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
Federal Register / Vol. 77, No. 225 / Wednesday, November 21, 2012 / Rules and Regulations 69739 

rounded to whole dollars for ease of 

compliance. 

The fee trigger being adjusted in this 

Federal Register notice pursuant to 

TILA section 103(bb) is used in 

determining whether a loan is covered 

by § 1026.32. Such loans have generally 

been known as ‘‘HOEPA loans.’’ In July 

2008, the Board revised Regulation Z to 

adopt additional protections for 

‘‘higher-priced mortgage loans,’’ using 

its authority under TILA section 

129(l)(2), since redesignated as section 

129(p)(2). Those revisions define a class 

of dwelling-secured transactions, 

described in § 1026.35, using a 

threshold based on average market rates. 

The adjustment published today does 

not affect the triggers adopted in July 

2008 by the Board for higher-priced 

mortgage loans. 

On July 9, 2012, the Bureau issued a 

proposed rule pursuant to, inter alia, 

section 1431 of the Dodd-Frank Act, 

which revises the statutory fee trigger 

for HOEPA loans. The Bureau is 

mindful of the need to coordinate 

implementation of this final rule with 

the effective date of the final rule 

adopting revisions to the HOEPA fee 

trigger pursuant to the July 9, 2012 

proposal. Accordingly, the adjustment 

to the fee trigger that is being published 

today will become effective on January 

1, 2013 and will apply for one year, or 

until final rules the Bureau proposed on 

July 9, 2012 to implement section 1431 

of the Dodd-Frank Act become effective, 

whichever is earlier. 

II. Adjustment and Commentary 

Revision 

Effective January 1, 2013, for purposes 

of determining whether a home 

mortgage transaction is covered by 

§ 1026.32 (based on the total points and 

fees payable by the consumer at or 

before loan closing), a loan is covered if 

the points and fees exceed the greater of 

$625 or 8 percent of the total loan 

amount. Comment 32(a)(1)(ii)–2, which 

lists the adjustments for each year, is 

amended to reflect the new dollar 

threshold amount for 2013. 

Under the Administrative Procedure 

Act, notice and opportunity for public 

comment are not required if the Bureau 

finds that notice and public comment 

are impracticable, unnecessary, or 

contrary to the public interest. 5 U.S.C. 

553(b)(B). Because the timing and 

method of the adjustment are set by 

statute and are technical and nondiscretionary, the Bureau finds that 

notice and public comment on the 

change are unnecessary. 5 U.S.C. 

553(b)(B). 

Because no notice of proposed 

rulemaking is required, the Regulatory 

Flexibility Act does not apply. 5 U.S.C. 

601(2). In any event, the Bureau certifies 

that this amendment to Regulation Z 

will not have a significant economic 

impact on a substantial number of small 

entities. The only change is to increase 

the threshold for transactions requiring 

HOEPA disclosures and protections to 

reflect the annual percentage increase in 

the CPI–U. This change is required by 

statute. Furthermore, the Bureau 

believes that the number of small 

entities that will be required to comply 

with Regulation Z’s HOEPA protections 

solely due to this adjustment because 

they offer ‘‘HOEPA’’ loans is not 

substantial. In addition, for entities that 

already offer ‘‘HOEPA’’ 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 loan amount, 

whichever is less, the Bureau believes 

the economic impact to comply with 

Regulation Z for additional ‘‘HOEPA’’ 

loans in which the total points and fees 

payable by the consumer at or before 

loan consummation exceed the greater 

of $625 or 8 percent of the loan amount, 

whichever is less, will not be 

significant. 

List of Subjects in 12 CFR Part 1026 

Advertising, Consumer protection, 

Credit, Credit unions, Mortgages, 

National banks, Reporting and 

recordkeeping requirements, Savings 

association, Truth in lending. 

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 1026.32—Requirements for 

Certain Closed-End Home Mortgages, 

32(a) Coverage, paragraph 32(a)(1)(ii), 

paragraph 2 is amended by adding new 

paragraph 2.xviii to read as follows: 

SUPPLEMENT I TO PART 1026— 

OFFICIAL INTERPRETATIONS 

* * * * * 

Section 1026.32—Requirements for Certain 

Closed-End Home Mortgages 

32(a) Coverage. 

* * * * * 

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

* * * * * 

2. Annual adjustment of $400 amount. 

* * * 

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. 

* * * * * 

Dated: November 6, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–27997 Filed 11–20–12; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2012–0498; Directorate 

Identifier 2011–NM–212–AD; Amendment 

39–17238; AD 2012–22–02] 

RIN 2120–AA64 

Airworthiness Directives; The Boeing 

Company Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: We are adopting a new 

airworthiness directive (AD) for certain 

The Boeing Company Model 747–400, 

–400D, and –400F series airplanes. This 

AD was prompted by reports of crown 

frame web cracking at left buttock line 

(LBL) 15.0, station (STA) 320. This AD 

requires measuring the web at STA 320 

and, depending on findings, various 

inspections for cracks and missing 

fasteners, web and fastener replacement, 

and related investigative and corrective 

actions if necessary. We are issuing this 

AD to prevent complete fracture of the 

crown frame assembly, and consequent 

damage to the skin and in-flight 

decompression of the airplane. 

DATES: This AD is effective December 

26, 2012. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in the AD 

as of December 26, 2012. 

ADDRESSES: For service information 

identified in this AD, contact Boeing 

Commercial Airplanes, Attention: Data 

& Services Management, P.O. Box 3707, 

MC 2H–65, Seattle, WA 98124–2207; 

telephone 206–544–5000, extension 1; 

fax 206–766–5680; Internet https:// 

www.myboeingfleet.com. You may 

review copies of the referenced service 

information at the FAA, Transport 

Airplane Directorate, 1601 Lind Avenue 

SW., Renton, WA. For information on 


emcdonald on DSK67QTVN1PROD with RULES