Truth in Lending threshold adjustments for 2020

Greetings compliance friends!

Just last month, the Bureau of Consumer Financial Protection (CFPB) issued its annual inflation-based adjustments of certain threshold dollar amounts for transactions covered under Regulation Z. The changes apply to provisions under the Truth in Lending Act, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit 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). These laws, as implemented by Regulation Z, require the CFPB to make annual adjustments to certain thresholds based on the annual percentage change reflected in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in effect on June 1st of the prior year. The updated thresholds become effective on January 1, 2020. Below are a few notable adjustments:

Credit Cards

Regulation Z prohibits a card issuer from imposing a fee for violating the terms or other requirements of a credit card account under an open-end (not home-secured) plan unless the fee “represents a reasonable proportion of the total costs” incurred for the violation, or is within the safe harbor provision of section 1026.52(b). If a credit card issuer charges anything up to the safe harbor amount for certain violations, it is considered to be in compliance with Regulation Z. For 2020, the safe harbor will increase by $1 from the 2019 amount to:

 

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