Written by Steve Van Beek
A new year usually brings with it updated thresholds for various regulations. Below are a couple of updated thresholds and, unfortunately, one unknown.
Reg Z - Section 32 Threshold
Each year, the "points and fees" dollar amount threshold for Section 32 (high-cost mortgage loans) is adjusted. The underlying requirement comes from 12 CFR 1026.32(a)(1)(ii):
"(ii) The total points and fees payable by the consumer at or before loan closing will exceed the greater of 8 percent of the total loan amount, or $400; the $400 figure shall be adjusted annually on January 1 by the annual percentage change in the Consumer Price Index that was reported on the preceding June 1."
Here are the last few years - including 2012 - from Comment 2 in the Official Staff Commentary to Section 1026.32(a)(1)(ii):
"xiv. For 2009, $583, reflecting a 3.94 percent increase in the CPI–U from June 2007 to June 2008, rounded to the nearest whole dollar.
xv. For 2010, $579, reflecting a 0.74 percent decrease in the CPI–U from June 2008 to June 2009, rounded to the nearest whole dollar.
xvi. For 2011, $592, reflecting a 2.2 percent increase in the CPI–U from June 2009 to June 2010, rounded to the nearest whole dollar.
xvii. For 2012, $611, reflecting a 3.2 percent increase in the CPI–U from June 2010 to June 2011, rounded to the nearest whole dollar."
The 2012 threshold was published in the Federal Register by the Federal Reserve on June 20, 2011 (the Fed had authority over Reg Z until July 21, 2011).
Thresholds for Regulation Z and Regulation M
Dodd-Frank increased the exemptions in Regulation Z and Regulation M from $25,000 to $50,000 on July 21, 2011. These exemptions were also tied to inflation and increased to $51,800 on January 1, 2012.
- Regulation Z Federal Register from June 20, 2011.
- Regulation M Federal Register from June 20, 2011.
Comment 1 to the Official Staff Commentary to Regulation Z includes background on these exemption levels:
"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."
HMDA Reporting Asset Threshold
I wish I knew what to tell you. This seems to be the perfect example of growing pains with a new regulator.
In the past, the Federal Reserve published the HMDA asset threshold each December informing institutions who would need to collect HMDA data during the following year. Below are the announcements from the Federal Reserve for past years:
- For the 2011 reporting year, a $40 million asset threshold.
- For the 2010 reporting year, a $39 million asset threshold.
- For the 2009 reporting year, a $39 million asset threshold.
So, what is the threshold for 2012? Unfortunately, no one seems to know - the CFPB hasn't provided any information on the 2012 threshold. When the CFPB republished the consumer regulations, including Regulation C (HMDA), it did not update the asset threshold.
Here is how the Official Staff Commentary currently reads for Regulation C:
"2. Adjustment of exemption threshold for depository institutions. For data collection in 2011, the asset-size exemption threshold is $40 million. Depository institutions with assets at or below $40 million as of December 31, 2010 are exempt from collecting data for 2011." (emphasis added).
We'll be sure to update everyone as soon as we hear from the CFPB on the asset level for 2012 reporting. In the meantime, chalk this one up as an example of unnecessary regulatory burdens.
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New NAFCU Blog. The new year also brings exciting news on the blog front. Everyone knew blogging runs through his veins and it was only a matter of time before Anthony Demangone was blogging again. Well, he's back - this time sharing his experiences as an executive.
What is the new blog about? The blog's subtitle says it all: Great Links. Big Ideas. A splash of Random Commentary.
Take a peek at NAFCU's new blog - Musings from the CU Suite. Stop by, say hi, leave a comment and consider signing up for the email feed.
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