69736 Federal Register / Vol. 77, No. 225 / Wednesday, November 21, 2012 / Rules and Regulations 

consumers) and represents 

approximately 28 percent of the U.S. 

population. The adjustment reflects a 

2.4 percent increase in the CPI–W from 

April 2011 to April 2012 and is rounded 

to the nearest $100 increment. 

Accordingly, the Board and the Bureau 

are revising the commentaries to their 

respective regulations to add new 

subparagraph 2(e)–9.iv stating that, from 

January 1, 2013 through December 31, 

2013, the threshold amount is $53,000. 

These revisions are effective January 1, 

2013. 

III. Administrative Law Matters 

Administrative Procedure Act 

Under the Administrative Procedure 

Act, notice and opportunity for public 

comment are not required if the Board 

and the Bureau find that notice and 

public comment are impracticable, 

unnecessary, or contrary to the public 

interest. 5 U.S.C. 553(b)(B). This annual 

adjustment is required by statute. The 

amendment in this notice is technical 

and non-discretionary, and it applies 

the method previously established in 

the agencies’ regulations for 

determining adjustments to the 

exemption threshold. For these reasons, 

the Board and the Bureau have 

determined that publishing a notice of 

proposed rulemaking and providing 

opportunity for public comment are 

unnecessary. Therefore, the 

amendments are adopted in final form. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

does not apply to a rulemaking where a 

general notice of proposed rulemaking 

is not required. 5 U.S.C. 603 and 604. 

As noted previously, the agencies have 

determined that it is unnecessary to 

publish a general notice of proposed 

rulemaking for this joint final rule. 

Accordingly, the RFA’s requirements 

relating to an initial and final regulatory 

flexibility analysis do not apply. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3506; 

5 CFR 1320), the agencies reviewed this 

final rule. No collections of information 

pursuant to the Paperwork Reduction 

Act are contained in the final rule. 

List of Subjects 

12 CFR Part 213 

Advertising, Consumer leasing, 

Consumer protection, Federal Reserve 

System, Reporting and recordkeeping 

requirements. 

12 CFR Part 1013 

Advertising, Consumer leasing, 

Reporting and recordkeeping 

requirements. 

Board of Governors of the Federal 

Reserve System 

Text of Final Revisions 

For the reasons set forth in the 

preamble, the Board amends Regulation 

M, 12 CFR part 213, as set forth below: 

PART 213—CONSUMER LEASING 

(REGULATION M) 

■ 1. The authority citation for part 213 

continues to read as follows: 

Authority: 15 U.S.C. 1604 and 1667f; Pub. 

L. 111–203 § 1100E, 124 Stat. 1376. 

■ 2. In Supplement I to Part 213, under 

Section 213.2—Definitions, under 2(e) 

Consumer Lease, new paragraph 9.iv is 

added to read as follows: 

Supplement I to Part 213—Official Staff 

Commentary to Regulation M 

Section 213.2 Definitions 

* * * * * 

2(e) Consumer Lease. 

9. Threshold amount. * * * 

iv. From January 1, 2013 through December 

31, 2013, the threshold amount is $53,000. 

* * * * * 

Bureau of Consumer Financial 

Protection 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau amends 

Regulation M, 12 CFR part 1013, as set 

forth below: 

PART 1013—CONSUMER LEASING 

(REGULATION M) 

■ 1. The authority citation for part 1013 

is revised to read as follows: 

Authority: 15 U.S.C. 1604 and 1667f; Pub. 

L. 111–203 § 1100E, 124 Stat. 1376. 

■ 2. In Supplement I to part 1013, under 

Section 1013.2—Definitions, under 2(e) 

Consumer Lease, new paragraph 9.iv is 

added to read as follows: 

Supplement I to Part 1013—Official 

Interpretations 

* * * * * 

Section 1013.2 Definitions 

* * * * * 

2(e) Consumer Lease. 

9. Threshold amount. * * * 

iv. From January 1, 2013 through December 

31, 2013, the threshold amount is $53,000. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, November 8, 2012. 

Robert deV. Frierson, 

Secretary of the Board. 

Dated: November 6, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–27996 Filed 11–20–12; 8:45 am] 

BILLING CODE 6210–01–P; 4810–AM–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 226 

[Docket No. 1450] 

RIN 7100–AD94 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1026 

[Docket No. CFPB–2012–0043] 

Truth in Lending (Regulation Z) 

AGENCIES: Board of Governors of the 

Federal Reserve System (Board); and 

Bureau of Consumer Financial 

Protection (Bureau). 

ACTION: Final rules, official 

interpretations and commentary. 

SUMMARY: The Board and the Bureau are 

publishing final rules amending the 

official interpretations and commentary 

for the agencies’ regulations that 

implement the Truth in Lending Act 

(TILA). Effective July 21, 2011, the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank 

Act) amended TILA by increasing the 

threshold for exempt consumer credit 

transactions from $25,000 to $50,000 

and requiring that, on or after December 

31, 2011, this threshold be adjusted 

annually by any annual percentage 

increase in the Consumer Price Index 

for Urban Wage Earners and Clerical 

Workers (CPI–W). Accordingly, the 

exemption threshold was adjusted to 

$51,800 effective January 1, 2012. Based 

on the annual percentage increase in the 

CPI–W as of June 1, 2012, the Board and 

the Bureau are adjusting the exemption 

threshold from $51,800 to $53,000, 

effective January 1, 2013. 

Because the Dodd-Frank Act also 

requires similar adjustments in the 

Consumer Leasing Act’s threshold for 

exempt consumer leases, the Board and 

the Bureau are making similar 

amendments to each of their respective 

regulations implementing the Consumer 

Leasing Act elsewhere in the Federal 

Register. 

DATES: This final rule is effective 

January 1, 2013. 


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Federal Register / Vol. 77, No. 225 / Wednesday, November 21, 2012 / Rules and Regulations 69737 

1Although consumer credit transactions above 

the threshold are generally exempt, loans secured 

by real property or by personal property used or 

expected to be used as the principal dwelling of a 

consumer and private education loans are covered 

by TILA regardless of the loan amount. See 12 CFR 

226.3(b)(1)(i) and 12 CFR 1026.3(b)(1)(i). 

2Public Law 111–203 § 1100E, 124 Stat. 1376 

(2010). 

3 76 FR 18354 (Apr. 4, 2011). 

4 76 FR 79768 (Dec. 22, 2011). 

5Section 1029(a) of the Dodd-Frank Act states: 

‘‘Except as permitted in subsection (b), the Bureau 

may not exercise any rulemaking, supervisory, 

enforcement, or any other authority * * * over a 

motor vehicle dealer that is predominantly engaged 

in the sale and servicing of motor vehicles, the 

leasing and servicing of motor vehicles, or both.’’ 

12 U.S.C. 5519(a). Section 1029(b) of the DoddFrank Act states: ‘‘Subsection (a) shall not apply to 

any person, to the extent that such person (1) 

provides consumers with any services related to 

residential or commercial mortgages or selffinancing transactions involving real property; (2) 

operates a line of business (A) that involves the 

extension of retail credit or retail leases involving 

motor vehicles; and (B) in which (i) the extension 

of retail credit or retail leases are provided directly 

to consumers; and (ii) the contract governing such 

extension of retail credit or retail leases is not 

routinely assigned to an unaffiliated third party 

finance or leasing source; or (3) offers or provides 

a consumer financial product or service not 

involving or related to the sale, financing, leasing, 

rental, repair, refurbishment, maintenance, or other 

servicing of motor vehicles, motor vehicle parts, or 

any related or ancillary product or service.’’ 12 

U.S.C. 5519(b). 

FOR FURTHER INFORMATION CONTACT: 

Board: Vivian W. Wong, Counsel, 

Division of Consumer and Community 

Affairs, Board of Governors of the 

Federal Reserve System, at (202) 452– 

3667; for users of Telecommunications 

Device for the Deaf (TDD) only, contact 

(202) 263–4869. 

Bureau: David Friend, Counsel, Office 

of Regulations, Bureau of Consumer 

Financial Protection, at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 

(Dodd-Frank Act) increased the 

threshold in the Truth in Lending Act 

(TILA) for exempt consumer credit 

transactions 1 from $25,000 to $50,000, 

effective July 21, 2011.2 In addition, the 

Dodd-Frank Act requires that this 

threshold be adjusted annually for 

inflation by the annual percentage 

increase in the Consumer Price Index 

for Urban Wage Earners and Clerical 

Workers (CPI–W), as published by the 

Bureau of Labor Statistics. In April 

2011, the Board issued a final rule 

amending Regulation Z (which 

implements TILA) consistent with these 

provisions of the Dodd-Frank Act.3

Title X of the Dodd-Frank Act 

transferred rulemaking authority for a 

number of consumer financial 

protection laws from the Board to the 

Bureau, effective July 21, 2011. In 

connection with this transfer of 

rulemaking authority, the Bureau issued 

its own Regulation Z implementing 

TILA in an interim final rule, 12 CFR 

part 1026 (Bureau Interim Final Rule).4

The Bureau Interim Final Rule 

substantially duplicated the Board’s 

Regulation Z, including the revisions to 

the threshold for exempt transactions 

made by the Board in April 2011. 

Although the Bureau has the authority 

to issue rules to implement TILA for 

most entities, the Board retains 

authority to issue rules under TILA for 

certain motor vehicle dealers covered by 

section 1029(a) of the Dodd-Frank Act, 

and the Board’s Regulation Z continues 

to apply to those entities.5

Section 226.3(b)(1)(ii) of the Board’s 

Regulation Z and § 1026.3(b)(1)(ii) of the 

Bureau’s Regulation Z, and their 

accompanying commentaries, provide 

that the exemption threshold will be 

adjusted annually effective January 1 of 

each year based on any annual 

percentage increase in the CPI–W that 

was in effect on the preceding June 1. 

Any increase in the threshold amount 

will be rounded to the nearest $100 

increment. For example, if the annual 

percentage increase in the CPI–W would 

result in a $950 increase in the 

threshold amount, the threshold amount 

will be increased by $1,000. However, if 

the annual percentage increase in the 

CPI–W would result in a $949 increase 

in the threshold amount, the threshold 

amount will be increased by $900. See 

comments 3(b)–1 in Supplements I of 12 

CFR part 226 and 12 CFR part 1026. 

II. Adjustment and Commentary 

Revision 

Effective January 1, 2013, the adjusted 

exemption threshold amount is $53,000. 

This adjustment is based on the CPI–W 

index in effect on June 1, 2012, which 

was reported on May 15, 2012. The 

Bureau of Labor Statistics publishes 

consumer-based indices monthly, but 

does not report a CPI change on June 1; 

adjustments are reported in the middle 

of the month. The CPI–W is a subset of 

the CPI–U index (based on all urban 

consumers) and represents 

approximately 28 percent of the U.S. 

population. The adjustment reflects a 

2.4 percent increase in the CPI–W from 

April 2011 to April 2012 and is rounded 

to the nearest $100 increment. 

Accordingly, the Board and the Bureau 

are revising the commentaries to their 

respective regulations to add new 

subparagraph 3(b)–1.iv to state that, 

from January 1, 2013 through December 

31, 2013, the threshold amount is 

$53,000. These revisions are effective 

January 1, 2013. 

III. Administrative Law Matters 

Administrative Procedure Act 

Under the Administrative Procedure 

Act, notice and opportunity for public 

comment are not required if the Board 

and the Bureau find that notice and 

public comment are impracticable, 

unnecessary, or contrary to the public 

interest. 5 U.S.C. 553(b)(B). This annual 

adjustment is required by statute. The 

amendment in this notice is technical 

and non-discretionary, and it applies 

the method previously established in 

the agencies’ regulations for 

determining adjustments to the 

exemption threshold. For these reasons, 

the Board and the Bureau have 

determined that publishing a notice of 

proposed rulemaking and providing 

opportunity for public comment are 

unnecessary. Therefore, the 

amendments are adopted in final form. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

does not apply to a rulemaking where a 

general notice of proposed rulemaking 

is not required. 5 U.S.C. 603 and 604. 

As noted previously, the agencies have 

determined that it is unnecessary to 

publish a general notice of proposed 

rulemaking for this joint final rule. 

Accordingly, the RFA’s requirements 

relating to an initial and final regulatory 

flexibility analysis do not apply. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3506; 

5 CFR 1320), the agencies reviewed this 

final rule. No collections of information 

pursuant to the Paperwork Reduction 

Act are contained in the final rule. 

List of Subjects 

12 CFR Part 226 

Advertising, Consumer protection, 

Federal Reserve System, Reporting and 

recordkeeping requirements, Truth in 

Lending. 

12 CFR Part 1026 

Advertising, Consumer protection, 

Credit, Credit unions, Mortgages, 

National banks, Reporting and 

recordkeeping requirements, Savings 

associations, Truth in Lending. 

Board of Governors of the Federal 

Reserve System 

Text of Final Revisions 

For the reasons set forth in the 

preamble, the Board amends Regulation 

Z, 12 CFR part 226, as set forth below: 


emcdonald on DSK67QTVN1PROD with RULES
69738 Federal Register / Vol. 77, No. 225 / Wednesday, November 21, 2012 / Rules and Regulations 

1See sections 1061 and 1100A of the Dodd-Frank 

Wall Street Reform and Consumer Protection Act 

(Dodd-Frank Act), Public Law 11–203, 124 Stat. 

1376 (2010). Section 1029 of the Dodd-Frank Act 

excludes from this transfer of authority, subject to 

certain exceptions, any rulemaking authority over a 

motor vehicle dealer that is predominantly engaged 

in the sale and servicing of motor vehicles, the 

leasing and servicing of motor vehicles, or both. 

PART 226—TRUTH IN LENDING 

(REGULATION Z) 

■ 1. The authority citation for part 226 

continues to read as follows: 

Authority: 12 U.S.C. 3806; 15 U.S.C. 1604, 

1637(c)(5), and 1639(l); Pub. L. 111–24 § 2, 

123 Stat. 1734; Pub. L. 111–203, 124 Stat. 

1376. 

■ 2. In Supplement I to part 226, under 

Section 226.3—Exempt Transactions, 

under 3(b) Credit over applicable 

threshold amount, new paragraph 1.iv is 

added to read as follows: 

Supplement I to Part 226—Official Staff 

Interpretations 

* * * * * 

Subpart A—General 

* * * * * 

Section 226.3 Exempt Transactions 

* * * * * 

3(b) Credit over applicable threshold 

amount. 

1. Threshold amount. * * * 

iv. From January 1, 2013 through December 

31, 2013, the threshold amount is $53,000. 

* * * * * 

Bureau of Consumer Financial 

Protection 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau amends 

Regulation Z, 12 CFR part 1026, as set 

forth below: 

PART 1026—TRUTH IN LENDING 

(REGULATION Z) 

■ 1. The authority citation for part 1026 

is revised to read as follows: 

Authority: 12 U.S.C. 2601, 2603–2605, 

2607, 2609, 2617, 5511, 5512, 5532, 5581; 15 

U.S.C. 1601 et seq. 

■ 2. In Supplement I to part 1026, under 

Section 1026.3—Exempt Transactions, 

under 3(b) Credit over applicable 

threshold amount, new paragraph 1.iv is 

added to read as follows: 

Supplement I to Part 1026—Official 

Interpretations 

* * * * * 

Subpart A—General 

* * * * * 

Section 1026.3 Exempt Transactions 

* * * * * 

3(b) Credit over applicable threshold 

amount. 

1. Threshold amount. * * * 

iv. From January 1, 2013 through December 

31, 2013, the threshold amount is $53,000. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, November 8, 2012. 

Robert deV. Frierson, 

Secretary of the Board. 

Dated: November 6, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–27993 Filed 11–20–12; 8:45 am] 

BILLING CODE 6210–01–P; 4810–AM–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1026 

[Docket No. CFPB–2012–0044] 

Truth in Lending (Regulation Z) 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is 

publishing a final rule amending the 

official interpretations for Regulation Z 

(Truth in Lending). The Bureau is 

required to adjust annually the dollar 

amount that triggers requirements for 

certain home mortgage loans bearing 

fees above a certain amount. The Home 

Ownership and Equity Protection Act of 

1994 (HOEPA) sets forth rules for homesecured loans in which the total points 

and fees payable by the consumer at or 

before loan consummation exceed the 

greater of $400 or 8 percent of the total 

loan amount. In keeping with the 

statute, the Bureau has adjusted the 

$400 amount based on the annual 

percentage change reflected in the 

Consumer Price Index as reported on 

June 1, 2012. The adjusted dollar 

amount for 2013 is $625. 

DATES: This final rule is effective 

January 1, 2013. 

FOR FURTHER INFORMATION CONTACT: 

David Friend, Counsel, Office of 

Regulations, at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Truth in Lending Act (TILA; 15 

U.S.C. 1601–1666j) requires creditors to 

disclose credit terms and the cost of 

consumer credit as an annual 

percentage rate. 15 U.S.C. 1638(a)(4). 

TILA requires additional disclosures for 

loans secured by a consumer’s home, 

and permits consumers to cancel certain 

transactions that involve their principal 

dwelling. TILA is implemented by the 

Bureau’s Regulation Z (12 CFR part 

1026). Supplement I to Regulation Z 

contains the Bureau’s official 

interpretations of the regulation, and 

provides guidance to creditors in 

applying the regulation to specific 

transactions. 

In 1995, the Board of Governors of the 

Federal Reserve System (Board) 

published amendments to Regulation Z 

implementing HOEPA, which amended 

TILA and was contained in the Riegle 

Community Development and 

Regulatory Improvement Act of 1994, 

Public Law 103–325, 108 Stat. 2160. 

These amendments, reflected in 

§§ 1026.32 and 1026.34 of the 

regulation, impose substantive 

limitations and additional disclosure 

requirements on certain closed-end 

home mortgage loans bearing rates or 

fees above a certain percentage or 

amount. As enacted, the statute requires 

creditors to comply with the HOEPA 

requirements if the total points and fees 

payable by the consumer at or before 

loan closing exceed the greater of $400 

or 8 percent of the total loan amount. 

TILA and Regulation Z provide that the 

$400 figure shall be adjusted annually 

on January 1 by the annual percentage 

change in the Consumer Price Index 

(CPI) that was reported on the preceding 

June 1. 15 U.S.C. 1602(bb)(3); 12 CFR 

1026.32(a)(1)(ii). The Board adjusted the 

$400 amount to $611 for the year 2012 

on June 13, 2011. The responsibility for 

promulgating rules under TILA was 

transferred from the Board to the Bureau 

effective July 21, 2011.1 The Bureau 

restated Regulation Z on December 22, 

2011, and the Bureau’s Regulation Z is 

located at 12 CFR part 1026. 76 FR 

79768 (Dec. 22, 2011). 

The Bureau of Labor Statistics (BLS) 

publishes consumer-based indices 

monthly, but does not report a CPI 

change on June 1; adjustments are 

reported in the middle of each month. 

The Bureau uses the Consumer Price 

Index for All Urban Consumers (CPI–U) 

index, which is based on all urban 

consumers and represents 

approximately 88 percent of the U.S. 

population, as the index for adjusting 

the $400 figure. The adjustment to the 

CPI–U index reported by BLS on May 

15, 2012, was the CPI–U index in effect 

on June 1, and reflects the percentage 

change from April 2011 to April 2012. 

The adjustment to the $400 figure below 

reflects a 2.3 percent increase in the 

CPI–U index for this period and is 


emcdonald on DSK67QTVN1PROD with RULES