FRB Adjusts Dollar Threshold Under TILA and Regulation M

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.

If you have questions on the impact of this rule, please contact the experts listed below at (800) 270-9629. To receive banking updates from PYA on Twitter, click here.

WE ARE REQUIRED BY IRS CIRCULAR 230 TO INFORM YOU THAT THE FOLLOWING DISCUSSION WAS NOT INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED, NOR RELIED UPON, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW. THE ADVICE WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED IN THE DISCUSSION. EACH TAXPAYER SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.


Mike Shamblin

Mike Shamblin

Managing Principal of Audit & Assurance Services

Matt Neilson

Matt Neilson

Principal

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