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CFPB Announces Final Rule for Regulation Z Annual Adjustments

In a significant development for the financial industry, the Consumer Financial Protection Bureau (CFPB) has recently unveiled a final rule, slated to take effect on January 1, 2024. This rule is designed to implement the annual adjustment requirements outlined in Regulation Z, a crucial component of the Truth in Lending Act (TILA).

At its core, the final rule addresses the CFPB’s obligation to annually recalculate the dollar amounts associated with various provisions within Regulation Z. These provisions pertain to the implementation of TILA and its subsequent amendments, which have a profound impact on aspects related to the Home Ownership and Equity Protection Act (HOEPA) and Qualified Mortgages.

Adjustments Based on the Consumer Price Index
To ensure these provisions remain relevant and up to date, the CFPB is tasked with making adjustments as needed. These adjustments are determined by examining the annual percentage change as reflected in the Consumer Price Index (CPI) in effect on June 1, 2023. By employing this approach, the CFPB aims to align the dollar amounts with current economic conditions and inflation rates.

This meticulous process allows for a more accurate representation of the financial landscape, enabling borrowers and lenders alike to navigate lending transactions with confidence and clarity.

The final rule is scheduled to come into effect on January 1, 2024. This means that financial institutions, borrowers, and other stakeholders should be prepared for the adjustments to take effect from the beginning of the new year.

As these updates to Regulation Z become operational, it is crucial for all relevant parties to stay informed and ensure compliance with the revised dollar amounts. Adhering to these adjustments is essential for maintaining the integrity of lending practices and safeguarding the interests of both consumers and lenders in the ever-evolving financial landscape.

Credit unions will need to ensure that they are in compliance with the updated dollar amounts and thresholds specified in Regulation Z. This may involve reviewing and potentially modifying their loan origination and servicing processes to align with the revised rules.

The full rule can be found here.

Access the ‘Compliance Hotline’
Your League-member benefits include the Compliance Hotline — providing exclusive access to dedicated compliance experts:

Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!

Additionally, other League-member compliance resources include:

  • ViClarity
  • CU PolicyPro
  • ComplySight
  • InfoSight
  • CU Store
  • Record Retention Guide
  • GRC Technology Solutions

For more information, email Lisa Quaranta.

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