘‘Subsection (a) shall not apply to any person, to the extent that such person (1) provides consumers with any services related to residential or commercial mortgages or selffinancing transactions involving real property; (2) operates a line of business (A) that involves the extension of retail credit or retail leases involving motor vehicles; and (B) in which (i) the extension of retail credit or retail leases are provided directly to consumers; and (ii) the contract governing such extension of retail credit or retail leases is not routinely assigned to an unaffiliated third party finance or leasing source; or (3) offers or provides a consumer financial product or service not involving or related to the sale, financing, leasing, rental, repair, refurbishment, maintenance, or other servicing of motor vehicles, motor vehicle parts, or any related or ancillary product or service.’’ 12 U.S.C. 5519(b). 6 12 CFR 213.2(e)(1) (Board) and 12 CFR 1013.2(e)(1) (Bureau). 7 See comments 2(e)–9 in Supplements I of 12 CFR parts 213 and 1013. PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 59275 threshold to ensure that, as contemplated by section 1100E(b) of the Dodd-Frank Act, the values for the exemption threshold keep pace with the CPI–W (Regulation M Adjustment Calculation Rule).8 The Regulation M Adjustment Calculation Rule memorialized the policy that, if there is no annual percentage increase in the CPI–W, the Board and Bureau will not adjust the exemption threshold from the prior year. The Regulation M Adjustment Calculation Rule also provided that, in years following a year in which the exemption threshold was not adjusted because there was a decrease in the CPI–W from the previous year, the threshold is calculated by applying the annual percentage change in the CPI–W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI–W had been taken into account. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly; if the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted, after rounding. II. 2019 Adjustment and Commentary Revision Effective January 1, 2019, the exemption threshold amount is increased from $55,800 to $57,200. This is based on the CPI–W in effect on June 1, 2018, which was reported on May 10, 2018. The Bureau of Labor Statistics publishes consumer-based indices monthly, but does not report a CPI change on June 1; adjustments are reported in the middle of the prior month. The CPI–W is a subset of the CPI–U index (based on all urban consumers) and represents approximately 29 percent of the U.S. population. The CPI–W reported on May 10, 2018 reflects a 2.6 percent increase in the CPI–W from April 2017 to April 2018. Accordingly, the 2.6 percent increase in the CPI–W from April 2017 to April 2018 results in an exemption threshold amount of $57,200. The Board and the Bureau are revising the commentaries to their respective regulations to add new comment 2(e)– 11.x to state that, from January 1, 2019 through December 31, 2019, the threshold amount is $57,200. These revisions are effective January 1, 2019. 8 See E:\FR\FM\23NOR1.SGM 81 FR 86256 (Nov. 30, 2016). 23NOR1 59276 Federal Register / Vol. 83, No. 226 / Friday, November 23, 2018 / Rules and Regulations III. Regulatory Analysis 12 CFR Part 1013 2(e) Consumer Lease Administrative Procedure Act Advertising, Consumer leasing, Reporting and recordkeeping requirements, Truth in lending. * Under the Administrative Procedure Act, notice and opportunity for public comment are not required if the Board and the Bureau find that notice and public comment are impracticable, unnecessary, or contrary to the public interest.9 The amendments in this rule are technical and apply the method previously set forth in the Board Final Threshold Rules and the Regulation M Adjustment Calculation Rule. For these reasons, the Board and the Bureau have determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendments are adopted in final form. Regulatory Flexibility Act Authority and Issuance For the reasons set forth in the preamble, the Board amends Regulation M, 12 CFR part 213, as set forth below: PART 213—CONSUMER LEASING (REGULATION M) 1. The authority citation for part 213 continues to read as follows: ■ Authority: 15 U.S.C. 1604 and 1667f; Pub. L. 111–203 section 1100E, 124 Stat. 1376. Paperwork Reduction Act Bureau Congressional Review Act Statement List of Subjects RIN 7100–AF25 * Advertising, Consumer leasing, Consumer protection, Federal Reserve System, Reporting and recordkeeping requirements. U.S.C. 553(b)(B). 10 5 U.S.C. 603 and 604. 11 44 U.S.C. 3506; 5 CFR part 1320. 16:13 Nov 21, 2018 * * * Section 213.2—Definitions * * * * BUREAU OF CONSUMER FINANCIAL PROTECTION For the reasons set forth in the preamble, the Bureau amends Regulation M, 12 CFR part 1013, as set forth below: PART 1013—CONSUMER LEASING (REGULATION M) 3. The authority citation for part 1013 continues to read as follows: ■ Authority: 15 U.S.C. 1604 and 1667f; Pub. L. 111–203 section 1100E, 124 Stat. 1376. 4. In Supplement I to part 1013, under Section 1013.2—Definitions, under 2(e)—Consumer Lease, paragraph 11.x is added to read as follows: Supplement I to Part 1013—Official Interpretations Jkt 247001 * * * Section 1013.2—Definitions * PO 00000 * * Frm 00008 * Fmt 4700 * Sfmt 4700 [Docket No. R–1633] BUREAU OF CONSUMER FINANCIAL PROTECTION RIN 3170–AA90 * * * * 11. * * * x. From January 1, 2019 through December 31, 2019, the threshold amount is $57,200. * * * * * * 12 CFR Part 226 12 CFR Part 1026 * 2(e) Consumer Lease * 95 VerDate Sep<11>2014 * ■ 12 CFR Part 213 BILLING CODE 4810–AM–P; 6210–01–P Supplement I to Part 213—Official Staff Interpretations Authority and Issuance 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 U.S. Senate, the U.S. 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). [FR Doc. 2018–25396 Filed 11–21–18; 8:45 am] FEDERAL RESERVE SYSTEM * In accordance with the Paperwork Reduction Act of 1995,11 the agencies reviewed this final rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule. By order of the Board of Governors of the Federal Reserve System, under delegated authority, November 7, 2018. Ann E. Misback, Secretary of the Board. Dated: November 9, 2018. Mick Mulvaney, Acting Director, Bureau of Consumer Financial Protection. 2. In Supplement I to Part 213, under Section 213.2—Definitions, under 2(e) Consumer Lease, paragraph 11.x is added to read as follows: ■ The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required.10 As noted previously, the agencies have determined that it is unnecessary to publish a general notice of proposed rulemaking for this joint final rule. Accordingly, the RFA’s requirements relating to an initial and final regulatory flexibility analysis do not apply. amozie on DSK3GDR082PROD with RULES BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM * * * * 11. * * * x. From January 1, 2019 through December 31, 2019, the threshold amount is $57,200. * * * * * Truth in Lending (Regulation Z) Board of Governors of the Federal Reserve System (Board); and Bureau of Consumer Financial Protection (Bureau). ACTION: Final rules, official interpretations and commentary. AGENCY: The Board and the Bureau are publishing final rules amending the official interpretations and commentary for the agencies’ regulations that implement the Truth in Lending Act (TILA). The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended TILA by requiring that the dollar threshold for exempt consumer credit transactions be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W). If there is no annual percentage increase in the CPI– W, the Board and the Bureau will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, the threshold is calculated by applying the annual percentage change in the CPI–W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI–W had been taken into account. SUMMARY: E:\FR\FM\23NOR1.SGM 23NOR1

Agencies

[Federal Register Volume 83, Number 226 (Friday, November 23, 2018)]
[Rules and Regulations]
[Pages 59274-59276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25396]


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FEDERAL RESERVE SYSTEM

12 CFR Part 213

[Docket No. R-1632]
RIN 7100-AF24

BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1013

RIN 3170-AA89


Consumer Leasing (Regulation M)

AGENCY:  Board of Governors of the Federal Reserve System (Board); and 
Bureau of Consumer Financial Protection (Bureau).

ACTION: Final rules, official interpretations and commentary.

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SUMMARY: The Board and the Bureau are finalizing amendments to the 
official interpretations and commentary for the agencies' regulations 
that implement the Consumer Leasing Act (CLA). The Dodd-Frank Wall 
Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the 
CLA by requiring that the dollar threshold for exempt consumer leases 
be adjusted annually by the annual percentage increase in the Consumer 
Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If 
there is no annual percentage increase in the CPI-W, the Board and the 
Bureau will not adjust this exemption threshold from the prior year. 
However, in years following a year in which the exemption threshold was 
not adjusted, the threshold is calculated by applying the annual 
percentage change in the CPI-W to the dollar amount that would have 
resulted, after rounding, if the decreases and any subsequent increases 
in the CPI-W had been taken into account. Based on the annual 
percentage increase in the CPI-W as of June 1, 2018, the exemption 
threshold will increase from $55,800 to $57,200 effective January 1, 
2019.

[[Page 59275]]

    Because the Dodd-Frank Act also requires similar adjustments in the 
Truth in Lending Act's threshold for exempt consumer credit 
transactions, the Board and the Bureau are making similar amendments to 
each of their respective regulations implementing the Truth in Lending 
Act elsewhere in this issue of the Federal Register.

DATES: This final rule is effective January 1, 2019.

FOR FURTHER INFORMATION CONTACT: 
    Board: Vivian W. Wong, Senior Counsel, Division of Consumer and 
Community Affairs, Board of Governors of the Federal Reserve System, at 
(202) 452-3667; for users of Telecommunications Device for the Deaf 
(TDD) only, contact (202) 263-4869.
    Bureau: Shelley Thompson, Counsel, Office of Regulations, Bureau of 
Consumer Financial Protection, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    The Dodd-Frank Wall Street Reform and Consumer Protection Act of 
2010 (Dodd-Frank Act) increased the threshold in the Consumer Leasing 
Act (CLA) for exempt consumer leases, and the threshold in the Truth in 
Lending Act (TILA) for exempt consumer credit transactions,\1\ from 
$25,000 to $50,000, effective July 21, 2011.\2\ In addition, the Dodd-
Frank Act requires that, on and after December 31, 2011, these 
thresholds be adjusted annually for inflation by the annual percentage 
increase in the Consumer Price Index for Urban Wage Earners and 
Clerical Workers (CPI-W), as published by the Bureau of Labor 
Statistics. In April 2011, the Board issued a final rule amending 
Regulation M (which implements the CLA) consistent with these 
provisions of the Dodd-Frank Act, along with a similar final rule 
amending Regulation Z (which implements TILA) (collectively, the Board 
Final Threshold Rules).\3\
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    \1\ Although consumer credit transactions above the threshold 
are generally exempt, loans secured by real property or by personal 
property used or expected to be used as the principal dwelling of a 
consumer and private education loans are covered by TILA regardless 
of the loan amount. See 12 CFR 226.3(b)(1)(i) (Board) and 12 CFR 
1026.3(b)(1)(i) (Bureau).
    \2\ Public Law 111-203, section 1100E, 124 Stat. 1376, 2111 
(2010).
    \3\ 76 FR 18349 (Apr. 4, 2011); 76 FR 18354 (Apr. 4, 2011).
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    Title X of the Dodd-Frank Act transferred rulemaking authority for 
a number of consumer financial protection laws from the Board to the 
Bureau, effective July 21, 2011. In connection with this transfer of 
rulemaking authority, the Bureau issued its own Regulation M 
implementing the CLA, 12 CFR part 1013, substantially duplicating the 
Board's Regulation M.\4\ Although the Bureau has the authority to issue 
rules to implement the CLA for most entities, the Board retains 
authority to issue rules under the CLA for certain motor vehicle 
dealers covered by section 1029(a) of the Dodd-Frank Act, and the 
Board's Regulation M continues to apply to those entities.\5\
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    \4\ See 76 FR 78500 (Dec. 19, 2011); 81 FR 25323 (April 28, 
2016).
    \5\ Section 1029(a) of the Dodd-Frank Act states: ``Except as 
permitted in subsection (b), the Bureau may not exercise any 
rulemaking, supervisory, enforcement, or any other 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.'' 12 U.S.C. 5519(a). Section 1029(b) of the 
Dodd-Frank Act states: ``Subsection (a) shall not apply to any 
person, to the extent that such person (1) provides consumers with 
any services related to residential or commercial mortgages or self-
financing transactions involving real property; (2) operates a line 
of business (A) that involves the extension of retail credit or 
retail leases involving motor vehicles; and (B) in which (i) the 
extension of retail credit or retail leases are provided directly to 
consumers; and (ii) the contract governing such extension of retail 
credit or retail leases is not routinely assigned to an unaffiliated 
third party finance or leasing source; or (3) offers or provides a 
consumer financial product or service not involving or related to 
the sale, financing, leasing, rental, repair, refurbishment, 
maintenance, or other servicing of motor vehicles, motor vehicle 
parts, or any related or ancillary product or service.'' 12 U.S.C. 
5519(b).
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    The Board's and the Bureau's regulations,\6\ and their accompanying 
commentaries, provide that the exemption threshold will be adjusted 
annually effective January 1 of each year based on any annual 
percentage increase in the CPI-W that was in effect on the preceding 
June 1. They further provide that any increase in the threshold amount 
will be rounded to the nearest $100 increment. For example, if the 
annual percentage increase in the CPI-W would result in a $950 increase 
in the threshold amount, the threshold amount will be increased by 
$1,000. However, if the annual percentage increase in the CPI-W would 
result in a $949 increase in the threshold amount, the threshold amount 
will be increased by $900.\7\ Since 2011, the Board and the Bureau have 
adjusted the Regulation M exemption threshold annually, in accordance 
with these rules.
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    \6\ 12 CFR 213.2(e)(1) (Board) and 12 CFR 1013.2(e)(1) (Bureau).
    \7\ See comments 2(e)-9 in Supplements I of 12 CFR parts 213 and 
1013.
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    On November 30, 2016, the Board and the Bureau published a final 
rule in the Federal Register to memorialize the calculation method used 
by the agencies each year to adjust the exemption threshold to ensure 
that, as contemplated by section 1100E(b) of the Dodd-Frank Act, the 
values for the exemption threshold keep pace with the CPI-W (Regulation 
M Adjustment Calculation Rule).\8\ The Regulation M Adjustment 
Calculation Rule memorialized the policy that, if there is no annual 
percentage increase in the CPI-W, the Board and Bureau will not adjust 
the exemption threshold from the prior year. The Regulation M 
Adjustment Calculation Rule also provided that, in years following a 
year in which the exemption threshold was not adjusted because there 
was a decrease in the CPI-W from the previous year, the threshold is 
calculated by applying the annual percentage change in the CPI-W to the 
dollar amount that would have resulted, after rounding, if the 
decreases and any subsequent increases in the CPI-W had been taken into 
account. If the resulting amount calculated, after rounding, is greater 
than the current threshold, then the threshold effective January 1 the 
following year will increase accordingly; if the resulting amount 
calculated, after rounding, is equal to or less than the current 
threshold, then the threshold effective January 1 the following year 
will not change, but future increases will be calculated based on the 
amount that would have resulted, after rounding.
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    \8\ See 81 FR 86256 (Nov. 30, 2016).
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II. 2019 Adjustment and Commentary Revision

    Effective January 1, 2019, the exemption threshold amount is 
increased from $55,800 to $57,200. This is based on the CPI-W in effect 
on June 1, 2018, which was reported on May 10, 2018. The Bureau of 
Labor Statistics publishes consumer-based indices monthly, but does not 
report a CPI change on June 1; adjustments are reported in the middle 
of the prior month. The CPI-W is a subset of the CPI-U index (based on 
all urban consumers) and represents approximately 29 percent of the 
U.S. population. The CPI-W reported on May 10, 2018 reflects a 2.6 
percent increase in the CPI-W from April 2017 to April 2018. 
Accordingly, the 2.6 percent increase in the CPI-W from April 2017 to 
April 2018 results in an exemption threshold amount of $57,200. The 
Board and the Bureau are revising the commentaries to their respective 
regulations to add new comment 2(e)-11.x to state that, from January 1, 
2019 through December 31, 2019, the threshold amount is $57,200. These 
revisions are effective January 1, 2019.

[[Page 59276]]

III. Regulatory Analysis

Administrative Procedure Act

    Under the Administrative Procedure Act, notice and opportunity for 
public comment are not required if the Board and the Bureau find that 
notice and public comment are impracticable, unnecessary, or contrary 
to the public interest.\9\ The amendments in this rule are technical 
and apply the method previously set forth in the Board Final Threshold 
Rules and the Regulation M Adjustment Calculation Rule. For these 
reasons, the Board and the Bureau have determined that publishing a 
notice of proposed rulemaking and providing opportunity for public 
comment are unnecessary. Therefore, the amendments are adopted in final 
form.
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    \9\ 5 U.S.C. 553(b)(B).
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Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking 
where a general notice of proposed rulemaking is not required.\10\ As 
noted previously, the agencies have determined that it is unnecessary 
to publish a general notice of proposed rulemaking for this joint final 
rule. Accordingly, the RFA's requirements relating to an initial and 
final regulatory flexibility analysis do not apply.
---------------------------------------------------------------------------

    \10\ 5 U.S.C. 603 and 604.
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Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995,\11\ the 
agencies reviewed this final rule. No collections of information 
pursuant to the Paperwork Reduction Act are contained in the final 
rule.
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    \11\ 44 U.S.C. 3506; 5 CFR part 1320.
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Bureau Congressional Review Act Statement

    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 U.S. Senate, the U.S. 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

12 CFR Part 213

    Advertising, Consumer leasing, Consumer protection, Federal Reserve 
System, Reporting and recordkeeping requirements.

12 CFR Part 1013

    Advertising, Consumer leasing, Reporting and recordkeeping 
requirements, Truth in lending.

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Authority and Issuance

    For the reasons set forth in the preamble, the Board amends 
Regulation M, 12 CFR part 213, as set forth below:

PART 213--CONSUMER LEASING (REGULATION M)

0
1. The authority citation for part 213 continues to read as follows:

    Authority: 15 U.S.C. 1604 and 1667f; Pub. L. 111-203 section 
1100E, 124 Stat. 1376.


0
2. In Supplement I to Part 213, under Section 213.2--Definitions, under 
2(e) Consumer Lease, paragraph 11.x is added to read as follows:

Supplement I to Part 213--Official Staff Interpretations

* * * * *

Section 213.2--Definitions

* * * * *

2(e) Consumer Lease

* * * * *
    11. * * *
    x. From January 1, 2019 through December 31, 2019, the threshold 
amount is $57,200.
* * * * *

BUREAU OF CONSUMER FINANCIAL PROTECTION

Authority and Issuance

    For the reasons set forth in the preamble, the Bureau amends 
Regulation M, 12 CFR part 1013, as set forth below:

PART 1013--CONSUMER LEASING (REGULATION M)

0
3. The authority citation for part 1013 continues to read as follows:

    Authority: 15 U.S.C. 1604 and 1667f; Pub. L. 111-203 section 
1100E, 124 Stat. 1376.


0
4. In Supplement I to part 1013, under Section 1013.2--Definitions, 
under 2(e)--Consumer Lease, paragraph 11.x is added to read as follows:

Supplement I to Part 1013--Official Interpretations

* * * * *

Section 1013.2--Definitions

* * * * *

2(e) Consumer Lease

* * * * *
    11. * * *
    x. From January 1, 2019 through December 31, 2019, the threshold 
amount is $57,200.
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, under delegated authority, November 7, 2018.
Ann E. Misback,
Secretary of the Board.
    Dated: November 9, 2018.
Mick Mulvaney,
Acting Director, Bureau of Consumer Financial Protection.
[FR Doc. 2018-25396 Filed 11-21-18; 8:45 am]
BILLING CODE 4810-AM-P; 6210-01-P