In the October 2, 2015, issue of the Federal Register (80 FR 59944, click here) the Consumer Financial Protection Bureau (CFPB) issued a final rule (Rule) revising the definitions of small creditor, rural area and underserved area as currently provided in the following Regulation Z rules and official staff commentary: §1026.35(b)(2)(iii)(A), (B), (C), and (D), §1026.35(b)(2)(iv)(A) and (B) and official staff commentary, cross-referenced in §§1026.43(e)(5) and (e)(6), §§1026.43(f)(1) and (f)(2) and official staff commentary, and §1026.32(d)(1)(ii)(C). The Rule’s revisions to the definitions of small creditor and rural and underserved areas are effective for covered transaction consummated on or after January 1, 2016. Summary of Rule The following redacted summary of the Rule is taken from the CFPB’s preamble published with the Rule: • Raises the loan origination limit for determining eligibility for small-creditor status from 500 originations of covered transactions secured by a first lien, to 2,000 such originations (referred to in the Rule as “extensions of covered transactions”), and excludes originated loans held in portfolio by the creditor and its affiliates from that limit. The Rule also establishes a grace period from calendar year to calendar year to allow a creditor that exceeded the origination limit in the preceding calendar year to operate, in certain circumstances, as a small creditor with respect to transactions with applications received before April 1 of the current calendar year.

Complete Memorandum