Comment Call: Regulation M – Increasing the threshold for exempt consumer lease

CUNA
January 26, 2011 | COMMENTS

Regulation M – Increasing the threshold for exempt consumer leases

The Federal Reserve Board (Fed) has issued a proposed rule that will increase the threshold for exempt consumer leases as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. As required by the Act, the rule will have an effective date of July 21, 2011.

Specifically, the proposed rule requires consumer leases up to $50,000 to be subject to the uniform cost and other disclosure requirements of the Consumer Leasing Act (CLA) and Regulation M. These requirements currently only apply to consumer leases up to $25,000. The new $50,000 threshold must be adjusted annually by any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) beginning on January 1, 2012. In addition, the Fed is revising its staff commentary to clarify how the exemption will be applied in practice and regarding when Regulation M’s advertising rules apply.

Click here for CUNA's Regulatory Comment Call on this proposed rule.