Agencies Increase Thresholds for Exempt Consumer Credit and Lease Transactions

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The CFPB and Federal Reserve Board announced increases to the dollar thresholds for exempt consumer credit and lease transactions under Regulation Z (TILA) and Regulation M (Consumer Leasing Act).  Effective, January 1, 2020, the exemption threshold amounts will increase from $57,200 to $58,300.

Based on these adjustments, certain consumer protections provided by TILA and the Consumer Leasing Act will apply to consumer credit transactions and consumer leases of $58,300 or less in 2020.  However, private education loans and loans secured by real property (e.g., mortgages) will remain subject to TILA regardless of the loan amount.  

In accordance with the requirement for the exemption thresholds to be adjusted each year based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, these latest adjustments reflect the annual percentage increase in the consumer price index in effect as of June 1, 2019.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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