[Federal Register Volume 80, Number 228 (Friday, November 27, 2015)]
[Rules and Regulations]
[Pages 73945-73947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-30071]
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
12 CFR Part 213
[Docket No. R-1519]
RIN 7100 AE-35
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1013
RIN 3170-AA06
Consumer Leasing (Regulation M)
AGENCIES: Board of Governors of the Federal Reserve System (Board); and
Bureau of Consumer Financial Protection (Bureau).
[[Page 73946]]
ACTION: Final rules, official interpretations and commentary.
-----------------------------------------------------------------------
SUMMARY: The Board and the Bureau are publishing final rules amending
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). If there is no annual percentage increase in the CPI-W, the
Board and Bureau will not adjust this exemption threshold from the
prior year. Based on the annual percentage decrease in the CPI-W as of
June 1, 2015, the exemption threshold will remain at $54,600 through
December 31, 2016.
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 this issue of the Federal Register.
DATES: This final rule is effective January 1, 2016.
FOR FURTHER INFORMATION CONTACT: Board: Vivian W. Wong, Counsel,
Division of Consumer and Community Affairs, Board of Governors of the
Federal Reserve System, at (202) 452-3667; for users of
Telecommunications Device for the Deaf (TDD) only, contact (202) 263-
4869.
Bureau: James Wylie, Counsel, Office of Regulations, Bureau of
Consumer Financial Protection, at (202) 435-7700.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (Dodd-Frank Act) increased the threshold in the Consumer Leasing
Act (CLA) for exempt consumer leases from $25,000 to $50,000, effective
July 21, 2011.\1\ In addition, the Dodd-Frank Act requires that this
threshold be adjusted annually for inflation by the annual percentage
increase in the Consumer Price Index for Urban Wage Earners and
Clerical Workers (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 the Truth in Lending Act)
(collectively, the Board Final Threshold Rules).\2\
---------------------------------------------------------------------------
\1\ Public Law 111-203 section 1100E, 124 Stat. 1376 (2010).
\2\ 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 in an interim final rule, 12 CFR part 1013 (Bureau
Interim Final Rule).\3\ The Bureau Interim Final Rule substantially
duplicated the Board's Regulation M, including the revisions to the
threshold for exempt transactions made by the Board in April 2011.
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.\4\
---------------------------------------------------------------------------
\3\ 76 FR 78500 (Dec. 19, 2011).
\4\ 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 states: ``Subsection (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).
---------------------------------------------------------------------------
Section 213.2(e)(1) of the Board's Regulation M and Sec.
1013.2(e)(1) of the Bureau's Regulation M, 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. 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.\5\ As stated in the Board Final Threshold Rules, if there is no
annual percentage increase in the CPI-W, the Board and Bureau will not
adjust the exemption threshold from the prior year.\6\
---------------------------------------------------------------------------
\5\ See comments 2(e)-9 in Supplements I of 12 CFR part 213 and
12 CFR part 1013.
\6\ 76 FR 18354, 18355 n.1 (Apr. 4, 2011) (``[A]n annual period
of deflation or no inflation would not require a change in the
threshold amount.'').
---------------------------------------------------------------------------
II. Adjustment and Commentary Revision
Effective January 1, 2016, the exemption threshold amount remains
at $54,600. This is based on the CPI-W in effect on June 1, 2015, which
was reported on May 22, 2015. The Bureau of Labor Statistics publishes
consumer-based indices monthly, but does not report a CPI change on
June 1; adjustments are reported in the middle of the month. The CPI-W
is a subset of the CPI-U index (based on all urban consumers) and
represents approximately 28 percent of the U.S. population. Because the
CPI-W reported on May 22, 2015 reflects a 0.8 percent decrease in the
CPI-W from April 2014 to April 2015, the Board and the Bureau are not
adjusting the exemption threshold amount. The Board and the Bureau are
revising the commentaries to their respective regulations to add new
comment 2(e)-9.vii to state that, from January 1, 2016 through December
31, 2016, the threshold amount is $54,600. These revisions are
effective January 1, 2016.
III. Administrative Law Matters
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 interest.\7\ The amendment in this notice is technical
and applies the method previously set forth in the Board Final
Threshold Rules.\8\ 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.
---------------------------------------------------------------------------
\7\ See 5 U.S.C. 553(b)(B).
\8\ See supra note 6.
---------------------------------------------------------------------------
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) does not apply to a rulemaking
where a
[[Page 73947]]
general notice of proposed rulemaking is not required.\9\ 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.
---------------------------------------------------------------------------
\9\ See 5 U.S.C. 603 and 604.
---------------------------------------------------------------------------
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\10\ the
agencies reviewed this final rule. No collections of information
pursuant to the Paperwork Reduction Act are contained in the final
rule.
---------------------------------------------------------------------------
\10\ 44 U.S.C. 3506; 5 CFR part 1320.
---------------------------------------------------------------------------
List of Subjects
12 CFR Part 213
Advertising, Consumer leasing, Consumer protection, Federal Reserve
System, Reporting and recordkeeping requirements.
12 CFR Part 1013
Advertising, Consumer leasing, Reporting and recordkeeping
requirements.
Board of Governors of the Federal Reserve System
Text of Final Revisions
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, under
2(e) Consumer Lease, paragraph 9.vii is added to read as follows:
Supplement I to Part 213--Official Staff Commentary to Regulation M
* * * * *
Section 213.2--Definitions
* * * * *
2(e) Consumer Lease.
9. * * *
vii. From January 1, 2016 through December 31, 2016, the
threshold amount is $54,600.
* * * * *
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 section
1100E, 124 Stat. 1376.
0
4. In Supplement I to part 1013, under Section 1013.2--Definitions,
under 2(e) Consumer Lease, paragraph 9.vii is added to read as follows:
Supplement I to Part 1013--Official Interpretations
* * * * *
Section 1013.2--Definitions
* * * * *
2(e) Consumer Lease. * * * .
9. * * *
vii. From January 1, 2016 through December 31, 2016, the
threshold amount is $54,600.
* * * * *
By order of the Board of Governors of the Federal Reserve
System, November 18, 2015.
Robert deV. Frierson,
Secretary of the Board.
Dated: September 22, 2015.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2015-30071 Filed 11-25-15; 8:45 am]
BILLING CODE 4810-AM-P; 6210-01-P