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

51973 

Vol. 82, No. 216 

Thursday, November 9, 2017 

1Public Law 111–203, section 1471, 124 Stat. 

1376, 2185–87 (2010), codified at TILA section 

129H, 15 U.S.C. 1639h. 2 78 FR 10368 (Feb. 13, 2013). 

3 78 FR 48548 (Aug. 8, 2013). 

4 78 FR 78520 (Dec. 26, 2013). 

5See NCUA: 12 CFR 722.3; FHFA: 12 CFR part 

1222. Although the FDIC adopted the Bureau’s 

version of the regulation, the FDIC did not issue its 

own regulation containing a cross-reference to the 

Bureau’s version. See 78 FR 10368, 10370 (Feb. 13, 

2013). 

6 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2) 

(Board); and 12 CFR 1026.35(c)(2)(ii) (Bureau). 

7See 12 CFR part 34, appendix C to subpart G, 

comment 203(b)(2)–1 (OCC); 12 CFR part 226, 

supplement I, comment 43(b)(2)–1 (Board); and 12 

CFR part 1026, supplement I, comment 35(c)(2)(ii)– 

1 (Bureau). 

8See 78 FR 48548, 48565 (Aug. 8, 2013) (‘‘Thus, 

under the proposal, if the CPI–W decreases in an 

Continued 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Part 34 

[Docket No. OCC–2017–0016] 

RIN 1557–AE25 

FEDERAL RESERVE SYSTEM 

12 CFR Part 226 

[Docket No. R–1580] 

RIN 7100 AE–87 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1026 

[Docket No. CFPB–2017–0029] 

Appraisals for Higher-Priced Mortgage 

Loans Exemption Threshold 

AGENCY: Board of Governors of the 

Federal Reserve System (Board); Bureau 

of Consumer Financial Protection 

(Bureau); and Office of the Comptroller 

of the Currency, Treasury (OCC). 

ACTION: Final rules, official 

interpretations and commentary. 

SUMMARY: The OCC, the Board, and the 

Bureau are finalizing amendments to the 

official interpretations for their 

regulations that implement section 

129H of the Truth in Lending Act 

(TILA). Section 129H of TILA 

establishes special appraisal 

requirements for ‘‘higher-risk 

mortgages,’’ termed ‘‘higher-priced 

mortgage loans’’ or ‘‘HPMLs’’ in the 

agencies’ regulations. The OCC, the 

Board, the Bureau, the Federal Deposit 

Insurance Corporation (FDIC), the 

National Credit Union Administration 

(NCUA) and the Federal Housing 

Finance Agency (FHFA) (collectively, 

the Agencies) issued joint final rules 

implementing these requirements, 

effective January 18, 2014. The 

Agencies’ rules exempted, among other 

loan types, transactions of $25,000 or 

less, and required that this loan amount 

be adjusted annually based on any 

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 OCC, 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 

increase 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 

CPI–W in effect as of June 1, 2017, the 

exemption threshold will increase from 

$25,500 to $26,000 effective January 1, 

2018. 

DATES: This final rule is effective 

January 1, 2018. 

FOR FURTHER INFORMATION CONTACT: 

OCC: MaryAnn Nash, Counsel, 

Legislative and Regulatory Activities 

Division, (202) 649–6287; for persons 

who are deaf and hard of hearing TTY, 

(202) 649–5597. Board: Lorna M. Neill, 

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) amended the Truth in 

Lending Act (TILA) to add special 

appraisal requirements for ‘‘higher-risk 

mortgages.’’ 1 In January 2013, the 

Agencies issued a joint final rule 

implementing these requirements and 

adopted the term ‘‘higher-priced 

mortgage loan’’ (HPML) instead of 

‘‘higher-risk mortgage’’ (the January 

2013 Final Rule).2 In July 2013, the 

Agencies proposed additional 

exemptions from the January 2013 Final 

Rule (the 2013 Supplemental Proposed 

Rule).3 In December 2013, the Agencies 

issued a supplemental final rule with 

additional exemptions from the January 

2013 Final Rule (the December 2013 

Supplemental Final Rule).4 Among 

other exemptions, the Agencies adopted 

an exemption from the new HPML 

appraisal rules for transactions of 

$25,000 or less, to be adjusted annually 

for inflation. 

The OCC’s, the Board’s, and the 

Bureau’s versions of the January 2013 

Final Rule and December 2013 

Supplemental Final Rule and 

corresponding official interpretations 

are substantively identical. The FDIC, 

NCUA, and FHFA adopted the Bureau’s 

version of the regulations under the 

January 2013 Final Rule and December 

2013 Supplemental Final Rule.5

The OCC’s, Board’s, and Bureau’s 

regulations,6 and their accompanying 

interpretations,7 provide that the 

exemption threshold for smaller loans 

will be adjusted effective January 1 of 

each year based on 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. 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 there is no 

annual percentage increase in the CPI– 

W, the OCC, the Board, and the Bureau 

will not adjust the threshold amounts 

from the prior year.8


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annual period, the percentage increase would be 

zero, and the dollar amount threshold for the 

exemption would not change.’’). 

9See 81 FR 86250 (Nov. 30, 2016). 

10 5 U.S.C. 553(b)(B). 

11See 78 FR 48548, 48565 (Aug. 8, 2013) (‘‘Thus, 

under the proposal, if the CPI–W decreases in an 

annual period, the percentage increase would be 

zero, and the dollar amount threshold for the 

exemption would not change.’’). 

12 5 U.S.C. 603 and 604. 

13 44 U.S.C. 3506; 5 CFR part 1320. 14 2 U.S.C. 1532. 

On November 30, 2016, the OCC, 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 in the December 2013 

Supplemental Final Rule (HPML Small 

Dollar Adjustment Calculation Rule).9

The HPML Small Dollar Adjustment 

Calculation Rule memorialized the 

policy that if there is no annual 

percentage increase in the CPI–W, the 

OCC, the Board, and Bureau will not 

adjust the exemption threshold from the 

prior year. The HPML Small Dollar 

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 $25,500 to $26,000. 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 $26,000. 

The OCC, the Board, and the Bureau are 

revising the commentaries to their 

respective regulations to add new 

comments as follows: 

• Comment 203(b)(2)–3.v to 12 CFR 

part 34, appendix C to subpart G (OCC); 

• Comment 43(b)(2)–3.v to 

supplement I of 12 CFR part 226 

(Board); and 

• Comment 35(c)(2)(ii)–3.v to 

supplement I of 12 CFR part 1026 

(Bureau). 

These new comments state that, from 

January 1, 2018, through December 31, 

2018, the threshold amount is $26,000. 

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 an agency 

finds that notice and public comment 

are impracticable, unnecessary, or 

contrary to the public interest.10 The 

amendments in this rule are technical 

and apply the method previously set 

forth in the 2013 Supplemental 

Proposed Rule 11 and the HPML Small 

Dollar Adjustment Calculation Rule. For 

these reasons, the OCC, the Board and 

the Bureau have determined that 

publishing a notice of proposed 

rulemaking and providing opportunity 

for public comment are unnecessary. 

Therefore, the amendments are adopted 

in final form. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

does not apply to a rulemaking where a 

general notice of proposed rulemaking 

is not required.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 

In accordance with the Paperwork 

Reduction Act of 1995,13 the agencies 

reviewed this final rule. No collections 

of information pursuant to the 

Paperwork Reduction Act are contained 

in the final rule. 

Unfunded Mandates Reform Act 

The OCC analyzes proposed rules for 

the factors listed in Section 202 of the 

Unfunded Mandates Reform Act of 

1995, before promulgating a final rule 

for which a general notice of proposed 

rulemaking was published.14 As 

discussed above, the OCC has 

determined that the publication of a 

general notice of proposed rulemaking 

is unnecessary. 

List of Subjects 

12 CFR Part 34 

Appraisal, Appraiser, Banks, Banking, 

Consumer protection, Credit, Mortgages, 

National banks, Reporting and 

recordkeeping requirements, Savings 

associations, Truth in lending. 

12 CFR Part 226 

Advertising, Appraisal, Appraiser, 

Consumer protection, Credit, Federal 

Reserve System, Mortgages, Reporting 

and recordkeeping requirements, Truth 

in lending. 

12 CFR Part 1026 

Advertising, Appraisal, Appraiser, 

Banking, Banks, Consumer protection, 

Credit, Credit unions, Mortgages, 

National banks, Reporting and 

recordkeeping requirements, Savings 

associations, Truth in lending. 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

Authority and Issuance 

For the reasons set forth in the 

preamble, the OCC amends 12 CFR part 

34 as set forth below: 

PART 34—REAL ESTATE LENDING 

AND APPRAISALS 

■ 1. The authority citation for part 34 

continues to read as follows: 

Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 

371, 1463, 1464, 1465, 1701j-3, 1828(o), 3331 

et seq., 5101 et seq., 5412(b)(2)(B) and 15 

U.S.C. 1639h. 

Subpart G—Appraisals for HigherPriced Mortgage Loans 

■ 2. In appendix C to subpart G, under 

Section 34.203—Appraisals for HigherPriced Mortgage Loans, under 

Paragraph 34.203(b)(2), paragraph 3.v is 

added to read as follows: 


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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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