The Consumer Financial Protection Bureau (CFPB) announced 2018 thresholds applicable under Regulation Z last week. The bureau is required to adjust on an annual basis certain thresholds under Regulation Z.
These changes will be effective Jan. 1.
Requirements for High-Cost Mortgages
A loan can be classified as a high-cost mortgage based on 1 of 3 independent triggers, including the points and fees charged in connection with the transaction.
Starting Jan. 1, a loan will be classified as high-cost if the total points and fees charged in connection with the transaction exceed:
Limitations on credit card fees
Regulation Z establishes a safe harbor for the imposition of penalty fees in association with credit card accounts. A credit union is considered to be compliant as long as their penalty fees do not exceed the following amounts:
These thresholds remain unchanged from the current 2017 levels.
Ability to Repay/Qualified Mortgages
One way a credit union may satisfy the ability to repay requirements of Regulation Z is to originate the loan as a qualified mortgage (QM). A QM has very specific requirements, including a limitation on the points and fees charged in connection with the transaction.
Beginning Jan. 1, the points and fees limits will be as follows: