Truth in Lending (Regulation Z) Annual Threshold Adjustments (Credit Cards, HOEPA, and Qualified Mortgages), 50944-50950 [2020-15900]
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Federal Register / Vol. 85, No. 161 / Wednesday, August 19, 2020 / Rules and Regulations
involved a rigorous, formal, and
documented evaluation using objective
criteria and qualified and independent
reviewers to make a judgment as to the
technical/scientific/business merit, the
actual or anticipated results, and the
productivity and management
effectiveness of programs and/or
projects. The ‘‘Energy Conservation
Standards Rulemaking Peer Review
Report,’’ dated February 2007, has been
disseminated and is available at the
following website: https://
www.energy.gov/eere/buildings/peerreview. Because available data, models,
and technological understanding have
changed since 2007, DOE has engaged
the National Academies of Sciences,
Engineering, and Medicine to undertake
a new peer review of its analytical
methodologies, as noted above.
N. Congressional Notification
As required by 5 U.S.C. 801, DOE will
submit to Congress a report regarding
the issuance of this final rule prior to
the effective date set forth at the outset
of this rulemaking. The report will state
that it has been determined that the rule
is not a ‘‘major rule’’ as defined by 5
U.S.C. 801(2).
V. Approval of the Office of the
Secretary
The Secretary of Energy has approved
publication of this final rule.
List of Subjects in 10 CFR Part 430
Administrative practice and
procedure, Confidential business
information, Energy conservation,
Household appliances, Imports,
Incorporation by reference,
Intergovernmental relations, Small
businesses, Test procedures.
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Signing Authority
This document of the Department of
Energy was signed on July 17, 2020, by
Daniel R Simmons, Assistant Secretary
for Energy Efficiency, Energy Efficiency
and Renewable Energy, pursuant to
delegated authority from the Secretary
of Energy. That document with the
original signature and date is
maintained by DOE. For administrative
purposes only, and in compliance with
requirements of the Office of the Federal
Register, the undersigned DOE Federal
Register Liaison Officer has been
authorized to sign and submit the
document in electronic format for
publication, as an official document of
the Department of Energy. This
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the legal effect of this document upon
publication in the Federal Register.
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Signed in Washington, DC, on July 20,
2020.
Treena V. Garrett
Federal Register Liaison Officer, U.S.
Department of Energy.
For the reasons stated in the
preamble, DOE is amending part 430 of
title 10 of the Code of Federal
Regulations as set forth below:
PART 430—ENERGY CONSERVATION
PROGRAM FOR CONSUMER
PRODUCTS
1. The authority citation for part 430
continues to read as follows:
■
Authority: 42 U.S.C. 6291–6309; 28 U.S.C.
2461 note.
2. In appendix A to subpart C of part
430, revise paragraph 7(e) to read as
follows:
■
Appendix A to Subpart C of Part 430—
Procedures, Interpretations and
Policies for Consideration of New or
Revised Energy Conservation Standards
for Consumer Products
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7. Policies on Selection of Standards
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(e)(1) Selection of proposed standard.
Based on the results of the analysis of
impacts, DOE will select a standard level to
be proposed for public comment in the
NOPR. As required under 42 U.S.C.
6295(o)(2)(A), any new or revised standard
must be designed to achieve the maximum
improvement in energy efficiency that is
determined to be both technologically
feasible and economically justified.
(2) Statutory policies. The fundamental
policies concerning the selection of standards
include:
(i) A trial standard level will not be
proposed or promulgated if the Department
determines that it is not both technologically
feasible and economically justified. (42
U.S.C. 6295(o)(2)(A) and 42 U.S.C. (o)(3)(B))
For a trial standard level to be economically
justified, the Secretary must determine that
the benefits of the standard exceed its
burdens by, to the greatest extent practicable,
considering the factors listed in 42 U.S.C.
6295(o)(2)(B)(i). In making such a
determination, the Secretary shall compare
the benefits and burdens of the standard
against the benefits and burdens of the
baseline case (‘‘no new standards’’ case) and
all other trial standard levels under
consideration. This comparative analysis
includes assessing the incremental changes
in costs and benefits for each TSL’s benefits
and burdens relative to other TSLs and as
part of a holistic analysis across all TSLs. 42
U.S.C. 6295(o)(2)(B). The Secretary will also
consider, consistent with the statute, other
economic measures such as life-cycle cost
analysis, manufacturer impact analysis, and
other relevant measures. A standard level is
subject to a rebuttable presumption that it is
economically justified if the payback period
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is three years or less. (42 U.S.C.
6295(o)(2)(B)(iii))
(ii) If the Department determines that
interested persons have established by a
preponderance of the evidence that a
standard level is likely to result in the
unavailability in the United States of any
covered product/equipment type (or class)
with performance characteristics (including
reliability), features, sizes, capacities, and
volumes that are substantially the same as
products generally available in the U.S. at the
time of the determination, then that standard
level will not be proposed. (42 U.S.C.
6295(o)(4))
(iii) If the Department determines that a
standard level would not result in significant
conservation of energy, that standard level
will not be proposed. (42 U.S.C.
6295(o)(3)(B))
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[FR Doc. 2020–15967 Filed 8–18–20; 8:45 am]
BILLING CODE 6450–01–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:
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, 2020.
DATES: This final rule is effective
January 1, 2021.
FOR FURTHER INFORMATION CONTACT:
Rachel Ross, Attorney-Advisor; Jaydee
DiGiovanni, Counsel, Office of
Regulations, at (202) 435–7700. If you
require this document in an alternative
SUMMARY:
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electronic format, please contact CFPB_
Accessibility@cfpb.gov.
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 2021. For open-end
consumer credit plans under the CARD
Act amendments to TILA, the adjusted
dollar amount in 2021 for the safe
harbor for a first violation penalty fee
will remain unchanged at $29 and the
adjusted dollar amount for the safe
harbor for a subsequent violation
penalty fee will also remain unchanged
at $40. For HOEPA loans, the adjusted
total loan amount threshold for highcost mortgages in 2021 will be $22,052.
The adjusted points-and-fees dollar
trigger for high-cost mortgages in 2021
will be $1,103. For qualified mortgages,
which provide creditors with certain
protections from liability under the
Ability-to-Repay Rule, the maximum
thresholds for total points and fees in
2021 will be 3 percent of the total loan
amount for a loan greater than or equal
to $110,260; $3,308 for a loan amount
greater than or equal to $66,156 but less
than $110,260; 5 percent of the total
loan amount for a loan greater than or
equal to $22,052 but less than $66,156;
$1,103 for a loan amount greater than or
equal to $13,783 but less than $22,052;
and 8 percent of the total loan amount
for a loan amount less than $13,783.
SUPPLEMENTARY INFORMATION:
I. Background
A. Credit Card Annual Adjustments
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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 creditors to
disclose any minimum interest charge
exceeding $1.00 that could be imposed
during a billing cycle. These provisions
also state that, for open-end consumer
credit plans, the minimum interest
charge thresholds 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
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Workers (CPI–W) for this adjustment.1 If
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. This adjustment
analysis is based on the CPI–W index in
effect on June 1, 2020, which was
reported by BLS on May 12, 2020,2 and
reflects the percentage change from
April 2019 to April 2020. The
adjustment analysis accounts for a 0.1
percent increase in the CPI–W from
April 2019 to April 2020. This increase
in the CPI–W when applied to the
current amounts in §§ 1026.6(b)(2)(iii)
and 1026.60(b)(3) does 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, which was added to TILA by
the CARD Act.3 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. If 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, if 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 2021
adjustment analysis is based on the CPI–
W index in effect on June 1, 2020,
which was reported by BLS on May 12,
2020, and reflects the percentage change
from April 2019 to April 2020. The
permissible fee thresholds of $29 for a
first violation penalty fee and $40 for a
subsequent violation will remain
1 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.
2 BLS publishes Consumer Price Indices monthly,
usually in the middle of each calendar month.
Thus, the CPI–W reported on May 12, 2020, was the
most current as of June 1, 2020.
3 Credit Card Accountability Responsibility and
Disclosure Act of 2009, Public Law 111–24, 123
Stat. 1734 (2009).
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unchanged and reflect a 0.1 percent
increase in the CPI–W from April 2019
to April 2020 with the resulting
thresholds 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,4 which amended the HOEPA
points-and-fees coverage test. Under
§ 1026.32(a)(1)(ii)(A) and (B), in
assessing whether a transaction is a
high-cost mortgage due to points and
fees the creditor is charging, 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 the preceding June 1; the Bureau
uses the CPI–U for this adjustment.5 The
2021 adjustment is based on the CPI–U
index in effect on June 1, which was
reported by BLS on May 12, 2020, and
reflects the percentage change from
April 2019 to April 2020. The
adjustment to $22,052 here reflects a 0.3
percent increase in the CPI–U index
from April 2019 to April 2020 and is
rounded to the nearest whole dollar
amount for ease of compliance.
Under § 1026.32(a)(1)(ii)(B) the
HOEPA points-and-fees threshold 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 the preceding June 1;
the Bureau uses the CPI–U for this
adjustment. The 2021 adjustment is
based on the CPI–U index in effect on
June 1, 2020, which was reported by
BLS on May 12, 2020, and reflects the
percentage change from April 2019 to
April 2020. The adjustment to $1,103
here reflects a 0.3 percent increase in
the CPI–U index from April 2019 to
April 2020 and is rounded to the nearest
whole dollar amount 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
4 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010).
5 The CPI–U is based on all urban consumers and
represents approximately 93 percent of the U.S.
population.
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Federal Register / Vol. 85, No. 161 / Wednesday, August 19, 2020 / Rules and Regulations
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 the preceding June 1.
The 2021 adjustment is based on the
CPI–U index in effect on June 1, 2020,
which was reported by BLS on May 12,
2020, and reflects the percentage change
from April 2019 to April 2020. The
adjustment to the 2020 figures 6 being
adopted here reflects a 0.3 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 2021. Accordingly,
the Bureau is not amending these
sections of Regulation Z.
Safe Harbor Penalty Fees—
§ 1026.52(b)(1)(ii)(A) and (B)
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Effective January 1, 2021, the
permissible fee threshold amounts did
not increase from the amounts for 2020
and remain at $29 for
§ 1026.52(b)(1)(ii)(A) and $40 for
§ 1026.52(b)(1)(ii)(B). Accordingly, the
Bureau is leaving § 1026.52(b)(1)(ii)(A)
and (B) unchanged. The Bureau is
amending comment 52(b)(1)(ii)–2.i to
6 For 2021, 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 $110,260; $3,308 for
a loan amount greater than or equal to $66,156 but
less than $110,260; 5 percent of the total loan
amount for loans greater than or equal to $22,052
but less than $66,156; $1,103 for a loan amount
greater than or equal to $13,783 but less than
$22,052; or 8 percent of the total loan amount for
loans less than $13,783.
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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, 2021, for purposes
of determining under § 1026.32(a)(1)(ii)
the points-and-fees coverage test under
HOEPA to which a transaction is
subject, the total loan amount threshold
is $22,052, and the adjusted points-andfees dollar trigger under
§ 1026.32(a)(1)(ii)(B) is $1,103. If the
total loan amount for a transaction is
$22,052 or more, and the points-andfees amount exceeds 5 percent of the
total loan amount, the transaction is a
high-cost mortgage. If the total loan
amount for a transaction is less than
$22,052, and the points-and-fees
amount exceeds the lesser of the
adjusted points-and-fees dollar trigger of
$1,103 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 2021 the new points-and-fees
dollar trigger and the new loan amount
dollar threshold, respectively.
C. Qualified Mortgages Annual
Threshold Adjustments
Effective January 1, 2021, 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 $110,260; $3,308 for a loan
amount greater than or equal to $66,156
but less than $110,260; 5 percent of the
total loan amount for loans greater than
or equal to $22,052 but less than
$66,156; $1,103 for a loan amount
greater than or equal to $13,783 but less
than $22,052; or 8 percent of the total
loan amount for loans less than $13,783.
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 2021.
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
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.8
C. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995,9 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).
E. Signing Authority
The Acting Associate Director for
Research, Markets and Regulations,
having reviewed and approved this
document, is delegating the authority to
electronically sign this document to
Laura Galban, a Bureau Federal Register
Liaison, for purposes of publication in
the Federal Register.
List of Subjects in 12 CFR Part 1026
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.7
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.vii and –3.vii, 43(e)(3)(ii)–
1.vii, and 52(b)(1)(ii)–2.i.H in
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 Bureau amends
Regulation Z, 12 CFR part 1026, as set
forth below:
85
75
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U.S.C. 553(b)(B).
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U.S.C. 603(a), 604(a).
U.S.C. 3506; 5 CFR part 1320.
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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.
2. In Supplement I to Part 1026:
a. Under Section 1026.32—
Requirements for High-Cost Mortgages,
revise Paragraph 32(a)(1)(ii).
■ b. Under Section 1026.43—Minimum
Standards for Transactions Secured by
a Dwelling, revise Paragraph 43(e)(3)(ii).
■ c. Under Section 1026.52—
Limitations on Fees, revise 52(b)(1)(ii)
Safe harbors.
The revisions read as follows:
SUPPLEMENT I TO PART 1026—
OFFICIAL INTERPRETATIONS
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Section 1026.32—Requirements for
High-Cost Mortgages
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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 0.2
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.
vi. For 2020, $1,099, reflecting a 2
percent increase in the CPI–U from June
2018 to June 2019, rounded to the
nearest whole dollar.
vii. For 2021, $1,103, reflecting a 0.3
percent increase in the CPI–U from June
2019 to June 2020, 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
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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.
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
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50947
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.
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.
vi. For 2020, $21,980, reflecting a 2
percent increase in the CPI–U from June
2018 to June 2019, rounded to the
nearest whole dollar.
vii. For 2021, $22,052 reflecting a 0.3
percent increase in the CPI–U from June
2019 to June 2020, 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
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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 0.2 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.
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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.
vi. For 2020, 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 transaction’s total points and
fees do not exceed:
A. For a loan amount greater than or
equal to $109,898: 3 percent of the total
loan amount;
B. For a loan amount greater than or
equal to $65,939 but less than $109,898:
$3,297;
C. For a loan amount greater than or
equal to $21,980 but less than $65,939:
5 percent of the total loan amount;
D. For a loan amount greater than or
equal to $13,737 but less than $21,980:
$1,099;
E. For a loan amount less than
$13,737: 8 percent of the total loan
amount.
vii. For 2021, reflecting a 0.3 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:
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A. For a loan amount greater than or
equal to $110,260: 3 percent of the total
loan amount;
B. For a loan amount greater than or
equal to $66,156 but less than $110,260:
$3,308;
C. For a loan amount greater than or
equal to $22,052 but less than $66,156:
5 percent of the total loan amount;
D. For a loan amount greater than or
equal to $13,783 but less than $22,052:
$1,103;
E. For a loan amount less than
$13,783: 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 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
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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
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15:52 Aug 18, 2020
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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, § 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
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50949
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 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
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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.
G. Card issuers were permitted to
impose a fee for violating the terms of
an agreement if the fee did not exceed
$28 under § 1026.52(b)(1)(ii)(A) and $39
under § 1026.52(b)(1)(ii)(B), through
December 31, 2019.
H. Card issuers were permitted to
impose a fee for violating the terms of
an agreement if the fee did not exceed
$29 under § 1026.52(b)(1)(ii)(A) and $40
under § 1026.52(b)(1)(ii)(B), through
December 31, 2020.
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 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
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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.
*
*
*
*
*
Dated: July 17, 2020.
Laura Galban,
Federal Register Liaison, Bureau of Consumer
Financial Protection.
[FR Doc. 2020–15900 Filed 8–18–20; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 882 and 895
[Docket No. FDA–2016–N–1111]
Medical Devices; Petition for an
Administrative Stay of Action:
Electrical Stimulation Devices for SelfInjurious or Aggressive Behavior
AGENCY:
Food and Drug Administration,
HHS.
Final rule; notification of
administrative stay.
ACTION:
The Food and Drug
Administration (FDA or Agency) is
providing notice of a stay of the
effectiveness of provisions for devices in
use on specific individuals who have or
would need to obtain a physiciandirected transition plan as of the date of
publication on March 6, 2020, of the
SUMMARY:
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final regulation banning electrical
stimulation devices (ESDs) for selfinjurious or aggressive behavior. FDA is
publishing this notification in response
to petitions for an administrative stay of
action in accordance with regulatory
requirements.
DATES: FDA is administratively staying
temporarily the final regulation
published on March 6, 2020 (85 FR
13312), for those devices in use on
specific individuals as described in
SUPPLEMENTARY INFORMATION. FDA will
publish a document in the Federal
Register lifting the stay or taking further
action as needed.
ADDRESSES: For access to the docket, go
to https://www.regulations.gov and
insert the docket number, found in
brackets in the heading of this
document, into the ‘‘Search’’ box and
follow the prompts and/or go to the
Dockets Management Staff, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852,
between 9 a.m. and 4 p.m., Monday
through Friday. Publicly available
submissions may be seen in the docket.
FOR FURTHER INFORMATION CONTACT:
Rebecca Nipper, Center for Devices and
Radiological Health, Food and Drug
Administration, 10903 New Hampshire
Ave., Bldg. 66, Rm. 1540, Silver Spring,
MD 20993–0002, 301–796–6527,
rebecca.nipper@fda.hhs.gov.
SUPPLEMENTARY INFORMATION: In the
Federal Register of March 6, 2020 (85
FR 13312), FDA issued a final regulation
banning electrical stimulation devices
(ESDs) for self-injurious behavior (SIB)
or aggressive behavior (AB). This final
regulation provided two operational
dates. The ban is in effect for all devices
as of April 6, 2020, 30 days after the
date of publication. However, for
devices in use on specific individuals as
of the date of publication and subject to
a physician-directed transition plan,
compliance is required on September 2,
2020, 180 days after the date of
publication of the final rule.
FDA received two requests under 21
CFR 10.35 to immediately and
indefinitely stay these dates for the final
regulation banning ESDs for SIB or AB.
The first petition, dated March 20, 2020,
is from Eckert Seamans Cherin & Mellot,
LLC on behalf of their client, the Judge
Rotenberg Educational Center, Inc. (JRC)
(see Docket No. FDA–2020–P–1166). As
described below, FDA temporarily
granted this petition (JRC petition) in
part on March 27, 2020. The second
petition, dated March 24, 2020, is from
Todd & Weld, LLP on behalf of their
clients the parents and guardians of
certain patients at JRC, as well as the
patients themselves, and the JRC Parents
and Friends Association, Inc. (see
E:\FR\FM\19AUR1.SGM
19AUR1
]]>Agencies
[Federal Register Volume 85, Number 161 (Wednesday, August 19, 2020)]
[Rules and Regulations]
[Pages 50944-50950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15900]
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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.
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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, 2020.
DATES: This final rule is effective January 1, 2021.
FOR FURTHER INFORMATION CONTACT: Rachel Ross, Attorney-Advisor; Jaydee
DiGiovanni, Counsel, Office of Regulations, at (202) 435-7700. If you
require this document in an alternative
[[Page 50945]]
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 2021. For open-end consumer credit plans under the CARD Act
amendments to TILA, the adjusted dollar amount in 2021 for the safe
harbor for a first violation penalty fee will remain unchanged at $29
and the adjusted dollar amount for the safe harbor for a subsequent
violation penalty fee will also remain unchanged at $40. For HOEPA
loans, the adjusted total loan amount threshold for high-cost mortgages
in 2021 will be $22,052. The adjusted points-and-fees dollar trigger
for high-cost mortgages in 2021 will be $1,103. For qualified
mortgages, which provide creditors with certain protections from
liability under the Ability-to-Repay Rule, the maximum thresholds for
total points and fees in 2021 will be 3 percent of the total loan
amount for a loan greater than or equal to $110,260; $3,308 for a loan
amount greater than or equal to $66,156 but less than $110,260; 5
percent of the total loan amount for a loan greater than or equal to
$22,052 but less than $66,156; $1,103 for a loan amount greater than or
equal to $13,783 but less than $22,052; and 8 percent of the total loan
amount for a loan amount less than $13,783.
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 creditors to disclose any
minimum interest charge exceeding $1.00 that could be imposed during a
billing cycle. These provisions also state that, for open-end consumer
credit plans, the minimum interest charge thresholds 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.\1\ If 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. This
adjustment analysis is based on the CPI-W index in effect on June 1,
2020, which was reported by BLS on May 12, 2020,\2\ and reflects the
percentage change from April 2019 to April 2020. The adjustment
analysis accounts for a 0.1 percent increase in the CPI-W from April
2019 to April 2020. 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) does
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).
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\1\ 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.
\2\ BLS publishes Consumer Price Indices monthly, usually in the
middle of each calendar month. Thus, the CPI-W reported on May 12,
2020, was the most current as of June 1, 2020.
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Safe Harbor Penalty Fees
Section 1026.52(b)(1)(ii)(A) and (B) of Regulation Z implements
section 149(e) of TILA, which was added to TILA by the CARD Act.\3\
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. If 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, if 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 2021 adjustment
analysis is based on the CPI-W index in effect on June 1, 2020, which
was reported by BLS on May 12, 2020, and reflects the percentage change
from April 2019 to April 2020. The permissible fee thresholds of $29
for a first violation penalty fee and $40 for a subsequent violation
will remain unchanged and reflect a 0.1 percent increase in the CPI-W
from April 2019 to April 2020 with the resulting thresholds rounded to
the nearest $1 increment.
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\3\ Credit Card Accountability Responsibility and Disclosure Act
of 2009, Public Law 111-24, 123 Stat. 1734 (2009).
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B. HOEPA Annual Threshold Adjustments
Section 1026.32(a)(1)(ii) of Regulation Z implements section 1431
of the Dodd-Frank Act,\4\ which amended the HOEPA points-and-fees
coverage test. Under Sec. 1026.32(a)(1)(ii)(A) and (B), in assessing
whether a transaction is a high-cost mortgage due to points and fees
the creditor is charging, 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 the preceding June 1; the Bureau uses the CPI-U for this
adjustment.\5\ The 2021 adjustment is based on the CPI-U index in
effect on June 1, which was reported by BLS on May 12, 2020, and
reflects the percentage change from April 2019 to April 2020. The
adjustment to $22,052 here reflects a 0.3 percent increase in the CPI-U
index from April 2019 to April 2020 and is rounded to the nearest whole
dollar amount for ease of compliance.
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\4\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, 124 Stat. 1376 (2010).
\5\ The CPI-U is based on all urban consumers and represents
approximately 93 percent of the U.S. population.
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Under Sec. 1026.32(a)(1)(ii)(B) the HOEPA points-and-fees
threshold 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 the preceding June 1; the Bureau uses the CPI-U for this
adjustment. The 2021 adjustment is based on the CPI-U index in effect
on June 1, 2020, which was reported by BLS on May 12, 2020, and
reflects the percentage change from April 2019 to April 2020. The
adjustment to $1,103 here reflects a 0.3 percent increase in the CPI-U
index from April 2019 to April 2020 and is rounded to the nearest whole
dollar amount 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
[[Page 50946]]
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 the preceding
June 1. The 2021 adjustment is based on the CPI-U index in effect on
June 1, 2020, which was reported by BLS on May 12, 2020, and reflects
the percentage change from April 2019 to April 2020. The adjustment to
the 2020 figures \6\ being adopted here reflects a 0.3 percent increase
in the CPI-U index for this period and is rounded to whole dollars for
ease of compliance.
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\6\ For 2021, 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
$110,260; $3,308 for a loan amount greater than or equal to $66,156
but less than $110,260; 5 percent of the total loan amount for loans
greater than or equal to $22,052 but less than $66,156; $1,103 for a
loan amount greater than or equal to $13,783 but less than $22,052;
or 8 percent of the total loan amount for loans less than $13,783.
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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 2021. 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, 2021, the permissible fee threshold amounts
did not increase from the amounts for 2020 and remain at $29 for Sec.
1026.52(b)(1)(ii)(A) and $40 for Sec. 1026.52(b)(1)(ii)(B).
Accordingly, the Bureau is leaving Sec. 1026.52(b)(1)(ii)(A) and (B)
unchanged. The Bureau is amending comment 52(b)(1)(ii)-2.i to preserve
a list of the historical thresholds for this provision.
B. HOEPA Annual Threshold Adjustment--Comments 32(a)(1)(ii)-1 and -3
Effective January 1, 2021, for purposes of determining under Sec.
1026.32(a)(1)(ii) the points-and-fees coverage test under HOEPA to
which a transaction is subject, the total loan amount threshold is
$22,052, and the adjusted points-and-fees dollar trigger under Sec.
1026.32(a)(1)(ii)(B) is $1,103. If the total loan amount for a
transaction is $22,052 or more, and the points-and-fees amount exceeds
5 percent of the total loan amount, the transaction is a high-cost
mortgage. If the total loan amount for a transaction is less than
$22,052, and the points-and-fees amount exceeds the lesser of the
adjusted points-and-fees dollar trigger of $1,103 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 2021 the new points-and-fees dollar
trigger and the new loan amount dollar threshold, respectively.
C. Qualified Mortgages Annual Threshold Adjustments
Effective January 1, 2021, 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 $110,260; $3,308 for a loan amount
greater than or equal to $66,156 but less than $110,260; 5 percent of
the total loan amount for loans greater than or equal to $22,052 but
less than $66,156; $1,103 for a loan amount greater than or equal to
$13,783 but less than $22,052; or 8 percent of the total loan amount
for loans less than $13,783. 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 2021.
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.\7\ 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.vii and -3.vii, 43(e)(3)(ii)-1.vii, and 52(b)(1)(ii)-
2.i.H 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.
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\7\ 5 U.S.C. 553(b)(B).
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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.\8\
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\8\ 5 U.S.C. 603(a), 604(a).
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C. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\9\ the
Bureau reviewed this final rule. No collections of information pursuant
to the Paperwork Reduction Act are contained in the final rule.
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\9\ 44 U.S.C. 3506; 5 CFR part 1320.
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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).
E. Signing Authority
The Acting Associate Director for Research, Markets and
Regulations, having reviewed and approved this document, is delegating
the authority to electronically sign this document to Laura Galban, a
Bureau Federal Register Liaison, for purposes of publication in the
Federal Register.
List of Subjects in 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 Bureau amends
Regulation Z, 12 CFR part 1026, as set forth below:
[[Page 50947]]
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.
0
2. In Supplement I to Part 1026:
0
a. Under Section 1026.32--Requirements for High-Cost Mortgages, revise
Paragraph 32(a)(1)(ii).
0
b. Under Section 1026.43--Minimum Standards for Transactions Secured by
a Dwelling, revise Paragraph 43(e)(3)(ii).
0
c. Under Section 1026.52--Limitations on Fees, revise 52(b)(1)(ii) Safe
harbors.
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 0.2 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.
vi. For 2020, $1,099, reflecting a 2 percent increase in the CPI-U
from June 2018 to June 2019, rounded to the nearest whole dollar.
vii. For 2021, $1,103, reflecting a 0.3 percent increase in the
CPI-U from June 2019 to June 2020, 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.
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.
vi. For 2020, $21,980, reflecting a 2 percent increase in the CPI-U
from June 2018 to June 2019, rounded to the nearest whole dollar.
vii. For 2021, $22,052 reflecting a 0.3 percent increase in the
CPI-U from June 2019 to June 2020, 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
[[Page 50948]]
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 0.2 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.
vi. For 2020, 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 transaction's total points and fees do
not exceed:
A. For a loan amount greater than or equal to $109,898: 3 percent
of the total loan amount;
B. For a loan amount greater than or equal to $65,939 but less than
$109,898: $3,297;
C. For a loan amount greater than or equal to $21,980 but less than
$65,939: 5 percent of the total loan amount;
D. For a loan amount greater than or equal to $13,737 but less than
$21,980: $1,099;
E. For a loan amount less than $13,737: 8 percent of the total loan
amount.
vii. For 2021, reflecting a 0.3 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 $110,260: 3 percent
of the total loan amount;
B. For a loan amount greater than or equal to $66,156 but less than
$110,260: $3,308;
C. For a loan amount greater than or equal to $22,052 but less than
$66,156: 5 percent of the total loan amount;
D. For a loan amount greater than or equal to $13,783 but less than
$22,052: $1,103;
E. For a loan amount less than $13,783: 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 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
[[Page 50949]]
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
[[Page 50950]]
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.
G. Card issuers were permitted to impose a fee for violating the
terms of an agreement if the fee did not exceed $28 under Sec.
1026.52(b)(1)(ii)(A) and $39 under Sec. 1026.52(b)(1)(ii)(B), through
December 31, 2019.
H. Card issuers were permitted to impose a fee for violating the
terms of an agreement if the fee did not exceed $29 under Sec.
1026.52(b)(1)(ii)(A) and $40 under Sec. 1026.52(b)(1)(ii)(B), through
December 31, 2020.
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 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: July 17, 2020.
Laura Galban,
Federal Register Liaison, Bureau of Consumer Financial Protection.
[FR Doc. 2020-15900 Filed 8-18-20; 8:45 am]
BILLING CODE 4810-AM-P
