View Rule

Section 129H of the Truth in Lending Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, establishes special appraisal requirements for higher-risk mortgages, termed higher-priced mortgage loans or HPMLs.  The CFPB, the Board, the OCC, the FDIC, the NCUA and the FHFA (collectively, the Agencies) issued joint final rules implementing these requirements, effective January 18, 2014.  The Agencies’ rules exempted, among other loan types, 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).  Section 1026.35(c)(2)(ii) of the CFPB’s Regulation Z, 226.43(b)(2) of the Board’s Regulation Z, and 34.203(b)(2) of Subpart G of part 34 of the OCC’s regulations, and their accompanying commentaries, 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.  The CFPB, the Board, and the OCC issued a proposal on August 4, 2016, to amend the official interpretations and commentary to explain that the CFPB, the Board, and the OCC will not adjust the exemption threshold from the prior year when there is no annual percentage increase in the CPI-W, and the calculation method for determining the adjustment in years following a year in which there is no annual percentage increase in the CPI-W.  The CFPB will work with the Board and the OCC to issue jointly a final rule.