In case you missed any of these updates, annual threshold adjustments have been made for HMDA, Reg Z, Reg M, and HOEPA as of the time of this publication.
Annual adjustments to these asset-size thresholds are based on the change in the average of the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest million.
For 2024, the threshold was $56 million. During the 12-month period ending in November 2024, the average of the CPI-W increased by 2.9 percent. As a result, the exemption threshold is increased to $58 million. Thus, banks and savings associations with assets of $58 million or less as of Dec. 31, 2024 are exempt from collecting data in 2025. That being said, a bank’s exemption from collecting data in 2025 does not affect its responsibility to report data it was required to collect in 2024.
Reg Z and Reg M Thresholds for 2025
Dodd-Frank Act amended TILA and CLA by requiring annual adjustments to the thresholds based on the annual percentage increase in the consumer price index for urban wage earners and clerical workers. Only those transactions at or below the thresholds are subject to the protections of the regulations.
Based on the annual percentage increase, TILA and CLA will apply to consumer credit transactions and consumer leases of $71,900 or less in 2025.
Keep in mind, this particular exemption threshold is not applicable to some types of credit, as listed below:
- Loans secured by any real property, or by personal property used or expected to be used as the principal dwelling of the consumer; or private education loans.
- Private education loans and loans secured by real property (such as home mortgage loans) or the consumer’s principal dwelling remain subject to TILA regardless of the amount of the loan.
HOEPA and QM Threshold Adjustments
This section of the regulation contains a points and fees coverage test for use in calculating whether a transaction is a high-cost mortgage. Where applicable, the total points and fees thresholds are as follows:
- 5% of the total loan amount for loans greater than or equal to $26,968 (32(a)(1)(ii)(A)).
- 8% of the total loan amount or $1,348, whichever is less, for loans less than $26,968 (32(a)(1)(ii)(B)).
Ability to Repay/Qualified Mortgages (ATR/QM): This section of the regulation contains standards for determining whether a transaction is a QM. In part, a transaction is not a QM if the transaction’s total points and fees exceed certain thresholds, based on specific loan amounts (1026.43(e)(3)(i)). Where applicable, the thresholds are as follows:
- Points and fees may not exceed 3% for a loan amount greater than or equal to $134,841
- Points and fees may not exceed $4,045 – for loans greater than or equal to $80,905 but less than $134,841
- Points and fees may not exceed 5% for loans greater than or equal to $26,968 but less than $80,905
- Points and fees may not exceed $1,348 for loans greater than or equal to $16,855 but less than $26,968
- Points and fees may not exceed 8% – for loans less than $16,855.
As always, if you have questions about updates to thresholds or any other compliance concerns, please reach out to the Compliance Hub Hotline via chat, phone, or email.