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Federal Reserve & CFPB Announce Regulations Z and M Thresholds For 2021

Nov 20, 2020

The Federal Reserve Board  and Consumer Financial Protection Bureau (CFPB) today announced the dollar thresholds in Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) that will apply for determining exempt consumer credit and lease transactions in 2021.

These thresholds are set pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amendments to the Truth in Lending Act and the Consumer Leasing Act. The amendments require adjusting the thresholds annually based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Based on the increase in the CPI-W as of June 1, 2020, the protections of the Truth in Lending Act and the Consumer Leasing Act generally will apply to consumer credit transactions and consumer leases of $58,300 or less in 2021.

Dealers should keep in mind that third-party funding sources will likely conform all of their contracts with Regulation Z and Regulation M regardless of the dollar amount of the deal, and further, that New Jersey’s state law governing consumer automobile leases contains no dollar threshold. For these reasons, the above-described changes will have little practical effect for New Jersey dealers

For more information you can read the joint press release HERE.