On December 23, 2014, the Governors of the Federal Reserve Board (“Federal Reserve Board”) issued an annual technical adjustment regarding the exemption of small loans from special appraisal requirements applicable to higher-priced mortgage loans.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) required creditors to obtain a written appraisal based on a physical visit of the home’s interior prior to making a higher-priced mortgage loan. However, the rule also created an exemption for loans of $25,000 or less with an annual adjustment based on the annual percentage change in the Consumer Price Index (“CPI”).

Based on the increase in the CPI for Urban Wage Earners and Clerical Workers as of June 1, 2014, the loan exemption threshold was adjusted to $25,500. The amendment will be effective January 1, 2015.

The Federal Register notice is available at: