This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

65113 

Vol. 88, No. 182 

Thursday, September 21, 2023 

1On April 20, 2023, the CFPB published a 

document announcing the availability of a revised 

version of its ‘‘Methodology for Determining 

Average Prime Offer Rates,’’ which describes the 

data and methodology used to calculate the average 

prime offer rate for purposes of Regulation C and 

Regulation Z. See 88 FR 24393. The methodology 

statement was revised to address the imminent 

unavailability of certain data the CFPB previously 

relied on to calculate average prime offer rates, as 

a result of a decision by Freddie Mac to make 

changes to its Primary Mortgage Market Survey®

(PMMS). After evaluating potential sources, the 

CFPB determined that data from Intercontinental 

Exchange Mortgage Technology (ICE Mortgage 

Technology) is currently the most suitable option to 

replace PMMS. Beginning on April 24, 2023, the 

CFPB started using data provided by ICE Mortgage 

Technology and the revised methodology to 

calculate average prime offer rates. 

2The QM categories in Regulation Z appear at 12 

CFR 1026.43(e)(2), (e)(4), (e)(5), (e)(6), and (e)(7). 

Note that 12 CFR 1026.43(e)(6) applies only to 

covered transactions for which the application was 

received before April 1, 2016. 

3The CPI–W is a subset of the Consumer Price 

Index for All Urban Consumers (CPI–U) index and 

represents approximately 30 percent of the U.S. 

population. 

4BLS publishes Consumer Price Indices monthly, 

usually in the middle of each calendar month. 

Thus, the CPI–W reported on May 10, 2023, was the 

most current as of June 1, 2023. 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1026 

Truth in Lending (Regulation Z) Annual 

Threshold Adjustments (Credit Cards, 

HOEPA, and Qualified Mortgages) 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Consumer Financial 

Protection Bureau (Bureau or CFPB) is 

issuing this final rule amending the 

regulation text and official 

interpretations for Regulation Z, which 

implements the Truth in Lending Act 

(TILA). The CFPB calculates the dollar 

amounts for several provisions in 

Regulation Z annually; this final rule 

revises, as applicable, the dollar 

amounts for provisions implementing 

TILA and amendments to TILA, 

including under the Home Ownership 

and Equity Protection Act of 1994 

(HOEPA), and the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (Dodd-Frank Act). The CFPB is 

adjusting these amounts, where 

appropriate, based on the annual 

percentage change reflected in the 

Consumer Price Index (CPI) in effect on 

June 1, 2023. 

DATES: This final rule is effective 

January 1, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Anna Boadwee and Adrien Fernandez, 

Attorney-Advisors, Office of 

Regulations, at (202) 435–7700. If you 

require this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: The CFPB 

is amending the regulation text and 

official interpretations for Regulation Z, 

which implements TILA, to update the 

dollar amounts of various thresholds 

that it must adjust annually to reflect 

the annual percentage change in the CPI 

as published by the Bureau of Labor 

Statistics (BLS). Specifically, for openend consumer credit plans under TILA, 

the threshold that triggers requirements 

to disclose minimum interest charges 

will remain unchanged at $1.00 in 2024. 

For HOEPA loans, the adjusted total 

loan amount threshold for high-cost 

mortgages in 2024 will be $26,092. The 

adjusted points-and-fees dollar trigger 

for high-cost mortgages in 2024 will be 

$1,305. For qualified mortgages (QMs) 

under the General QM loan definition in 

§ 1026.43(e)(2), the thresholds for the 

spread between the annual percentage 

rate (APR) and the average prime offer 

rate (APOR) 1 in 2024 will be: 2.25 or 

more percentage points for a first-lien 

covered transaction with a loan amount 

greater than or equal to $130,461; 3.5 or 

more percentage points for a first-lien 

covered transaction with a loan amount 

greater than or equal to $78,277 but less 

than $130,461; 6.5 or more percentage 

points for a first-lien covered 

transaction with a loan amount less than 

$78,277; 6.5 or more percentage points 

for a first-lien covered transaction 

secured by a manufactured home with 

a loan amount less than $130,461; 3.5 or 

more percentage points for a 

subordinate-lien covered transaction 

with a loan amount greater than or equal 

to $78,277; or 6.5 or more percentage 

points for a subordinate-lien covered 

transaction with a loan amount less than 

$78,277. For all categories of QMs, the 

thresholds for total points and fees in 

2024 will be 3 percent of the total loan 

amount for a loan greater than or equal 

to $130,461; $3,914 for a loan amount 

greater than or equal to $78,277 but less 

than $130,461; 5 percent of the total 

loan amount for a loan greater than or 

equal to $26,092 but less than $78,277; 

$1,305 for a loan amount greater than or 

equal to $16,308 but less than $26,092; 

and 8 percent of the total loan amount 

for a loan amount less than $16,308.2

I. Background 

A. Credit Card Annual Adjustments 

Minimum Interest Charge Disclosure 

Thresholds 

Sections 1026.6(b)(2)(iii) and 

1026.60(b)(3) of Regulation Z implement 

sections 127(a)(3) and 127(c)(1)(A)(ii)(II) 

of TILA. Sections 1026.6(b)(2)(iii) and 

1026.60(b)(3) require creditors to 

disclose any minimum interest charge 

exceeding $1.00 that could be imposed 

during a billing cycle. These provisions 

also state that, for open-end consumer 

credit plans, the CFPB shall calculate 

the minimum interest charge thresholds 

annually using the CPI that was in effect 

on the preceding June 1; the CFPB uses 

the Consumer Price Index for Urban 

Wage Earners and Clerical Workers 

(CPI–W) for this adjustment.3 If the 

cumulative change in the adjusted 

minimum value derived from applying 

the annual CPI–W level to the current 

amounts in §§ 1026.6(b)(2)(iii) and 

1026.60(b)(3) has risen by a whole 

dollar, the CFPB will increase the 

minimum interest charge amounts set 

forth in the regulation by $1.00. The 

CFPB bases its 2024 adjustment analysis 

on the CPI–W index in effect on June 1, 

2023, as reported by BLS on May 10, 

2023.4 As a result, the adjustment 

reflects the percentage change in the 

CPI–W from April 2022 to April 2023. 

The adjustment analysis accounts for a 

4.6 percent increase in the CPI–W from 

April 2022 to April 2023. This increase 

in the CPI–W when applied to the 

current amounts in §§ 1026.6(b)(2)(iii) 

and 1026.60(b)(3) does not trigger an 

increase in the minimum interest charge 

threshold of at least $1.00, and the 

CFPB, therefore, is not amending 

§§ 1026.6(b)(2)(iii) and 1026.60(b)(3). 


ddrumheller on DSK120RN23PROD with RULES1
65114 Federal Register / Vol. 88, No. 182 / Thursday, September 21, 2023 / Rules and Regulations 

5 Dodd-Frank Wall Street Reform and Consumer 

Protection Act, Public Law 111–203, 124 Stat. 1376 

(2010). 

6The CPI–U is based on all urban consumers and 

represents approximately 93 percent of the U.S. 

population. 

7 85 FR 86308 (Dec. 29, 2020). This final rule was 

initially effective on March 1, 2021, with a 

mandatory compliance date of July 1, 2021. On 

April 27, 2021, the CFPB issued a final rule 

effective June 30, 2021, which extended the 

mandatory compliance date of the final rule 

published on December 29, 2020, at 85 FR 86308, 

until October 1, 2022. 86 FR 22844 (Apr. 30, 2021). 

8The loan amounts in the regulatory text reflect 

the CPI–U in effect on June 1, 2020. 9See comment 43(e)(2)(vi)–3. 

10For 2024, a covered transaction is a qualified 

mortgage if the APR does not exceed the APOR for 

a comparable transaction as of the date the interest 

rate is set by: 2.25 or more percentage points for a 

first-lien covered transaction with a loan amount 

greater than or equal to $130,461; 3.5 or more 

percentage points for a first-lien covered transaction 

with a loan amount greater than or equal to $78,277 

but less than $130,461; 6.5 or more percentage 

points for a first-lien covered transaction with a 

loan amount less than $78,277; 6.5 or more 

percentage points for a first-lien covered transaction 

secured by a manufactured home with a loan 

amount less than $130,461; 3.5 or more percentage 

points for a subordinate-lien covered transaction 

with a loan amount greater than or equal to $78,277; 

or 6.5 or more percentage points for a subordinatelien covered transaction with a loan amount less 

than $78,277. Additionally, a covered transaction is 

not a qualified mortgage if the transaction’s total 

points and fees exceed 3 percent of the total loan 

amount for a loan amount greater than or equal to 

$130,461; $3,914 for a loan amount greater than or 

equal to $78,277 but less than $130,461; 5 percent 

of the total loan amount for loans greater than or 

equal to $26,092 but less than $78,277; $1,305 for 

a loan amount greater than or equal to $16,308 but 

less than $26,092; or 8 percent of the total loan 

amount for loans less than $16,308. 

B. HOEPA Annual Threshold 

Adjustments 

Section 1026.32(a)(1)(ii) of Regulation 

Z implements section 1431 of the DoddFrank Act,5 which amended the HOEPA 

points-and-fees coverage test. Under 

§ 1026.32(a)(1)(ii)(A) and (B), in 

assessing whether a transaction is a 

high-cost mortgage due to points and 

fees the creditor is charging, the 

applicable points-and-fees coverage test 

depends on whether the total loan 

amount is for $20,000 or more, or for 

less than $20,000. Section 

1026.32(a)(1)(ii) provides that the CFPB 

recalculate this threshold amount 

annually using the CPI index in effect 

on the preceding June 1; the CFPB uses 

the CPI–U for this adjustment.6 The 

CFPB bases the 2024 adjustment on the 

CPI–U index in effect on June 1, 2023, 

as reported by BLS on May 10, 2023. As 

a result, the adjustment reflects the 

percentage change in the CPI–U from 

April 2022 to April 2023, which is an 

increase of 4.9 percent. The adjustment 

to $26,092 here reflects the 4.9 percent 

increase in the CPI–U index from April 

2022 to April 2023 rounded to the 

nearest whole dollar amount for ease of 

compliance. 

Under § 1026.32(a)(1)(ii)(B), the 

HOEPA points-and-fees threshold is the 

lesser of 8 percent of the total loan 

amount or $1,000. Section 

1026.32(a)(1)(ii)(B) provides that the 

CFPB will recalculate the dollar amount 

threshold annually using the CPI index 

in effect on the preceding June 1; the 

CFPB uses the CPI–U for this 

adjustment. The CFPB bases the 2024 

adjustment on the CPI–U index in effect 

on June 1, 2023, as reported by BLS on 

May 10, 2023. As a result, the 

adjustment reflects the percentage 

change in CPI–U from April 2022 to 

April 2023, which is an increase of 4.9 

percent. The adjustment to $1,305 here 

reflects the 4.9 percent increase in the 

CPI–U index from April 2022 to April 

2023 rounded to the nearest whole 

dollar amount for ease of compliance. 

C. QM Annual Threshold Adjustments 

The CFPB’s Regulation Z implements 

sections 1411 and 1412 of the DoddFrank Act, which generally require 

creditors to make a reasonable, goodfaith determination of a consumer’s 

ability to repay any consumer credit 

transaction secured by a dwelling and 

establishes certain protections from 

liability under this requirement for 

QMs. 

On December 10, 2020, the CFPB 

issued a final rule amending the General 

QM loan definition in § 1026.43(e)(2).7

The final rule established pricing 

thresholds in § 1026.43(e)(2)(vi)(A) 

through (F) based on the spread of a 

loan’s APR compared to the APOR for 

a comparable transaction as of the date 

the interest rate is set. To satisfy the 

General QM loan definition, a loan’s 

APR must be below the applicable 

pricing threshold and must satisfy other 

requirements in § 1026.43(e)(2). 

Specifically, under § 1026.43(e)(2)(vi), a 

covered transaction is a QM if the APR 

does not exceed the APOR for a 

comparable transaction as of the date 

the interest rate is set by: 2.25 or more 

percentage points for a first-lien covered 

transaction with a loan amount greater 

than or equal to $110,260 (indexed for 

inflation); 3.5 or more percentage points 

for a first-lien covered transaction with 

a loan amount greater than or equal to 

$66,156 (indexed for inflation) but less 

than $110,260 (indexed for inflation); 

6.5 or more percentage points for a firstlien covered transaction with a loan 

amount less than $66,156 (indexed for 

inflation); 6.5 or more percentage points 

for a first-lien covered transaction 

secured by a manufactured home with 

a loan amount less than $110,260 

(indexed for inflation); 3.5 or more 

percentage points for a subordinate-lien 

covered transaction with a loan amount 

greater than or equal to $66,156 

(indexed for inflation); or 6.5 or more 

percentage points for a subordinate-lien 

covered transaction with a loan amount 

less than $66,156 (indexed for 

inflation).8 The rule states that the CFPB 

will adjust the loan amounts in 

§ 1026.43(e)(2)(vi) annually on January 1 

by the annual percentage change in the 

CPI–U that was in effect on the 

preceding June 1.9

Regulation Z also contains points and 

fees limits applicable to all categories of 

QMs. Under § 1026.43(e)(3)(i), a covered 

transaction is not a QM if the 

transaction’s total points and fees 

exceed: 3 percent of the total loan 

amount for a loan amount greater than 

or equal to $100,000 (indexed for 

inflation); $3,000 (indexed for inflation) 

for a loan amount greater than or equal 

to $60,000 (indexed for inflation) but 

less than $100,000 (indexed for 

inflation); 5 percent of the total loan 

amount for loans greater than or equal 

to $20,000 (indexed for inflation) but 

less than $60,000 (indexed for inflation); 

$1,000 (indexed for inflation) for a loan 

amount greater than or equal to $12,500 

(indexed for inflation) but less than 

$20,000 (indexed for inflation); or 8 

percent of the total loan amount for 

loans less than $12,500 (indexed for 

inflation). Section 1026.43(e)(3)(ii) 

provides that the CFPB will recalculate 

the limits and loan amounts in 

§ 1026.43(e)(3)(i) annually for inflation 

using the CPI–U index in effect on the 

preceding June 1. 

The CFPB bases the 2024 adjustment 

to the loan amounts applicable to the 

pricing thresholds for the General QM 

loan definition and the points and fees 

limits for all categories of QM on the 

CPI–U index in effect on June 1, 2023, 

as reported by BLS on May 10, 2023. As 

a result, the adjustment reflects the 

percentage change in CPI–U from April 

2022 to April 2023, which is an increase 

of 4.9 percent. The 2024 adjustment 10

adopted here reflects a 4.9 percent 

increase in the CPI–U index for this 

period rounded to whole dollars for ease 

of compliance. 

II. Adjustment and Commentary 

Revision 

A. Credit Card Annual Adjustments 

Minimum Interest Charge Disclosure 

Thresholds—§§ 1026.6(b)(2)(iii) and 

1026.60(b)(3) 

The minimum interest charge 

amounts for §§ 1026.6(b)(2)(iii) and 

1026.60(b)(3) will remain unchanged at 


ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 88, No. 182 / Thursday, September 21, 2023 / Rules and Regulations 65115 

11 5 U.S.C. 553(b)(B). 

12 5 U.S.C. 603(a), 604(a). 

13 44 U.S.C. 3506; 5 CFR part 1320. 

$1.00 for the year 2024. Accordingly, 

the CFPB is not amending these sections 

of Regulation Z. 

B. HOEPA Annual Threshold 

Adjustment—Comments 32(a)(1)(ii)–1 

and –3 

Effective January 1, 2024, for purposes 

of determining under § 1026.32(a)(1)(ii) 

the points-and-fees coverage test under 

HOEPA to which a transaction is 

subject, the total loan amount threshold 

figure is $26,092, and the adjusted 

points-and-fees dollar trigger under 

§ 1026.32(a)(1)(ii)(B) is $1,305. If the 

total loan amount for a transaction is 

$26,092 or more, and the points-andfees amount exceeds 5 percent of the 

total loan amount, the transaction is a 

high-cost mortgage. If the total loan 

amount for a transaction is less than 

$26,092, and the points-and-fees 

amount exceeds the lesser of the 

adjusted points-and-fees dollar trigger of 

$1,305 or 8 percent of the total loan 

amount, the transaction is a high-cost 

mortgage. The CFPB is amending 

comments 32(a)(1)(ii)–1 and –3, which 

list the adjustments for each year, to 

reflect for 2024 the new points-and-fees 

dollar trigger and the new loan amount 

dollar threshold, respectively. 

C. Qualified Mortgages Annual 

Threshold Adjustments 

Effective January 1, 2024, to satisfy 

§ 1026.43(e)(2)(vi) under the General 

QM loan definition, the annual 

percentage rate may not exceed the 

average prime offer rate for a 

comparable transaction as of the date 

the interest rate is set by the following 

amounts: 2.25 or more percentage points 

for a first-lien covered transaction with 

a loan amount greater than or equal to 

$130,461; 3.5 or more percentage points 

for a first-lien covered transaction with 

a loan amount greater than or equal to 

$78,277 but less than $130,461; 6.5 or 

more percentage points for a first-lien 

covered transaction with a loan amount 

less than $78,277; 6.5 or more 

percentage points for a first-lien covered 

transaction secured by a manufactured 

home with a loan amount less than 

$130,461; 3.5 or more percentage points 

for a subordinate-lien covered 

transaction with a loan amount greater 

than or equal to $78,277; or 6.5 or more 

percentage points for a subordinate-lien 

covered transaction with a loan amount 

less than $78,277. Accordingly, the 

CFPB is amending comment 

43(e)(2)(vi)–3, which lists the 

adjustments for each year, to reflect the 

new dollar threshold amounts for 

§ 1026.43(e)(2)(vi)(A) through (F). 

Effective January 1, 2024, a covered 

transaction is not a qualified mortgage 

if, pursuant to § 1026.43(e)(3), the 

transaction’s total points and fees 

exceed 3 percent of the total loan 

amount for a loan amount greater than 

or equal to $130,461; $3,914 for a loan 

amount greater than or equal to $78,277 

but less than $130,461; 5 percent of the 

total loan amount for loans greater than 

or equal to $26,092 but less than 

$78,277; $1,305 for a loan amount 

greater than or equal to $16,308 but less 

than $26,092; or 8 percent of the total 

loan amount for loans less than $16,308. 

The CFPB is amending comment 

43(e)(3)(ii)–1, which lists the 

adjustments for each year, to reflect the 

new dollar threshold amounts for 2024. 

III. Procedural Requirements 

A. Administrative Procedure Act 

The Administrative Procedure Act 

does not require notice and opportunity 

for public comment if an agency finds 

that notice and public comment are 

impracticable, unnecessary, or contrary 

to the public interest.11 Pursuant to this 

final rule, the CFPB adds comments 

32(a)(1)(ii)–1.ix, 32(a)(1)(ii)–3.ix, 

43(e)(2)(vi)–3.ii, and 43(e)(3)(ii)–1.ix to 

update the exemption thresholds. The 

amendments in this final rule are 

technical and non-discretionary, as they 

merely apply the method previously 

established in Regulation Z for 

determining adjustments to the 

thresholds. For these reasons, the CFPB 

has determined that publishing a notice 

of proposed rulemaking and providing 

opportunity for public comment are 

unnecessary. The amendments, 

therefore, are adopted in final form. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

does not apply to a rulemaking where a 

general notice of proposed rulemaking 

is not required.12 As noted previously, 

the CFPB has determined that it is 

unnecessary to publish a general notice 

of proposed rulemaking for this final 

rule. Accordingly, the RFA’s 

requirement relating to an initial and 

final regulatory flexibility analysis do 

not apply. 

C. Paperwork Reduction Act 

The information collections contained 

in Regulation Z which implements TILA 

are approved by OMB under Control 

number 3170–0015. The current 

approval for this control number expires 

on May 31st, 2026. In accordance with 

the Paperwork Reduction Act of 1995,13

the CFPB reviewed this final rule. The 

CFPB has determined that this rule does 

not create any new information 

collections or substantially revise any 

existing collections. 

D. Congressional Review Act 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), the CFPB will 

submit a report containing this rule and 

other required information to the United 

States Senate, the United States House 

of Representatives, and the Comptroller 

General of the United States prior to the 

rule taking effect. The Office of 

Information and Regulatory Affairs 

(OIRA) has designated this rule as not 

a ‘‘major rule’’ as defined by 5 U.S.C. 

804(2). 

List of Subjects in 12 CFR Part 1026 

Advertising, Banks, banking, 

Consumer protection, Credit, Credit 

unions, Mortgages, National banks, 

Reporting and recordkeeping 

requirements, Savings associations, 

Truth-in-lending. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the CFPB 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 

continues to read as follows: 

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

2607, 2609, 2617, 3353, 5511, 5512, 5532, 

5581; 15 U.S.C. 1601 ET SEQ. 

■ 2. In Supplement I to Part 1026: 

■ a. Under Section 1026.32— 

Requirements for High-Cost Mortgages, 

revise Paragraph 32(a)(1)(ii); and 

■ b. Under Section 1026.43—Minimum 

Standards for Transactions Secured by 

a Dwelling, revise Paragraph 43(e)(2)(vi) 

and Paragraph 43(e)(3)(ii). 

The revisions read as follows: 

SUPPLEMENT I TO PART 1026— 

OFFICIAL INTERPRETATIONS 

* * * * * 

Section 1026.32—Requirements for High-Cost 

Mortgages 

* * * * * 

Paragraph 32(a)(1)(ii). 

1. Annual adjustment of $1,000 amount. 

The $1,000 figure in § 1026.32(a)(1)(ii)(B) is 

adjusted annually on January 1 by the annual 

percentage change in the CPI that was in 

effect on the preceding June 1. The Bureau 

will publish adjustments after the June 

figures become available each year. 

i. For 2015, $1,020, reflecting a 2 percent 

increase in the CPI–U from June 2013 to June 

2014, rounded to the nearest whole dollar. 

ii. For 2016, $1,017, reflecting a 0.2 percent 

decrease in the CPI–U from June 2014 to June 

2015, rounded to the nearest whole dollar. 

iii. For 2017, $1,029, reflecting a 1.1 

percent increase in the CPI–U from June 2015 


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65116 Federal Register / Vol. 88, No. 182 / Thursday, September 21, 2023 / Rules and Regulations 

to June 2016, rounded to the nearest whole 

dollar. 

iv. For 2018, $1,052, reflecting a 2.2 

percent increase in the CPI–U from June 2016 

to June 2017, rounded to the nearest whole 

dollar. 

v. For 2019, $1,077, reflecting a 2.5 percent 

increase in the CPI–U from June 2017 to June 

2018, rounded to the nearest whole dollar. 

vi. For 2020, $1,099, reflecting a 2 percent 

increase in the CPI–U from June 2018 to June 

2019, rounded to the nearest whole dollar. 

vii. For 2021, $1,103, reflecting a 0.3 

percent increase in the CPI–U from June 2019 

to June 2020, rounded to the nearest whole 

dollar. 

viii. For 2022, $1,148, reflecting a 4.2 

percent increase in the CPI–U from June 2020 

to June 2021, rounded to the nearest whole 

dollar. 

ix. For 2023, $1,243, reflecting an 8.3 

percent increase in the CPI–U from June 2021 

to June 2022, rounded to the nearest whole 

dollar. 

x. For 2024, $1,305, reflecting a 4.9 percent 

increase in the CPI–U from June 2022 to June 

2023, rounded to the nearest whole dollar. 

2. Historical adjustment of $400 amount. 

Prior to January 10, 2014, a mortgage loan 

was covered by § 1026.32 if the total points 

and fees payable by the consumer at or before 

loan consummation exceeded the greater of 

$400 or 8 percent of the total loan amount. 

The $400 figure was adjusted annually on 

January 1 by the annual percentage change in 

the CPI that was in effect on the preceding 

June 1, as follows: 

i. For 1996, $412, reflecting a 3 percent 

increase in the CPI–U from June 1994 to June 

1995, rounded to the nearest whole dollar. 

ii. For 1997, $424, reflecting a 2.9 percent 

increase in the CPI–U from June 1995 to June 

1996, rounded to the nearest whole dollar. 

iii. For 1998, $435, reflecting a 2.5 percent 

increase in the CPI–U from June 1996 to June 

1997, rounded to the nearest whole dollar. 

iv. For 1999, $441, reflecting a 1.4 percent 

increase in the CPI–U from June 1997 to June 

1998, rounded to the nearest whole dollar. 

v. For 2000, $451, reflecting a 2.3 percent 

increase in the CPI–U from June 1998 to June 

1999, rounded to the nearest whole dollar. 

vi. For 2001, $465, reflecting a 3.1 percent 

increase in the CPI–U from June 1999 to June 

2000, rounded to the nearest whole dollar. 

vii. For 2002, $480, reflecting a 3.27 

percent increase in the CPI–U from June 2000 

to June 2001, rounded to the nearest whole 

dollar. 

viii. For 2003, $488, reflecting a 1.64 

percent increase in the CPI–U from June 2001 

to June 2002, rounded to the nearest whole 

dollar. 

ix. For 2004, $499, reflecting a 2.22 percent 

increase in the CPI–U from June 2002 to June 

2003, rounded to the nearest whole dollar. 

x. For 2005, $510, reflecting a 2.29 percent 

increase in the CPI–U from June 2003 to June 

2004, rounded to the nearest whole dollar. 

xi. For 2006, $528, reflecting a 3.51 percent 

increase in the CPI–U from June 2004 to June 

2005, rounded to the nearest whole dollar. 

xii. For 2007, $547, reflecting a 3.55 

percent increase in the CPI–U from June 2005 

to June 2006, rounded to the nearest whole 

dollar. 

xiii. For 2008, $561, reflecting a 2.56 

percent increase in the CPI–U from June 2006 

to June 2007, rounded to the nearest whole 

dollar. 

xiv. For 2009, $583, reflecting a 3.94 

percent increase in the CPI–U from June 2007 

to June 2008, rounded to the nearest whole 

dollar. 

xv. For 2010, $579, reflecting a 0.74 

percent decrease in the CPI–U from June 

2008 to June 2009, rounded to the nearest 

whole dollar. 

xvi. For 2011, $592, reflecting a 2.2 percent 

increase in the CPI–U from June 2009 to June 

2010, rounded to the nearest whole dollar. 

xvii. For 2012, $611, reflecting a 3.2 

percent increase in the CPI–U from June 2010 

to June 2011, rounded to the nearest whole 

dollar. 

xviii. For 2013, $625, reflecting a 2.3 

percent increase in the CPI–U from June 2011 

to June 2012, rounded to the nearest whole 

dollar. 

xix. For 2014, $632, reflecting a 1.1 percent 

increase in the CPI–U from June 2012 to June 

2013, rounded to the nearest whole dollar. 

3. Applicable threshold. For purposes of 

§ 1026.32(a)(1)(ii), a creditor must determine 

the applicable points and fees threshold 

based on the face amount of the note (or, in 

the case of an open-end credit plan, the 

credit limit for the plan when the account is 

opened). However, the creditor must apply 

the allowable points and fees percentage to 

the ‘‘total loan amount,’’ as defined in 

§ 1026.32(b)(4). For closed-end credit 

transactions, the total loan amount may be 

different than the face amount of the note. 

The $20,000 amount in § 1026.32(a)(1)(ii)(A) 

and (B) is adjusted annually on January 1 by 

the annual percentage change in the CPI that 

was in effect on the preceding June 1. 

i. For 2015, $20,391, reflecting a 2 percent 

increase in the CPI–U from June 2013 to June 

2014, rounded to the nearest whole dollar. 

ii. For 2016, $20,350, reflecting a .2 percent 

decrease in the CPI–U from June 2014 to June 

2015, rounded to the nearest whole dollar. 

iii. For 2017, $20,579, reflecting a 1.1 

percent increase in the CPI–U from June 2015 

to June 2016, rounded to the nearest whole 

dollar. 

iv. For 2018, $21,032, reflecting a 2.2 

percent increase in the CPI–U from June 2016 

to June 2017, rounded to the nearest whole 

dollar. 

v. For 2019, $21,549, reflecting a 2.5 

percent increase in the CPI–U from June 2017 

to June 2018, rounded to the nearest whole 

dollar. 

vi. For 2020, $21,980, reflecting a 2 percent 

increase in the CPI–U from June 2018 to June 

2019, rounded to the nearest whole dollar. 

vii. For 2021, $22,052 reflecting a 0.3 

percent increase in the CPI–U from June 2019 

to June 2020, rounded to the nearest whole 

dollar. 

viii. For 2022, $22,969 reflecting a 4.2 

percent increase in the CPI–U from June 2020 

to June 2021, rounded to the nearest whole 

dollar. 

ix. For 2023, $24,866 reflecting an 8.3 

percent increase in the CPI–U from June 2021 

to June 2022, rounded to the nearest whole 

dollar. 

x. For 2024, $26,092, reflecting a 4.9 

percent increase in the CPI–U from June 2022 

to June 2023, rounded to the nearest whole 

dollar. 

* * * * * 

Section 1026.43—Minimum Standards for 

Transactions Secured by a Dwelling 

* * * * * 

Paragraph 43(e)(2)(vi). 

1. Determining the average prime offer rate 

for a comparable transaction as of the date 

the interest rate is set. For guidance on 

determining the average prime offer rate for 

a comparable transaction as of the date the 

interest rate is set, see comments 43(b)(4)–1 

through –3. 

2. Determination of applicable threshold. A 

creditor must determine the applicable 

threshold by determining which category the 

loan falls into based on the face amount of 

the note (the ‘‘loan amount’’ as defined in 

§ 1026.43(b)(5)). For example, for a first-lien 

covered transaction with a loan amount of 

$75,000, the loan would fall into the tier for 

loans greater than or equal to $66,156 

(indexed for inflation) but less than $110,260 

(indexed for inflation), for which the 

applicable threshold is 3.5 or more 

percentage points. 

3. Annual adjustment for inflation. The 

dollar amounts in § 1026.43(e)(2)(vi) will be 

adjusted annually on January 1 by the annual 

percentage change in the CPI–U that was in 

effect on the preceding June 1. The Bureau 

will publish adjustments after the June 

figures become available each year. 

i. For 2022, reflecting a 4.2 percent 

increase in the CPI–U that was reported on 

the preceding June 1, to satisfy 

§ 1026.43(e)(2)(vi), the annual percentage rate 

may not exceed the average prime offer rate 

for a comparable transaction as of the date 

the interest rate is set by the following 

amounts: 

A. For a first-lien covered transaction with 

a loan amount greater than or equal to 

$114,847, 2.25 or more percentage points; 

B. For a first-lien covered transaction with 

a loan amount greater than or equal to 

$68,908 but less than $114,847, 3.5 or more 

percentage points; 

C. For a first-lien covered transaction with 

a loan amount less than $68,908, 6.5 or more 

percentage points; 

D. For a first-lien covered transaction 

secured by a manufactured home with a loan 

amount less than $114,847, 6.5 or more 

percentage points; 

E. For a subordinate-lien covered 

transaction with a loan amount greater than 

or equal to $68,908, 3.5 or more percentage 

points; 

F. For a subordinate-lien covered 

transaction with a loan amount less than 

$68,908, 6.5 or more percentage points. 

ii. For 2023, reflecting an 8.3 percent 

increase in the CPI–U that was reported on 

the preceding June 1, to satisfy 

§ 1026.43(e)(2)(vi), the annual percentage rate 

may not exceed the average prime offer rate 

for a comparable transaction as of the date 

the interest rate is set by the following 

amounts: 

A. For a first-lien covered transaction with 

a loan amount greater than or equal to 

$124,331, 2.25 or more percentage points; 

B. For a first-lien covered transaction with 

a loan amount greater than or equal to 


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$74,599 but less than $124,331, 3.5 or more 

percentage points; 

C. For a first-lien covered transaction with 

a loan amount less than $74,599, 6.5 or more 

percentage points; 

D. For a first-lien covered transaction 

secured by a manufactured home with a loan 

amount less than $124,331, 6.5 or more 

percentage points; 

E. For a subordinate-lien covered 

transaction with a loan amount greater than 

or equal to $74,599, 3.5 or more percentage 

points; 

F. For a subordinate-lien covered 

transaction with a loan amount less than 

$74,599, 6.5 or more percentage points. 

iii. For 2024, reflecting a 4.9 percent 

increase in the CPI–U that was reported on 

the preceding June 1, to satisfy 

§ 1026.43(e)(2)(vi), the annual percentage rate 

may not exceed the average prime offer rate 

for a comparable transaction as of the date 

the interest rate is set by the following 

amounts: 

A. For a first-lien covered transaction with 

a loan amount greater than or equal to 

$130,461, 2.25 or more percentage points; 

B. For a first-lien covered transaction with 

a loan amount greater than or equal to 

$78,277 but less than $130,461, 3.5 or more 

percentage points; 

C. For a first-lien covered transaction with 

a loan amount less than $78,277, 6.5 or more 

percentage points; 

D. For a first-lien covered transaction 

secured by a manufactured home with a loan 

amount less than $130,461, 6.5 or more 

percentage points; 

E. For a subordinate-lien covered 

transaction with a loan amount greater than 

or equal to $78,277, 3.5 or more percentage 

points; 

F. For a subordinate-lien covered 

transaction with a loan amount less than 

$78,277, 6.5 or more percentage points. 

4. Determining the annual percentage rate 

for certain loans for which the interest rate 

may or will change. 

i. In general. The commentary to 

§ 1026.17(c)(1) and other provisions in 

subpart C address how to determine the 

annual percentage rate disclosures for closedend credit transactions. Provisions in 

§ 1026.32(a)(3) address how to determine the 

annual percentage rate to determine coverage 

under § 1026.32(a)(1)(i). Section 

1026.43(e)(2)(vi) requires, for the purposes of 

§ 1026.43(e)(2)(vi), a different determination 

of the annual percentage rate for a qualified 

mortgage under § 1026.43(e)(2) for which the 

interest rate may or will change within the 

first five years after the date on which the 

first regular periodic payment will be due. 

An identical special rule for determining the 

annual percentage rate for such a loan also 

applies for purposes of § 1026.43(b)(4). 

ii. Loans for which the interest rate may or 

will change. Section 1026.43(e)(2)(vi) 

includes a special rule for determining the 

annual percentage rate for a loan for which 

the interest rate may or will change within 

the first five years after the date on which the 

first regular periodic payment will be due. 

This rule applies to adjustable-rate mortgages 

that have a fixed-rate period of five years or 

less and to step-rate mortgages for which the 

interest rate changes within that five-year 

period. 

iii. Maximum interest rate during the first 

five years. For a loan for which the interest 

rate may or will change within the first five 

years after the date on which the first regular 

periodic payment will be due, a creditor 

must treat the maximum interest rate that 

could apply at any time during that five-year 

period as the interest rate for the full term of 

the loan to determine the annual percentage 

rate for purposes of § 1026.43(e)(2)(vi), 

regardless of whether the maximum interest 

rate is reached at the first or subsequent 

adjustment during the five-year period. For 

additional instruction on how to determine 

the maximum interest rate during the first 

five years after the date on which the first 

regular periodic payment will be due, see 

comments 43(e)(2)(iv)–3 and –4. 

iv. Treatment of the maximum interest rate 

in determining the annual percentage rate. 

For a loan for which the interest rate may or 

will change within the first five years after 

the date on which the first regular periodic 

payment will be due, the creditor must 

determine the annual percentage rate for 

purposes of § 1026.43(e)(2)(vi) by treating the 

maximum interest rate that may apply within 

the first five years as the interest rate for the 

full term of the loan. For example, assume an 

adjustable-rate mortgage with a loan term of 

30 years and an initial discounted rate of 5.0 

percent that is fixed for the first three years. 

Assume that the maximum interest rate 

during the first five years after the date on 

which the first regular periodic payment will 

be due is 7.0 percent. Pursuant to 

§ 1026.43(e)(2)(vi), the creditor must 

determine the annual percentage rate based 

on an interest rate of 7.0 percent applied for 

the full 30-year loan term. 

5. Meaning of a manufactured home. For 

purposes of § 1026.43(e)(2)(vi)(D), 

manufactured home means any residential 

structure as defined under regulations of the 

U.S. Department of Housing and Urban 

Development (HUD) establishing 

manufactured home construction and safety 

standards (24 CFR 3280.2). Modular or other 

factory-built homes that do not meet the HUD 

code standards are not manufactured homes 

for purposes of § 1026.43(e)(2)(vi)(D). 

6. Scope of threshold for transactions 

secured by a manufactured home. The 

threshold in § 1026.43(e)(2)(vi)(D) applies to 

first-lien covered transactions less than 

$110,260 (indexed for inflation) that are 

secured by a manufactured home and land, 

or by a manufactured home only. 

* * * * * 

Paragraph 43(e)(3)(ii). 

1. Annual adjustment for inflation. The 

dollar amounts, including the loan amounts, 

in § 1026.43(e)(3)(i) will be adjusted annually 

on January 1 by the annual percentage 

change in the CPI–U that was in effect on the 

preceding June 1. The Bureau will publish 

adjustments after the June figures become 

available each year. 

i. For 2015, reflecting a 2 percent increase 

in the CPI–U that was reported on the 

preceding June 1, a covered transaction is not 

a qualified mortgage unless the transactions 

total points and fees do not exceed; 

A. For a loan amount greater than or equal 

to $101,953: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $61,172 but less than $101,953: $3,059; 

C. For a loan amount greater than or equal 

to $20,391 but less than $61,172: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $12,744 but less than $20,391; $1,020; 

E. For a loan amount less than $12,744: 8 

percent of the total loan amount. 

ii. For 2016, reflecting a 0.2 percent 

decrease in the CPI–U that was reported on 

the preceding June 1, a covered transaction 

is not a qualified mortgage unless the 

transactions total points and fees do not 

exceed; 

A. For a loan amount greater than or equal 

to $101,749: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $61,050 but less than $101,749: $3,052; 

C. For a loan amount greater than or equal 

to $20,350 but less than $61,050: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $12,719 but less than $20,350; $1,017; 

E. For a loan amount less than $12,719: 8 

percent of the total loan amount. 

iii. For 2017, reflecting a 1.1 percent 

increase in the CPI–U that was reported on 

the preceding June 1, a covered transaction 

is not a qualified mortgage unless the 

transactions total points and fees do not 

exceed: 

A. For a loan amount greater than or equal 

to $102,894: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $61,737 but less than $102,894: $3,087; 

C. For a loan amount greater than or equal 

to $20,579 but less than $61,737: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $12,862 but less than $20,579: $1,029; 

E. For a loan amount less than $12,862: 8 

percent of the total loan amount. 

iv. For 2018, reflecting a 2.2 percent 

increase in the CPI–U that was reported on 

the preceding June 1, a covered transaction 

is not a qualified mortgage unless the 

transaction’s total points and fees do not 

exceed: 

A. For a loan amount greater than or equal 

to $105,158: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $63,095 but less than $105,158: $3,155; 

C. For a loan amount greater than or equal 

to $21,032 but less than $63,095: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $13,145 but less than $21,032: $1,052; 

E. For a loan amount less than $13,145: 8 

percent of the total loan amount. 

v. For 2019, reflecting a 2.5 percent 

increase in the CPI–U that was reported on 

the preceding June 1, a covered transaction 

is not a qualified mortgage unless the 

transaction’s total points and fees do not 

exceed: 

A. For a loan amount greater than or equal 

to $107,747: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $64,648 but less than $107,747: $3,232; 


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C. For a loan amount greater than or equal 

to $21,549 but less than $64,648: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $13,468 but less than $21,549: $1,077; 

E. For a loan amount less than $13,468: 8 

percent of the total loan amount. 

vi. For 2020, reflecting a 2 percent increase 

in the CPI–U that was reported on the 

preceding June 1, a covered transaction is not 

a qualified mortgage unless the transaction’s 

total points and fees do not exceed: 

A. For a loan amount greater than or equal 

to $109,898: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $65,939 but less than $109,898: $3,297; 

C. For a loan amount greater than or equal 

to $21,980 but less than $65,939: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $13,737 but less than $21,980: $1,099; 

E. For a loan amount less than $13,737: 8 

percent of the total loan amount. 

vii. For 2021, reflecting a 0.3 percent 

increase in the CPI–U that was reported on 

the preceding June 1, a covered transaction 

is not a qualified mortgage unless the 

transaction’s total points and fees do not 

exceed: 

A. For a loan amount greater than or equal 

to $110,260: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $66,156 but less than $110,260: $3,308; 

C. For a loan amount greater than or equal 

to $22,052 but less than $66,156: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $13,783 but less than $22,052: $1,103; 

E. For a loan amount less than $13,783: 8 

percent of the total loan amount. 

viii. For 2022, reflecting a 4.2 percent 

increase in the CPI–U that was reported on 

the preceding June 1, a covered transaction 

is not a qualified mortgage unless the 

transaction’s total points and fees do not 

exceed: 

A. For a loan amount greater than or equal 

to $114,847: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $68,908 but less than $114,847: $3,445; 

C. For a loan amount greater than or equal 

to $22,969 but less than $68,908: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $14,356 but less than $22,969: $1,148; 

E. For a loan amount less than $14,356: 8 

percent of the total loan amount. 

ix. For 2023, reflecting an 8.3 percent 

increase in the CPI–U that was reported on 

the preceding June 1, a covered transaction 

is not a qualified mortgage unless the 

transaction’s total points and fees do not 

exceed: 

A. For a loan amount greater than or equal 

to $124,331: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $74,599 but less than $124,331: $3,730; 

C. For a loan amount greater than or equal 

to $24,866 but less than $74,599: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $15,541 but less than $24,866: $1,243; 

E. For a loan amount less than $15,541: 8 

percent of the total loan amount. 

x. For 2024, reflecting a 4.9 percent 

increase in the CPI–U that was reported on 

the preceding June 1, a covered transaction 

is not a qualified mortgage unless the 

transaction’s total points and fees do not 

exceed: 

A. For a loan amount greater than or equal 

to $130,461: 3 percent of the total loan 

amount; 

B. For a loan amount greater than or equal 

to $78,277 but less than $130,461: $3,914; 

C. For a loan amount greater than or equal 

to $26,092 but less than $78,277: 5 percent 

of the total loan amount; 

D. For a loan amount greater than or equal 

to $16,308 but less than $26,092: $1,305; 

E. For a loan amount less than $16,308: 8 

percent of the total loan amount. 

* * * * * 

Brian Shearer, 

Senior Advisor, Consumer Financial 

Protection Bureau. 

[FR Doc. 2023–20476 Filed 9–20–23; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2023–1212; Project 

Identifier MCAI–2022–00423–E; Amendment 

39–22538; AD 2023–17–12] 

RIN 2120–AA64 

Airworthiness Directives; Rolls-Royce 

Deutschland Ltd. & Co. KG Engines 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for all 

Rolls-Royce Deutschland Ltd. & Co. KG 

(RRD) Model RB211 Trent 768–60, 772– 

60, and 772B–60 engines. This AD was 

prompted by reports of cracks on 

affected intermediate-pressure 

compressor (IPC) rotor shaft balance 

lands. This AD requires repetitive onwing or in-shop borescope inspections 

(BSIs) of the affected IPC rotor shaft 

balance land for cracks and replacement 

of any IPC rotor shaft if necessary and 

prohibits the installation of an affected 

IPC rotor shaft on any engine, as 

specified in a European Union Aviation 

Safety Agency (EASA) AD, which is 

incorporated by reference (IBR). The 

FAA is issuing this AD to address the 

unsafe condition on these products. 

DATES: This AD is effective October 26, 

2023. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in this AD 

as of October 26, 2023. 

ADDRESSES: 

AD Docket: You may examine the AD 

docket at regulations.gov under Docket 

No.FAA–2023–1212; or in person at 

Docket Operations between 9 a.m. and 

5 p.m., Monday through Friday, except 

Federal holidays. The AD docket 

contains this final rule, the mandatory 

continuing airworthiness information 

(MCAI), any comments received, and 

other information. The address for 

Docket Operations is U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE, 

Washington, DC 20590. 

Material Incorporated by Reference: 

• For EASA service information 

identified in this final rule, contact 

EASA, Konrad-Adenauer-Ufer 3, 50668 

Cologne, Germany; phone: +49 221 8999 

000; email: ADs@easa.europa.eu; 

website: easa.europa.eu. You may find 

this material on the EASA website at 

ad.easa.europa.eu. 

• You may view this service 

information at the FAA, Airworthiness 

Products Section, Operational Safety 

Branch, 1200 District Avenue, 

Burlington, MA 01803. For information 

on the availability of this material at the 

FAA, call (817) 222–5110. It is also 

available at regulations.gov under 

Docket No. FAA–2023–1212. 

FOR FURTHER INFORMATION CONTACT: 

Sungmo Cho, Aviation Safety Engineer, 

FAA, 2200 South 216th Street, Des 

Moines, WA 98198; phone: (781) 238– 

7241; email: sungmo.d.cho@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The FAA issued a notice of proposed 

rulemaking (NPRM) to amend 14 CFR 

part 39 by adding an AD that would 

apply to all RRD Model RB211 Trent 

768–60, 772–60, and 772B–60 engines. 

The NPRM published in the Federal 

Register on June 14, 2023 (88 FR 38759). 

The NPRM was prompted by AD 2022– 

0055, dated March 23, 2022 (EASA AD 

2022–0055) (also referred to as the 

MCAI), issued by EASA, which is the 

Technical Agent for the Member States 

of the European Union. The MCAI states 

that cracking on the IPC rotor shaft 

balance land has been historically 

observed on RRD Model Trent 700 

engines. To address this unsafe 

condition, Rolls-Royce plc (RR) 

originally developed Modification 72– 

AG402, which introduced a revised 

balancing method that removed the 

original balancing weights from the IPC 

rotor shaft balance land and published 

RR Service Bulletin (SB) RB.211–72– 


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