Effective July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amends the Truth in Lending Act (TILA) by increasing the threshold amount for exempt consumer credit transactions from $25,000 to $50,000. In addition, the Dodd-Frank Act provides that, on or after December 31, 2011, this threshold amount must be adjusted annually by any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers. Accordingly, in the April 4, 2011, issue of the Federal Register (76 FR 18354) the Board of Governors of the Federal Reserve System (FRB) published a final rule (the Final Rule) making corresponding amendments to Section 226.3(b) of Regulation Z and its accompanying official staff commentary. You are advised that the above revisions in Section 226.3(b) of Regulation Z have no effect on consumer credit transactions secured by real property. That is, a consumer credit transaction secured by (i) real property, or (ii) personal property that is the consumers principal dwelling, or (iii) a private education loan under Section 226.46(b)(5) is subject to Regulation Z whether or not the amount of credit extended or to be extended exceeds the applicable threshold amount in Section 226.3(b).

Complete Memorandum