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Updated Regulation Z Thresholds for 2022

Michael Christians • November 30, 2021

Each year, the Consumer Financial Protection Bureau (CFPB) is required to adjust certain thresholds under Regulation Z to reflect any increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) or the Consumer Price Index for All Urban Consumers (CPI-U). The following revised thresholds will be effective January 1, 2022.

Safe Harbor Amount for Credit Card Penalty Fees

The penalty fees assessed to a cardholder for a violation of the terms and/or conditions of a credit card account should not exceed certain amounts. For 2022, these amounts will be:

$30.00 for an initial violation; and
$41.00 for any subsequent violation.

Appraisal Exemption Threshold for Higher Priced Mortgage Loans

In connection with a higher priced mortgage loan, a creditor must generally obtain a written appraisal of the subject property. However, there are certain instances in which the use of an alternative method of valuation is permissible. One of these is dependent upon the amount of the loan. For 2022, a creditor may use an alternative method of valuation in connection with a higher priced mortgage loan of $28,500 or less.

Points and Fees Threshold for High-Cost Mortgages

A high-cost mortgage is a consumer credit transaction secured by the borrower's principal dwelling that meets one of three tests. One of these tests is contingent upon the points and fees charged in connection with the transaction. For 2022, a loan is considered high-cost if the points and fees charged in connection with the transaction exceed:

5% of the loan amount for loans of $22,969 or greater
For loans less than $22,969, the lesser of -
8% of the loan amount, or
$1,148

Loan Amounts for the Qualified Mortgage Pricing Test

One element of the CFPB's revised definition of a qualified mortgage is that the APR charged in connection with the transaction cannot exceed the value of the Average Prime Offer Rate (APOR) index by certain thresholds, dependent upon loan amount.

In 2022, for first lien loans, the applicable thresholds will be:

2.25% or more for loans greater than or equal to $114,847
3.50% or more for loans greater than or equal to $68,908 but less than $114,847
6.50% or more for loans less than $68,908

The applicable thresholds for subordinate lien loans in the new year will be:

3.50% or more for loans greater than or equal to $68,908
6.50% or more for loans less than $68,908

Points and Fees Thresholds for Qualified Mortgages

One additional element of the qualified mortgage test is a limitation on the amount of points and fees that may be charged in connection with the transaction. The revised points and fees caps for 2022 are:

For loans greater than $114,847
3% of the loan amount
For loans between $68,908 and $114,847
$3,445
For loans between $22,969 and $68,908
5% of the loan amount
For loans between $14,356 and $22,969
$1,148
For loans less than $14,356
8% of the loan amount

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