WASHINGTON, D.C. — The FED & Consumer Financial Protection Bureau today announced the dollar thresholds in Regulation Z (Truth in Lending) & Regulation M (Consumer Leasing) that will apply for determining exempt consumer credit & lease transactions in 2021.
These thresholds are set pursuant to the Dodd-Frank Wall Street Reform & Consumer Protection Act (Dodd-Frank Act) amendments to the Truth in Lending Act & the Consumer Leasing Act that require adjusting the thresholds annually based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners & Clerical Workers (CPI-W). If there is no annual percentage increase in the CPI-W, the FED & the Bureau will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, the threshold is calculated by applying the annual percentage change in CPI-W to the dollar amount that would have resulted, after rounding, if the decreases & any subsequent increases in the CPI-W had been taken into account. Transactions at or below the thresholds are subject to the protections of the regulations.
Based on the annual percentage increase in the CPI-W as of June 1, 2020, the protections of the Truth in Lending Act & the Consumer Leasing Act generally will apply to consumer credit transactions & consumer leases of $58,300 or less in 2021. However, private education loans & loans secured by real property (such as mortgages) are subject to the Truth in Lending Act regardless of the amount of the loan.
Although the Dodd-Frank Act generally transferred rulemaking authority under the Truth in Lending Act & the Consumer Leasing Act to the Bureau, the FED retains authority to issue rules for certain motor vehicle dealers. Therefore, the agencies are issuing these notices jointly.
Source: Federal Reserves
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