82934 Federal Register / Vol. 89, No. 199 / Tuesday, October 15, 2024 / Rules and Regulations 

xi. From January 1, 2024, through 

December 31, 2024, the threshold amount is 

$32,400. 

xii. From January 1, 2025, through 

December 31, 2025, the threshold amount is 

$33,500. 

4. Qualifying for exemption—in general. A 

transaction is exempt under § 226.43(b)(2) if 

the creditor makes an extension of credit at 

consummation that is equal to or below the 

threshold amount in effect at the time of 

consummation. 

5. Qualifying for exemption—subsequent 

changes. A transaction does not meet the 

condition for an exemption under 

§ 226.43(b)(2) merely because it is used to 

satisfy and replace an existing exempt loan 

unless the amount of the new extension of 

credit is equal to or less than the applicable 

threshold amount. For example, assume a 

closed-end loan that qualified for a 

§ 226.43(b)(2) exemption at consummation in 

year one is refinanced in year ten and that 

the new loan amount is greater than the 

threshold amount in effect in year ten. In 

these circumstances, the creditor must 

comply with all of the applicable 

requirements of § 226.43 with respect to the 

year ten transaction if the original loan is 

satisfied and replaced by the new loan unless 

another exemption from the requirements of 

§ 226.43 applies. See § 226.43(b) and (d)(7). 

* * * * * 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

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) 

■ 5. 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. 

■ 6. In supplement I to part 1026, under 

Section 1026.35—Requirements for 

Higher-Priced Mortgage Loans, 

paragraph 35(c)(2)(ii) is revised to read 

as follows: 

Supplement I to Part 1026—Official 

Interpretations 

* * * * * 

Section 1026.35—Requirements for HigherPriced Mortgage Loans 

* * * * * 

Paragraph 35(c)(2)(ii) 

1. Threshold amount. For purposes of 

§ 1026.35(c)(2)(ii), the threshold amount in 

effect during a particular period is the 

amount stated in comment 35(c)(2)(ii)–3 for 

that period. The threshold amount is 

adjusted effective January 1 of each year by 

any annual percentage increase in the 

Consumer Price Index for Urban Wage 

Earners and Clerical Workers (CPI–W) that 

was in effect on the preceding June 1. 

Comment 35(c)(2)(ii)–3 will be amended to 

provide the threshold amount for the 

upcoming year after the annual percentage 

change in the CPI–W that was in effect on 

June 1 becomes available. 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. 

2. No increase in the CPI–W. If the CPI–W 

in effect on June 1 does not increase from the 

CPI–W in effect on June 1 of the previous 

year, the threshold amount effective the 

following January 1 through December 31 

will not change from the previous year. 

When this occurs, for the years that follow, 

the threshold is calculated based on the 

annual percentage change in the CPI–W 

applied to the dollar amount that would have 

resulted, after rounding, if decreases and any 

subsequent increases in the CPI–W had been 

taken into account. 

i. Net increases. If the resulting amount 

calculated, after rounding, is greater than the 

current threshold, then the threshold 

effective January 1 the following year will 

increase accordingly. 

ii. Net decreases. If the resulting amount 

calculated, after rounding, is equal to or less 

than the current threshold, then the 

threshold effective January 1 the following 

year will not change, but future increases 

will be calculated based on the amount that 

would have resulted. 

3. Threshold. For purposes of 

§ 1026.35(c)(2)(ii), the threshold amount in 

effect during a particular period is the 

amount stated in the following for that 

period. 

i. From January 18, 2014, through 

December 31, 2014, the threshold amount is 

$25,000. 

ii. From January 1, 2015, through 

December 31, 2015, the threshold amount is 

$25,500. 

iii. From January 1, 2016, through 

December 31, 2016, the threshold amount is 

$25,500. 

iv. From January 1, 2017, through 

December 31, 2017, the threshold amount is 

$25,500. 

v. From January 1, 2018, through December 

31, 2018, the threshold amount is $26,000. 

vi. From January 1, 2019, through 

December 31, 2019, the threshold amount is 

$26,700. 

vii. From January 1, 2020, through 

December 31, 2020, the threshold amount is 

$27,200. 

viii. From January 1, 2021, through 

December 31, 2021, the threshold amount is 

$27,200. 

ix. From January 1, 2022, through 

December 31, 2022, the threshold amount is 

$28,500. 

x. From January 1, 2023, through December 

31, 2023, the threshold amount is $31,000. 

xi. From January 1, 2024, through 

December 31, 2024, the threshold amount is 

$32,400. 

xii. From January 1, 2025, through 

December 31, 2025, the threshold amount is 

$33,500. 

4. Qualifying for exemption—in general. A 

transaction is exempt under 

§ 1026.35(c)(2)(ii) if the creditor makes an 

extension of credit at consummation that is 

equal to or below the threshold amount in 

effect at the time of consummation. 

5. Qualifying for exemption—subsequent 

changes. A transaction does not meet the 

condition for an exemption under 

§ 1026.35(c)(2)(ii) merely because it is used to 

satisfy and replace an existing exempt loan 

unless the amount of the new extension of 

credit is equal to or less than the applicable 

threshold amount. For example, assume a 

closed-end loan that qualified for a 

§ 1026.35(c)(2)(ii) exemption at 

consummation in year one is refinanced in 

year ten and that the new loan amount is 

greater than the threshold amount in effect in 

year ten. In these circumstances, the creditor 

must comply with all of the applicable 

requirements of § 1026.35(c) with respect to 

the year ten transaction if the original loan 

is satisfied and replaced by the new loan 

unless another exemption from the 

requirements of § 1026.35(c) applies. See 

§ 1026.35(c)(2) and (c)(4)(vii). 

* * * * * 

Michael J. Hsu, 

Acting Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

Secretary of the Board under delegated 

authority. 

Benjamin W. McDonough, 

Deputy Secretary of the Board. 

Brian Shearer, 

Assistant Director, Office of Policy Planning 

and Strategy, Consumer Financial Protection 

Bureau. 

[FR Doc. 2024–23277 Filed 10–11–24; 8:45 am] 

BILLING CODE 6210–01–P; 4810–33–P; 4810–AM–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 213 

[Docket No. R–1842] 

RIN 7100–AG 83 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1013 

Consumer Leasing (Regulation M) 

AGENCY: Board of Governors of the 

Federal Reserve System (Board) and 

Consumer Financial Protection Bureau 

(CFPB). 

ACTION: Final rules and official 

interpretations. 

SUMMARY: The Board and the CFPB 

(collectively, Agencies) are finalizing 

amendments to the official 


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Federal Register / Vol. 89, No. 199 / Tuesday, October 15, 2024 / Rules and Regulations 82935 

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) (Board) and 12 CFR 1026.3(b)(1)(i) 

(CFPB). 

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

2111 (2010). 

3 Id. 

4 76 FR 18349 (Apr. 4, 2011); 76 FR 18354 (Apr. 

4, 2011). 

5See 76 FR 78500 (Dec. 19, 2011); 81 FR 25323 

(Apr. 28, 2016). 

6Section 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 provides that ‘‘[s]ubsection (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 

self-financing 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). 

7 12 CFR 213.2(e)(1) (Board) and 12 CFR 

1013.2(e)(1) (CFPB). 

8See comments 2(e)–9 in supplement I of 12 CFR 

parts 213 and 1013. 

9See 81 FR 86256 (Nov. 30, 2016). 

10The Bureau of Labor Statistics calculates 

consumer-based indices for each month but does 

not report those indices until the middle of the 

following month. As such, the most recently 

reported indices as of June 1, 2024, were reported 

on May 15, 2024, and reflect economic conditions 

in April 2024. 

interpretations for the Agencies’ 

regulations that implement the 

Consumer Leasing Act (CLA). The 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank 

Act) amended the CLA by requiring that 

the dollar threshold for exempt 

consumer leases be adjusted annually 

by the annual percentage increase in the 

Consumer Price Index for Urban Wage 

Earners and Clerical Workers (CPI–W). 

Based on the annual percentage increase 

in the CPI–W as of June 1, 2024, the 

exemption threshold will increase from 

$69,500 to $71,900 effective January 1, 

2025. Because the Dodd-Frank Act also 

requires similar adjustments in the 

Truth in Lending Act’s threshold for 

exempt consumer credit transactions, 

the Agencies are making similar 

amendments to each of their respective 

regulations implementing the Truth in 

Lending Act elsewhere in the Rules 

section of this issue of the Federal 

Register. 

DATES: This final rule is effective 

January 1, 2025. 

FOR FURTHER INFORMATION CONTACT: 

Board: Vivian W. Wong, Senior 

Counsel, Division of Consumer and 

Community Affairs, Board of Governors 

of the Federal Reserve System, at (202) 

452–3667. For users of TTY–TRS, please 

call 711 from any telephone, anywhere 

in the United States. 

CFPB: George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or at: https://reginquiries.

consumerfinance.gov/. If you require 

this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Act increased the 

threshold in the CLA for exempt 

consumer leases, and 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, on and after December 

31, 2011, these thresholds be adjusted 

annually for inflation by the annual 

percentage increase in the CPI–W, as 

published by the Bureau of Labor 

Statistics.3 In April 2011, the Board 

issued a final rule amending Regulation 

M (which implements the CLA) 

consistent with these provisions of the 

Dodd-Frank Act, along with a similar 

final rule amending Regulation Z 

(which implements TILA) (collectively, 

Board Final Threshold Rules).4

Title X of the Dodd-Frank Act 

transferred rulemaking authority for a 

number of consumer financial 

protection laws from the Board to the 

CFPB, effective July 21, 2011. In 

connection with this transfer of 

rulemaking authority, the CFPB issued 

its own Regulation M implementing the 

CLA, 12 CFR part 1013, substantially 

duplicating the Board’s Regulation M.5

Although the CFPB has the authority to 

issue rules to implement the CLA for 

most entities, the Board retains 

authority to issue rules under the CLA 

for certain motor vehicle dealers 

covered by section 1029(a) of the DoddFrank Act, and the Board’s Regulation 

M continues to apply to those entities.6

The Agencies’ regulations,7 and their 

accompanying official interpretations, 

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. They further provide that 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 $900.8 Since 2011, 

the Agencies have adjusted the 

Regulation M exemption threshold 

annually, in accordance with these 

rules. 

On November 30, 2016, the Agencies 

published a final rule in the Federal 

Register to memorialize the calculation 

method used by the Agencies each year 

to adjust the exemption threshold to 

ensure that, as contemplated by section 

1100E(b) of the Dodd-Frank Act, the 

values for the exemption threshold keep 

pace with the CPI–W (Regulation M 

Adjustment Calculation Rule).9 The 

Regulation M Adjustment Calculation 

Rule memorialized the policy 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 Regulation M 

Adjustment Calculation Rule also 

provided that, in years following a year 

in which the exemption threshold was 

not adjusted because there was a 

decrease in the CPI–W from the 

previous year, the threshold is 

calculated by applying the annual 

percentage change in the CPI–W to the 

dollar amount that would have resulted, 

after rounding, if the decreases and any 

subsequent increases in the CPI–W had 

been taken into account. If the resulting 

amount calculated, after rounding, is 

greater than the current threshold, then 

the threshold effective January 1 the 

following year will increase 

accordingly; if the resulting amount 

calculated, after rounding, is equal to or 

less than the current threshold, then the 

threshold effective January 1 the 

following year will not change, but 

future increases will be calculated based 

on the amount that would have resulted, 

after rounding. 

II. 2025 Adjustment and Official 

Interpretations Revision 

Effective January 1, 2025, the 

exemption threshold amount is 

increased from $69,500 to $71,900. This 

amount is based on the CPI–W in effect 

on June 1, 2024, which was reported on 

May 15, 2024 (based on April 2024 

data).10 The CPI–W is a subset of the 


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82936 Federal Register / Vol. 89, No. 199 / Tuesday, October 15, 2024 / Rules and Regulations 

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

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

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

CPI–U index (based on all urban 

consumers) and represents 

approximately 30 percent of the U.S. 

population. The CPI–W reported on 

May 15, 2024, reflects a 3.4 percent 

increase in the CPI–W from April 2023 

to April 2024. Accordingly, the 3.4 

percent increase in the CPI–W from 

April 2023 to April 2024 results in an 

exemption threshold amount of $71,900, 

after rounding. The Agencies are 

revising the official interpretations to 

their respective regulations to add new 

comment 2(e)–11.xvi to state that, from 

January 1, 2025, through December 31, 

2025, the threshold amount is $71,900. 

These revisions are effective January 1, 

2025. 

III. Regulatory Analysis 

Administrative Procedure Act 

Under the Administrative Procedure 

Act, notice and opportunity for public 

comment are not required if the 

Agencies find that notice and public 

comment are impracticable, 

unnecessary, or contrary to the public 

interest.11 The amendments in this rule 

are technical and apply the method 

previously set forth in the Board Final 

Threshold Rules and the Regulation M 

Adjustment Calculation Rule. For these 

reasons, the Agencies 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.12 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 

The Agencies reviewed this final rule 

in accordance with the Paperwork 

Reduction Act of 1995.13 The Agencies 

have determined that this rule does not 

create any new information collections 

or substantially revise any existing 

collections. 

CFPB Congressional Review Act 

Statement 

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 U.S. 

Senate, the U.S. House of 

Representatives, and the Comptroller 

General of the United States prior to the 

rule taking effect. The Office of 

Information and Regulatory Affairs has 

designated this rule as not a ‘‘major 

rule’’ as defined by 5 U.S.C. 804(2). 

List of Subjects 

12 CFR Part 213 

Advertising, Consumer leasing, 

Consumer protection, Federal Reserve 

System, Reporting and recordkeeping 

requirements. 

12 CFR Part 1013 

Administrative practice and 

procedure, Advertising, Consumer 

protection, Reporting and recordkeeping 

requirements, Truth-in-lending. 

BOARD OF GOVERNORS OF THE 

FEDERAL RESERVE SYSTEM 

Authority and Issuance 

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 section 1100E, 124 Stat. 1376. 

■ 2. In supplement I to part 213, under 

Section 213.2—Definitions, revise 2(e) 

Consumer Lease, as follows: 

Supplement I to Part 213—Official Staff 

Interpretations 

* * * * * 

Section 213.2—Definitions 

* * * * * 

2(e) Consumer Lease 

1. Primary purposes. A lessor must 

determine in each case if the leased property 

will be used primarily for personal, family, 

or household purposes. If a question exists as 

to the primary purpose for a lease, the fact 

that a lessor gives disclosures is not 

controlling on the question of whether the 

transaction is covered. The primary purpose 

of a lease is determined before or at 

consummation and a lessor need not provide 

Regulation M disclosures where there is a 

subsequent change in the primary use. 

2. Period of time. To be a consumer lease, 

the initial term of the lease must be more 

than four months. Thus, a lease of personal 

property for four months, three months or on 

a month-to-month or week-to-week basis 

(even though the lease actually extends 

beyond four months) is not a consumer lease 

and is not subject to the disclosure 

requirements of the regulation. However, a 

lease that imposes a penalty for not 

continuing the lease beyond four months is 

considered to have a term of more than four 

months. To illustrate: 

i. A three-month lease extended on a 

month-to-month basis and terminated after 

one year is not subject to the regulation. 

ii. A month-to-month lease with a penalty, 

such as the forfeiture of a security deposit for 

terminating before one year, is subject to the 

regulation. 

3. Total contractual obligation. The total 

contractual obligation is not necessarily the 

same as the total of payments disclosed 

under § 213.4(e). The total contractual 

obligation includes nonrefundable amounts a 

lessee is contractually obligated to pay to the 

lessor, but excludes items such as: 

i. Residual value amounts or purchaseoption prices; 

ii. Amounts collected by the lessor but 

paid to a third party, such as taxes, licenses, 

and registration fees. 

4. Credit sale. The regulation does not 

cover a lease that meets the definition of a 

credit sale in Regulation Z, 12 CFR 

226.2(a)(16), which is defined, in part, as a 

bailment or lease (unless terminable without 

penalty at any time by the consumer) under 

which the consumer: 

i. Agrees to pay as compensation for use a 

sum substantially equivalent to, or in excess 

of, the total value of the property and 

services involved; and 

ii. Will become (or has the option to 

become), for no additional consideration or 

for nominal consideration, the owner of the 

property upon compliance with the 

agreement. 

5. Agricultural purpose. Agricultural 

purpose means a purpose related to the 

production, harvest, exhibition, marketing, 

transportation, processing, or manufacture of 

agricultural products by a natural person 

who cultivates, plants, propagates, or 

nurtures those agricultural products, 

including but not limited to the acquisition 

of personal property and services used 

primarily in farming. Agricultural products 

include horticultural, viticultural, and dairy 

products, livestock, wildlife, poultry, bees, 

forest products, fish and shellfish, and any 

products thereof, including processed and 

manufactured products, and any and all 

products raised or produced on farms and 

any processed or manufactured products 

thereof. 

6. Organization or other entity. A consumer 

lease does not include a lease made to an 

organization such as a corporation or a 

government agency or instrumentality. Such 

a lease is not covered by the regulation even 

if the leased property is used (by an 

employee, for example) primarily for 

personal, family or household purposes, or is 

guaranteed by or subsequently assigned to a 

natural person. 

7. Leases of personal property incidental to 

a service. The following leases of personal 

property are deemed incidental to a service 

and thus are not subject to the regulation: 

i. Home entertainment systems requiring 

the consumer to lease equipment that enables 

a television to receive the transmitted 

programming. 

ii. Security alarm systems requiring the 

installation of leased equipment intended to 


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Federal Register / Vol. 89, No. 199 / Tuesday, October 15, 2024 / Rules and Regulations 82937 

monitor unlawful entries into a home and in 

some cases to provide fire protection. 

iii. Propane gas service where the 

consumer must lease a propane tank to 

receive the service. 

8. Safe deposit boxes. The lease of a safe 

deposit box is not a consumer lease under 

§ 213.2(e). 

9. Threshold amount. A consumer lease is 

exempt from the requirements of this part if 

the total contractual obligation exceeds the 

threshold amount in effect at the time of 

consummation. The threshold amount in 

effect during a particular time period is the 

amount stated in comment 2(e)–11 for that 

period. The threshold amount is adjusted 

effective January 1 of each year by any 

annual percentage increase in the Consumer 

Price Index for Urban Wage Earners and 

Clerical Workers (CPI–W) that was in effect 

on the preceding June 1. Comment 2(e)–11 

will be amended to provide the threshold 

amount for the upcoming year after the 

annual percentage change in the CPI–W that 

was in effect on June 1 becomes available. 

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. If a 

consumer lease is exempt from the 

requirements of this part because the total 

contractual obligation exceeds the threshold 

amount in effect at the time of 

consummation, the lease remains exempt 

regardless of a subsequent increase in the 

threshold amount. 

10. No increase in the CPI–W. If the CPI– 

W in effect on June 1 does not increase from 

the CPI–W in effect on June 1 of the previous 

year, the threshold amount effective the 

following January 1 through December 31 

will not change from the previous year. 

When this occurs, for the years that follow, 

the threshold is calculated based on the 

annual percentage change in the CPI–W 

applied to the dollar amount that would have 

resulted, after rounding, if decreases and any 

subsequent increases in the CPI–W had been 

taken into account. 

i. Net increases. If the resulting amount 

calculated, after rounding, is greater than the 

current threshold, then the threshold 

effective January 1 the following year will 

increase accordingly. 

ii. Net decreases. If the resulting amount 

calculated, after rounding, is equal to or less 

than the current threshold, then the 

threshold effective January 1 the following 

year will not change, but future increases 

will be calculated based on the amount that 

would have resulted. 

11. Threshold. For purposes of 

§ 213.2(e)(1), the threshold amount in effect 

during a particular period is the amount 

stated in the following for that period. 

i. Prior to July 21, 2011, the threshold 

amount is $25,000. 

ii. From July 21, 2011, through December 

31, 2011, the threshold amount is $50,000. 

iii. From January 1, 2012, through 

December 31, 2012, the threshold amount is 

$51,800. 

iv. From January 1, 2013, through 

December 31, 2013, the threshold amount is 

$53,000. 

v. From January 1, 2014, through December 

31, 2014, the threshold amount is $53,500. 

vi. From January 1, 2015, through 

December 31, 2015, the threshold amount is 

$54,600. 

vii. From January 1, 2016, through 

December 31, 2016, the threshold amount is 

$54,600. 

viii. From January 1, 2017, through 

December 31, 2017, the threshold amount is 

$54,600. 

ix. From January 1, 2018, through 

December 31, 2018, the threshold amount is 

$55,800. 

x. From January 1, 2019, through December 

31, 2019, the threshold amount is $57,200. 

xi. From January 1, 2020, through 

December 31, 2020, the threshold amount is 

$58,300. 

xii. From January 1, 2021, through 

December 31, 2021, the threshold amount is 

$58,300. 

xiii. From January 1, 2022, through 

December 31, 2022, the threshold amount is 

$61,000. 

xiv. From January 1, 2023, through 

December 31, 2023, the threshold amount is 

$66,400. 

xv. From January 1, 2024, through 

December 31, 2024, the threshold amount is 

$69,500. 

xvi. From January 1, 2025, through 

December 31, 2025, the threshold amount is 

$71,900. 

* * * * * 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

Authority and Issuance 

For the reasons set forth in the 

preamble, the CFPB amends Regulation 

M, 12 CFR part 1013, as set forth below: 

PART 1013—CONSUMER LEASING 

(REGULATION M) 

■ 3. The authority citation for part 1013 

continues to read as follows: 

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

L. 111–203 sec. 1100E, 124 Stat. 1376. 

■ 4. In supplement I to part 1013, under 

Section 1013.2—Definitions, revise 

2(e)—Consumer Lease to read as 

follows: 

Supplement I to Part 1013—Official 

Interpretations 

* * * * * 

Section 1013.2—Definitions 

* * * * * 

2(e) Consumer Lease 

1. Primary purposes. A lessor must 

determine in each case if the leased property 

will be used primarily for personal, family, 

or household purposes. If a question exists as 

to the primary purpose for a lease, the fact 

that a lessor gives disclosures is not 

controlling on the question of whether the 

transaction is covered. The primary purpose 

of a lease is determined before or at 

consummation and a lessor need not provide 

Regulation M disclosures where there is a 

subsequent change in the primary use. 

2. Period of time. To be a consumer lease, 

the initial term of the lease must be more 

than four months. Thus, a lease of personal 

property for four months, three months or on 

a month-to-month or week-to-week basis 

(even though the lease actually extends 

beyond four months) is not a consumer lease 

and is not subject to the disclosure 

requirements of the regulation. However, a 

lease that imposes a penalty for not 

continuing the lease beyond four months is 

considered to have a term of more than four 

months. To illustrate: 

i. A three-month lease extended on a 

month-to-month basis and terminated after 

one year is not subject to the regulation. 

ii. A month-to-month lease with a penalty, 

such as the forfeiture of a security deposit for 

terminating before one year, is subject to the 

regulation. 

3. Total contractual obligation. The total 

contractual obligation is not necessarily the 

same as the total of payments disclosed 

under § 1013.4(e). The total contractual 

obligation includes nonrefundable amounts a 

lessee is contractually obligated to pay to the 

lessor, but excludes items such as: 

i. Residual value amounts or purchaseoption prices; 

ii. Amounts collected by the lessor but 

paid to a third party, such as taxes, licenses, 

and registration fees. 

4. Credit sale. The regulation does not 

cover a lease that meets the definition of a 

credit sale in Regulation Z, 12 CFR 

226.2(a)(16), which is defined, in part, as a 

bailment or lease (unless terminable without 

penalty at any time by the consumer) under 

which the consumer: 

i. Agrees to pay as compensation for use a 

sum substantially equivalent to, or in excess 

of, the total value of the property and 

services involved; and 

ii. Will become (or has the option to 

become), for no additional consideration or 

for nominal consideration, the owner of the 

property upon compliance with the 

agreement. 

5. Agricultural purpose. Agricultural 

purpose means a purpose related to the 

production, harvest, exhibition, marketing, 

transportation, processing, or manufacture of 

agricultural products by a natural person 

who cultivates, plants, propagates, or 

nurtures those agricultural products, 

including but not limited to the acquisition 

of personal property and services used 

primarily in farming. Agricultural products 

include horticultural, viticultural, and dairy 

products, livestock, wildlife, poultry, bees, 

forest products, fish and shellfish, and any 

products thereof, including processed and 

manufactured products, and any and all 

products raised or produced on farms and 

any processed or manufactured products 

thereof. 

6. Organization or other entity. A consumer 

lease does not include a lease made to an 


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82938 Federal Register / Vol. 89, No. 199 / Tuesday, October 15, 2024 / Rules and Regulations 

organization such as a corporation or a 

government agency or instrumentality. Such 

a lease is not covered by the regulation even 

if the leased property is used (by an 

employee, for example) primarily for 

personal, family or household purposes, or is 

guaranteed by or subsequently assigned to a 

natural person. 

7. Leases of personal property incidental to 

a service. The following leases of personal 

property are deemed incidental to a service 

and thus are not subject to the regulation: 

i. Home entertainment systems requiring 

the consumer to lease equipment that enables 

a television to receive the transmitted 

programming. 

ii. Security alarm systems requiring the 

installation of leased equipment intended to 

monitor unlawful entries into a home and in 

some cases to provide fire protection. 

iii. Propane gas service where the 

consumer must lease a propane tank to 

receive the service. 

8. Safe deposit boxes. The lease of a safe 

deposit box is not a consumer lease under 

§ 1013.2(e). 

9. Threshold amount. A consumer lease is 

exempt from the requirements of this part if 

the total contractual obligation exceeds the 

threshold amount in effect at the time of 

consummation. The threshold amount in 

effect during a particular time period is the 

amount stated in comment 2(e)–1 for that 

period. The threshold amount is adjusted 

effective January 1 of each year by any 

annual percentage increase in the Consumer 

Price Index for Urban Wage Earners and 

Clerical Workers (CPI–W) that was in effect 

on the preceding June 1. Comment 2(e)–11 

will be amended to provide the threshold 

amount for the upcoming year after the 

annual percentage change in the CPI–W that 

was in effect on June 1 becomes available. 

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. If a 

consumer lease is exempt from the 

requirements of this part because the total 

contractual obligation exceeds the threshold 

amount in effect at the time of 

consummation, the lease remains exempt 

regardless of a subsequent increase in the 

threshold amount. 

10. No increase in the CPI–W. If the CPI– 

W in effect on June 1 does not increase from 

the CPI–W in effect on June 1 of the previous 

year, the threshold amount effective the 

following January 1 through December 31 

will not change from the previous year. 

When this occurs, for the years that follow, 

the threshold is calculated based on the 

annual percentage change in the CPI–W 

applied to the dollar amount that would have 

resulted, after rounding, if decreases and any 

subsequent increases in the CPI–W had been 

taken into account. 

i. Net increases. If the resulting amount 

calculated, after rounding, is greater than the 

current threshold, then the threshold 

effective January 1 the following year will 

increase accordingly. 

ii. Net decreases. If the resulting amount 

calculated, after rounding, is equal to or less 

than the current threshold, then the 

threshold effective January 1 the following 

year will not change, but future increases 

will be calculated based on the amount that 

would have resulted. 

11. Threshold. For purposes of 

§ 1013.2(e)(1), the threshold amount in effect 

during a particular period is the amount 

stated in the following for that period. 

i. Prior to July 21, 2011, the threshold 

amount is $25,000. 

ii. From July 21, 2011, through December 

31, 2011, the threshold amount is $50,000. 

iii. From January 1, 2012, through 

December 31, 2012, the threshold amount is 

$51,800. 

iv. From January 1, 2013, through 

December 31, 2013, the threshold amount is 

$53,000. 

v. From January 1, 2014, through December 

31, 2014, the threshold amount is $53,500. 

vi. From January 1, 2015, through 

December 31, 2015, the threshold amount is 

$54,600. 

vii. From January 1, 2016, through 

December 31, 2016, the threshold amount is 

$54,600. 

viii. From January 1, 2017, through 

December 31, 2017, the threshold amount is 

$54,600. 

ix. From January 1, 2018, through 

December 31, 2018, the threshold amount is 

$55,800. 

x. From January 1, 2019, through December 

31, 2019, the threshold amount is $57,200. 

xi. From January 1, 2020, through 

December 31, 2020, the threshold amount is 

$58,300. 

xii. From January 1, 2021, through 

December 31, 2021, the threshold amount is 

$58,300. 

xiii. From January 1, 2022, through 

December 31, 2022, the threshold amount is 

$61,000. 

xiv. From January 1, 2023, through 

December 31, 2023, the threshold amount is 

$66,400. 

xv. From January 1, 2024, through 

December 31, 2024, the threshold amount is 

$69,500. 

xvi. From January 1, 2025, through 

December 31, 2025, the threshold amount is 

$71,900. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

Secretary of the Board under delegated 

authority. 

Benjamin W. McDonough, 

Deputy Secretary of the Board. 

Brian Shearer, 

Assistant Director, Office of Policy Planning 

and Strategy, Consumer Financial Protection 

Bureau. 

[FR Doc. 2024–23276 Filed 10–11–24; 8:45 am] 

BILLING CODE 6210–01–P; 4810–AM–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 226 

[Docket No. R–1843] 

RIN 7100–AG 84 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1026 

Truth in Lending (Regulation Z) 

AGENCY: Board of Governors of the 

Federal Reserve System (Board) and 

Consumer Financial Protection Bureau 

(CFPB). 

ACTION: Final rules, official 

interpretations. 

SUMMARY: The Board and the CFPB 

(collectively, Agencies) are publishing 

final rules amending the official 

interpretations for the Agencies’ 

regulations that implement the Truth in 

Lending Act (TILA). The Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act) 

amended TILA by requiring that the 

dollar threshold for exempt consumer 

credit transactions be adjusted annually 

by the annual percentage increase in the 

Consumer Price Index for Urban Wage 

Earners and Clerical Workers (CPI–W). 

Based on the annual percentage increase 

in the CPI–W as of June 1, 2024, the 

exemption threshold will increase from 

$69,500 to $71,900 effective January 1, 

2025. Because the Dodd-Frank Act also 

requires similar adjustments in the 

Consumer Leasing Act’s threshold for 

exempt consumer leases, the Agencies 

are making similar amendments to each 

of their respective regulations 

implementing the Consumer Leasing 

Act elsewhere in the Rules section of 

this issue of the Federal Register. 

DATES: This final rule is effective 

January 1, 2025. 

FOR FURTHER INFORMATION CONTACT: 

Board: Vivian W. Wong, Senior 

Counsel, Division of Consumer and 

Community Affairs, Board of Governors 

of the Federal Reserve System, at (202) 

452–3667. For users of TTY–TRS, please 

call 711 from any telephone, anywhere 

in the United States. 

CFPB: George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or at: https://reginquiries.

consumerfinance.gov/. If you require 

this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 


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