Rule2021-25909
Consumer Leasing (Regulation M)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 30, 2021
Effective
January 1, 2022
Issuing agencies
Federal Reserve SystemConsumer Financial Protection Bureau
Abstract
The Board and the Bureau are finalizing amendments to the official interpretations and commentary for the agencies' regulations that implement the Consumer Leasing Act (CLA). The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the CLA by requiring that the dollar threshold for exempt consumer leases be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Under regulations adopted by the Board and the Bureau, if there is no annual percentage increase in the CPI-W, the Board and the Bureau will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, 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. Based on the annual percentage increase in the CPI-W as of June 1, 2021, the exemption threshold will increase from $58,300 to $61,000 effective January 1, 2022. Because the Dodd-Frank Act also requires similar adjustments in the Truth in Lending Act's threshold for exempt consumer credit transactions, the Board and the Bureau are making similar amendments to each of their respective regulations implementing the Truth in Lending Act elsewhere in the Rules section of this issue of the Federal Register.
Full Text
<html>
<head>
<title>Federal Register, Volume 86 Issue 227 (Tuesday, November 30, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 227 (Tuesday, November 30, 2021)]
[Rules and Regulations]
[Pages 67847-67851]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-25909]
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
12 CFR Part 213
[Docket No. R-1756]
RIN 7100-AG19
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1013
Consumer Leasing (Regulation M)
AGENCY: Board of Governors of the Federal Reserve System (Board) and
Bureau of Consumer Financial Protection (Bureau).
ACTION: Final rules, official interpretations and commentary.
-----------------------------------------------------------------------
SUMMARY: The Board and the Bureau are finalizing amendments to the
official interpretations and commentary for the agencies' regulations
that implement the Consumer Leasing Act (CLA). The Dodd-Frank Wall
Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the
CLA by requiring that the dollar threshold for exempt consumer leases
be adjusted annually by the annual percentage increase in the Consumer
Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Under
regulations adopted by the Board and the Bureau, if there is no annual
percentage increase in the CPI-W, the Board and the Bureau will not
adjust this exemption threshold from the prior year. However, in years
following a year in which the exemption threshold was not adjusted, 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. Based on the annual percentage increase in the CPI-W as
of June 1, 2021, the exemption threshold will increase from $58,300 to
$61,000 effective January 1, 2022. Because the Dodd-Frank Act also
requires similar adjustments in the Truth in Lending Act's threshold
for exempt consumer credit transactions, the Board and the Bureau are
making similar amendments to each of their respective regulations
implementing the Truth in Lending Act elsewhere in the Rules section of
this issue of the Federal Register.
DATES: This final rule is effective January 1, 2022.
FOR FURTHER INFORMATION CONTACT:
Board: Vivian W. Wong, Senior Counsel, Division of Consumer and
Community Affairs, Board of Governors
[[Page 67848]]
of the Federal Reserve System, at (202) 452-3667.
Bureau: Lanique Eubanks, Senior Counsel, Office of Regulations,
Bureau of Consumer Financial Protection, at (202) 435-7700. If you
require this document in an alternative electronic format, please
contact <a href="/cdn-cgi/l/email-protection#fbb8bdabb9a4ba98989e888892999297928f82bb989d8b99d59c948d"><span class="__cf_email__" data-cfemail="5d1e1b0d1f021c3e3e382e2e343f34313429241d3e3b2d3f733a322b">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Act increased the threshold in the CLA for exempt
consumer leases, and the threshold in the Truth in Lending Act (TILA)
for exempt consumer credit transactions,\1\ from $25,000 to $50,000,
effective July 21, 2011.\2\ In addition, the Dodd-Frank Act requires
that, on and after December 31, 2011, these thresholds be adjusted
annually for inflation by the annual percentage increase in the CPI-W,
as published by the Bureau of Labor Statistics. In April 2011, the
Board issued a final rule amending Regulation M (which implements the
CLA) consistent with these provisions of the Dodd-Frank Act, along with
a similar final rule amending Regulation Z (which implements TILA)
(collectively, the Board Final Threshold Rules).\3\
---------------------------------------------------------------------------
\1\ Although consumer credit transactions above the threshold
are generally exempt, loans secured by real property or by personal
property used or expected to be used as the principal dwelling of a
consumer and private education loans are covered by TILA regardless
of the loan amount. See 12 CFR 226.3(b)(1)(i) (Board) and 12 CFR
1026.3(b)(1)(i) (Bureau).
\2\ Public Law 111-203, section 1100E, 124 Stat. 1376, 2111
(2010).
\3\ 76 FR 18349 (Apr. 4, 2011); 76 FR 18354 (Apr. 4, 2011).
---------------------------------------------------------------------------
Title X of the Dodd-Frank Act transferred rulemaking authority for
a number of consumer financial protection laws from the Board to the
Bureau, effective July 21, 2011. In connection with this transfer of
rulemaking authority, the Bureau issued its own Regulation M
implementing the CLA, 12 CFR part 1013, substantially duplicating the
Board's Regulation M.\4\ Although the Bureau has the authority to issue
rules to implement the CLA for most entities, the Board retains
authority to issue rules under the CLA for certain motor vehicle
dealers covered by section 1029(a) of the Dodd-Frank Act, and the
Board's Regulation M continues to apply to those entities.\5\
---------------------------------------------------------------------------
\4\ See 76 FR 78500 (Dec. 19, 2011); 81 FR 25323 (Apr. 28,
2016).
\5\ Section 1029(a) of the Dodd-Frank Act states: ``Except as
permitted in subsection (b), the Bureau may not exercise any
rulemaking, supervisory, enforcement, or any other authority . . .
over a motor vehicle dealer that is predominantly engaged in the
sale and servicing of motor vehicles, the leasing and servicing of
motor vehicles, or both.'' 12 U.S.C. 5519(a). Section 1029(b) of the
Dodd-Frank Act provides that ``[s]ubsection (a) shall not apply to
any person, to the extent that such person--(1) provides consumers
with any services related to residential or commercial mortgages or
self-financing transactions involving real property; (2) operates a
line of business--(A) that involves the extension of retail credit
or retail leases involving motor vehicles; and (B) in which--(i) the
extension of retail credit or retail leases are provided directly to
consumers; and (ii) the contract governing such extension of retail
credit or retail leases is not routinely assigned to an unaffiliated
third party finance or leasing source; or (3) offers or provides a
consumer financial product or service not involving or related to
the sale, financing, leasing, rental, repair, refurbishment,
maintenance, or other servicing of motor vehicles, motor vehicle
parts, or any related or ancillary product or service.'' 12 U.S.C.
5519(b).
---------------------------------------------------------------------------
The Board's and the Bureau's regulations,\6\ and their accompanying
commentaries, provide that the exemption threshold will be adjusted
annually 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. They further provide that 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.\7\ Since 2011, the Board and the Bureau have
adjusted the Regulation M exemption threshold annually, in accordance
with these rules.
---------------------------------------------------------------------------
\6\ 12 CFR 213.2(e)(1) (Board) and 12 CFR 1013.2(e)(1) (Bureau).
\7\ See comments 2(e)-9 in Supplements I of 12 CFR parts 213 and
1013.
---------------------------------------------------------------------------
On November 30, 2016, the Board and the Bureau published a final
rule in the Federal Register to memorialize the calculation method used
by the agencies each year to adjust the exemption threshold to ensure
that, as contemplated by section 1100E(b) of the Dodd-Frank Act, the
values for the exemption threshold keep pace with the CPI-W (Regulation
M Adjustment Calculation Rule).\8\ The Regulation M Adjustment
Calculation Rule memorialized the policy that, if there is no annual
percentage increase in the CPI-W, the Board and the Bureau will not
adjust the exemption threshold from the prior year. The Regulation M
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.
---------------------------------------------------------------------------
\8\ See 81 FR 86256 (Nov. 30, 2016).
---------------------------------------------------------------------------
II. 2022 Adjustment and Commentary Revision
Effective January 1, 2022, the exemption threshold amount is
increased from $58,300 to $61,000. This amount is based on the CPI-W in
effect on June 1, 2021, which was reported on May 12, 2021 (based on
April 2021 data).\9\ The CPI-W is a subset of the CPI-U index (based on
all urban consumers) and represents approximately 29 percent of the
U.S. population. The CPI-W reported on May 12, 2021 reflects a 4.7
percent increase in the CPI-W from April 2020 to April 2021.
Accordingly, the 4.7 percent increase in the CPI-W from April 2020 to
April 2021 results in an exemption threshold amount of $61,000, after
rounding. The Board and the Bureau are revising the commentaries to
their respective regulations to add new comment 2(e)-11.xiii to state
that, from January 1, 2022 through December 31, 2022, the threshold
amount is $61,000. These revisions are effective January 1, 2022.\10\
---------------------------------------------------------------------------
\9\ 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, 2021 were reported on May 12, 2021, and
reflect economic conditions in April 2021.
\10\ The agencies note that to add new comment 2(e)-11.xiii to
their respective rules, Supplement I to part 213, section 213.2
paragraph 2(e) (Board) and Supplement I to part 1013, section
1013.2, paragraph 2(e) (Bureau) are being republished in their
entirety to comply with the Federal Register's publication
requirement.
---------------------------------------------------------------------------
III. Regulatory Analysis
Administrative Procedure Act
Under the Administrative Procedure Act, notice and opportunity for
public comment are not required if the Board and the Bureau find that
notice and public comment are impracticable, unnecessary, or contrary
to the public
[[Page 67849]]
interest.\11\ The amendments in this rule are technical and apply the
method previously set forth in the Board Final Threshold Rules and the
Regulation M Adjustment Calculation Rule. For these reasons, 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 agencies have determined that it is unnecessary
to publish a general notice of proposed rulemaking for this joint 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) and 604(a).
---------------------------------------------------------------------------
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\13\ the
agencies reviewed this final rule. No collections of information
pursuant to the Paperwork Reduction Act are contained in the final
rule.
---------------------------------------------------------------------------
\13\ 44 U.S.C. 3506; 5 CFR part 1320.
---------------------------------------------------------------------------
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 (OIRA) has
designated this rule as not a ``major rule'' as defined by 5 U.S.C.
804(2).
Bureau Signing Authority
The Associate Director of Research, Markets, and Regulations, Janis
K. Pappalardo, having reviewed and approved this document, is
delegating the authority to electronically sign this document to Laura
Galban, Bureau Federal Register Liaison, for purposes of publication in
the Federal Register.
List of Subjects
12 CFR Part 213
Advertising, Consumer leasing, Consumer protection, Federal Reserve
System, Reporting and recordkeeping requirements.
12 CFR Part 1013
Administrative practice and procedure, Advertising, Consumer
protection, Reporting and recordkeeping requirements, Truth in lending.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Authority and Issuance
For the reasons set forth in the preamble, the Board amends
Regulation M, 12 CFR part 213, as set forth below:
PART 213--CONSUMER LEASING (REGULATION M)
0
1. The authority citation for part 213 continues to read as follows:
Authority: 15 U.S.C. 1604 and 1667f; Pub. L. 111-203 section
1100E, 124 Stat. 1376.
0
2. In Supplement I to Part 213, under Section 213.2--Definitions,
revise 2(e) Consumer Lease, as follows:
Supplement I to Part 213--Official Staff Interpretations
* * * * *
Section 213.2--Definitions
* * * * *
2(e) Consumer Lease. 1. Primary purposes. A lessor must determine
in each case if the leased property will be used primarily for
personal, family, or household purposes. If a question exists as to the
primary purpose for a lease, the fact that a lessor gives disclosures
is not controlling on the question of whether the transaction is
covered. The primary purpose of a lease is determined before or at
consummation and a lessor need not provide Regulation M disclosures
where there is a subsequent change in the primary use.
2. Period of time. To be a consumer lease, the initial term of the
lease must be more than four months. Thus, a lease of personal property
for four months, three months or on a month-to-month or week-to-week
basis (even though the lease actually extends beyond four months) is
not a consumer lease and is not subject to the disclosure requirements
of the regulation. However, a lease that imposes a penalty for not
continuing the lease beyond four months is considered to have a term of
more than four months. To illustrate:
i. A three-month lease extended on a month-to-month basis and
terminated after one year is not subject to the regulation.
ii. A month-to-month lease with a penalty, such as the forfeiture
of a security deposit for terminating before one year, is subject to
the regulation.
3. Total contractual obligation. The total contractual obligation
is not necessarily the same as the total of payments disclosed under
Sec. 213.4(e). The total contractual obligation includes nonrefundable
amounts a lessee is contractually obligated to pay to the lessor, but
excludes items such as:
i. Residual value amounts or purchase-option prices;
ii. Amounts collected by the lessor but paid to a third party, such
as taxes, licenses, and registration fees.
4. Credit sale. The regulation does not cover a lease that meets
the definition of a credit sale in Regulation Z, 12 CFR 226.2(a)(16),
which is defined, in part, as a bailment or lease (unless terminable
without penalty at any time by the consumer) under which the consumer:
i. Agrees to pay as compensation for use a sum substantially
equivalent to, or in excess of, the total value of the property and
services involved; and
ii. Will become (or has the option to become), for no additional
consideration or for nominal consideration, the owner of the property
upon compliance with the agreement.
5. Agricultural purpose. Agricultural purpose means a purpose
related to the production, harvest, exhibition, marketing,
transportation, processing, or manufacture of agricultural products by
a natural person who cultivates, plants, propagates, or nurtures those
agricultural products, including but not limited to the acquisition of
personal property and services used primarily in farming. Agricultural
products include horticultural, viticultural, and dairy products,
livestock, wildlife, poultry, bees, forest products, fish and
shellfish, and any products thereof, including processed and
manufactured products, and any and all products raised or produced on
farms and any processed or manufactured products thereof.
6. Organization or other entity. A consumer lease does not include
a lease made to an organization such as a corporation or a government
agency or instrumentality. Such a lease is not covered by the
regulation even if the leased property is used (by an employee, for
example) primarily for personal, family or household purposes, or is
guaranteed by or subsequently assigned to a natural person.
7. Leases of personal property incidental to a service. The
following leases of personal property are deemed incidental to a
service and thus are not subject to the regulation:
i. Home entertainment systems requiring the consumer to lease
equipment that enables a television to receive the transmitted
programming.
ii. Security alarm systems requiring the installation of leased
equipment intended to monitor unlawful entries
[[Page 67850]]
into a home and in some cases to provide fire protection.
iii. Propane gas service where the consumer must lease a propane
tank to receive the service.
8. Safe deposit boxes. The lease of a safe deposit box is not a
consumer lease under Sec. 213.2(e).
9. Threshold amount. A consumer lease is exempt from the
requirements of this part if the total contractual obligation exceeds
the threshold amount in effect at the time of consummation. The
threshold amount in effect during a particular time period is the
amount stated in comment 2(e)-11 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 2(e)-11 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. If a consumer lease is
exempt from the requirements of this part because the total contractual
obligation exceeds the threshold amount in effect at the time of
consummation, the lease remains exempt regardless of a subsequent
increase in the threshold amount.
10. 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.
11. Threshold. For purposes of Sec. 213.2(e)(1), the threshold
amount in effect during a particular period is the amount stated below
for that period.
i. Prior to July 21, 2011, the threshold amount is $25,000.
ii. From July 21, 2011 through December 31, 2011, the threshold
amount is $50,000.
iii. From January 1, 2012 through December 31, 2012, the threshold
amount is $51,800.
iv. From January 1, 2013 through December 31, 2013, the threshold
amount is $53,000.
v. From January 1, 2014 through December 31, 2014, the threshold
amount is $53,500.
vi. From January 1, 2015 through December 31, 2015, the threshold
amount is $54,600.
vii. From January 1, 2016 through December 31, 2016, the threshold
amount is $54,600.
viii. From January 1, 2017 through December 31, 2017, the threshold
amount is $54,600.
ix. From January 1, 2018 through December 31, 2018, the threshold
amount is $55,800.
x. From January 1, 2019 through December 31, 2019, the threshold
amount is $57,200.
xi. From January 1, 2020 through December 31, 2020, the threshold
amount is $58,300.
xii. From January 1, 2021 through December 31, 2021, the threshold
amount is $58,300.
xiii. From January 1, 2022 through December 31, 2022, the threshold
amount is $61,000.
* * * * *
BUREAU OF CONSUMER FINANCIAL PROTECTION
Authority and Issuance
For the reasons set forth in the preamble, the Bureau amends
Regulation M, 12 CFR part 1013, as set forth below:
PART 1013--CONSUMER LEASING (REGULATION M)
0
3. The authority citation for part 1013 continues to read as follows:
Authority: 15 U.S.C. 1604 and 1667f; Pub. L. 111-203 sec.
1100E, 124 Stat. 1376.
0
4. In Supplement I to part 1013, under Section 1013.2--Definitions,
revise 2(e)--Consumer Lease to read as follows:
Supplement I to Part 1013--Official Interpretations
* * * * *
Section 1013.2--Definitions
* * * * *
2(e) Consumer Lease 1. Primary purposes. A lessor must determine in
each case if the leased property will be used primarily for personal,
family, or household purposes. If a question exists as to the primary
purpose for a lease, the fact that a lessor gives disclosures is not
controlling on the question of whether the transaction is covered. The
primary purpose of a lease is determined before or at consummation and
a lessor need not provide Regulation M disclosures where there is a
subsequent change in the primary use.
2. Period of time. To be a consumer lease, the initial term of the
lease must be more than four months. Thus, a lease of personal property
for four months, three months or on a month-to-month or week-to-week
basis (even though the lease actually extends beyond four months) is
not a consumer lease and is not subject to the disclosure requirements
of the regulation. However, a lease that imposes a penalty for not
continuing the lease beyond four months is considered to have a term of
more than four months. To illustrate:
i. A three-month lease extended on a month-to-month basis and
terminated after one year is not subject to the regulation.
ii. A month-to-month lease with a penalty, such as the forfeiture
of a security deposit for terminating before one year, is subject to
the regulation.
3. Total contractual obligation. The total contractual obligation
is not necessarily the same as the total of payments disclosed under
Sec. 1013.4(e). The total contractual obligation includes
nonrefundable amounts a lessee is contractually obligated to pay to the
lessor, but excludes items such as:
i. Residual value amounts or purchase-option prices;
ii. Amounts collected by the lessor but paid to a third party, such
as taxes, licenses, and registration fees.
4. Credit sale. The regulation does not cover a lease that meets
the definition of a credit sale in Regulation Z, 12 CFR 226.2(a)(16),
which is defined, in part, as a bailment or lease (unless terminable
without penalty at any time by the consumer) under which the consumer:
i. Agrees to pay as compensation for use a sum substantially
equivalent to, or in excess of, the total value of the property and
services involved; and
ii. Will become (or has the option to become), for no additional
consideration
[[Page 67851]]
or for nominal consideration, the owner of the property upon compliance
with the agreement.
5. Agricultural purpose. Agricultural purpose means a purpose
related to the production, harvest, exhibition, marketing,
transportation, processing, or manufacture of agricultural products by
a natural person who cultivates, plants, propagates, or nurtures those
agricultural products, including but not limited to the acquisition of
personal property and services used primarily in farming. Agricultural
products include horticultural, viticultural, and dairy products,
livestock, wildlife, poultry, bees, forest products, fish and
shellfish, and any products thereof, including processed and
manufactured products, and any and all products raised or produced on
farms and any processed or manufactured products thereof.
6. Organization or other entity. A consumer lease does not include
a lease made to an organization such as a corporation or a government
agency or instrumentality. Such a lease is not covered by the
regulation even if the leased property is used (by an employee, for
example) primarily for personal, family or household purposes, or is
guaranteed by or subsequently assigned to a natural person.
7. Leases of personal property incidental to a service. The
following leases of personal property are deemed incidental to a
service and thus are not subject to the regulation:
i. Home entertainment systems requiring the consumer to lease
equipment that enables a television to receive the transmitted
programming.
ii. Security alarm systems requiring the installation of leased
equipment intended to monitor unlawful entries into a home and in some
cases to provide fire protection.
iii. Propane gas service where the consumer must lease a propane
tank to receive the service.
8. Safe deposit boxes. The lease of a safe deposit box is not a
consumer lease under Sec. 1013.2(e).
9. Threshold amount. A consumer lease is exempt from the
requirements of this part if the total contractual obligation exceeds
the threshold amount in effect at the time of consummation. The
threshold amount in effect during a particular time period is the
amount stated in comment 2(e)-11 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 2(e)-11 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. If a consumer lease is
exempt from the requirements of this part because the total contractual
obligation exceeds the threshold amount in effect at the time of
consummation, the lease remains exempt regardless of a subsequent
increase in the threshold amount.
10. 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.
11. Threshold. For purposes of Sec. 1013.2(e)(1), the threshold
amount in effect during a particular period is the amount stated below
for that period.
i. Prior to July 21, 2011, the threshold amount is $25,000.
ii. From July 21, 2011 through December 31, 2011, the threshold
amount is $50,000.
iii. From January 1, 2012 through December 31, 2012, the threshold
amount is $51,800.
iv. From January 1, 2013 through December 31, 2013, the threshold
amount is $53,000.
v. From January 1, 2014 through December 31, 2014, the threshold
amount is $53,500.
vi. From January 1, 2015 through December 31, 2015, the threshold
amount is $54,600.
vii. From January 1, 2016 through December 31, 2016, the threshold
amount is $54,600.
viii. From January 1, 2017 through December 31, 2017, the threshold
amount is $54,600.
ix. From January 1, 2018 through December 31, 2018, the threshold
amount is $55,800.
x. From January 1, 2019 through December 31, 2019, the threshold
amount is $57,200.
xi. From January 1, 2020 through December 31, 2020, the threshold
amount is $58,300.
xii. From January 1, 2021 through December 31, 2021, the threshold
amount is $58,300.
xiii. From January 1, 2022 through December 31, 2022, the threshold
amount is $61,000.
* * * * *
By order of the Board of Governors of the Federal Reserve
System, acting through the Secretary of the Board under delegated
authority.
Ann Misback,
Secretary of the Board.
Laura Galban,
Federal Register Liaison, Bureau of Consumer Financial Protection.
[FR Doc. 2021-25909 Filed 11-29-21; 8:45 am]
BILLING CODE 6210-01-P; 4810-25-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on November 30, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.