Appraisals for Higher-Priced Mortgage Loans Exemption Threshold, 82931-82934 [2024-23277]
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Rules and Regulations
Federal Register
Vol. 89, No. 199
Tuesday, October 15, 2024
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 34
[Docket No. OCC–2024–0013]
RIN 1557–AF28
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R–1841]
RIN 7100 AG 82
CONSUMER FINANCIAL PROTECTION
BUREAU
12 CFR Part 1026
Appraisals for Higher-Priced Mortgage
Loans Exemption Threshold
Office of the Comptroller of the
Currency, Treasury (OCC); Board of
Governors of the Federal Reserve
System (Board); and Consumer
Financial Protection Bureau (CFPB).
ACTION: Final rules and official
interpretations.
AGENCY:
The OCC, the Board, and the
CFPB are finalizing amendments to the
official interpretations for their
regulations that implement section
129H of the Truth in Lending Act
(TILA). Section 129H of TILA
establishes special appraisal
requirements for ‘‘higher-risk
mortgages,’’ termed ‘‘higher-priced
mortgage loans’’ or ‘‘HPMLs’’ in the
agencies’ regulations. A December 2013
rulemaking exempted transactions of
$25,000 or less and required that this
loan amount be adjusted annually based
on any annual percentage increase in
the Consumer Price Index for Urban
Wage Earners and Clerical Workers
(CPI–W). Based on the CPI–W in effect
as of June 1, 2024, the exemption
threshold will increase from $32,400 to
$33,500, effective January 1, 2025.
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SUMMARY:
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This final rule is effective
January 1, 2025.
DATES:
FOR FURTHER INFORMATION CONTACT:
OCC: MaryAnn Nash, Counsel, Chief
Counsel’s Office, at (202) 649–6287. If
you are deaf, hard of hearing, or have a
speech disability, please dial 7–1–1 to
access telecommunications relay
services.
Board: Lorna M. Neill, Senior
Counsel, Division of Consumer and
Community Affairs, Board of Governors
of the Federal Reserve System, at (202)
452–3667. For users of TTY–TRS, please
call 711 from any telephone, anywhere
in the United States.
CFPB: George Karithanom, Regulatory
Implementation & Guidance Program
Analyst, Office of Regulations, at 202–
435–7700 or at: https://reginquiries.
consumerfinance.gov/. If you require
this document in an alternative
electronic format, please contact CFPB_
Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010
(Dodd-Frank Act) amended TILA to add
special appraisal requirements for
‘‘higher-risk mortgages.’’ 1 In January
2013, the OCC, the Board, the CFPB, the
Federal Deposit Insurance Corporation
(FDIC), the National Credit Union
Administration (NCUA), and the
Federal Housing Finance Agency
(FHFA) (collectively, Agencies) jointly
issued a final rule implementing these
requirements and adopted the term
‘‘higher-priced mortgage loan’’ (HPML)
instead of ‘‘higher-risk mortgage’’
(January 2013 Final Rule).2 In July 2013,
the Agencies proposed additional
exemptions from the January 2013 Final
Rule.3 In December 2013, the Agencies
issued a supplemental final rule with
additional exemptions from the January
2013 Final Rule (December 2013
Supplemental Final Rule).4 Among
other exemptions, the Agencies adopted
an exemption from the new HPML
appraisal rules for transactions of
$25,000 or less, to be adjusted annually
for inflation.
1 Public Law 111–203, sec. 1471, 124 Stat. 1376,
2185–87 (2010), codified at TILA sec. 129H, 15
U.S.C. 1639h.
2 78 FR 10368 (Feb. 13, 2013).
3 78 FR 48548 (Aug. 8, 2013).
4 78 FR 78520 (Dec. 26, 2013).
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The OCC’s, Board’s, and CFPB’s
versions of the January 2013 Final Rule
and December 2013 Supplemental Final
Rule and corresponding official
interpretations are substantively
identical. The FDIC, NCUA, and FHFA
adopted the CFPB’s version of the
regulations under the January 2013
Final Rule and December 2013
Supplemental Final Rule.5
The OCC’s, Board’s, and CFPB’s
regulations,6 and their accompanying
official interpretations,7 provide that the
exemption threshold for smaller loans
will be adjusted effective January 1 of
each year based on any annual
percentage increase in the CPI–W that
was in effect on the preceding June 1.
Any increase in the threshold amount
will be rounded to the nearest $100
increment. For example, if the annual
percentage increase in the CPI–W would
result in a $950 increase in the
threshold amount, the threshold amount
will be increased by $1,000. However, if
the annual percentage increase in the
CPI–W would result in a $949 increase
in the threshold amount, the threshold
amount will be increased by $900. If
there is no annual percentage increase
in the CPI–W, the OCC, the Board, and
the CFPB will not adjust the threshold
amounts from the prior year.8
On November 30, 2016, the OCC, the
Board, and the CFPB published a final
rule in the Federal Register to
memorialize the calculation method
used by the OCC, the Board, and the
CFPB each year to adjust the exemption
threshold to ensure that the values for
the exemption threshold keep pace with
the CPI–W (HPML Small Dollar
Adjustment Calculation Rule).9 The
HPML Small Dollar Adjustment
Calculation Rule memorialized the
policy that, if there is no annual
5 See NCUA: 12 CFR 722.3; FHFA: 12 CFR part
1222. Although the FDIC adopted the CFPB’s
version of the regulation, the FDIC did not issue its
own regulation containing a cross-reference to the
CFPB’s version. See 78 FR 10368, 10370 (Feb. 13,
2013).
6 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2)
(Board); and 12 CFR 1026.35(c)(2)(ii) (CFPB).
7 12 CFR part 34, appendix C to subpart G,
comment 203(b)(2)–1 (OCC); 12 CFR part 226,
supplement I, comment 43(b)(2)–1 (Board); and 12
CFR part 1026, supplement I, comment 35(c)(2)(ii)–
1 (CFPB).
8 See 12 CFR part 34, appendix C to subpart G,
comment 203(b)(2)–1 and –2 (OCC); 12 CFR part
226, supplement I, comment 43(b)(2)–1 and –2
(Board); and 12 CFR part 1026, supplement I,
comment 35(c)(2)(ii)–1 and –2 (CFPB).
9 See 81 FR 86250 (Nov. 30, 2016).
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Federal Register / Vol. 89, No. 199 / Tuesday, October 15, 2024 / Rules and Regulations
percentage increase in the CPI–W, the
OCC, Board, and CFPB will not adjust
the exemption threshold from the prior
year. The HPML Small Dollar
Adjustment Calculation Rule also
provided that, in years following a year
in which the exemption threshold was
not adjusted because there was a
decrease in the CPI–W from the
previous year, the threshold is
calculated by applying the annual
percentage change in the CPI–W to the
dollar amount that would have resulted,
after rounding, if the decreases and any
subsequent increases in the CPI–W had
been taken into account. If the resulting
amount calculated, after rounding, is
greater than the current threshold, then
the threshold effective January 1 the
following year will increase
accordingly. If the resulting amount
calculated, after rounding, is equal to or
less than the current threshold, then the
threshold effective January 1 the
following year will not change, but
future increases will be calculated based
on the amount that would have resulted,
after rounding.
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II. 2025 Adjustment and Official
Interpretations Revision
Effective January 1, 2025, the
exemption threshold amount is
increased from $32,400 to $33,500. This
amount is based on the CPI–W in effect
on June 1, 2024, which was reported on
May 15, 2024 (based on April 2024
data).10 The CPI–W is a subset of the
CPI–U index (based on all urban
consumers) and represents
approximately 30 percent of the U.S.
population. The CPI–W reported on
May 15, 2024, reflects a 3.4 percent
increase in the CPI–W from April 2023
to April 2024. Accordingly, the 3.4
percent increase in the CPI–W from
April 2023 to April 2024 results in an
exemption threshold amount of $33,500,
after rounding. The OCC, the Board, and
the CFPB are revising the official
interpretations to their respective
regulations to add new comments as
follows:
• Comment 203(b)(2)–3.xii to 12 CFR
part 34, appendix C to subpart G (OCC);
• Comment 43(b)(2)–3.xii to
supplement I of 12 CFR part 226
(Board); and
• Comment 35(c)(2)(ii)–3.xii to
supplement I of 12 CFR part 1026
(CFPB).
10 The Bureau of Labor Statistics calculates
consumer-based indices for each month but does
not report those indices until the middle of the
following month. As such, the most recently
reported indices as of June 1, 2024, were reported
on May 15, 2024, and reflect economic conditions
in April 2024.
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These new comments state that, from
January 1, 2025, through December 31,
2025, the threshold amount is $33,500.
These revisions are effective January 1,
2025.
III. Regulatory Analysis
Administrative Procedure Act
Under the Administrative Procedure
Act, notice and opportunity for public
comment are not required if the agency
finds that notice and public comment
are impracticable, unnecessary, or
contrary to the public interest.11 The
amendments in this rule are technical
and apply the method previously
memorialized in the December 2013
Supplemental Final Rule and the HPML
Small Dollar Adjustment Calculation
Rule. For these reasons, the OCC, the
Board, and the CFPB have determined
that publishing a notice of proposed
rulemaking and providing opportunity
for public comment are unnecessary.
Therefore, the amendments are adopted
in final form.
Regulatory Flexibility Act
CFPB Congressional Review Act
Statement
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the CFPB will
submit a report containing this rule and
other required information to the U.S.
Senate, the U.S. House of
Representatives, and the Comptroller
General of the United States prior to the
rule taking effect. The Office of
Information and Regulatory Affairs has
designated this rule as not a ‘‘major
rule’’ as defined by 5 U.S.C. 804(2).
List of Subjects
12 CFR Part 34
Accounting, Banks, banking,
Consumer protection, Credit, Mortgages,
National banks, Reporting and
recordkeeping requirements, Savings
associations, Truth-in-lending.
12 CFR Part 226
Advertising, Appraisal, Appraiser,
Consumer protection, Credit, Federal
Reserve System, Reporting and
recordkeeping requirements, Truth-inlending.
The Regulatory Flexibility Act (RFA)
does not apply to a rulemaking where a
general notice of proposed rulemaking
is not required.12 The OCC, the Board,
and the CFPB have determined that it is
unnecessary to publish a general notice
of proposed rulemaking for this final
rule. Accordingly, the RFA’s
requirements relating to an initial and
final regulatory flexibility analysis do
not apply.
12 CFR Part 1026
Paperwork Reduction Act
Authority and Issuance
The OCC, the Board, and the CFPB
reviewed this final rule in accordance
with the Paperwork Reduction Act of
1995.13 The OCC, the Board, and the
CFPB have determined that this rule
does not create any new information
collections or substantially revise any
existing collections.
For the reasons set forth in the
preamble, the OCC amends 12 CFR part
34 as set forth below:
Unfunded Mandates Reform Act
The OCC analyzes proposed rules for
the factors listed in section 202 of the
Unfunded Mandates Reform Act of 1995
before promulgating a final rule for
which a general notice of proposed
rulemaking was published.14 As
discussed above, the OCC has
determined that the publication of a
general notice of proposed rulemaking
is unnecessary.
11 5
U.S.C. 553(b)(B).
U.S.C. 603(a), 604(a).
13 44 U.S.C. 3506; 5 CFR part 1320.
14 2 U.S.C. 1532.
12 5
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Advertising, Banks, banking,
Consumer protection, Credit, Credit
unions, Mortgages, National banks,
Reporting and recordkeeping
requirements, Savings associations,
Truth-in-lending.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
PART 34—REAL ESTATE LENDING
AND APPRAISALS
1. The authority citation for part 34
continues to read as follows:
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Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a,
371, 1462a, 1463, 1464, 1465, 1701j–3,
1828(o), 3331 et seq., 5101 et seq.,
5412(b)(2)(B) and 15 U.S.C. 1639h.
2. In appendix C to subpart G, under
Section 34.203—Appraisals for HigherPriced Mortgage Loans, paragraph
34.203(b)(2) is revised to read as
follows:
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Appendix C to Subpart G—OCC
Interpretations
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Section 34.203—Appraisals for HigherPriced Mortgage Loans
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Federal Register / Vol. 89, No. 199 / Tuesday, October 15, 2024 / Rules and Regulations
Paragraph 34.203(b)(2)
1. Threshold amount. For purposes of
§ 34.203(b)(2), the threshold amount in effect
during a particular period is the amount
stated in comment 203(b)(2)–3 for that
period. The threshold amount is adjusted
effective January 1 of each year by any
annual percentage increase in the Consumer
Price Index for Urban Wage Earners and
Clerical Workers (CPI–W) that was in effect
on the preceding June 1. Comment 203(b)(2)–
3 will be amended to provide the threshold
amount for the upcoming year after the
annual percentage change in the CPI–W that
was in effect on June 1 becomes available.
Any increase in the threshold amount will be
rounded to the nearest $100 increment. For
example, if the annual percentage increase in
the CPI–W would result in a $950 increase
in the threshold amount, the threshold
amount will be increased by $1,000.
However, if the annual percentage increase in
the CPI–W would result in a $949 increase
in the threshold amount, the threshold
amount will be increased by $900.
2. No increase in the CPI–W. If the CPI–W
in effect on June 1 does not increase from the
CPI–W in effect on June 1 of the previous
year, the threshold amount effective the
following January 1 through December 31
will not change from the previous year.
When this occurs, for the years that follow,
the threshold is calculated based on the
annual percentage change in the CPI–W
applied to the dollar amount that would have
resulted, after rounding, if decreases and any
subsequent increases in the CPI–W had been
taken into account.
i. Net increases. If the resulting amount
calculated, after rounding, is greater than the
current threshold, then the threshold
effective January 1 the following year will
increase accordingly.
ii. Net decreases. If the resulting amount
calculated, after rounding, is equal to or less
than the current threshold, then the
threshold effective January 1 the following
year will not change, but future increases
will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of
§ 34.203(b)(2), the threshold amount in effect
during a particular period is the amount
stated in the following for that period.
i. From January 18, 2014, through
December 31, 2014, the threshold amount is
$25,000.
ii. From January 1, 2015, through
December 31, 2015, the threshold amount is
$25,500.
iii. From January 1, 2016, through
December 31, 2016, the threshold amount is
$25,500.
iv. From January 1, 2017, through
December 31, 2017, the threshold amount is
$25,500.
v. From January 1, 2018, through December
31, 2018, the threshold amount is $26,000.
vi. From January 1, 2019, through
December 31, 2019, the threshold amount is
$26,700.
vii. From January 1, 2020, through
December 31, 2020, the threshold amount is
$27,200.
viii. From January 1, 2021, through
December 31, 2021, the threshold amount is
$27,200.
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ix. From January 1, 2022, through
December 31, 2022, the threshold amount is
$28,500.
x. From January 1, 2023, through December
31, 2023, the threshold amount is $31,000.
xi. From January 1, 2024, through
December 31, 2024, the threshold amount is
$32,400.
xii. From January 1, 2025, through
December 31, 2025, the threshold amount is
$33,500.
4. Qualifying for exemption—in general. A
transaction is exempt under § 34.203(b)(2) if
the creditor makes an extension of credit at
consummation that is equal to or below the
threshold amount in effect at the time of
consummation.
5. Qualifying for exemption—subsequent
changes. A transaction does not meet the
condition for an exemption under
§ 34.203(b)(2) merely because it is used to
satisfy and replace an existing exempt loan
unless the amount of the new extension of
credit is equal to or less than the applicable
threshold amount. For example, assume a
closed-end loan that qualified for a
§ 34.203(b)(2) exemption at consummation in
year one is refinanced in year ten and that
the new loan amount is greater than the
threshold amount in effect in year ten. In
these circumstances, the creditor must
comply with all of the applicable
requirements of § 34.203 with respect to the
year ten transaction if the original loan is
satisfied and replaced by the new loan unless
another exemption from the requirements of
§ 34.203 applies. See § 34.203(b) and (d)(7).
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BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
Authority and Issuance
For the reasons set forth in the
preamble, the Board amends Regulation
Z, 12 CFR part 226, as set forth below:
PART 226—TRUTH IN LENDING
(REGULATION Z)
3. The authority citation for part 226
continues to read as follows:
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Authority: 12 U.S.C. 3806; 15 U.S.C. 1604,
1637(c)(5), 1639(l), and 1639h; Pub. L. 111–
24, section 2, 123 Stat. 1734; Pub. L. 111–
203, 124 Stat. 1376.
4. In supplement I to part 226, under
Section 226.43—Appraisals for HigherRisk Mortgage Loans, paragraph 43(b)(2)
is revised to read as follows:
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Supplement I to Part 226—Official Staff
Interpretations
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Section 226.43—Appraisals for Higher-Risk
Mortgage Loans
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Paragraph 43(b)(2)
1. Threshold amount. For purposes of
§ 226.43(b)(2), the threshold amount in effect
during a particular period is the amount
stated in comment 43(b)(2)–3 for that period.
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The threshold amount is adjusted effective
January 1 of each year by any annual
percentage increase in the Consumer Price
Index for Urban Wage Earners and Clerical
Workers (CPI–W) that was in effect on the
preceding June 1. Comment 43(b)(2)–3 will
be amended to provide the threshold amount
for the upcoming year after the annual
percentage change in the CPI–W that was in
effect on June 1 becomes available. Any
increase in the threshold amount will be
rounded to the nearest $100 increment. For
example, if the annual percentage increase in
the CPI–W would result in a $950 increase
in the threshold amount, the threshold
amount will be increased by $1,000.
However, if the annual percentage increase in
the CPI–W would result in a $949 increase
in the threshold amount, the threshold
amount will be increased by $900.
2. No increase in the CPI–W. If the CPI–W
in effect on June 1 does not increase from the
CPI–W in effect on June 1 of the previous
year, the threshold amount effective the
following January 1 through December 31
will not change from the previous year.
When this occurs, for the years that follow,
the threshold is calculated based on the
annual percentage change in the CPI–W
applied to the dollar amount that would have
resulted, after rounding, if decreases and any
subsequent increases in the CPI–W had been
taken into account.
i. Net increases. If the resulting amount
calculated, after rounding, is greater than the
current threshold, then the threshold
effective January 1 the following year will
increase accordingly.
ii. Net decreases. If the resulting amount
calculated, after rounding, is equal to or less
than the current threshold, then the
threshold effective January 1 the following
year will not change, but future increases
will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of
§ 226.43(b)(2), the threshold amount in effect
during a particular period is the amount
stated in the following for that period.
i. From January 18, 2014, through
December 31, 2014, the threshold amount is
$25,000.
ii. From January 1, 2015, through
December 31, 2015, the threshold amount is
$25,500.
iii. From January 1, 2016, through
December 31, 2016, the threshold amount is
$25,500.
iv. From January 1, 2017, through
December 31, 2017, the threshold amount is
$25,500.
v. From January 1, 2018, through December
31, 2018, the threshold amount is $26,000.
vi. From January 1, 2019, through
December 31, 2019, the threshold amount is
$26,700.
vii. From January 1, 2020, through
December 31, 2020, the threshold amount is
$27,200.
viii. From January 1, 2021, through
December 31, 2021, the threshold amount is
$27,200.
ix. From January 1, 2022, through
December 31, 2022, the threshold amount is
$28,500.
x. From January 1, 2023, through December
31, 2023, the threshold amount is $31,000.
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Federal Register / Vol. 89, No. 199 / Tuesday, October 15, 2024 / Rules and Regulations
xi. From January 1, 2024, through
December 31, 2024, the threshold amount is
$32,400.
xii. From January 1, 2025, through
December 31, 2025, the threshold amount is
$33,500.
4. Qualifying for exemption—in general. A
transaction is exempt under § 226.43(b)(2) if
the creditor makes an extension of credit at
consummation that is equal to or below the
threshold amount in effect at the time of
consummation.
5. Qualifying for exemption—subsequent
changes. A transaction does not meet the
condition for an exemption under
§ 226.43(b)(2) merely because it is used to
satisfy and replace an existing exempt loan
unless the amount of the new extension of
credit is equal to or less than the applicable
threshold amount. For example, assume a
closed-end loan that qualified for a
§ 226.43(b)(2) exemption at consummation in
year one is refinanced in year ten and that
the new loan amount is greater than the
threshold amount in effect in year ten. In
these circumstances, the creditor must
comply with all of the applicable
requirements of § 226.43 with respect to the
year ten transaction if the original loan is
satisfied and replaced by the new loan unless
another exemption from the requirements of
§ 226.43 applies. See § 226.43(b) and (d)(7).
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CONSUMER FINANCIAL PROTECTION
BUREAU
Authority and Issuance
For the reasons set forth in the
preamble, the CFPB amends Regulation
Z, 12 CFR part 1026, as set forth below:
PART 1026—TRUTH IN LENDING
(REGULATION Z)
5. The authority citation for part 1026
continues to read as follows:
■
Authority: 12 U.S.C. 2601, 2603–2605,
2607, 2609, 2617, 3353, 5511, 5512, 5532,
5581; 15 U.S.C. 1601 et seq.
6. In supplement I to part 1026, under
Section 1026.35—Requirements for
Higher-Priced Mortgage Loans,
paragraph 35(c)(2)(ii) is revised to read
as follows:
■
Supplement I to Part 1026—Official
Interpretations
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Section 1026.35—Requirements for HigherPriced Mortgage Loans
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Paragraph 35(c)(2)(ii)
1. Threshold amount. For purposes of
§ 1026.35(c)(2)(ii), the threshold amount in
effect during a particular period is the
amount stated in comment 35(c)(2)(ii)–3 for
that period. The threshold amount is
adjusted effective January 1 of each year by
any annual percentage increase in the
Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI–W) that
was in effect on the preceding June 1.
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Comment 35(c)(2)(ii)–3 will be amended to
provide the threshold amount for the
upcoming year after the annual percentage
change in the CPI–W that was in effect on
June 1 becomes available. Any increase in the
threshold amount will be rounded to the
nearest $100 increment. For example, if the
annual percentage increase in the CPI–W
would result in a $950 increase in the
threshold amount, the threshold amount will
be increased by $1,000. However, if the
annual percentage increase in the CPI–W
would result in a $949 increase in the
threshold amount, the threshold amount will
be increased by $900.
2. No increase in the CPI–W. If the CPI–W
in effect on June 1 does not increase from the
CPI–W in effect on June 1 of the previous
year, the threshold amount effective the
following January 1 through December 31
will not change from the previous year.
When this occurs, for the years that follow,
the threshold is calculated based on the
annual percentage change in the CPI–W
applied to the dollar amount that would have
resulted, after rounding, if decreases and any
subsequent increases in the CPI–W had been
taken into account.
i. Net increases. If the resulting amount
calculated, after rounding, is greater than the
current threshold, then the threshold
effective January 1 the following year will
increase accordingly.
ii. Net decreases. If the resulting amount
calculated, after rounding, is equal to or less
than the current threshold, then the
threshold effective January 1 the following
year will not change, but future increases
will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of
§ 1026.35(c)(2)(ii), the threshold amount in
effect during a particular period is the
amount stated in the following for that
period.
i. From January 18, 2014, through
December 31, 2014, the threshold amount is
$25,000.
ii. From January 1, 2015, through
December 31, 2015, the threshold amount is
$25,500.
iii. From January 1, 2016, through
December 31, 2016, the threshold amount is
$25,500.
iv. From January 1, 2017, through
December 31, 2017, the threshold amount is
$25,500.
v. From January 1, 2018, through December
31, 2018, the threshold amount is $26,000.
vi. From January 1, 2019, through
December 31, 2019, the threshold amount is
$26,700.
vii. From January 1, 2020, through
December 31, 2020, the threshold amount is
$27,200.
viii. From January 1, 2021, through
December 31, 2021, the threshold amount is
$27,200.
ix. From January 1, 2022, through
December 31, 2022, the threshold amount is
$28,500.
x. From January 1, 2023, through December
31, 2023, the threshold amount is $31,000.
xi. From January 1, 2024, through
December 31, 2024, the threshold amount is
$32,400.
PO 00000
Frm 00004
Fmt 4700
Sfmt 4700
xii. From January 1, 2025, through
December 31, 2025, the threshold amount is
$33,500.
4. Qualifying for exemption—in general. A
transaction is exempt under
§ 1026.35(c)(2)(ii) if the creditor makes an
extension of credit at consummation that is
equal to or below the threshold amount in
effect at the time of consummation.
5. Qualifying for exemption—subsequent
changes. A transaction does not meet the
condition for an exemption under
§ 1026.35(c)(2)(ii) merely because it is used to
satisfy and replace an existing exempt loan
unless the amount of the new extension of
credit is equal to or less than the applicable
threshold amount. For example, assume a
closed-end loan that qualified for a
§ 1026.35(c)(2)(ii) exemption at
consummation in year one is refinanced in
year ten and that the new loan amount is
greater than the threshold amount in effect in
year ten. In these circumstances, the creditor
must comply with all of the applicable
requirements of § 1026.35(c) with respect to
the year ten transaction if the original loan
is satisfied and replaced by the new loan
unless another exemption from the
requirements of § 1026.35(c) applies. See
§ 1026.35(c)(2) and (c)(4)(vii).
*
*
*
*
*
Michael J. Hsu,
Acting Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System, acting through the
Secretary of the Board under delegated
authority.
Benjamin W. McDonough,
Deputy Secretary of the Board.
Brian Shearer,
Assistant Director, Office of Policy Planning
and Strategy, Consumer Financial Protection
Bureau.
[FR Doc. 2024–23277 Filed 10–11–24; 8:45 am]
BILLING CODE 6210–01–P; 4810–33–P; 4810–AM–P
FEDERAL RESERVE SYSTEM
12 CFR Part 213
[Docket No. R–1842]
RIN 7100–AG 83
CONSUMER FINANCIAL PROTECTION
BUREAU
12 CFR Part 1013
Consumer Leasing (Regulation M)
Board of Governors of the
Federal Reserve System (Board) and
Consumer Financial Protection Bureau
(CFPB).
ACTION: Final rules and official
interpretations.
AGENCY:
The Board and the CFPB
(collectively, Agencies) are finalizing
amendments to the official
SUMMARY:
E:\FR\FM\15OCR1.SGM
15OCR1
]]>Agencies
[Federal Register Volume 89, Number 199 (Tuesday, October 15, 2024)]
[Rules and Regulations]
[Pages 82931-82934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23277]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 89, No. 199 / Tuesday, October 15, 2024 /
Rules and Regulations
[[Page 82931]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 34
[Docket No. OCC-2024-0013]
RIN 1557-AF28
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R-1841]
RIN 7100-AG82
CONSUMER FINANCIAL PROTECTION BUREAU
12 CFR Part 1026
Appraisals for Higher-Priced Mortgage Loans Exemption Threshold
AGENCY: Office of the Comptroller of the Currency, Treasury (OCC);
Board of Governors of the Federal Reserve System (Board); and Consumer
Financial Protection Bureau (CFPB).
ACTION: Final rules and official interpretations.
-----------------------------------------------------------------------
SUMMARY: The OCC, the Board, and the CFPB are finalizing amendments to
the official interpretations for their regulations that implement
section 129H of the Truth in Lending Act (TILA). Section 129H of TILA
establishes special appraisal requirements for ``higher-risk
mortgages,'' termed ``higher-priced mortgage loans'' or ``HPMLs'' in
the agencies' regulations. A December 2013 rulemaking exempted
transactions of $25,000 or less and required that this loan amount be
adjusted annually based on any annual percentage increase in the
Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-
W). Based on the CPI-W in effect as of June 1, 2024, the exemption
threshold will increase from $32,400 to $33,500, effective January 1,
2025.
DATES: This final rule is effective January 1, 2025.
FOR FURTHER INFORMATION CONTACT: OCC: MaryAnn Nash, Counsel, Chief
Counsel's Office, at (202) 649-6287. If you are deaf, hard of hearing,
or have a speech disability, please dial 7-1-1 to access
telecommunications relay services.
Board: Lorna M. Neill, Senior Counsel, Division of Consumer and
Community Affairs, Board of Governors of the Federal Reserve System, at
(202) 452-3667. For users of TTY-TRS, please call 711 from any
telephone, anywhere in the United States.
CFPB: George Karithanom, Regulatory Implementation & Guidance
Program Analyst, Office of Regulations, at 202-435-7700 or at: https://reginquiries.consumerfinance.gov/. If you require this document in an
alternative electronic format, please contact
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (Dodd-Frank Act) amended TILA to add special appraisal
requirements for ``higher-risk mortgages.'' \1\ In January 2013, the
OCC, the Board, the CFPB, the Federal Deposit Insurance Corporation
(FDIC), the National Credit Union Administration (NCUA), and the
Federal Housing Finance Agency (FHFA) (collectively, Agencies) jointly
issued a final rule implementing these requirements and adopted the
term ``higher-priced mortgage loan'' (HPML) instead of ``higher-risk
mortgage'' (January 2013 Final Rule).\2\ In July 2013, the Agencies
proposed additional exemptions from the January 2013 Final Rule.\3\ In
December 2013, the Agencies issued a supplemental final rule with
additional exemptions from the January 2013 Final Rule (December 2013
Supplemental Final Rule).\4\ Among other exemptions, the Agencies
adopted an exemption from the new HPML appraisal rules for transactions
of $25,000 or less, to be adjusted annually for inflation.
---------------------------------------------------------------------------
\1\ Public Law 111-203, sec. 1471, 124 Stat. 1376, 2185-87
(2010), codified at TILA sec. 129H, 15 U.S.C. 1639h.
\2\ 78 FR 10368 (Feb. 13, 2013).
\3\ 78 FR 48548 (Aug. 8, 2013).
\4\ 78 FR 78520 (Dec. 26, 2013).
---------------------------------------------------------------------------
The OCC's, Board's, and CFPB's versions of the January 2013 Final
Rule and December 2013 Supplemental Final Rule and corresponding
official interpretations are substantively identical. The FDIC, NCUA,
and FHFA adopted the CFPB's version of the regulations under the
January 2013 Final Rule and December 2013 Supplemental Final Rule.\5\
---------------------------------------------------------------------------
\5\ See NCUA: 12 CFR 722.3; FHFA: 12 CFR part 1222. Although the
FDIC adopted the CFPB's version of the regulation, the FDIC did not
issue its own regulation containing a cross-reference to the CFPB's
version. See 78 FR 10368, 10370 (Feb. 13, 2013).
---------------------------------------------------------------------------
The OCC's, Board's, and CFPB's regulations,\6\ and their
accompanying official interpretations,\7\ provide that the exemption
threshold for smaller loans will be adjusted effective January 1 of
each year based on any annual percentage increase in the CPI-W that was
in effect on the preceding June 1. Any increase in the threshold amount
will be rounded to the nearest $100 increment. For example, if the
annual percentage increase in the CPI-W would result in a $950 increase
in the threshold amount, the threshold amount will be increased by
$1,000. However, if the annual percentage increase in the CPI-W would
result in a $949 increase in the threshold amount, the threshold amount
will be increased by $900. If there is no annual percentage increase in
the CPI-W, the OCC, the Board, and the CFPB will not adjust the
threshold amounts from the prior year.\8\
---------------------------------------------------------------------------
\6\ 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2) (Board); and
12 CFR 1026.35(c)(2)(ii) (CFPB).
\7\ 12 CFR part 34, appendix C to subpart G, comment 203(b)(2)-1
(OCC); 12 CFR part 226, supplement I, comment 43(b)(2)-1 (Board);
and 12 CFR part 1026, supplement I, comment 35(c)(2)(ii)-1 (CFPB).
\8\ See 12 CFR part 34, appendix C to subpart G, comment
203(b)(2)-1 and -2 (OCC); 12 CFR part 226, supplement I, comment
43(b)(2)-1 and -2 (Board); and 12 CFR part 1026, supplement I,
comment 35(c)(2)(ii)-1 and -2 (CFPB).
---------------------------------------------------------------------------
On November 30, 2016, the OCC, the Board, and the CFPB published a
final rule in the Federal Register to memorialize the calculation
method used by the OCC, the Board, and the CFPB each year to adjust the
exemption threshold to ensure that the values for the exemption
threshold keep pace with the CPI-W (HPML Small Dollar Adjustment
Calculation Rule).\9\ The HPML Small Dollar Adjustment Calculation Rule
memorialized the policy that, if there is no annual
[[Page 82932]]
percentage increase in the CPI-W, the OCC, Board, and CFPB will not
adjust the exemption threshold from the prior year. The HPML Small
Dollar Adjustment Calculation Rule also provided that, in years
following a year in which the exemption threshold was not adjusted
because there was a decrease in the CPI-W from the previous year, the
threshold is calculated by applying the annual percentage change in the
CPI-W to the dollar amount that would have resulted, after rounding, if
the decreases and any subsequent increases in the CPI-W had been taken
into account. If the resulting amount calculated, after rounding, is
greater than the current threshold, then the threshold effective
January 1 the following year will increase accordingly. If the
resulting amount calculated, after rounding, is equal to or less than
the current threshold, then the threshold effective January 1 the
following year will not change, but future increases will be calculated
based on the amount that would have resulted, after rounding.
---------------------------------------------------------------------------
\9\ See 81 FR 86250 (Nov. 30, 2016).
---------------------------------------------------------------------------
II. 2025 Adjustment and Official Interpretations Revision
Effective January 1, 2025, the exemption threshold amount is
increased from $32,400 to $33,500. This amount is based on the CPI-W in
effect on June 1, 2024, which was reported on May 15, 2024 (based on
April 2024 data).\10\ The CPI-W is a subset of the CPI-U index (based
on all urban consumers) and represents approximately 30 percent of the
U.S. population. The CPI-W reported on May 15, 2024, reflects a 3.4
percent increase in the CPI-W from April 2023 to April 2024.
Accordingly, the 3.4 percent increase in the CPI-W from April 2023 to
April 2024 results in an exemption threshold amount of $33,500, after
rounding. The OCC, the Board, and the CFPB are revising the official
interpretations to their respective regulations to add new comments as
follows:
---------------------------------------------------------------------------
\10\ The Bureau of Labor Statistics calculates consumer-based
indices for each month but does not report those indices until the
middle of the following month. As such, the most recently reported
indices as of June 1, 2024, were reported on May 15, 2024, and
reflect economic conditions in April 2024.
---------------------------------------------------------------------------
Comment 203(b)(2)-3.xii to 12 CFR part 34, appendix C to
subpart G (OCC);
Comment 43(b)(2)-3.xii to supplement I of 12 CFR part 226
(Board); and
Comment 35(c)(2)(ii)-3.xii to supplement I of 12 CFR part
1026 (CFPB).
These new comments state that, from January 1, 2025, through
December 31, 2025, the threshold amount is $33,500. These revisions are
effective January 1, 2025.
III. Regulatory Analysis
Administrative Procedure Act
Under the Administrative Procedure Act, notice and opportunity for
public comment are not required if the agency finds that notice and
public comment are impracticable, unnecessary, or contrary to the
public interest.\11\ The amendments in this rule are technical and
apply the method previously memorialized in the December 2013
Supplemental Final Rule and the HPML Small Dollar Adjustment
Calculation Rule. For these reasons, the OCC, the Board, and the CFPB
have determined that publishing a notice of proposed rulemaking and
providing opportunity for public comment are unnecessary. Therefore,
the amendments are adopted in final form.
---------------------------------------------------------------------------
\11\ 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) does not apply to a rulemaking
where a general notice of proposed rulemaking is not required.\12\ The
OCC, the Board, and the CFPB have determined that it is unnecessary to
publish a general notice of proposed rulemaking for this final rule.
Accordingly, the RFA's requirements relating to an initial and final
regulatory flexibility analysis do not apply.
---------------------------------------------------------------------------
\12\ 5 U.S.C. 603(a), 604(a).
---------------------------------------------------------------------------
Paperwork Reduction Act
The OCC, the Board, and the CFPB reviewed this final rule in
accordance with the Paperwork Reduction Act of 1995.\13\ The OCC, the
Board, and the CFPB have determined that this rule does not create any
new information collections or substantially revise any existing
collections.
---------------------------------------------------------------------------
\13\ 44 U.S.C. 3506; 5 CFR part 1320.
---------------------------------------------------------------------------
Unfunded Mandates Reform Act
The OCC analyzes proposed rules for the factors listed in section
202 of the Unfunded Mandates Reform Act of 1995 before promulgating a
final rule for which a general notice of proposed rulemaking was
published.\14\ As discussed above, the OCC has determined that the
publication of a general notice of proposed rulemaking is unnecessary.
---------------------------------------------------------------------------
\14\ 2 U.S.C. 1532.
---------------------------------------------------------------------------
CFPB Congressional Review Act Statement
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the CFPB will submit a report containing this rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the United States prior to the rule taking
effect. The Office of Information and Regulatory Affairs has designated
this rule as not a ``major rule'' as defined by 5 U.S.C. 804(2).
List of Subjects
12 CFR Part 34
Accounting, Banks, banking, Consumer protection, Credit, Mortgages,
National banks, Reporting and recordkeeping requirements, Savings
associations, Truth-in-lending.
12 CFR Part 226
Advertising, Appraisal, Appraiser, Consumer protection, Credit,
Federal Reserve System, Reporting and recordkeeping requirements,
Truth-in-lending.
12 CFR Part 1026
Advertising, Banks, banking, Consumer protection, Credit, Credit
unions, Mortgages, National banks, Reporting and recordkeeping
requirements, Savings associations, Truth-in-lending.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
Authority and Issuance
For the reasons set forth in the preamble, the OCC amends 12 CFR
part 34 as set forth below:
PART 34--REAL ESTATE LENDING AND APPRAISALS
0
1. The authority citation for part 34 continues to read as follows:
Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1462a, 1463,
1464, 1465, 1701j-3, 1828(o), 3331 et seq., 5101 et seq.,
5412(b)(2)(B) and 15 U.S.C. 1639h.
0
2. In appendix C to subpart G, under Section 34.203--Appraisals for
Higher-Priced Mortgage Loans, paragraph 34.203(b)(2) is revised to read
as follows:
Appendix C to Subpart G--OCC Interpretations
* * * * *
Section 34.203--Appraisals for Higher-Priced Mortgage Loans
* * * * *
[[Page 82933]]
Paragraph 34.203(b)(2)
1. Threshold amount. For purposes of Sec. 34.203(b)(2), the
threshold amount in effect during a particular period is the amount
stated in comment 203(b)(2)-3 for that period. The threshold amount
is adjusted effective January 1 of each year by any annual
percentage increase in the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W) that was in effect on the
preceding June 1. Comment 203(b)(2)-3 will be amended to provide the
threshold amount for the upcoming year after the annual percentage
change in the CPI-W that was in effect on June 1 becomes available.
Any increase in the threshold amount will be rounded to the nearest
$100 increment. For example, if the annual percentage increase in
the CPI-W would result in a $950 increase in the threshold amount,
the threshold amount will be increased by $1,000. However, if the
annual percentage increase in the CPI-W would result in a $949
increase in the threshold amount, the threshold amount will be
increased by $900.
2. No increase in the CPI-W. If the CPI-W in effect on June 1
does not increase from the CPI-W in effect on June 1 of the previous
year, the threshold amount effective the following January 1 through
December 31 will not change from the previous year. When this
occurs, for the years that follow, the threshold is calculated based
on the annual percentage change in the CPI-W applied to the dollar
amount that would have resulted, after rounding, if decreases and
any subsequent increases in the CPI-W had been taken into account.
i. Net increases. If the resulting amount calculated, after
rounding, is greater than the current threshold, then the threshold
effective January 1 the following year will increase accordingly.
ii. Net decreases. If the resulting amount calculated, after
rounding, is equal to or less than the current threshold, then the
threshold effective January 1 the following year will not change,
but future increases will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of Sec. 34.203(b)(2), the threshold
amount in effect during a particular period is the amount stated in
the following for that period.
i. From January 18, 2014, through December 31, 2014, the
threshold amount is $25,000.
ii. From January 1, 2015, through December 31, 2015, the
threshold amount is $25,500.
iii. From January 1, 2016, through December 31, 2016, the
threshold amount is $25,500.
iv. From January 1, 2017, through December 31, 2017, the
threshold amount is $25,500.
v. From January 1, 2018, through December 31, 2018, the
threshold amount is $26,000.
vi. From January 1, 2019, through December 31, 2019, the
threshold amount is $26,700.
vii. From January 1, 2020, through December 31, 2020, the
threshold amount is $27,200.
viii. From January 1, 2021, through December 31, 2021, the
threshold amount is $27,200.
ix. From January 1, 2022, through December 31, 2022, the
threshold amount is $28,500.
x. From January 1, 2023, through December 31, 2023, the
threshold amount is $31,000.
xi. From January 1, 2024, through December 31, 2024, the
threshold amount is $32,400.
xii. From January 1, 2025, through December 31, 2025, the
threshold amount is $33,500.
4. Qualifying for exemption--in general. A transaction is exempt
under Sec. 34.203(b)(2) if the creditor makes an extension of
credit at consummation that is equal to or below the threshold
amount in effect at the time of consummation.
5. Qualifying for exemption--subsequent changes. A transaction
does not meet the condition for an exemption under Sec.
34.203(b)(2) merely because it is used to satisfy and replace an
existing exempt loan unless the amount of the new extension of
credit is equal to or less than the applicable threshold amount. For
example, assume a closed-end loan that qualified for a Sec.
34.203(b)(2) exemption at consummation in year one is refinanced in
year ten and that the new loan amount is greater than the threshold
amount in effect in year ten. In these circumstances, the creditor
must comply with all of the applicable requirements of Sec. 34.203
with respect to the year ten transaction if the original loan is
satisfied and replaced by the new loan unless another exemption from
the requirements of Sec. 34.203 applies. See Sec. 34.203(b) and
(d)(7).
* * * * *
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Authority and Issuance
For the reasons set forth in the preamble, the Board amends
Regulation Z, 12 CFR part 226, as set forth below:
PART 226--TRUTH IN LENDING (REGULATION Z)
0
3. The authority citation for part 226 continues to read as follows:
Authority: 12 U.S.C. 3806; 15 U.S.C. 1604, 1637(c)(5), 1639(l),
and 1639h; Pub. L. 111-24, section 2, 123 Stat. 1734; Pub. L. 111-
203, 124 Stat. 1376.
0
4. In supplement I to part 226, under Section 226.43--Appraisals for
Higher-Risk Mortgage Loans, paragraph 43(b)(2) is revised to read as
follows:
Supplement I to Part 226--Official Staff Interpretations
* * * * *
Section 226.43--Appraisals for Higher-Risk Mortgage Loans
* * * * *
Paragraph 43(b)(2)
1. Threshold amount. For purposes of Sec. 226.43(b)(2), the
threshold amount in effect during a particular period is the amount
stated in comment 43(b)(2)-3 for that period. The threshold amount
is adjusted effective January 1 of each year by any annual
percentage increase in the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W) that was in effect on the
preceding June 1. Comment 43(b)(2)-3 will be amended to provide the
threshold amount for the upcoming year after the annual percentage
change in the CPI-W that was in effect on June 1 becomes available.
Any increase in the threshold amount will be rounded to the nearest
$100 increment. For example, if the annual percentage increase in
the CPI-W would result in a $950 increase in the threshold amount,
the threshold amount will be increased by $1,000. However, if the
annual percentage increase in the CPI-W would result in a $949
increase in the threshold amount, the threshold amount will be
increased by $900.
2. No increase in the CPI-W. If the CPI-W in effect on June 1
does not increase from the CPI-W in effect on June 1 of the previous
year, the threshold amount effective the following January 1 through
December 31 will not change from the previous year. When this
occurs, for the years that follow, the threshold is calculated based
on the annual percentage change in the CPI-W applied to the dollar
amount that would have resulted, after rounding, if decreases and
any subsequent increases in the CPI-W had been taken into account.
i. Net increases. If the resulting amount calculated, after
rounding, is greater than the current threshold, then the threshold
effective January 1 the following year will increase accordingly.
ii. Net decreases. If the resulting amount calculated, after
rounding, is equal to or less than the current threshold, then the
threshold effective January 1 the following year will not change,
but future increases will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of Sec. 226.43(b)(2), the threshold
amount in effect during a particular period is the amount stated in
the following for that period.
i. From January 18, 2014, through December 31, 2014, the
threshold amount is $25,000.
ii. From January 1, 2015, through December 31, 2015, the
threshold amount is $25,500.
iii. From January 1, 2016, through December 31, 2016, the
threshold amount is $25,500.
iv. From January 1, 2017, through December 31, 2017, the
threshold amount is $25,500.
v. From January 1, 2018, through December 31, 2018, the
threshold amount is $26,000.
vi. From January 1, 2019, through December 31, 2019, the
threshold amount is $26,700.
vii. From January 1, 2020, through December 31, 2020, the
threshold amount is $27,200.
viii. From January 1, 2021, through December 31, 2021, the
threshold amount is $27,200.
ix. From January 1, 2022, through December 31, 2022, the
threshold amount is $28,500.
x. From January 1, 2023, through December 31, 2023, the
threshold amount is $31,000.
[[Page 82934]]
xi. From January 1, 2024, through December 31, 2024, the
threshold amount is $32,400.
xii. From January 1, 2025, through December 31, 2025, the
threshold amount is $33,500.
4. Qualifying for exemption--in general. A transaction is exempt
under Sec. 226.43(b)(2) if the creditor makes an extension of
credit at consummation that is equal to or below the threshold
amount in effect at the time of consummation.
5. Qualifying for exemption--subsequent changes. A transaction
does not meet the condition for an exemption under Sec.
226.43(b)(2) merely because it is used to satisfy and replace an
existing exempt loan unless the amount of the new extension of
credit is equal to or less than the applicable threshold amount. For
example, assume a closed-end loan that qualified for a Sec.
226.43(b)(2) exemption at consummation in year one is refinanced in
year ten and that the new loan amount is greater than the threshold
amount in effect in year ten. In these circumstances, the creditor
must comply with all of the applicable requirements of Sec. 226.43
with respect to the year ten transaction if the original loan is
satisfied and replaced by the new loan unless another exemption from
the requirements of Sec. 226.43 applies. See Sec. 226.43(b) and
(d)(7).
* * * * *
CONSUMER FINANCIAL PROTECTION BUREAU
Authority and Issuance
For the reasons set forth in the preamble, the CFPB amends
Regulation Z, 12 CFR part 1026, as set forth below:
PART 1026--TRUTH IN LENDING (REGULATION Z)
0
5. The authority citation for part 1026 continues to read as follows:
Authority: 12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353,
5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq.
0
6. In supplement I to part 1026, under Section 1026.35--Requirements
for Higher-Priced Mortgage Loans, paragraph 35(c)(2)(ii) is revised to
read as follows:
Supplement I to Part 1026--Official Interpretations
* * * * *
Section 1026.35--Requirements for Higher-Priced Mortgage Loans
* * * * *
Paragraph 35(c)(2)(ii)
1. Threshold amount. For purposes of Sec. 1026.35(c)(2)(ii),
the threshold amount in effect during a particular period is the
amount stated in comment 35(c)(2)(ii)-3 for that period. The
threshold amount is adjusted effective January 1 of each year by any
annual percentage increase in the Consumer Price Index for Urban
Wage Earners and Clerical Workers (CPI-W) that was in effect on the
preceding June 1. Comment 35(c)(2)(ii)-3 will be amended to provide
the threshold amount for the upcoming year after the annual
percentage change in the CPI-W that was in effect on June 1 becomes
available. Any increase in the threshold amount will be rounded to
the nearest $100 increment. For example, if the annual percentage
increase in the CPI-W would result in a $950 increase in the
threshold amount, the threshold amount will be increased by $1,000.
However, if the annual percentage increase in the CPI-W would result
in a $949 increase in the threshold amount, the threshold amount
will be increased by $900.
2. No increase in the CPI-W. If the CPI-W in effect on June 1
does not increase from the CPI-W in effect on June 1 of the previous
year, the threshold amount effective the following January 1 through
December 31 will not change from the previous year. When this
occurs, for the years that follow, the threshold is calculated based
on the annual percentage change in the CPI-W applied to the dollar
amount that would have resulted, after rounding, if decreases and
any subsequent increases in the CPI-W had been taken into account.
i. Net increases. If the resulting amount calculated, after
rounding, is greater than the current threshold, then the threshold
effective January 1 the following year will increase accordingly.
ii. Net decreases. If the resulting amount calculated, after
rounding, is equal to or less than the current threshold, then the
threshold effective January 1 the following year will not change,
but future increases will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of Sec. 1026.35(c)(2)(ii), the
threshold amount in effect during a particular period is the amount
stated in the following for that period.
i. From January 18, 2014, through December 31, 2014, the
threshold amount is $25,000.
ii. From January 1, 2015, through December 31, 2015, the
threshold amount is $25,500.
iii. From January 1, 2016, through December 31, 2016, the
threshold amount is $25,500.
iv. From January 1, 2017, through December 31, 2017, the
threshold amount is $25,500.
v. From January 1, 2018, through December 31, 2018, the
threshold amount is $26,000.
vi. From January 1, 2019, through December 31, 2019, the
threshold amount is $26,700.
vii. From January 1, 2020, through December 31, 2020, the
threshold amount is $27,200.
viii. From January 1, 2021, through December 31, 2021, the
threshold amount is $27,200.
ix. From January 1, 2022, through December 31, 2022, the
threshold amount is $28,500.
x. From January 1, 2023, through December 31, 2023, the
threshold amount is $31,000.
xi. From January 1, 2024, through December 31, 2024, the
threshold amount is $32,400.
xii. From January 1, 2025, through December 31, 2025, the
threshold amount is $33,500.
4. Qualifying for exemption--in general. A transaction is exempt
under Sec. 1026.35(c)(2)(ii) if the creditor makes an extension of
credit at consummation that is equal to or below the threshold
amount in effect at the time of consummation.
5. Qualifying for exemption--subsequent changes. A transaction
does not meet the condition for an exemption under Sec.
1026.35(c)(2)(ii) merely because it is used to satisfy and replace
an existing exempt loan unless the amount of the new extension of
credit is equal to or less than the applicable threshold amount. For
example, assume a closed-end loan that qualified for a Sec.
1026.35(c)(2)(ii) exemption at consummation in year one is
refinanced in year ten and that the new loan amount is greater than
the threshold amount in effect in year ten. In these circumstances,
the creditor must comply with all of the applicable requirements of
Sec. 1026.35(c) with respect to the year ten transaction if the
original loan is satisfied and replaced by the new loan unless
another exemption from the requirements of Sec. 1026.35(c) applies.
See Sec. 1026.35(c)(2) and (c)(4)(vii).
* * * * *
Michael J. Hsu,
Acting Comptroller of the Currency.
By order of the Board of Governors of the Federal Reserve
System, acting through the Secretary of the Board under delegated
authority.
Benjamin W. McDonough,
Deputy Secretary of the Board.
Brian Shearer,
Assistant Director, Office of Policy Planning and Strategy, Consumer
Financial Protection Bureau.
[FR Doc. 2024-23277 Filed 10-11-24; 8:45 am]
BILLING CODE 6210-01-P; 4810-33-P; 4810-AM-P
