[Federal Register Volume 88, Number 228 (Wednesday, November 29, 2023)]
[Rules and Regulations]
[Pages 83311-83316]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25047]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 34

[Docket No. OCC-2023-0012]
RIN 1557-AF23

FEDERAL RESERVE SYSTEM

12 CFR Part 226

[Docket No. R-1819]
RIN 7100-AG19

CONSUMER FINANCIAL PROTECTION BUREAU

12 CFR Part 1026


Appraisals for Higher-Priced Mortgage Loans Exemption Threshold

AGENCY: Office of the Comptroller of the Currency, Treasury (OCC); 
Board of Governors of the Federal Reserve System (Board); and Consumer 
Financial Protection Bureau (Bureau).

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) jointly issued 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. Additionally, in years 
following a year in which the exemption threshold was not adjusted 
because the CPI-W decreased, the threshold is calculated by applying 
the annual percentage increase in the CPI-W to the dollar amount that

[[Page 83312]]

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, 2023, the exemption threshold will 
increase from $31,000 to $32,400, effective January 1, 2024.

DATES: This final rule is effective January 1, 2024.

FOR FURTHER INFORMATION CONTACT: 
    OCC: MaryAnn Nash, Counsel, Chief Counsel's Office, Office of the 
Comptroller of the Currency, at (202) 649-6287. If you are deaf, hard 
of hearing, or have a speech disability, please dial 7-1-1 to access 
telecommunications relay services.
    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 TTY-TRS, please call 711 from any 
telephone, anywhere in the United States.
    Bureau: Anna Boadwee and Adrien Fernandez, Attorney-Advisors, 
Office of Regulations, Consumer Financial Protection Bureau, at (202) 
435-7700. If you require this document in an alternative electronic 
format, please contact [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    The Dodd-Frank Wall Street Reform and Consumer Protection Act of 
2010 (Dodd-Frank Act) amended TILA to add special appraisal 
requirements for ``higher-risk mortgages.'' \1\ In January 2013, the 
Agencies jointly issued a 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.\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.
---------------------------------------------------------------------------

    \1\ Public 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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \5\ See 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).
---------------------------------------------------------------------------

    The OCC's, the Board's, and the 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 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\
---------------------------------------------------------------------------

    \6\ 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2) (Board); and 
12 CFR 1026.35(c)(2)(ii) (Bureau).
    \7\ 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).
    \8\ See 12 CFR part 34, appendix C to subpart G, comment 
203(b)(2)-1 and -2 (OCC); 12 CFR part 226, Supplement I, comment 
43(b)(2)-1 and -2 (Board); and 12 CFR part 1026, Supplement I, 
comment 35(c)(2)(ii)-1 and -2 (Bureau).
---------------------------------------------------------------------------

    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 OCC, the Board, and the Bureau each year to adjust 
the exemption threshold to ensure that the values for the exemption 
threshold keep pace with the CPI-W (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 the 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.
---------------------------------------------------------------------------

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

II. 2024 Adjustment and Commentary Revision

    Effective January 1, 2024, the exemption threshold amount will 
increase from $31,000 to $32,400. This amount is based on the CPI-W in 
effect on June 1, 2023, which was reported on May 10, 2023 (based on 
April 2023 data).\10\ The CPI-W is a subset of the CPI-U index (based 
on all urban consumers) and represents approximately 30 percent of the 
U.S. population. The CPI-W reported on May 10, 2023, reflects a 4.6 
percent increase in the CPI-W from April 2022 to April 2023. 
Accordingly, the 4.6 percent increase in the CPI-W from April 2022 to 
April 2023 results in an exemption threshold amount of $32,400, after 
rounding. The OCC, the Board, and the Bureau are revising the 
commentaries to their respective regulations to add new comments as 
follows:
---------------------------------------------------------------------------

    \10\ The 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, 2023, were reported on May 10, 2023, and 
reflect economic conditions in April 2023.
---------------------------------------------------------------------------

     Comment 203(b)(2)-3.xi to 12 CFR part 34, Appendix C to 
Subpart G (OCC);
     Comment 43(b)(2)-3.xi to Supplement I of 12 CFR part 226 
(Board); and
     Comment 35(c)(2)(ii)-3.xi to Supplement I of 12 CFR part 
1026 (Bureau).
    These new comments state that, from January 1, 2024, through 
December 31, 2024, the threshold amount is $32,400. These revisions are 
effective January 1, 2024.

III. Regulatory Analysis

Administrative Procedure Act

    Under the Administrative Procedure Act, notice and opportunity for 
public comment are not required if the agency

[[Page 83313]]

finds 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 memorialized in the December 
2013 Supplemental Final Rule 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.
---------------------------------------------------------------------------

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

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 OCC, the Board, and the Bureau have determined 
that it is unnecessary to publish a general notice of proposed 
rulemaking for this final rule. Accordingly, the RFA's requirements 
relating to an initial and final regulatory flexibility analysis do not 
apply.
---------------------------------------------------------------------------

    \12\ 5 U.S.C. 603(a), 604(a).
---------------------------------------------------------------------------

Paperwork Reduction Act

    The information collections contained in Regulation Z which 
implements TILA are approved by OMB under Control number 3170-0015. The 
current approval for this control number expires on May 31, 2026. In 
accordance with the Paperwork Reduction Act of 1995,\13\ the OCC, the 
Board, and the Bureau reviewed this final rule. The OCC, the Board, and 
the Bureau have determined that this rule does not create any new 
information collections or substantially revise any existing 
collections.
---------------------------------------------------------------------------

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

Unfunded Mandates Reform Act

    As a general matter, the Unfunded Mandates Reform Act of 1995 
(UMRA), 2 U.S.C. 1531 et seq., requires the preparation of a budgetary 
impact statement before promulgating a rule that includes a Federal 
mandate that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. However, the UMRA does not apply to 
final rules for which a general notice of proposed rulemaking was not 
published. See 2 U.S.C. 1532(a). Therefore, because the OCC has found 
good cause to dispense with notice and comment for this final rule, the 
OCC has not prepared a budgetary impact statement for the final rule 
under the UMRA.

Bureau Congressional Review Act Statement

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Bureau 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).

OCC Congressional Review Act Statement

    For purposes of the Congressional Review Act, OMB makes a 
determination as to whether a final rule constitutes a ``major'' 
rule.\14\ If a rule is deemed a ``major rule'' by OMB, the 
Congressional Review Act generally provides that the rule may not take 
effect until at least 60 days following its publication.\15\
---------------------------------------------------------------------------

    \14\ 5 U.S.C. 801 et seq.
    \15\ 5 U.S.C. 801(a)(3).
---------------------------------------------------------------------------

    The Congressional Review Act defines a ``major rule'' as any rule 
that the Administrator of the Office of Information and Regulatory 
Affairs of the OMB finds has resulted in or is likely to result in (A) 
an annual effect on the economy of $100,000,000 or more; (B) a major 
increase in costs or prices for consumers, individual industries, 
Federal, State, or local government agencies or geographic regions, or 
(C) significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.\16\ The OCC currently supervises approximately 1,060 
national banks, federal savings associations, trust companies and 
federal branches and agencies of foreign banks (collectively, 
banks).\17\ Based on the CPI-W in effect as of June 1, 2023, this final 
rule will increase the exemption threshold from $31,000 to $32,400, 
effective January 1, 2024. 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).
---------------------------------------------------------------------------

    \16\ 5 U.S.C. 804(2).
    \17\ Based on data as of February 28, 2023.
---------------------------------------------------------------------------

    For the same reasons set forth above, the OCC is adopting this 
final rule without the delayed effective date generally prescribed 
under the Congressional Review Act. The delayed effective date required 
by the Congressional Review Act does not apply to ``any rule which an 
agency for good cause finds (and incorporates the finding and a brief 
statement of reasons therefor in the rule issued) that notice and 
public procedure thereon are impracticable, unnecessary, or contrary to 
the public interest.'' \18\ In light of the fact that the final rule 
will have a de minimis impact, delaying the effective date of the final 
rule is unnecessary.
---------------------------------------------------------------------------

    \18\ 5 U.S.C. 808(2).
---------------------------------------------------------------------------

    As required by the Congressional Review Act, the OCC will submit 
the final rule and other appropriate reports to Congress and the 
Government Accountability Office for review.

List of Subjects

12 CFR Part 34

    Accounting, 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, Reporting and recordkeeping requirements, Truth 
in lending.

12 CFR Part 1026

    Advertising, Banks, banking, 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

0
1. The authority citation for part 34 continues to read as follows:

    Authority:  12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1462a, 1463, 
1464, 1465, 1701j-3, 1828(o), 3331 et seq., 5101 et seq., 
5412(b)(2)(B) and 15 U.S.C. 1639h.


0
2. In Appendix C to Subpart G, under Section 34.203--Appraisals for 
Higher-Priced Mortgage Loans, paragraph 34.203(b)(2) is revised to read 
as follows:

Appendix C to Subpart G--OCC Interpretations

* * * * *

Section 34.203--Appraisals for Higher-Priced Mortgage Loans

* * * * *

[[Page 83314]]

    Paragraph 34.203(b)(2)
    1. Threshold amount. For purposes of Sec.  34.203(b)(2), the 
threshold amount in effect during a particular period is the amount 
stated in comment 203(b)(2)-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 203(b)(2)-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 Sec.  34.203(b)(2), the threshold 
amount in effect during a particular period is the amount stated 
below 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.
    4. Qualifying for exemption--in general. A transaction is exempt 
under Sec.  34.203(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 Sec.  
34.203(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 Sec.  
34.203(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 Sec.  34.203 
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 Sec.  34.203 applies. See Sec.  34.203(b) and 
(d)(7).
* * * * *

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)

0
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.


0
4. In Supplement I to part 226, under Section 226.43--Appraisals for 
Higher-Risk Mortgage Loans, paragraph 43(b)(2) is revised to read as 
follows:

Supplement I to Part 226--Official Staff Interpretations

* * * * *

Section 226.43--Appraisals for Higher-Risk Mortgage Loans

* * * * *
    Paragraph 43(b)(2)
    1. Threshold amount. For purposes of Sec.  226.43(b)(2), the 
threshold amount in effect during a particular period is the amount 
stated in comment 43(b)(2)-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 43(b)(2)-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 Sec.  226.43(b)(2), the threshold 
amount in effect during a particular period is the amount stated below 
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.

[[Page 83315]]

    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.
    4. Qualifying for exemption--in general. A transaction is exempt 
under Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  226.43 applies. See 
Sec.  226.43(b) and (d)(7).
* * * * *

CONSUMER FINANCIAL PROTECTION BUREAU

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)

0
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.

0
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 Higher-Priced Mortgage Loans

* * * * *
    Paragraph 35(c)(2)(ii)
    1. Threshold amount. For purposes of Sec.  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 Sec.  1026.35(c)(2)(ii), the 
threshold amount in effect during a particular period is the amount 
stated below 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.
    4. Qualifying for exemption--in general. A transaction is exempt 
under Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  
1026.35(c)

[[Page 83316]]

applies. See Sec.  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.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
Brian Shearer,
Senior Advisor, Consumer Financial Protection Bureau.
[FR Doc. 2023-25047 Filed 11-28-23; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 4810-AM-P