The Consumer Financial Protection Bureau and the Federal Reserve Board jointly announced new dollar thresholds that will determine the scope of federal consumer protection rules for credit and lease transactions in 2026. The updated thresholds affect the applicability of Regulation Z, which implements the Truth in Lending Act, and Regulation M, which governs consumer leasing protections.
The annual threshold adjustments are required under federal law to account for inflation and economic changes that affect consumer lending markets. These thresholds serve as critical gatekeepers that determine whether specific credit and lease transactions must comply with detailed federal disclosure requirements, interest rate regulations, and other consumer protections.
Regulation Z, commonly known as Truth in Lending, requires lenders to provide clear and standardized information about loan terms, including annual percentage rates, finance charges, and payment schedules. The regulation applies to most types of consumer credit, including mortgages, credit cards, auto loans, and personal loans. However, certain transactions below specified dollar amounts may be exempt from some requirements.
Similarly, Regulation M implements the Consumer Leasing Act and requires lessors to provide standardized disclosures for consumer lease agreements. The regulation covers vehicle leases, equipment rentals, and other consumer leasearrangements that exceed certain dollar thresholds and meet other criteria.
The threshold adjustments reflect the agencies' ongoing efforts to maintain appropriate regulatory coverage as economic conditions change. When dollar amounts for credit and lease transactions increase due to inflation or market factors, the regulatory thresholds must be updated to ensure that consumer protections continue to apply to transactions of similar economic significance.
For lenders and lessors, the updated thresholds will determine which of their 2026 transactions must comply with the full range of federal disclosure and substantive requirements. Transactions that fall below the thresholds may be subject to fewer regulatory obligations, while those above the limits must meet comprehensive federal standards for consumer protection.
The threshold adjustments are part of the agencies' broader regulatory framework designed to protect consumers in credit and lease markets. Both the CFPB and Federal Reserve have emphasized the importance of maintaining clear, accessible information for consumers making financial decisions, regardless of the size of the transaction.
Consumer advocates have long supported robust application of Truth in Lending and Consumer Leasing protections, arguing that standardized disclosures help consumers compare offers and make informed decisions. Industry representatives generally support predictable threshold adjustments that provide clarity about regulatory requirements while allowing flexibility for smaller transactions.
The timing of the announcement allows lenders, lessors, and other market participants to prepare their systems and processes for compliance with the updated requirements when they take effect in 2026. Financial institutions typically need several months to update their documentation, staff training, and operational procedures to reflect new regulatory thresholds.
Both agencies have indicated that the threshold adjustments are based on established formulas that account for changes in the Consumer Price Index and other economic indicators. This systematic approach is designed to provide predictability for industry participants while ensuring that consumer protections keep pace with economic developments.
The announcement represents ongoing coordination between the CFPB and Federal Reserve in implementing consumer financial protection laws. While the CFPB has primary responsibility for many consumer protection regulations, the Federal Reserve retains authority over certain aspects of Truth in Lending and works closely with the consumer bureau on threshold determinations.
For consumers, the updated thresholds will determine which of their 2026 credit and lease agreements will be subject to the most comprehensive federal protections. Transactions covered by the regulations must include detailed disclosures about costs, terms, and consumer rights, providing important safeguards for borrowers and lessees.
The agencies' announcement continues their practice of providing advance notice of threshold changes, allowing market participants to plan accordingly and ensuring smooth implementation of the updated requirements. This approach reflects the agencies' commitment to regulatory predictability while maintaining strong consumer protections in evolving credit and lease markets.