81 FR 86256 - Consumer Leasing (Regulation M)
FEDERAL RESERVE SYSTEM
BUREAU OF CONSUMER FINANCIAL PROTECTION Federal Register Volume 81, Issue 230 (November 30, 2016)
BUREAU OF CONSUMER FINANCIAL PROTECTION
Federal Register Volume 81, Issue 230 (November 30, 2016)
| Page Range | 86256-86260 | |
| FR Document | 2016-28710 |
[Federal Register Volume 81, Number 230 (Wednesday, November 30, 2016)] [Rules and Regulations] [Pages 86256-86260] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-28710] ----------------------------------------------------------------------- FEDERAL RESERVE SYSTEM 12 CFR Part 213 [Docket No. R-1545] RIN 7100 AE-56 BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Part 1013 [Docket No. CFPB-2016-0036] RIN 3170-AA66 Consumer Leasing (Regulation M) AGENCY: Board of Governors of the Federal Reserve System (Board); and Bureau of Consumer Financial Protection (Bureau). ACTION: Final rules, official interpretations and commentary. ----------------------------------------------------------------------- SUMMARY: The Board and the Bureau are finalizing amendments to the official interpretations and commentary for the agencies' regulations that implement the Consumer Leasing Act (CLA). The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the CLA by requiring that the dollar threshold for exempt consumer leases be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If there is no annual percentage increase in the CPI-W, the Board and Bureau will not adjust this exemption threshold from the prior year. The final rule memorializes this as well as the agencies' calculation method for determining the adjustment in years following a year in which there is no annual percentage increase in the CPI-W. Based on the CPI-W in effect as of June 1, 2016, the exemption threshold will remain at $54,600 through 2017. The Dodd-Frank Act also requires similar adjustments in the Truth in Lending Act's threshold for exempt consumer credit transactions. Accordingly, the Board and the Bureau are adopting similar amendments to the commentaries to each of their respective regulations implementing the Truth in Lending Act elsewhere in this issue of the Federal Register. DATES: This final rule is effective January 1, 2017. FOR FURTHER INFORMATION CONTACT: Board: Vivian W. Wong, Senior Counsel, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452-3667; for users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263- 4869. Bureau: Jaclyn Maier, Counsel, Office of Regulations, Consumer Financial Protection Bureau, at (202) 435-7700. SUPPLEMENTARY INFORMATION: I. Background The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) increased the threshold in the Consumer Leasing Act (CLA) for exempt consumer leases, and the threshold in the Truth in Lending Act (TILA) for exempt consumer credit transactions,\1\ from $25,000 to $50,000, effective July 21, 2011.\2\ In addition, the Dodd- Frank Act requires that, on and after December 31, 2011, these thresholds be adjusted annually for inflation by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as published by the Bureau of Labor Statistics. In April 2011, the Board issued a final rule amending Regulation M (which implements the CLA) consistent with these provisions of the Dodd-Frank Act, along with a similar final rule amending Regulation Z (which implements TILA) (collectively, the Board Final Threshold Rules).\3\ --------------------------------------------------------------------------- \1\ Although consumer credit transactions above the threshold are generally exempt, loans secured by real property or by personal property used or expected to be used as the principal dwelling of a consumer and private education loans are covered by TILA regardless of the loan amount. See 12 CFR 226.3(b)(1)(i) (Board) and 12 CFR 1026.3(b)(1)(i) (Bureau). \2\ Public Law 111-203, section 1100E, 124 Stat. 1376 (2010). \3\ 76 FR 18349 (Apr. 4, 2011); 76 FR 18354 (Apr. 4, 2011). --------------------------------------------------------------------------- Title X of the Dodd-Frank Act transferred rulemaking authority for a number of consumer financial protection laws from the Board to the Bureau, effective July 21, 2011. In connection with this transfer of rulemaking authority, the Bureau issued its own Regulation M implementing the CLA in an interim final rule, 12 CFR part 1013 (Bureau Interim Final Rule).\4\ The Bureau Interim Final Rule substantially duplicated the Board's Regulation M, including the revisions to the threshold for exempt transactions made by the Board in April 2011. In April 2016, the Bureau adopted the Bureau Interim Final Rule as final, subject to intervening final rules published by the Bureau.\5\ Although the Bureau has the authority to issue rules to implement the CLA for most entities, the Board retains authority to issue rules under the CLA for certain motor vehicle dealers covered by section 1029(a) of the Dodd-Frank Act, and the Board's Regulation M continues to apply to those entities.\6\ --------------------------------------------------------------------------- \4\ 76 FR 78500 (Dec. 19, 2011). \5\ 81 FR 25323 (April 28, 2016). \6\ Section 1029(a) of the Dodd-Frank Act states: ``Except as permitted in subsection (b), the Bureau may not exercise any rulemaking, supervisory, enforcement, or any other authority * * * over a motor vehicle dealer that is predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both.'' 12 U.S.C. 5519(a). Section 1029(b) of the Dodd-Frank Act states: ``Subsection (a) shall not apply to any person, to the extent that such person (1) provides consumers with any services related to residential or commercial mortgages or self- financing transactions involving real property; (2) operates a line of business (A) that involves the extension of retail credit or retail leases involving motor vehicles; and (B) in which (i) the extension of retail credit or retail leases are provided directly to consumers; and (ii) the contract governing such extension of retail credit or retail leases is not routinely assigned to an unaffiliated third party finance or leasing source; or (3) offers or provides a consumer financial product or service not involving or related to the sale, financing, leasing, rental, repair, refurbishment, maintenance, or other servicing of motor vehicles, motor vehicle parts, or any related or ancillary product or service.'' 12 U.S.C. 5519(b). --------------------------------------------------------------------------- [[Page 86257]] Section 213.2(e)(1) of the Board's Regulation M and Sec. 1013.2(e)(1) of the Bureau's Regulation M, and their accompanying commentaries, provide that the exemption threshold will be adjusted annually effective January 1 of each year based on any annual percentage increase in the CPI-W that was in effect on the preceding June 1. They further provide that any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI-W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI-W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900.\7\ If there is no annual percentage increase in the CPI-W, the Board and Bureau will not adjust the exemption threshold from the prior year. Since 2011, the Board and the Bureau have adjusted the Regulation M exemption threshold annually, in accordance with these rules. --------------------------------------------------------------------------- \7\ See comments 2(e)-9 in supplements I of 12 CFR parts 213 and 1013. --------------------------------------------------------------------------- II. Commentary Revision On August 4, 2016, the Board and the Bureau published a proposed rule in the Federal Register to memorialize the calculation method used by the agencies each year to adjust the exemption threshold. See 81 FR 51400 (Aug. 4, 2016). The proposed commentary stated that if there is no annual percentage increase in the CPI-W, the Board and Bureau will not adjust the exemption threshold from the prior year. The proposed commentary further set forth the calculation method the agencies would use in years following a year in which the exemption threshold was not adjusted because there was no increase in the CPI-W from the previous year. As the Board and the Bureau discussed in the proposal, the proposed calculation method would ensure that the values for the exemption threshold keep pace with the CPI-W as contemplated by section 1100E(b) of the Dodd-Frank Act. The comment period closed on September 6, 2016. In response to the proposal, the Board and the Bureau received one comment from a consumer supporting the proposal. The Board and the Bureau are adopting the commentary revisions as proposed, with some minor clarifying amendments. These changes will be effective on January 1, 2017. Specifically, the Board and the Bureau are adopting comment 2(e)-9 as proposed to move the text regarding the threshold amount that is in effect during a particular period to a new comment 2(e)-11. The discussion of how the agencies round the threshold calculation will remain in comment 2(e)-9. Furthermore, the Board and the Bureau are adopting new comment 2(e)-10 as proposed to provide that if the CPI-W in effect on June 1 does not increase from the CPI-W in effect on June 1 of the previous year (i.e., the CPI-W in effect on June 1 is either equal to or less than the CPI-W in effect on June 1 of the previous year), the threshold amount effective the following January 1 through December 31 will not change from the previous year. As the Board and the Bureau discussed in the proposal, this position is consistent with section 1100E(b) of the Dodd-Frank Act, which states that the threshold must be adjusted by the ``annual percentage increase'' in the CPI-W (emphasis added), and the position the agencies have previously taken.\8\ Thus, if the threshold in effect from January 1, 2019, through December 31, 2019, is $55,500 and the CPI-W in effect on June 1 of 2019 indicates a 1.1 percent decrease from the CPI-W in effect on June 1, 2018, the threshold in effect for January 1, 2020, through December 31, 2020, will remain $55,500. --------------------------------------------------------------------------- \8\ See, e.g., 76 FR 18354, 18355 n.1 (Apr. 4, 2011) (``[A]n annual period of deflation or no inflation would not require a change in the threshold amount.''). --------------------------------------------------------------------------- Comment 2(e)-10 also provides that, for the years after a year in which the threshold did not change because the CPI-W in effect on June 1 decreased from the CPI-W in effect on June 1 of the previous year, the threshold is calculated by applying the annual percentage change in the CPI-W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI-W had been taken into account. Comment 2(e)-10.i further states that, if the resulting amount, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly. For example, assume that the threshold in effect from January 1, 2019, through December 31, 2019, is $55,500 and that, due to a 1.1 percent decrease from the CPI-W in effect on June 1, 2018, to the CPI-W in effect on June 1, 2019, the threshold in effect from January 1, 2020, through December 31, 2020, remains at $55,500. If, however, the threshold had been adjusted downward to reflect the decrease in the CPI-W over that time period, the threshold in effect from January 1, 2020, through December 31, 2020, would have been $54,900, after rounding. Further assume that the CPI-W in effect on June 1, 2020, increased by 1.6 percent from the CPI-W in effect on June 1, 2019. The calculation for the threshold that will be in effect from January 1, 2021, through December 31, 2021, is based on the impact of a 1.6 percent increase in the CPI-W on $54,900, rather than $55,500, resulting in a 2021 threshold of $55,800. Furthermore, comment 2(e)-10.ii states that, if the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted, after rounding. To illustrate, assume in the example above that the CPI-W in effect on June 1, 2020, increased by only 0.6 percent from the CPI-W in effect on June 1, 2019. The calculation for the threshold that will be in effect from January 1, 2021, through December 31, 2021, is based on the impact of a 0.6 percent increase in the CPI-W on $54,900. The resulting amount, after rounding, is $55,200, which is lower than $55,500, the threshold in effect from January 1, 2020, through December 31, 2020. Therefore, the threshold in effect from January 1, 2021, through December 31, 2021, will remain $55,500. However, the calculation for the threshold that will be in effect from January 1, 2022, through December 31, 2022, will apply the percentage change in the CPI-W to $55,200, the amount that would have resulted based on the 0.6 percent change from the CPI-W in effect on June 1, 2019, after rounding, to the CPI-W in effect on June 1, 2020. III. 2017 Threshold Based on the calculation method detailed above, the exemption threshold amount for 2017 remains at $54,600. This is based on the CPI- W in effect on June 1, 2016, which was reported on May 17, 2016. The Bureau of Labor Statistics publishes consumer-based indices monthly, but does not report a CPI change on June 1; adjustments are reported in the middle of the month. The CPI-W is a subset of the CPI-U index (based on all urban consumers) and represents approximately 28 percent of the U.S. population. The CPI-W reported on May 17, 2016 reflects a 0.8 percent increase in the CPI-W from April 2015 to April 2016. Because the CPI-W decreased from April 2014 to April 2015, the Board and the Bureau are calculating the threshold based on the amount that would have resulted had this decrease been taken into [[Page 86258]] account, which is $54,200. A 0.8 percent increase in the CPI-W applied to $54,200 results in $54,600, which is the same threshold amount for 2016. Thus, the exemption threshold amount that will be in effect for 2017 remains at $54,600. The Board and the Bureau are revising the commentaries to their respective regulations to add new comment 2(e)- 11.viii to state that, from January 1, 2017, through December 31, 2017, the threshold amount is $54,600. These revisions are effective January 1, 2017. IV. Regulatory Analysis Administrative Procedure Act Under the Administrative Procedure Act, notice and opportunity for public comment are not required if the Board and the Bureau find that notice and public comment are impracticable, unnecessary, or contrary to the public interest.\9\ The 2017 threshold amount for exempt consumer leases announced in this rule, $54,600, is technical and applies the calculation method set forth elsewhere in this final rule, for which notice and public comment were provided.\10\ For these reasons, the Board and the Bureau have determined that publishing a notice of proposed rulemaking and providing opportunity for public comment for purposes of the 2017 threshold adjustment are unnecessary. Therefore, the amendments regarding the 2017 threshold amount for exempt consumer leases are adopted in final form. --------------------------------------------------------------------------- \9\ 5 U.S.C. 553(b)(B). \10\ See 81 FR 51400 (Aug. 4, 2016). --------------------------------------------------------------------------- Bureau's Dodd-Frank Act Section 1022(b)(2) Analysis In developing the final rule, the Bureau has considered potential benefits, costs, and impacts.\11\ In addition, the Bureau has consulted, or offered to consult with, the prudential regulators, the Securities and Exchange Commission, the Department of Housing and Urban Development, the Federal Housing Finance Agency, the Federal Trade Commission, and the Department of the Treasury, including regarding consistency with any prudential, market, or systemic objectives administered by such agencies. --------------------------------------------------------------------------- \11\ Specifically, section 1022(b)(2)(A) calls for the Bureau to consider the potential benefits and costs of a regulation to consumers and covered persons, including the potential reduction of access by consumers to consumer financial products or services; the impact on depository institutions and credit unions with $10 billion or less in total assets as described in section 1026 of the Act; and the impact on consumers in rural areas. --------------------------------------------------------------------------- The Bureau has chosen to evaluate the benefits, costs and impacts of the final rule against the current state of the world, which takes into account the current regulatory regime. The Bureau is not aware of any significant benefits or costs to consumers or covered persons associated with the final rule relative to the baseline. The Board previously stated that if there is no annual percentage increase in the CPI-W, then the Board (and now the Bureau) will not adjust the exemption threshold from the prior year.\12\ The final rule memorializes this in official commentary. The final rule also clarifies how the threshold is calculated for years after a year in which the threshold did not change. The Bureau believes that this clarification memorializes the method that the Bureau would be expected to use: This method holds the threshold fixed until a notional threshold calculated using the Bureau's methodology, taking into account both decreases and increases in the CPI-W, exceeds the actual threshold. The Bureau requested, but did not receive, comment on this point. Thus, the Bureau concludes that the final rule will not change the regulatory regime relative to the baseline and will create no significant benefits, costs, or impacts. --------------------------------------------------------------------------- \12\ 76 FR 18354, 18355 n.1 (Apr. 4, 2011) (``[A]n annual period of deflation or no inflation would not require a change in the threshold amount.''). --------------------------------------------------------------------------- The final rule will have no unique impact on depository institutions or credit unions with $10 billion or less in assets as described in section 1026(a) of the Dodd-Frank Act or on rural consumers. The Bureau does not expect this final rule to affect consumers' access to credit. Regulatory Flexibility Act Board: An initial regulatory flexibility analysis (IRFA) was included in the proposal in accordance with section 3(a) of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA). In the IRFA, the Board requested comments on any approaches, other than the proposed alternatives, that would reduce the burden on small entities. The RFA requires an agency to prepare a final regulatory flexibility analysis (FRFA) unless the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. In accordance with section 3(a) of the RFA, the Board has reviewed the final regulation. Based on its analysis, and for the reasons stated below, the Board believes that the rule will not have a significant economic impact on a substantial number of small entities. 1. Statement of the need for, and objectives of, the final rule. The final rule memorializes the calculation method used by the Board each year to adjust the exemption threshold in accordance with section 1100E of the Dodd-Frank Act. The final rule also adopts the exemption threshold that will apply from January 1, 2017, through December 31, 2017, based on the calculation method memorialized in this final rule. 2. Summary of issues raised by comments in response to the initial regulatory flexibility analysis. The Board did not receive any comments on the initial regulatory flexibility analysis. 3. Small entities affected by the final rule. Motor vehicle dealers that are subject to the Board's Regulation M and offer consumer leases that may be exempt from Regulation M under 12 CFR 213.2(e) would be affected. While the total number of small entities likely to be affected by the final rule is unknown, the Board does not believe the final rule will have a significant economic impact on the entities that it affects. 4. Recordkeeping, reporting, and compliance requirements. The final rule would not impose any recordkeeping, reporting, or compliance requirements. 5. Significant alternatives to the final revisions. The Board has not identified any significant alternatives that would reduce the regulatory burden on small entities associated with this final rule. Bureau: The RFA generally requires an agency to conduct an initial regulatory flexibility analysis (IRFA) and a final regulatory flexibility analysis (FRFA) of any rule subject to notice-and-comment rulemaking requirements.\13\ These analyses must describe the impact of the proposed and final rules on small entities.\14\ An IRFA or FRFA is not required if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities.\15\ The Bureau also is subject to certain additional procedures under the RFA involving the convening of a panel to [[Page 86259]] consult with small business representatives prior to proposing a rule for which an IRFA is required.\16\ --------------------------------------------------------------------------- \13\ 5 U.S.C. 601 et seq. \14\ Id. at 603(a) and 604(a). For purposes of assessing the impacts of the rule on small entities, ``small entities'' is defined in the RFA to include small businesses, small not-for-profit organizations, and small government jurisdictions. Id. at 601(6). A ``small business'' is determined by application of Small Business Administration regulations and reference to the North American Industry Classification System (NAICS) classifications and size standards. Id. at 601(3). A ``small organization'' is any ``not-for- profit enterprise which is independently owned and operated and is not dominant in its field.'' Id. at 601(4). A ``small governmental jurisdiction'' is the government of a city, county, town, township, village, school district, or special district with a population of less than 50,000. Id. at 601(5). \15\ Id. at 605(b). \16\ Id. at 609. --------------------------------------------------------------------------- A FRFA is not required for this final rule because it will not have a significant economic impact on a substantial number of small entities. As discussed in the Bureau's Section 1022(b)(2) Analysis above, this final rule does not introduce costs or benefits to covered persons because it seeks only to clarify the method of threshold adjustment which has already been established in previous Agency rules. Therefore this final rule will not have a significant impact on small entities. Certification Accordingly, the Bureau Director, by signing below, certifies that this final rule will not have a significant economic impact on a substantial number of small entities. Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995,\17\ the agencies reviewed this final rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule. --------------------------------------------------------------------------- \17\ 44 U.S.C. 3506; 5 CFR 1320. --------------------------------------------------------------------------- List of Subjects 12 CFR Part 213 Advertising, Consumer leasing, Consumer protection, Federal Reserve System, Reporting and recordkeeping requirements. 12 CFR Part 1013 Advertising, Consumer leasing, Reporting and recordkeeping requirements, Truth in lending. Board of Governors of the Federal Reserve System Authority and Issuance For the reasons set forth in the preamble, the Board amends Regulation M, 12 CFR part 213, as set forth below: PART 213--CONSUMER LEASING (REGULATION M) 0 1. The authority citation for part 213 continues to read as follows: Authority: 15 U.S.C. 1604 and 1667f; Public Law 111-203, section 1100E, 124 Stat. 1376. 0 2. In supplement I to part 213, under Section 213.2--Definitions, under 2(e) Consumer lease, paragraph 9 is revised, and paragraphs 10 and 11 are added, to read as follows: Supplement I to Part 213--Official Staff Commentary to Regulation M * * * * * Section 213.2--Definitions * * * * * 2(e) Consumer Lease * * * * * 9. Threshold amount. A consumer lease is exempt from the requirements of this part if the total contractual obligation exceeds the threshold amount in effect at the time of consummation. The threshold amount in effect during a particular time period is the amount stated in comment 2(e)-11 for that period. The threshold amount is adjusted effective January 1 of each year by any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) that was in effect on the preceding June 1. Comment 2(e)-11 will be amended to provide the threshold amount for the upcoming year after the annual percentage change in the CPI-W that was in effect on June 1 becomes available. Any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI-W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI-W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900. If a consumer lease is exempt from the requirements of this Part because the total contractual obligation exceeds the threshold amount in effect at the time of consummation, the lease remains exempt regardless of a subsequent increase in the threshold amount. 10. No increase in the CPI-W. If the CPI-W in effect on June 1 does not increase from the CPI-W in effect on June 1 of the previous year, the threshold amount effective the following January 1 through December 31 will not change from the previous year. When this occurs, for the years that follow, the threshold is calculated based on the annual percentage change in the CPI-W applied to the dollar amount that would have resulted, after rounding, if decreases and any subsequent increases in the CPI-W had been taken into account. i. Net increases. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly. ii. Net decreases. If the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted. 11. Threshold. For purposes of Sec. 213.2(e)(1), the threshold amount in effect during a particular period is the amount stated below for that period. i. Prior to July 21, 2011, the threshold amount is $25,000. ii. From July 21, 2011 through December 31, 2011, the threshold amount is $50,000. iii. From January 1, 2012 through December 31, 2012, the threshold amount is $51,800. iv. From January 1, 2013 through December 31, 2013, the threshold amount is $53,000. v. From January 1, 2014 through December 31, 2014, the threshold amount is $53,500. vi. From January 1, 2015 through December 31, 2015, the threshold amount is $54,600. vii. From January 1, 2016 through December 31, 2016, the threshold amount is $54,600. viii. From January 1, 2017 through December 31, 2017, the threshold amount is $54,600. Bureau of Consumer Financial Protection Authority and Issuance For the reasons set forth in the preamble, the Bureau amends Regulation M, 12 CFR part 1013, as set forth below: PART 1013--CONSUMER LEASING (REGULATION M) 0 3. The authority citation for part 1013 continues to read as follows: Authority: 15 U.S.C. 1604 and 1667f; Public Law 111-203, section 1100E, 124 Stat. 1376. 0 4. In supplement I to part 1013, under Section 1013.2--Definitions, under 2(e)--Consumer Lease, paragraph 9 is revised, and paragraphs 10 and 11 are added, to read as follows: Supplement I to Part 1013--Official Interpretations * * * * * Section 1013.2--Definitions * * * * * 2(e) Consumer Lease * * * * * 9. Threshold amount. A consumer lease is exempt from the requirements of [[Page 86260]] this part if the total contractual obligation exceeds the threshold amount in effect at the time of consummation. The threshold amount in effect during a particular time period is the amount stated in comment 2(e)-11 for that period. The threshold amount is adjusted effective January 1 of each year by any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI- W) that was in effect on the preceding June 1. Comment 2(e)-11 will be amended to provide the threshold amount for the upcoming year after the annual percentage change in the CPI-W that was in effect on June 1 becomes available. Any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI-W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI-W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900. If a consumer lease is exempt from the requirements of this part because the total contractual obligation exceeds the threshold amount in effect at the time of consummation, the lease remains exempt regardless of a subsequent increase in the threshold amount. 10. No increase in the CPI-W. If the CPI-W in effect on June 1 does not increase from the CPI-W in effect on June 1 of the previous year, the threshold amount effective the following January 1 through December 31 will not change from the previous year. When this occurs, for the years that follow, the threshold is calculated based on the annual percentage change in the CPI-W applied to the dollar amount that would have resulted, after rounding, if decreases and any subsequent increases in the CPI-W had been taken into account. i. Net increases. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly. ii. Net decreases. If the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted. 11. Threshold. For purposes of Sec. 1013.2(e)(1), the threshold amount in effect during a particular period is the amount stated below for that period. i. Prior to July 21, 2011, the threshold amount is $25,000. ii. From July 21, 2011 through December 31, 2011, the threshold amount is $50,000. iii. From January 1, 2012 through December 31, 2012, the threshold amount is $51,800. iv. From January 1, 2013 through December 31, 2013, the threshold amount is $53,000. v. From January 1, 2014 through December 31, 2014, the threshold amount is $53,500. vi. From January 1, 2015 through December 31, 2015, the threshold amount is $54,600. vii. From January 1, 2016 through December 31, 2016, the threshold amount is $54,600. viii. From January 1, 2017 through December 31, 2017, the threshold amount is $54,600. By order of the Board of Governors of the Federal Reserve System, November 17, 2016. Robert deV. Frierson, Secretary of the Board. Dated: November 7, 2016. Richard Cordray, Director, Bureau of Consumer Financial Protection. [FR Doc. 2016-28710 Filed 11-29-16; 8:45 am] BILLING CODE 6210-01-P; 4810-AM-P
![86256 Federal Register / Vol. 81, No. 230 / Wednesday, November 30, 2016 / Rules and Regulations
amount in effect at the time of interpretations and commentary for the after December 31, 2011, these
consummation. agencies’ regulations that implement the thresholds be adjusted annually for
5. Qualifying for exemption— Consumer Leasing Act (CLA). The inflation by the annual percentage
subsequent changes. A transaction does Dodd-Frank Wall Street Reform and increase in the Consumer Price Index
not meet the condition for an exemption Consumer Protection Act (Dodd-Frank for Urban Wage Earners and Clerical
under § 1026.35(c)(2)(ii) merely because Act) amended the CLA by requiring that Workers (CPI–W), as published by the
it is used to satisfy and replace an the dollar threshold for exempt Bureau of Labor Statistics. In April
existing exempt loan, unless the amount consumer leases be adjusted annually 2011, the Board issued a final rule
of the new extension of credit is equal by the annual percentage increase in the amending Regulation M (which
to or less than the applicable threshold Consumer Price Index for Urban Wage implements the CLA) consistent with
amount. For example, assume a closed- Earners and Clerical Workers (CPI–W). these provisions of the Dodd-Frank Act,
end loan that qualified for a If there is no annual percentage increase along with a similar final rule amending
§ 1026.35(c)(2)(ii) exemption at in the CPI–W, the Board and Bureau Regulation Z (which implements TILA)
consummation in year one is refinanced will not adjust this exemption threshold (collectively, the Board Final Threshold
in year ten and that the new loan from the prior year. The final rule Rules).3
amount is greater than the threshold memorializes this as well as the Title X of the Dodd-Frank Act
amount in effect in year ten. In these agencies’ calculation method for transferred rulemaking authority for a
circumstances, the creditor must determining the adjustment in years number of consumer financial
comply with all of the applicable following a year in which there is no protection laws from the Board to the
requirements of § 1026.35(c) with annual percentage increase in the CPI– Bureau, effective July 21, 2011. In
respect to the year ten transaction if the W. Based on the CPI–W in effect as of connection with this transfer of
original loan is satisfied and replaced by June 1, 2016, the exemption threshold rulemaking authority, the Bureau issued
the new loan, unless another exemption will remain at $54,600 through 2017. its own Regulation M implementing the
from the requirements of § 1026.35(c) The Dodd-Frank Act also requires CLA in an interim final rule, 12 CFR
applies. See § 1026.35(c)(2) and similar adjustments in the Truth in part 1013 (Bureau Interim Final Rule).4
(c)(4)(vii). Lending Act’s threshold for exempt The Bureau Interim Final Rule
* * * * * consumer credit transactions. substantially duplicated the Board’s
Accordingly, the Board and the Bureau Regulation M, including the revisions to
Dated: November 22, 2016.
are adopting similar amendments to the the threshold for exempt transactions
Thomas J. Curry, commentaries to each of their respective made by the Board in April 2011. In
Comptroller of the Currency. regulations implementing the Truth in April 2016, the Bureau adopted the
By order of the Board of Governors of the Lending Act elsewhere in this issue of Bureau Interim Final Rule as final,
Federal Reserve System, November 21, 2016. the Federal Register. subject to intervening final rules
Robert deV. Frierson, DATES: This final rule is effective published by the Bureau.5 Although the
Secretary of the Board. January 1, 2017. Bureau has the authority to issue rules
FOR FURTHER INFORMATION CONTACT: to implement the CLA for most entities,
Dated: November 7, 2016.
Board: Vivian W. Wong, Senior the Board retains authority to issue rules
Richard Cordray, under the CLA for certain motor vehicle
Counsel, Division of Consumer and
Director, Bureau of Consumer Financial Community Affairs, Board of Governors dealers covered by section 1029(a) of the
Protection. Dodd-Frank Act, and the Board’s
of the Federal Reserve System, at (202)
[FR Doc. 2016–28699 Filed 11–29–16; 8:45 am] Regulation M continues to apply to
452–3667; for users of
BILLING CODE 4810–33–P; 6210–01–P; 4810–AM–P Telecommunications Device for the Deaf those entities.6
(TDD) only, contact (202) 263–4869.
Bureau: Jaclyn Maier, Counsel, Office 3 76 FR 18349 (Apr. 4, 2011); 76 FR 18354 (Apr.
FEDERAL RESERVE SYSTEM of Regulations, Consumer Financial 4, 2011).
4 76 FR 78500 (Dec. 19, 2011).
12 CFR Part 213 Protection Bureau, at (202) 435–7700. 5 81 FR 25323 (April 28, 2016).
SUPPLEMENTARY INFORMATION: 6 Section 1029(a) of the Dodd-Frank Act states:
[Docket No. R–1545] ‘‘Except as permitted in subsection (b), the Bureau
I. Background may not exercise any rulemaking, supervisory,
RIN 7100 AE–56
The Dodd-Frank Wall Street Reform enforcement, or any other authority * * * over a
motor vehicle dealer that is predominantly engaged
BUREAU OF CONSUMER FINANCIAL and Consumer Protection Act of 2010 in the sale and servicing of motor vehicles, the
PROTECTION (Dodd-Frank Act) increased the leasing and servicing of motor vehicles, or both.’’
threshold in the Consumer Leasing Act 12 U.S.C. 5519(a). Section 1029(b) of the Dodd-
(CLA) for exempt consumer leases, and Frank Act states: ‘‘Subsection (a) shall not apply to
12 CFR Part 1013 any person, to the extent that such person (1)
the threshold in the Truth in Lending provides consumers with any services related to
[Docket No. CFPB–2016–0036] Act (TILA) for exempt consumer credit residential or commercial mortgages or self-
RIN 3170–AA66 transactions,1 from $25,000 to $50,000, financing transactions involving real property; (2)
effective July 21, 2011.2 In addition, the operates a line of business (A) that involves the
Consumer Leasing (Regulation M) extension of retail credit or retail leases involving
Dodd-Frank Act requires that, on and motor vehicles; and (B) in which (i) the extension
AGENCY: Board of Governors of the of retail credit or retail leases are provided directly
1 Although consumer credit transactions above
to consumers; and (ii) the contract governing such
Federal Reserve System (Board); and
sradovich on DSK3GMQ082PROD with RULES
the threshold are generally exempt, loans secured extension of retail credit or retail leases is not
Bureau of Consumer Financial by real property or by personal property used or routinely assigned to an unaffiliated third party
Protection (Bureau). expected to be used as the principal dwelling of a finance or leasing source; or (3) offers or provides
consumer and private education loans are covered a consumer financial product or service not
ACTION: Final rules, official by TILA regardless of the loan amount. See 12 CFR involving or related to the sale, financing, leasing,
interpretations and commentary. 226.3(b)(1)(i) (Board) and 12 CFR 1026.3(b)(1)(i) rental, repair, refurbishment, maintenance, or other
(Bureau). servicing of motor vehicles, motor vehicle parts, or
SUMMARY: The Board and the Bureau are 2 Public Law 111–203, section 1100E, 124 Stat. any related or ancillary product or service.’’ 12
finalizing amendments to the official 1376 (2010). U.S.C. 5519(b).
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![Federal Register / Vol. 81, No. 230 / Wednesday, November 30, 2016 / Rules and Regulations 86257
Section 213.2(e)(1) of the Board’s threshold amount that is in effect during threshold in effect from January 1, 2020,
Regulation M and § 1013.2(e)(1) of the a particular period to a new comment through December 31, 2020, would have
Bureau’s Regulation M, and their 2(e)–11. The discussion of how the been $54,900, after rounding. Further
accompanying commentaries, provide agencies round the threshold assume that the CPI–W in effect on June
that the exemption threshold will be calculation will remain in comment 1, 2020, increased by 1.6 percent from
adjusted annually effective January 1 of 2(e)–9. the CPI–W in effect on June 1, 2019. The
each year based on any annual Furthermore, the Board and the calculation for the threshold that will be
percentage increase in the CPI–W that Bureau are adopting new comment 2(e)– in effect from January 1, 2021, through
was in effect on the preceding June 1. 10 as proposed to provide that if the December 31, 2021, is based on the
They further provide that any increase CPI–W in effect on June 1 does not impact of a 1.6 percent increase in the
in the threshold amount will be increase from the CPI–W in effect on CPI–W on $54,900, rather than $55,500,
rounded to the nearest $100 increment. June 1 of the previous year (i.e., the CPI– resulting in a 2021 threshold of $55,800.
For example, if the annual percentage W in effect on June 1 is either equal to Furthermore, comment 2(e)–10.ii
increase in the CPI–W would result in or less than the CPI–W in effect on June states that, if the resulting amount
a $950 increase in the threshold 1 of the previous year), the threshold calculated, after rounding, is equal to or
amount, the threshold amount will be amount effective the following January less than the current threshold, then the
increased by $1,000. However, if the 1 through December 31 will not change threshold effective January 1 the
annual percentage increase in the CPI– from the previous year. As the Board following year will not change, but
W would result in a $949 increase in the and the Bureau discussed in the future increases will be calculated based
threshold amount, the threshold amount proposal, this position is consistent on the amount that would have resulted,
will be increased by $900.7 If there is no with section 1100E(b) of the Dodd-Frank after rounding. To illustrate, assume in
annual percentage increase in the CPI– Act, which states that the threshold the example above that the CPI–W in
W, the Board and Bureau will not adjust must be adjusted by the ‘‘annual effect on June 1, 2020, increased by only
the exemption threshold from the prior percentage increase’’ in the CPI–W 0.6 percent from the CPI–W in effect on
year. Since 2011, the Board and the (emphasis added), and the position the June 1, 2019. The calculation for the
Bureau have adjusted the Regulation M agencies have previously taken.8 Thus, threshold that will be in effect from
exemption threshold annually, in if the threshold in effect from January 1, January 1, 2021, through December 31,
accordance with these rules. 2019, through December 31, 2019, is 2021, is based on the impact of a 0.6
$55,500 and the CPI–W in effect on June percent increase in the CPI–W on
II. Commentary Revision $54,900. The resulting amount, after
1 of 2019 indicates a 1.1 percent
On August 4, 2016, the Board and the decrease from the CPI–W in effect on rounding, is $55,200, which is lower
Bureau published a proposed rule in the June 1, 2018, the threshold in effect for than $55,500, the threshold in effect
Federal Register to memorialize the January 1, 2020, through December 31, from January 1, 2020, through December
calculation method used by the agencies 2020, will remain $55,500. 31, 2020. Therefore, the threshold in
each year to adjust the exemption Comment 2(e)–10 also provides that, effect from January 1, 2021, through
threshold. See 81 FR 51400 (Aug. 4, for the years after a year in which the December 31, 2021, will remain
2016). The proposed commentary stated threshold did not change because the $55,500. However, the calculation for
that if there is no annual percentage CPI–W in effect on June 1 decreased the threshold that will be in effect from
increase in the CPI–W, the Board and from the CPI–W in effect on June 1 of January 1, 2022, through December 31,
Bureau will not adjust the exemption the previous year, the threshold is 2022, will apply the percentage change
threshold from the prior year. The calculated by applying the annual in the CPI–W to $55,200, the amount
proposed commentary further set forth percentage change in the CPI–W to the that would have resulted based on the
the calculation method the agencies dollar amount that would have resulted, 0.6 percent change from the CPI–W in
would use in years following a year in after rounding, if the decreases and any effect on June 1, 2019, after rounding, to
which the exemption threshold was not subsequent increases in the CPI–W had the CPI–W in effect on June 1, 2020.
adjusted because there was no increase been taken into account. Comment 2(e)– III. 2017 Threshold
in the CPI–W from the previous year. As 10.i further states that, if the resulting
the Board and the Bureau discussed in Based on the calculation method
amount, after rounding, is greater than detailed above, the exemption threshold
the proposal, the proposed calculation the current threshold, then the
method would ensure that the values for amount for 2017 remains at $54,600.
threshold effective January 1 the This is based on the CPI–W in effect on
the exemption threshold keep pace with following year will increase
the CPI–W as contemplated by section June 1, 2016, which was reported on
accordingly. May 17, 2016. The Bureau of Labor
1100E(b) of the Dodd-Frank Act. For example, assume that the
The comment period closed on Statistics publishes consumer-based
threshold in effect from January 1, 2019, indices monthly, but does not report a
September 6, 2016. In response to the through December 31, 2019, is $55,500
proposal, the Board and the Bureau CPI change on June 1; adjustments are
and that, due to a 1.1 percent decrease reported in the middle of the month.
received one comment from a consumer from the CPI–W in effect on June 1,
supporting the proposal. The Board and The CPI–W is a subset of the CPI–U
2018, to the CPI–W in effect on June 1, index (based on all urban consumers)
the Bureau are adopting the 2019, the threshold in effect from
commentary revisions as proposed, with and represents approximately 28
January 1, 2020, through December 31, percent of the U.S. population. The CPI–
some minor clarifying amendments. 2020, remains at $55,500. If, however,
These changes will be effective on W reported on May 17, 2016 reflects a
sradovich on DSK3GMQ082PROD with RULES
the threshold had been adjusted 0.8 percent increase in the CPI–W from
January 1, 2017. downward to reflect the decrease in the
Specifically, the Board and the April 2015 to April 2016. Because the
CPI–W over that time period, the CPI–W decreased from April 2014 to
Bureau are adopting comment 2(e)–9 as
proposed to move the text regarding the 8 See, e.g., 76 FR 18354, 18355 n.1 (Apr. 4, 2011)
April 2015, the Board and the Bureau
(‘‘[A]n annual period of deflation or no inflation
are calculating the threshold based on
7 See comments 2(e)–9 in supplements I of 12 would not require a change in the threshold the amount that would have resulted
CFR parts 213 and 1013. amount.’’). had this decrease been taken into
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![86258 Federal Register / Vol. 81, No. 230 / Wednesday, November 30, 2016 / Rules and Regulations
account, which is $54,200. A 0.8 rule against the current state of the rule memorializes the calculation
percent increase in the CPI–W applied world, which takes into account the method used by the Board each year to
to $54,200 results in $54,600, which is current regulatory regime. The Bureau is adjust the exemption threshold in
the same threshold amount for 2016. not aware of any significant benefits or accordance with section 1100E of the
Thus, the exemption threshold amount costs to consumers or covered persons Dodd-Frank Act. The final rule also
that will be in effect for 2017 remains associated with the final rule relative to adopts the exemption threshold that
at $54,600. The Board and the Bureau the baseline. The Board previously will apply from January 1, 2017,
are revising the commentaries to their stated that if there is no annual through December 31, 2017, based on
respective regulations to add new percentage increase in the CPI–W, then the calculation method memorialized in
comment 2(e)–11.viii to state that, from the Board (and now the Bureau) will not this final rule.
January 1, 2017, through December 31, adjust the exemption threshold from the 2. Summary of issues raised by
2017, the threshold amount is $54,600. prior year.12 The final rule memorializes comments in response to the initial
These revisions are effective January 1, this in official commentary. The final regulatory flexibility analysis. The
2017. rule also clarifies how the threshold is Board did not receive any comments on
calculated for years after a year in which the initial regulatory flexibility analysis.
IV. Regulatory Analysis 3. Small entities affected by the final
the threshold did not change. The
Administrative Procedure Act Bureau believes that this clarification rule. Motor vehicle dealers that are
memorializes the method that the subject to the Board’s Regulation M and
Under the Administrative Procedure
Bureau would be expected to use: This offer consumer leases that may be
Act, notice and opportunity for public
method holds the threshold fixed until exempt from Regulation M under 12
comment are not required if the Board
a notional threshold calculated using CFR 213.2(e) would be affected. While
and the Bureau find that notice and
the Bureau’s methodology, taking into the total number of small entities likely
public comment are impracticable,
account both decreases and increases in to be affected by the final rule is
unnecessary, or contrary to the public
the CPI–W, exceeds the actual unknown, the Board does not believe
interest.9 The 2017 threshold amount
threshold. The Bureau requested, but the final rule will have a significant
for exempt consumer leases announced
did not receive, comment on this point. economic impact on the entities that it
in this rule, $54,600, is technical and
Thus, the Bureau concludes that the affects.
applies the calculation method set forth
final rule will not change the regulatory 4. Recordkeeping, reporting, and
elsewhere in this final rule, for which
regime relative to the baseline and will compliance requirements. The final rule
notice and public comment were
create no significant benefits, costs, or would not impose any recordkeeping,
provided.10 For these reasons, the Board
impacts. reporting, or compliance requirements.
and the Bureau have determined that 5. Significant alternatives to the final
publishing a notice of proposed The final rule will have no unique
impact on depository institutions or revisions. The Board has not identified
rulemaking and providing opportunity any significant alternatives that would
for public comment for purposes of the credit unions with $10 billion or less in
assets as described in section 1026(a) of reduce the regulatory burden on small
2017 threshold adjustment are entities associated with this final rule.
unnecessary. Therefore, the the Dodd-Frank Act or on rural
consumers. The Bureau does not expect Bureau: The RFA generally requires
amendments regarding the 2017 an agency to conduct an initial
threshold amount for exempt consumer this final rule to affect consumers’
access to credit. regulatory flexibility analysis (IRFA)
leases are adopted in final form. and a final regulatory flexibility analysis
Bureau’s Dodd-Frank Act Section Regulatory Flexibility Act (FRFA) of any rule subject to notice-
1022(b)(2) Analysis Board: An initial regulatory flexibility and-comment rulemaking
analysis (IRFA) was included in the requirements.13 These analyses must
In developing the final rule, the
proposal in accordance with section 3(a) describe the impact of the proposed and
Bureau has considered potential
of the Regulatory Flexibility Act, 5 final rules on small entities.14 An IRFA
benefits, costs, and impacts.11 In
U.S.C. 601 et seq. (RFA). In the IRFA, or FRFA is not required if the agency
addition, the Bureau has consulted, or
the Board requested comments on any certifies that the rule will not have a
offered to consult with, the prudential
approaches, other than the proposed significant economic impact on a
regulators, the Securities and Exchange
alternatives, that would reduce the substantial number of small entities.15
Commission, the Department of Housing
burden on small entities. The RFA The Bureau also is subject to certain
and Urban Development, the Federal
requires an agency to prepare a final additional procedures under the RFA
Housing Finance Agency, the Federal
regulatory flexibility analysis (FRFA) involving the convening of a panel to
Trade Commission, and the Department
of the Treasury, including regarding unless the agency certifies that the rule
consistency with any prudential, will not, if promulgated, have a 13 5 U.S.C. 601 et seq.
14 Id. at 603(a) and 604(a). For purposes of
market, or systemic objectives significant economic impact on a
assessing the impacts of the rule on small entities,
administered by such agencies. substantial number of small entities. In ‘‘small entities’’ is defined in the RFA to include
The Bureau has chosen to evaluate the accordance with section 3(a) of the RFA, small businesses, small not-for-profit organizations,
benefits, costs and impacts of the final the Board has reviewed the final and small government jurisdictions. Id. at 601(6). A
regulation. Based on its analysis, and for ‘‘small business’’ is determined by application of
Small Business Administration regulations and
95 U.S.C. 553(b)(B). the reasons stated below, the Board reference to the North American Industry
10 See 81 FR 51400 (Aug. 4, 2016). believes that the rule will not have a Classification System (NAICS) classifications and
significant economic impact on a
sradovich on DSK3GMQ082PROD with RULES
11 Specifically, section 1022(b)(2)(A) calls for the size standards. Id. at 601(3). A ‘‘small organization’’
Bureau to consider the potential benefits and costs substantial number of small entities. is any ‘‘not-for-profit enterprise which is
of a regulation to consumers and covered persons, independently owned and operated and is not
1. Statement of the need for, and dominant in its field.’’ Id. at 601(4). A ‘‘small
including the potential reduction of access by
consumers to consumer financial products or objectives of, the final rule. The final governmental jurisdiction’’ is the government of a
services; the impact on depository institutions and city, county, town, township, village, school
credit unions with $10 billion or less in total assets 12 76 FR 18354, 18355 n.1 (Apr. 4, 2011) (‘‘[A]n district, or special district with a population of less
as described in section 1026 of the Act; and the annual period of deflation or no inflation would not than 50,000. Id. at 601(5).
impact on consumers in rural areas. require a change in the threshold amount.’’). 15 Id. at 605(b).
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![86260 Federal Register / Vol. 81, No. 230 / Wednesday, November 30, 2016 / Rules and Regulations
this part if the total contractual i. Prior to July 21, 2011, the threshold by the annual percentage increase in the
obligation exceeds the threshold amount amount is $25,000. Consumer Price Index for Urban Wage
in effect at the time of consummation. ii. From July 21, 2011 through Earners and Clerical Workers (CPI–W).
The threshold amount in effect during a December 31, 2011, the threshold If there is no annual percentage increase
particular time period is the amount amount is $50,000. in the CPI–W, the Board and Bureau
stated in comment 2(e)–11 for that iii. From January 1, 2012 through will not adjust this exemption threshold
period. The threshold amount is December 31, 2012, the threshold from the prior year. The final rule
adjusted effective January 1 of each year amount is $51,800. memorializes this as well as the
by any annual percentage increase in iv. From January 1, 2013 through agencies’ calculation method for
the Consumer Price Index for Urban December 31, 2013, the threshold determining the adjustment in years
Wage Earners and Clerical Workers amount is $53,000. following a year in which there is no
(CPI–W) that was in effect on the v. From January 1, 2014 through annual percentage increase in the CPI–
preceding June 1. Comment 2(e)–11 will December 31, 2014, the threshold W. Based on the CPI–W in effect as of
be amended to provide the threshold amount is $53,500. June 1, 2016, the exemption threshold
amount for the upcoming year after the vi. From January 1, 2015 through will remain at $54,600 through 2017.
annual percentage change in the CPI–W December 31, 2015, the threshold The Dodd-Frank Act also requires
that was in effect on June 1 becomes amount is $54,600. similar adjustments in the Consumer
available. Any increase in the threshold vii. From January 1, 2016 through Leasing Act’s threshold for exempt
amount will be rounded to the nearest December 31, 2016, the threshold consumer leases. Accordingly, the
$100 increment. For example, if the amount is $54,600. Board and the Bureau are adopting
annual percentage increase in the CPI– viii. From January 1, 2017 through similar amendments to the
W would result in a $950 increase in the December 31, 2017, the threshold commentaries to each of their respective
threshold amount, the threshold amount amount is $54,600. regulations implementing the Consumer
will be increased by $1,000. However, if By order of the Board of Governors of the Leasing Act elsewhere in this issue of
the annual percentage increase in the Federal Reserve System, November 17, 2016. the Federal Register.
CPI–W would result in a $949 increase Robert deV. Frierson, DATES: This final rule is effective
in the threshold amount, the threshold Secretary of the Board. January 1, 2017.
amount will be increased by $900. If a Dated: November 7, 2016. FOR FURTHER INFORMATION CONTACT:
consumer lease is exempt from the Board: Vivian W. Wong, Senior
Richard Cordray,
requirements of this part because the Counsel, Division of Consumer and
total contractual obligation exceeds the Director, Bureau of Consumer Financial
Protection.
Community Affairs, Board of Governors
threshold amount in effect at the time of of the Federal Reserve System, at (202)
[FR Doc. 2016–28710 Filed 11–29–16; 8:45 am]
consummation, the lease remains 452–3667; for users of
exempt regardless of a subsequent BILLING CODE 6210–01–P; 4810–AM–P
Telecommunications Device for the Deaf
increase in the threshold amount. (TDD) only, contact (202) 263–4869.
10. No increase in the CPI–W. If the Bureau: Jaclyn Maier, Counsel, Office
FEDERAL RESERVE SYSTEM
CPI–W in effect on June 1 does not of Regulations, Consumer Financial
increase from the CPI–W in effect on 12 CFR Part 226 Protection Bureau, at (202) 435–7700.
June 1 of the previous year, the SUPPLEMENTARY INFORMATION:
threshold amount effective the [Docket No. R–1546]
following January 1 through December I. Background
RIN 7100 AE–57
31 will not change from the previous The Dodd-Frank Wall Street Reform
year. When this occurs, for the years BUREAU OF CONSUMER FINANCIAL and Consumer Protection Act of 2010
that follow, the threshold is calculated PROTECTION (Dodd-Frank Act) increased the
based on the annual percentage change threshold in the Truth in Lending Act
in the CPI–W applied to the dollar 12 CFR Part 1026 (TILA) for exempt consumer credit
amount that would have resulted, after transactions,1 and the threshold in the
[Docket No. CFPB–2016–0037]
rounding, if decreases and any Consumer Leasing Act (CLA) for exempt
subsequent increases in the CPI–W had RIN 3170–AA67 consumer leases, from $25,000 to
been taken into account. $50,000, effective July 21, 2011.2 In
i. Net increases. If the resulting Truth in Lending (Regulation Z) addition, the Dodd-Frank Act requires
amount calculated, after rounding, is AGENCY: Board of Governors of the that, on and after December 31, 2011,
greater than the current threshold, then Federal Reserve System (Board); and these thresholds be adjusted annually
the threshold effective January 1 the Bureau of Consumer Financial for inflation by the annual percentage
following year will increase Protection (Bureau). increase in the Consumer Price Index
accordingly. for Urban Wage Earners and Clerical
ACTION: Final rules, official
ii. Net decreases. If the resulting Workers (CPI–W), as published by the
interpretations and commentary.
amount calculated, after rounding, is Bureau of Labor Statistics. In April
equal to or less than the current SUMMARY: The Board and the Bureau are 2011, the Board issued a final rule
threshold, then the threshold effective finalizing amendments to the official
1 Although consumer credit transactions above
January 1 the following year will not interpretations and commentary for the
sradovich on DSK3GMQ082PROD with RULES
the threshold are generally exempt, loans secured
change, but future increases will be agencies’ regulations that implement the by real property or by personal property used or
calculated based on the amount that Truth in Lending Act (TILA). The Dodd- expected to be used as the principal dwelling of a
would have resulted. Frank Wall Street Reform and Consumer consumer and private education loans are covered
11. Threshold. For purposes of Protection Act (Dodd-Frank Act) by TILA regardless of the loan amount. See 12 CFR
226.3(b)(1)(i) (Board) and 12 CFR 1026.3(b)(1)(i)
§ 1013.2(e)(1), the threshold amount in amended TILA by requiring that the (Bureau).
effect during a particular period is the dollar threshold for exempt consumer 2 Public Law 111–203, section 1100E, 124 Stat.
amount stated below for that period. credit transactions be adjusted annually 1376 (2010).
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Document Created: 2016-11-30 02:17:54
Document Modified: 2016-11-30 02:17:54
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rules, official interpretations and commentary. | |
| Dates | This final rule is effective January 1, 2017. | |
| Contact | Board: Vivian W. Wong, Senior Counsel, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452-3667; for users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263- 4869. | |
| FR Citation | 81 FR 86256 | |
| RIN Number | 7100 AE56 and 3170-AA66 | |
| CFR Citation | 12
CFR
1013 12 CFR 213 | |
| CFR Associated | Truth in Lending; Advertising; Consumer Leasing; Consumer Protection; Federal Reserve System and Reporting and Recordkeeping Requirements |
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