Agencies Issue Final Rule on Method to Adjust the Threshold for Exempting Small Loans from Special Appraisal Requirements and Announce 2017 Threshold

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB),
Federal Reserve Board, and Office of the Comptroller of the Currency (OCC) today
issued a final rule detailing the method that will be used to make annual
inflation adjustments to the threshold for exempting small loans from special
appraisal requirements. The final rule
also applies the calculation method to the exemption threshold for 2017. The threshold will remain at $25,500, based
on the CPI-W in effect on June 1, 2016.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 amended the Truth in Lending Act to
add special appraisal requirements for higher-priced mortgage loans, including
a requirement that creditors obtain a written appraisal based on a physical
visit to the home’s interior before making a higher-priced mortgage loan.  The rules implementing these requirements
contain an exemption for loans of $25,000 or less and also provide that the
exemption threshold will be adjusted annually to reflect increases in the Consumer
Price Index for Urban Wage Earners and Clerical Workers (CPI-W). 

The calculation method adopted in the final rule will allow
the thresholds to keep pace with the CPI-W. 
Among other clarifications, the final rule details that if there is no
annual percentage increase in the CPI-W, the agencies will not adjust the
exemption threshold from the prior year.  

The notice has been published in the Federal Register .

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Media contacts

Sam Gilford, Consumer Financial Protection Bureau
(202) 435-7673

Susan Stawick, Federal Reserve Board of Governors
(202) 452-2955

William Grassano, Office of the Comptroller of the Currency
(202) 649-6870