Agencies Announce Dollar Thresholds for Applicability of Truth in Lending and Consumer Leasing Rules for Consumer Credit and Lease Transactions

Key dates

2025-12-15

The CFPB and Federal Reserve announced and issued the final threshold amendments based on the 2.1% CPI-W increase as of June 1, 2025.

2026-01-01

The $73,400 Regulation Z and Regulation M thresholds became effective.

2026-12-31

The stated $73,400 thresholds apply through the end of the 2026 calendar year, subject to the applicable transaction-date rules.

Suggested considerations

• Compliance teams may wish to update underwriting, product-classification, and regulatory-coverage logic so that transactions of $73,400 or less are treated as within the applicable Regulation Z or Regulation M framework for the relevant 2026 transaction date.
• Firms should consider reviewing transaction-value calculations, including the total contractual obligation for consumer leases, to confirm that threshold determinations are made using the applicable regulatory definitions and the amount in effect at consummation.
• Lenders and lessors may wish to test disclosures, notices, document generation, and exception handling for transactions close to $73,400, including boundary cases and rounding controls.
• Compliance teams should consider retaining the prior $71,900 threshold for transactions governed by the 2025 threshold and applying $73,400 only to transactions covered by the 2026 period.
• Mortgage and private education lending teams should consider confirming that their systems do not incorrectly treat the $73,400 threshold as an exemption, because those Regulation Z categories remain covered regardless of loan amount.
• Firms may wish to document the annual CPI-W-based threshold change in regulatory inventories, procedures, monitoring scripts, and quality-assurance testing. Independent commentary from Sheppard Mullin characterized the change as an inflation-driven update to the exemption amount rather than a substantive change to TILA or CLA coverage, which supports focusing implementation on system and classification controls.

What changed

Effective January 1, 2026, the Regulation Z exemption threshold under 12 CFR 1026.3(b) and the Regulation M exemption threshold under 12 CFR 1013.2(e) increased to $73,400 from $71,900. The adjustment is based on the annual percentage increase in CPI-W as of June 1, 2025, reported as 2.1%, and is reflected in Regulation Z comment 3(b)-3.xvii and Regulation M comment 2(e)-11.xvii. Regulation Z and Regulation M generally apply to covered consumer credit transactions and consumer leases at or below $73,400; transactions above that amount are generally outside the relevant coverage. Private education loans and loans secured by real property, including mortgages, remain subject to Regulation Z regardless of loan amount. The update changes the dollar threshold only and does not otherwise revise

Who is affected

• Creditors originating or purchasing covered consumer credit transactions subject to Regulation Z
• Consumer lessors and finance companies offering leases subject to Regulation M
• Banks, credit unions, auto finance companies, and fintech lenders offering consumer-purpose credit or leases near the threshold
• Mortgage and private education lenders, which remain subject to Regulation Z regardless of transaction amount

Related regulations

• Truth in Lending Act
• Regulation Z
• Consumer Leasing Act
• Regulation M