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  • Agencies Announce Changes to Threshold Amounts for Truth in Lending Act and Consumer Leasing Act

    Agency Rule-Making & Guidance

    On November 8, the CFPB and the Federal Reserve Board (Board) finalized the annual dollar threshold adjustments that govern the application of Regulation Z (Truth in Lending Act) and Regulation M (Consumer Leasing Act) to credit transactions as required by the Dodd-Frank Act. Each year the thresholds must be readjusted based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The exemption threshold for 2018, based on the annual percentage increase in the CPI-W, is now $55,800 or less, except for private student loans and loans secured by real property, which are subject to TILA regardless of the amount.

    Additionally, on November 8, the OCC, along with the CFPB and the Board, finalized amendments to the official interpretations for the regulations implementing section 129H of TILA, which determines the threshold amount for a small loan’s exemption from the special appraisal requirements that apply to higher-priced mortgage loans. The threshold for 2018, based on the annual percentage increase in the CPI-W, is now $26,000.         

    Agency Rule-Making & Guidance CFPB Federal Reserve OCC TILA CLA

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  • FTC Fines California Auto Dealer for Violating Order About Disclosures

    Lending

    On November 6, the FTC announced a settlement of $1.4 million with a Southern California auto dealership for violating a 2014 administrative order (Order). The Order prohibited the dealership from misrepresenting the cost to finance or lease a vehicle. In issuing the Order, the FTC alleged that the dealership had violated the FTC Act by using advertisements that deceptively stated a $0 up-front lease option while excluding other fees and costs, and also that the dealership’s advertisements violated disclosure requirements of the Consumer Leasing Act (CLA) and TILA.

    The new settlement resolves a complaint in which the FTC alleged the auto dealership “routinely violated” the Order requiring the dealership to, among other things, (i) accurately represent costs and terms of financing or leasing vehicles; (ii) conform its advertisements to the requirements of the CLA and TILA; and (iv) maintain necessary records and make those records available to the agency. In addition to the monetary penalty and the prohibition of similar practices, the settlement also subjects the dealership to strong compliance and reporting requirements.

    Lending Auto Finance FTC Enforcement Settlement. FTC Act CLA TILA Disclosures

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