CFPB Announces Dollar Thresholds for Truth in Lending and Consumer Leasing

Last week, the Consumer Financial Protection Bureau (CFPB) announced new dollar thresholds for Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) that will apply for determining exempt consumer credit and lease transactions in 2020. These thresholds are adjusted annually based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and are set pursuant to the Dodd-Frank Act’s amendments to the Truth in Lending Act and the Consumer Leasing Act.

 The Truth in Lending Act was originally passed in 1968, and today aims to protect consumers “against unfair credit billing and credit card practices” by requiring lenders “to provide [consumers] with loan cost information so that [they] can comparison shop for certain types of loans,” according to the Office of the Comptroller of the Currency (OCC). The Consumer Leasing Act, originally passed in 1976, applies to consumer leases of personal property and assures “that meaningful and accurate disclosure of lease terms is provided to consumers before entering into a contract,” according to the Federal Reserve.

 According to the CFPB’s announcement, the new thresholds mean that protections of both acts “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 (such as mortgages) are subject to the Truth in Lending Act regardless of the amount of the loan.”