Federal Register / Vol. 82, No. 216 / Thursday, November 9, 2017 / Rules and Regulations 51975 

Appendix C to Subpart G—OCC 

Interpretations 

* * * * * 

Section 34.203—Appraisals for Higher-Priced 

Mortgage Loans 

* * * * * 

34.203(b) Exemptions. 

* * * * * 

Paragraph 34.203(b)(2) 

* * * * * 

3. * * * 

v. From January 1, 2018, through December 

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

* * * * * 

BOARD OF GOVERNORS OF THE 

FEDERAL RESERVE SYSTEM 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Board amends Regulation 

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

PART 226—TRUTH IN LENDING 

(REGULATION Z) 

■ 3. 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), 1639(l), and 1639h; Pub. L. 111– 

24, section 2, 123 Stat. 1734; Pub. L. 111– 

203, 124 Stat. 1376. 

■ 4. In supplement I to part 226, under 

Section 226.43—Appraisals for HigherRisk Mortgage Loans, under Paragraph 

43(b)(2), paragraph 3.v is added to read 

as follows: 

Supplement I to Part 226—Official Staff 

Interpretations 

* * * * * 

Subpart E—Special Rules for Certain Home 

Mortgage Transactions 

* * * * * 

Section 226.43—Appraisals for Higher-Risk 

Mortgage Loans 

* * * * * 

43(b) Exemptions. 

* * * * * 

Paragraph 43(b)(2) 

* * * * * 

3. * * * 

v. From January 1, 2018, through December 

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

* * * * * 

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) 

■ 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, under 

Paragraph 35(c)(2)(ii), paragraph 3.v is 

added to read as follows: 

Supplement I to Part 1026—Official 

Interpretations 

* * * * * 

Subpart E—Special Rules for Certain Home 

Mortgage Transactions 

* * * * * 

Section 1026.35—Requirements for HigherPriced Mortgage Loans 

* * * * * 

35(c)—Appraisals 

* * * * * 

35(c)(2) Exemptions 

* * * * * 

Paragraph 35(c)(2)(ii) 

* * * * * 

3. * * * 

v. From January 1, 2018, through December 

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

* * * * * 

Dated: September 26, 2017. 

Keith A. Noreika, 

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, November 2, 2017. 

Ann E. Misback, 

Secretary of the Board. 

Dated: September 7, 2017. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2017–24443 Filed 11–8–17; 8:45 am] 

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

FEDERAL RESERVE SYSTEM 

12 CFR Part 213 

[Docket No. R–1579] 

RIN 7100 AE–86 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1013 

[Docket No. CFPB–2017–0026] 

Consumer Leasing (Regulation M) 

AGENCY: Board of Governors of the 

Federal Reserve System (Board); and 

Bureau of Consumer Financial 

Protection (Bureau). 

ACTION: Final rules, official 

interpretations and commentary. 

SUMMARY: The Board and the Bureau are 

finalizing amendments to the official 

interpretations and commentary 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). 

If there is no annual percentage increase 

in the CPI–W, the Board and the Bureau 

will not adjust this exemption threshold 

from the prior year. However, in years 

following a year in which the exemption 

threshold was not adjusted, 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. 

Based on the annual percentage increase 

in the CPI–W as of June 1, 2017, the 

exemption threshold will increase from 

$54,600 to $55,800 effective January 1, 

2018. Because the Dodd-Frank Act also 

requires similar adjustments in the 

Truth in Lending Act’s threshold for 

exempt consumer credit transactions, 

the Board and the Bureau are making 

similar amendments to each of their 

respective regulations implementing the 

Truth in Lending Act elsewhere in this 

issue of the Federal Register. 

DATES: This final rule is effective 

January 1, 2018. 

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 


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51976 Federal Register / Vol. 82, No. 216 / Thursday, November 9, 2017 / Rules and Regulations 

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) 

(Bureau). 

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

1376, 2111 (2010). 

3 76 FR 18349 (Apr. 4, 2011); 76 FR 18354 (Apr. 

4, 2011). 

4See 76 FR 78500 (Dec. 19, 2011); 81 FR 25323 

(April 28, 2016). 

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

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

may not exercise any rulemaking, supervisory, 

enforcement, or any other authority * * * over a 

motor vehicle dealer that is predominantly engaged 

in the sale and servicing of motor vehicles, the 

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

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

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

provides consumers with any services related to 

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

operates a line of business (A) that involves the 

extension of retail credit or retail leases involving 

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

of retail credit or retail leases are provided directly 

to consumers; and (ii) the contract governing such 

extension of retail credit or retail leases is not 

routinely assigned to an unaffiliated third party 

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

a consumer financial product or service not 

involving or related to the sale, financing, leasing, 

rental, repair, refurbishment, maintenance, or other 

servicing of motor vehicles, motor vehicle parts, or 

any related or ancillary product or service.’’ 12 

U.S.C. 5519(b). 

6 12 CFR 213.2(e)(1) (Board) and 12 CFR 

1013.2(e)(1) (Bureau). 

7See comments 2(e)–9 in Supplements I of 12 

CFR parts 213 and 1013. 

8See 81 FR 86256 (Nov. 30, 2016). 9 5 U.S.C. 553(b)(B). 

Telecommunications Device for the Deaf 

(TDD) only, contact (202) 263–4869. 

Bureau: Jaclyn Maier, Counsel, Office 

of Regulations, Consumer Financial 

Protection Bureau, at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 

(Dodd-Frank Act) increased the 

threshold in the Consumer Leasing Act 

(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 Consumer Price Index 

for Urban Wage Earners and Clerical 

Workers (CPI–W), as published by the 

Bureau of Labor Statistics. In April 

2011, the Board issued a final rule 

amending Regulation 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, the Board Final Threshold 

Rules).3

Title X of the Dodd-Frank Act 

transferred rulemaking authority for a 

number of consumer financial 

protection laws from the Board to the 

Bureau, effective July 21, 2011. In 

connection with this transfer of 

rulemaking authority, the Bureau issued 

its own Regulation M implementing the 

CLA, 12 CFR 1013, substantially 

duplicating the Board’s Regulation M.4

Although the Bureau 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.5

The Board’s and the Bureau’s 

regulations,6 and their accompanying 

commentaries, provide that the 

exemption threshold will be adjusted 

annually effective January 1 of each year 

based on any annual percentage 

increase in the CPI–W that was in effect 

on the preceding June 1. 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 $900.7 Since 2011, the 

Board and the Bureau have adjusted the 

Regulation M exemption threshold 

annually, in accordance with these 

rules. 

On November 30, 2016, the Board and 

the Bureau 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 the values for 

the exemption threshold keep pace with 

the CPI–W as contemplated by section 

1100E(b) of the Dodd-Frank Act 

(Regulation M Adjustment Calculation 

Rule).8 The Regulation M Adjustment 

Calculation Rule memorialized the 

policy that if there is no annual 

percentage increase in the CPI–W, the 

Board and Bureau 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. 2018 Adjustment and Commentary 

Revision 

Effective January 1, 2018, the 

exemption threshold amount is 

increased from $54,600 to $55,800. This 

is based on the CPI–W in effect on June 

1, 2017, which was reported on May 12, 

2017. The Bureau of Labor Statistics 

publishes consumer-based indices 

monthly, but does not report a CPI 

change on June 1; adjustments are 

reported in the middle of the prior 

month. The CPI–W is a subset of the 

CPI–U index (based on all urban 

consumers) and represents 

approximately 28 percent of the U.S. 

population. The CPI–W reported on 

May 12, 2017 reflects a 2.1 percent 

increase in the CPI–W from April 2016 

to April 2017. Accordingly, the 2.1 

percent increase in the CPI–W from 

April 2016 to April 2017 results in an 

exemption threshold amount of $55,800. 

The Board and the Bureau are revising 

the commentaries to their respective 

regulations to add new comment 2(e)– 

11.ix to state that, from January 1, 2018 

through December 31, 2018, the 

threshold amount is $55,800. These 

revisions are effective January 1, 2018. 

III. Regulatory Analysis 

Administrative Procedure Act 

Under the Administrative Procedure 

Act, notice and opportunity for public 

comment are not required if the Board 

and the Bureau find that notice and 

public comment are impracticable, 

unnecessary, or contrary to the public 

interest.9 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 Board and the Bureau have 

determined that publishing a notice of 

proposed rulemaking and providing 


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Federal Register / Vol. 82, No. 216 / Thursday, November 9, 2017 / Rules and Regulations 51977 

10 5 U.S.C. 603 and 604. 

11 44 U.S.C. 3506; 5 CFR 1320. 

1Although consumer credit transactions above 

the threshold are generally exempt, loans secured 

by real property or by personal property used or 

Continued 

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.10 As noted previously, 

the agencies have determined that it is 

unnecessary to publish a general notice 

of proposed rulemaking for this joint 

final rule. Accordingly, the RFA’s 

requirements relating to an initial and 

final regulatory flexibility analysis do 

not apply. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995,11 the agencies 

reviewed this final rule. No collections 

of information pursuant to the 

Paperwork Reduction Act are contained 

in the final rule. 

List of Subjects 

12 CFR Part 213 

Advertising, Consumer leasing, 

Consumer protection, Federal Reserve 

System, Reporting and recordkeeping 

requirements. 

12 CFR Part 1013 

Advertising, Consumer leasing, 

Reporting and recordkeeping 

requirements, 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, under 2(e) 

Consumer Lease, paragraph 11.ix is 

added to read as follows: 

Supplement I to Part 213—Official Staff 

Interpretations 

* * * * * 

Section 213.2—Definitions 

* * * * * 

2(e) Consumer Lease 

* * * * * 

11. * * * 

ix. From January 1, 2018 through December 

31, 2018, the threshold amount is $55,800. 

* * * * * 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau amends 

Regulation M, 12 CFR part 1013, as set 

forth below: 

PART 1013—CONSUMER LEASING 

(REGULATION M) 

■ 3. The authority citation for part 1013 

continues to read as follows: 

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

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

■ 4. In Supplement I to part 1013, under 

Section 1013.2—Definitions, under 

2(e)—Consumer Lease, paragraph 11.ix 

is added to read as follows: 

Supplement I to Part 1013—Official 

Interpretations 

* * * * * 

Section 1013.2—Definitions 

* * * * * 

2(e) Consumer Lease 

* * * * * 

11. * * * 

ix. From January 1, 2018 through December 

31, 2018, the threshold amount is $55,800. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

Secretary of the Board under delegated 

authority, November 2, 2017. 

Ann E. Misback, 

Secretary of the Board. 

Dated: September 7, 2017. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2017–24411 Filed 11–8–17; 8:45 am] 

BILLING CODE 4810–AM–P 6210–01–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 226 

[Docket No. R–1581] 

RIN 7100 AE–88 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1026 

[Docket No. CFPB–2017–0027] 

Truth in Lending (Regulation Z) 

AGENCY: Board of Governors of the 

Federal Reserve System (Board); and 

Bureau of Consumer Financial 

Protection (Bureau). 

ACTION: Final rules, official 

interpretations and commentary. 

SUMMARY: The Board and the Bureau are 

publishing final rules amending the 

official interpretations and commentary 

for the agencies’ regulations that 

implement the Truth in Lending Act 

(TILA). 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). If there is no 

annual percentage increase in the CPI– 

W, the Board and the Bureau will not 

adjust this exemption threshold from 

the prior year. However, in years 

following a year in which the exemption 

threshold was not adjusted, 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. 

Based on the annual percentage increase 

in the CPI–W as of June 1, 2017, the 

exemption threshold will increase from 

$54,600 to $55,800 effective January 1, 

2018. Because the Dodd-Frank Act also 

requires similar adjustments in the 

Consumer Leasing Act’s threshold for 

exempt consumer leases, the Board and 

the Bureau are making similar 

amendments to each of their respective 

regulations implementing the Consumer 

Leasing Act elsewhere in this issue of 

the Federal Register. 

DATES: This final rule is effective 

January 1, 2018. 

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 

Telecommunications Device for the Deaf 

(TDD) only, contact (202) 263–4869. 

Bureau: Jaclyn Maier, Counsel, Office 

of Regulations, Consumer Financial 

Protection Bureau, at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 

(Dodd-Frank Act) increased the 

threshold in the Truth in Lending Act 

(TILA) for exempt consumer credit 

transactions,1 and the threshold in the 


nshattuck on DSK9F9SC42PROD with RULES