source:
  type: regulation
  id: reg-z-1026.3
  authority: 12 CFR §1026.3 — Exempt transactions (Regulation Z)
  description: 12 CFR §1026.3 — Exempt transactions.
  coverage_tier: operative
obligations:
- id: reg-z-1026.3-full
  canonical_id: reg-z-1026.3-full
  section: 12 CFR §1026.3 — Exempt transactions
  type: do
  tags:
  - regulator-direct
  - tila
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: 12 CFR §1026.3 — Exempt transactions
    source_class: cfpb-regulation
    source_url: https://www.law.cornell.edu/cfr/text/12/1026.3
    snapshot_id: 75b8e994440d80d8
    fetched_at: '2026-06-17T18:31:37Z'
    content_hash: sha256:dfafc0a7ab4f8ebdf4026342fd4315685f72bfa1a90b432d8b3cd69a5fca93b3
    paragraph_quote: '§ 1026.3 Exempt transactions. The following transactions are
      not subject to this part or, if the exemption is limited to specified provisions
      of this part, are not subject to those provisions: (a) Business, commercial,
      agricultural, or organizational credit. (1) An extension of credit primarily
      for a business, commercial or agricultural purpose. (2) An extension of credit
      to other than a natural person , including credit to government agencies or
      instrumentalities. (b) Credit over applicable threshold amount —(1) Exemption
      —(i) Requirements. An extension of credit in which the amount of credit extended
      exceeds the applicable threshold amount or in which there is an express written
      commitment to extend credit in excess of the applicable threshold amount , unless
      the extension of credit is: (A) Secured by any real property, or by personal
      property used or expected to be used as the principal dwelling of the consumer
      ; or (B) A private education loan as defined in § 1026.46(b)(5) . (ii) Annual
      adjustments. The threshold amount in paragraph (b)(1)(i) of this section is
      adjusted annually to reflect increases in the Consumer Price Index for Urban
      Wage Earners and Clerical Workers, as applicable. See the official commentary
      to this paragraph (b) for the threshold amount applicable to a specific extension
      of credit or express written commitment to extend credit. (2) Transition rule
      for open-end accounts exempt prior to July 21, 2011. An open-end account that
      is exempt on July 20, 2011 based on an express written commitment to extend
      credit in excess of $25,000 remains exempt until December 31, 2011 unless: (i)
      The creditor takes a security interest in any real property, or in personal
      property used or expected to be used as the principal dwelling of the consumer
      ; or (ii) The creditor reduces the express written commitment to extend credit
      to $25,000 or less. (c) Public utility credit. An extension of credit that involves
      public utility services provided through pipe, wire, other connected facilities,
      or radio or similar transmission (including extensions of such facilities),
      if the charges for service, delayed payment, or any discounts for prompt payment
      are filed with or regulated by any government unit. The financing of durable
      goods or home improvements by a public utility is not exempt. (d) Securities
      or commodities accounts. Transactions in securities or commodities accounts
      in which credit is extended by a broker-dealer registered with the Securities
      and Exchange Commission or the Commodity Futures Trading Commission . (e) Home
      fuel budget plans. An installment agreement for the purchase of home fuels in
      which no finance charge is imposed. (f) Student loan programs. Loans made, insured,
      or guaranteed pursuant to a program authorized by title IV of the Higher Education
      Act of 1965 ( 20 U.S.C. 1070 et ). (g) Employer-sponsored retirement plans.
      An extension of credit to a participant in an employer-sponsored retirement
      plan qualified under section 401(a) of the Internal Revenue Code , a tax-sheltered
      annuity under section 403(b) of the Internal Revenue Code , or an eligible governmental
      deferred compensation plan under section 457(b) of the Internal Revenue Code
      ( 26 U.S.C. 401(a) ; 26 U.S.C. 403(b) ; 26 U.S.C. 457(b) ), provided that the
      extension of credit is comprised of fully vested funds from such participant''s
      account and is made in compliance with the Internal Revenue Code ( 26 U.S.C.
      1 et seq. ). (h) Partial exemption for certain mortgage loans. The special disclosure
      requirements in § 1026.19(g) and, unless the creditor chooses to provide the
      disclosures described in § 1026.19(e) and (f) , in § 1026.19(e) and (f) do not
      apply to a transaction that satisfies all of the following criteria: (1) The
      transaction is secured by a subordinate lien; (2) The transaction is for the
      purpose of: (i) Downpayment , closing costs, or other similar home buyer assistance,
      such as principal or interest subsidies; (ii) Property rehabilitation assistance;
      (iii) Energy efficiency assistance; or (iv) Foreclosure avoidance or prevention;
      (3) The credit contract does not require the payment of interest; (4) The credit
      contract provides that repayment of the amount of credit extended is: (i) Forgiven
      either incrementally or in whole, at a date certain, and subject only to specified
      ownership and occupancy conditions, such as a requirement that the consumer
      maintain the property as the consumer ''s principal dwelling for five years;
      (ii) Deferred for a minimum of 20 years after consummation of the transaction;
      (iii) Deferred until sale of the property securing the transaction; or (iv)
      Deferred until the property securing the transaction is no longer the principal
      dwelling of the consumer ; (5) (i) The costs payable by the consumer in connection
      with the transaction at consummation are limited to: (A) Recording fees; (B)
      Transfer taxes; (C) A bona fide and reasonable application fee; and (D) A bona
      fide and reasonable fee for housing counseling services; and (ii) The total
      of costs payable by the consumer under paragraph (h)(5)(i)(C) and (D) of this
      section is less than 1 percent of the amount of credit extended; and (6) The
      following disclosures are provided: (i) Disclosures described in § 1026.18 that
      comply with this part; or (ii) Alternatively, disclosures described in § 1026.19(e)
      and (f) that comply with this part. (i) The exemptions in this section are not
      applicable to § 1026.42(i) (Quality Control Standards for Automated Valuation
      Models). [ 76 FR 79772 , Dec. 22, 2011, as amended at 78 FR 80107 , Dec. 31,
      2013; 82 FR 37768 , Aug. 11, 2017; 89 FR 64577 , Aug. 7, 2024]'
  judgment: false
