FRB Adjusts Dollar Threshold Under TILA and Regulation M
The Federal Reserve Board (FRB) recently adjusted the Truth in Lending Act (TILA) and Regulation M (Consumer Leasing) regulations by increasing the dollar threshold for exempt consumer credit and lease transactions. Transactions at or below this threshold are subject to protection under the regulations. Based on these adjustments, the threshold will be increased to $51,800 in 2012. It should be noted, however, that private education loans and loans secured by real property are subject to TILA regardless of the amount of the loan.
These adjustments are required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Under Dodd-Frank, these thresholds must be adjusted annually, based on changes in the consumer price index (CPI). These adjustments were based on the annual percentage increase in the CPI that was in effect as of June 1, 2011. The new adjustments will take effect on January 1, 2012.
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