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New Reg Z trigger CUNA analysis
WASHINGTON (9/16/08)—Starting Jan. 1, the dollar amount that triggers additional disclosures and prohibitions under the Truth in Lending Act (TILA) for certain mortgage loans will increase, reminds the Credit Union National Association (CUNA) in a final rule analysis. TILA requires creditors to disclose credit terms and the cost of consumer credit as an annual percentage rate. The act, implemented by the Fed’s Regulation Z, requires additional disclosures for loans secured by a consumer’s home, and permits consumers to cancel certain transactions that involve their principal dwelling. The recent adjustment to the trigger, which is tied to the Consumer Price Index, is required under the Home Ownership and Equity Protection Act of 1994. Under the Fed’s new trigger, the disclosures and prohibitions will now apply when total points and fees on a loan exceed $583 or 8% of the loan an amount, whichever is greater. The trigger for 2008 was $561. The adjustment does not affect the new mortgage lending rules adopted by the Fed in July 2008 for "higher-priced mortgage loans," the CUNA analysis notes. Coverage of mortgage loans under those rules is determined using a different rate-based threshold. Use the resource link below to read the Fed’s Regulation Z rule.
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