Executive Letter: Happy New Year – 2025 Brings Adjusted Regulatory Thresholds

By Rose Oswald Poels

Happy New Year! As we step into 2025, there are many thresholds which have been adjusted by both state and federal regulators which go into effect now that the new year has arrived. Below is a collection of thresholds effective January 1, 2025. A link has been provided for each as a reference.

Regulation Z, TILA  

• The exemption threshold for Regulation Z (Truth in Lending Act) will increase to $71,900, up from $69,500. https://www.govinfo.gov/content/pkg/FR-2024-10-15/pdf/2024-23275.pdf
• The exemption threshold under Regulation Z for HPML appraisals will increase to $33,500, up from $32,400. https://www.govinfo.gov/content/pkg/FR-2024-10-15/pdf/2024-23277.pdf
• The asset-size threshold under Regulation Z which exempts creditors from the requirement to establish an escrow account for HPMLs will be:
  • For creditors and their affiliates that regularly extended covered transactions secured by first liens, the asset-size threshold is adjusted to $2.717 billion, up from $2.640 billion; and
  • The exemption threshold for certain insured depository institutions with assets of $10 billion or less is adjusted to $12.179 billion, up from $11.835 billion. https://www.govinfo.gov/content/pkg/FR-2024-12-23/pdf/2024-30653.pdf
• The dollar amount thresholds under Regulation Z for HOEPA and QM-related loans have been adjusted as follows:
  • For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages will be $26,968.
  • The adjusted points-and-fees dollar trigger for high-cost mortgages will be $1,348.
  • For QMs under the General QM loan definition in § 1026.43(e)(2), the thresholds for the spread between the annual percentage rate (APR) and the average prime offer rate (APOR) will be:
    • 2.25 or more percentage points for a first-lien covered transaction with a loan amount greater than or equal to $134,841;
    • 3.5 or more percentage points for a first-lien covered transaction with a loan amount greater than or equal to $80,905 but less than $134,841;
    • 6.5 or more percentage points for a first-lien covered transaction with a loan amount less than $80,905;
    • 6.5 or more percentage points for a first-lien covered transaction secured by a manufactured home with a loan amount less than $134,841;
    • 3.5 or more percentage points for a subordinate-lien covered transaction with a loan amount greater than or equal to $80,905; or
    • 6.5 or more percentage points for a subordinate-lien covered transaction with a loan amount less than $80,905.
  • For all categories of QMs, the thresholds for total points and fees will be:
    • 3 percent of the total loan amount for a loan greater than or equal to $134,841;
    • $4,045 for a loan amount greater than or equal to $80,905 but less than $134,841;
    • 5 percent of the total loan amount for a loan greater than or equal to $26,968 but less than $80,905;
    • $1,348 for a loan amount greater than or equal to $16,855 but less than $26,968; and
    • 8 percent of the total loan amount for a loan amount less than $16,855.
• For open-end consumer credit plans under TILA, the threshold that triggers requirements to disclose minimum interest charges will remain unchanged at $1.00 for 2025. https://www.govinfo.gov/content/pkg/FR-2024-12-02/pdf/2024-27553.pdf

Regulation C, HMDA

• The asset-size threshold to be exempt from collecting HMDA data in 2023 is adjusted to $58 million, up from $56 million. https://www.govinfo.gov/content/pkg/FR-2024-12-27/pdf/2024-30652.pdf

Community Reinvestment Act (CRA)  

• The Board of Governors of the Federal Reserve System (FRB) and Federal Deposit Insurance Corporation (FDIC) CRA regulations have adjusted the asset-size thresholds used to define “small bank” and “intermediate small bank” to be:
  • Small bank means a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.609 billion; and
  • Intermediate small bank means a small bank with assets of at least $402 million as of December 31 of both of the prior two calendar years and less than $1.609 billion as of December 31 of either of the prior two calendar years. https://www.govinfo.gov/content/pkg/FR-2024-12-30/pdf/2024-30849.pdf
• The Office of the Comptroller of the Currency (OCC) made the identical adjustments to the asset-size thresholds used to define “small bank or savings association” and “intermediate small bank or savings association.” https://www.occ.gov/news-issuances/bulletins/2024/bulletin-2024-36.html

Required Escrow Rate under Wisconsin Law

• The Wisconsin Department of Financial Institutions (WDFI) has established the interest rate that must be paid on required escrow accounts under section 138.052(5) of the Wisconsin Statutes. The new rate is 0.20%. https://dfi.wi.gov/Pages/FinancialInstitutions/BankingSavingsInstitutions/HistoricalEscrowInterestRates.aspx

Other Regulatory Thresholds and Limits  

• The dollar amount of the maximum allowable charge for disclosures by a consumer reporting agency to a consumer pursuant to Fair Credit Report Act (FCRA) section 609 for the 2025 calendar year remains $15.50. https://www.govinfo.gov/content/pkg/FR-2024-11-29/pdf/2024-27695.pdf
• The exemption threshold for Regulation M (Consumer Leasing Act) will increase to $71,900, up from $69,500. https://www.govinfo.gov/content/pkg/FR-2024-10-15/pdf/2024-23276.pdf
• The FDIC Designated Reserve Ratio remains 2 percent for 2025. https://www.govinfo.gov/content/pkg/FR-2024-10-22/pdf/2024-24438.pdf
• Contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased to $23,500, up from $23,000. The limit on annual contributions to an IRA remains $7,000. https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000
• Multifamily loan purchase caps for Fannie Mae and Freddie Mac will be $73 billion for each enterprise, for a combined total of $146 billion. The caps reflect current market forecasts. FHFA will continue to require that at least 50 percent of Fannie’s and Freddie’s multifamily business be mission-driven affordable housing. https://www.fhfa.gov/sites/default/files/2024-11/2025-multifamily-loan-purchase-caps-fact-sheet.pdf
• The conforming loan limit values for mortgages to be acquired by Fannie Mae and Freddie Mac in 2025 for one-unit properties will be $806,500, an increase of $39,950 from 2024. https://www.fhfa.gov/news/news-release/fhfa-announces-conforming-loan-limit-values-for-2025
• FHA’s nationwide forward mortgage limit “floor” and “ceiling” for a one-unit property in 2025 are $524,225 and $1,209,750, respectively. For 2025, the nationwide Home Equity Conversion Mortgage (HECM) limit will be $1,209,750 for all areas. https://www.hud.gov/program_offices/housing/sfh/lender/origination/mortgage_limits
• Beginning January 1, 2025, the standard IRS mileage rates for the use of a car (also vans, pickups or panel trucks) will be as follows. The rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.
  • 70 cents per mile driven for business use, up 3 cents from 2024;
  • 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, the same as in 2024; and
  • 14 cents per mile driven in service of charitable organizations; the same as in 2024. https://www.irs.gov/newsroom/irs-increases-the-standard-mileage-rate-for-business-use-in-2025-key-rate-increases-3-cents-to-70-cents-per-mile