Q4 2024 Compliance Updates for Financial Institutions By Troy Snyder, Brad Birkholz, Peyton Lydigsen, Andrea Pech and Shawn McGuffin Plante Moran, ICBC Silver Associate Member Each quarter, our financial institution’s experts bring you the top headlines to keep you updated on regulatory compliance matters impacting banks and credit unions. Here’s the latest roundup of information you need to know. LENDING COMPLIANCE Agencies announce dollar thresholds for applicability of truth in lending and consumer leasing rules for consumer credit and lease transactions: The Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC) and Consumer Financial Protection Bureau (CFPB) announced new dollar thresholds for consumer credit and lease transactions. These thresholds determine whether certain consumer credit and lease transactions are subject to the protections of Regulation Z (truth in lending) and Regulation M (consumer leasing). The threshold rose from $69,500 to $71,900, effective Jan. 1, 2025. Private education loans and loans secured by real property, such as mortgages, are subject to Regulation Z regardless of the loan amount. Agencies announce dollar thresholds for smaller loan exemption from appraisal requirements for higher-priced mortgage loans: The FRB, OCC and CFPB announced new dollar thresholds for smaller loan exemptions from appraisal requirements for higher-priced mortgage loans. The 2025 threshold for higher-priced mortgage loans that are subject to special appraisal requirements increased from $31,000 to $32,400, effective Jan. 1, 2025. This adjustment is based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as of June 1, 2024. CFPB published adjustments to thresholds under TILA and FCRA: The CFPB announced two threshold adjustments for 2025. The first, under the Truth in Lending Act (TILA), keeps the minimum interest charge disclosure threshold at $1.00 and sets the high-cost mortgage threshold at $26,968. The second adjustment maintains the maximum charge for consumer file disclosures under the Fair Credit Reporting Act (FCRA) at $15.50. Both adjustments took effect on Jan. 1, 2025. CFPB published Supervisory Highlights describing illegal practices in auto lending: The CFPB’s latest Supervisory Highlights report uncovers illegal practices in auto finance, such as wrongful repossessions and inaccurate disclosures. Lenders were found repossessing cars despite timely payments or loan extensions, misapplying payments and providing incorrect credit report information. The report also highlights issues with add-on products, where consumers were charged for unwanted products and denied refunds upon early loan termination. The CFPB has directed INDEPENDENT REPORT | 17
RkJQdWJsaXNoZXIy MTg3NDExNQ==