January’s Top Regulatory Change

  • January 10, 2022
  • Quantivate

Regulatory change has come in a flurry to begin the new year, and compliance professionals are under increased scrutiny to keep pace. To help financial institutions remain compliant, each month Quantivate will provide our blog readers with access to the top attorney-generated compliance alert our customers receive.

This month, the top alert reminded customers that as of January 1, 2022, the Consumer Financial Protection Bureau (CFPB), Federal Reserve Board (FRB), and Office of the Comptroller of the Currency (OCC) made their annual updates to exemption thresholds effective.

Executive Summary

The Dodd-Frank Act amended the Truth in Lending Act (TILA) by requiring that the dollar threshold for exempt consumer credit transactions be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Workers and Clerical Workers (CPI-W). Similarly, the Dodd-Frank Act amended the Consumer Leasing Act by requiring that the dollar threshold for exempt consumer leases be adjusted annually by the annual percentage increase in the CPI-W. Lastly, the threshold for exemption from the TILA appraisal requirements for higher-priced mortgage loans is adjusted annually based on any annual percentage increase in the CPI-W.
Accordingly, the CFPB jointly issued three Final Rules related to the exemption thresholds, which set the 2022 exemption threshold amounts. Two of the Rules were issued under Regulation Z (exemption threshold for consumer credit transactions and HPML exemption), and one Rule was issued under Regulation M (exemption threshold for consumer leases).

  1. Regulation Z, Consumer Credit Transactions

Based on the annual percentage increase in the CPI-W as of June 1, 2021, the exemption threshold will increase from $58,300 to $61,000 effective January 1, 2022.

  1. Regulation Z, Appraisals for Higher-Priced Mortgage Loans

Based on the CPI-W in effect as of June 1, 2021, the exemption threshold will increase from $27,200 to $28,500, effective January 1, 2022.

  1. Regulation M, Consumer Leases

Based on the annual percentage increase in the CPI-W as of June 1, 2021, the exemption threshold will increase from $58,300 to $61,000 effective January 1, 2022.

Relevant Links

The full documentation can be found below.

Regulation Z –
Exemption Threshold
for Consumer Credit Transactions
Regulation Z –
Exemption Threshold
for Appraisals for HPML
Regulation M –
Exemption Threshold
for Consumer Leases

How to Ensure Compliance

Now that these regulation updates have become effective, banks and credit unions should review existing lending policies and procedures to reset any limits based on the exemption limit increases.

Navigate Regulatory Change Management with Ease

In January alone, Quantivate Compliance Management Services customers were made aware of 12 compliance alerts and advisories that will impact banks and credit unions soon. In partnership with business law firm Farleigh Wada Witt, Quantivate customers can access integrated regulatory change alerts featuring executive summaries, in-depth documentation, and action plans.

Quantivate’s software and content partners take the headache out of regulatory change management so compliance teams can focus on more important tasks.

As the leader in governance, risk management, and compliance for banks and credit unions, Quantivate provides an integrated approach to compliance management through:

  1. A fully configurable platform that adapts to even the most unique compliance processes.
  2. Templates, workflows, and configurable notifications/alerts designed for banks and credit unions
  3. Data integration with our Enterprise Risk Management, Internal Audit, Policy & Document, and Business Continuity applications to create a comprehensive view of your compliance program.

Looking to mature your compliance program and simplify regulatory change management? Learn more about Quantivate Compliance Management.

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