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

The baseline for which consumer loans and leases fall under federal oversight is shifting. Starting January 1, 2025, the threshold for Truth in Lending (Regulation Z) and Consumer Leasing (Regulation M) protections will increase to $71,100. For retailers and service providers, this means any credit or lease transaction below this dollar amount must strictly adhere to federal disclosure requirements. This adjustment is an annual requirement based on the Consumer Price Index. It ensures that consumer protections remain effective even as inflation drives up the cost of goods like vehicles, home renovations, and high-end medical procedures. If your ticket sizes are creeping up toward that $70k mark, you need to ensure your financing paperwork is compliant. Transactions above this threshold are generally exempt from these specific federal regulations, unless they are secured by a dwelling or are for private education loans. For most merchants, this update simply clarifies that your standard financing and leasing disclosures apply to almost every typical consumer transaction you process. Failing to provide the correct disclosures on covered transactions can lead to heavy fines or legal challenges from customers.

Source: CFPB Newsroom

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