More consumer credit and leasing transactions will be subject to the Truth in Lending Act (TILA) and Consumer Leasing Act (CLA) in 2015.
Effective January 1, 2015, the dollar threshold for exemption of most consumer credit transactions and consumer leases from TILA, the CLA, and their implementing regulations (Regulations Z and M) was increased from $53,500 (the threshold for 2014) to $54,600. The exemption applies only if the principal amount of credit extended, or the maximum principal amount of credit to be extended pursuant to a written commitment, exceeds the threshold. This means that consumer credit and leases with an extended or committed principal amount over $53,500 but not more than $54,600 are exempt from TILA, the CLA and Regulations Z and M in 2014, but not in 2015.
Pursuant to Regulation Z, this exemption does not apply to private education loans or to credit secured by real property or by personal property used or expected to be used as the consumer’s principal dwelling (e.g., a manufactured home). In these cases, unless another exemption applies, TILA and Regulation Z apply regardless of the dollar amount of the credit extended or committed to be extended.
As required by Section 1100E of the Dodd-Frank Consumer Financial Protection Act, the Consumer Financial Protection Bureau and the Board of Governors of the Federal Reserve System reset this threshold each year based upon the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as of June 1 of the preceding year, as published by the Bureau of Labor Statistics.
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