CFPB Issues Final Rule Regarding Annual Threshold Adjustments for 2017 HOEPA and QM Loans
On June 17 2016, the Consumer Financial Protection Bureau (CFPB) announced its annual adjustments to the dollar amounts of various thresholds under the Truth in Lending Act regulations that will apply to certain consumer credit transactions in 2017.
The adjustments are based on the percentage change in Consumer Price Index. The notice addresses the thresholds related to the minimum interest charge and safe harbor penalty fees under the Credit Card Accountability Responsibility and Disclosure Act (CARD Act), the total loan amount and points and fees dollar trigger for high-cost mortgages under the Home Ownership and Equity Protection Act (HOEPA), and the maximum points and fees for qualified mortgages under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The notice also revises one of the 2016 safe harbor penalty fee amounts due to a decline in the 2015 Consumer Price Index that was not fully accounted for. This final rule is effective on January 1, 2017 with the exception of section 1026.52(b)(1)(ii)(B) which is effective following publication in the Federal Register.
HOEPA loans
Adjusted total loan amount threshold is $20,579 and the adjusted statutory fee trigger is $1,029.
Qualified Mortgage (QM) thresholds
- 3% of the total loan amount for a loan greater than or equal to $102,894;
- $3,087 for a loan amount greater than or equal to $61,737 but less than $102,894;
- 5% of the total loan amount for a loan greater than or equal to $20,579 but less than 61,737;
- $1,029 for a loan amount greater than or equal to $12,862 but less than $20,579; and
- 8% of the total loan amount for a loan amount less than $12,862
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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