The agencies set the new dollar threshold based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which rose 2.1 percent as of June 1, 2025. Under the updated threshold, Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) will generally apply to consumer credit transactions and consumer leases of $73,400 or less in 2026.
Federal law requires the CFPB and Fed to adjust these thresholds annually to account for inflation, ensuring that consumer protections keep pace with economic conditions. Transactions at or below the established thresholds receive the full protections of the Truth in Lending Act and Consumer Leasing Act, including disclosure requirements and other consumer safeguards.
The threshold adjustment affects most consumer credit products, but certain categories remain subject to regulation regardless of amount. Private education loans and loans secured by real property, including mortgages, continue to fall under Regulation Z protections regardless of the loan amount, ensuring comprehensive coverage for these significant financial products.
The annual threshold adjustment represents a routine but important regulatory function that helps maintain the relevance of consumer credit protections as prices and loan amounts change over time. The 2.1 percent increase reflects relatively modest inflation compared to recent years, when threshold adjustments reached higher levels.
The threshold updates will take effect for transactions occurring in 2026, giving lenders and lessors time to adjust their compliance systems and procedures. Financial institutions must ensure their underwriting, disclosure, and operational systems account for the new thresholds when determining which transactions trigger Truth in Lending and Consumer Leasing requirements.