12 C.F.R. § 226.3

Exempt transactions

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This regulation does not apply to the following: 4

4 [Reserved]

(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 § 226.46(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 staff 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 seq.).

(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.).

[75 FR 7794, Feb. 22, 2010, as amended at 76 FR 18362, Apr. 4, 2011]

Notes of Decisions

Cited in 69 cases (7 in the last 5 years), 1974–2025 · leading case: Johnson v. Wells Fargo Home Mortg., Inc., 635 F.3d 401 (9th Cir. 2011).

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Johnson v. Wells Fargo Home Mortg., Inc., 635 F.3d 401 (9th Cir. 2011). · cites it 3× “” 12 C.F.R. § 226.3 (a)(1). In other words, Regulation Z does not define “a business .”

Friedman v. Maspeth Fed. Loan & Sav. Ass'n, 30 F. Supp. 3d 183 (E.D.N.Y 2014). · cites it 4× “See 12 C.F.R. § 226.3 , Supp. I, Cmt. (3)(i)(A)-(E); see also Mauro v.”

Johnson v. Farmers & Merchants State Bank of Balaton, 320 N.W.2d 892 (Minn. 1982). · cites it 3× “§ 1603 (5) (1976) and Regulation Z, 12 C.F.R. § 226.3 (1976). Appellant Bank claims exemption because the note was one of a number of notes issued pursuant to a $40,000 line of credit established by the Bank for Johnson for general *899 agricultural purposes.”

Maus v. Toder, 681 F. Supp. 2d 1007 (D. Minnesota 2010). · cites it 6× “12 C.F.R. § 226.3 (b). Certain transactions are exempt from the Truth in- Lending Act.”

Aronson v. Pennsylvania Pub. Util. Comm'n, 740 A.2d 1208 (Pa. Commw. Ct. 1999). · cites it 3× “12 CFR § 226.3 (c). In Pennsylvania, every public utility is required to file with the PUC “tariffs showing all rates established by it and collected or enforced, or to be collected or enforced, within the jurisdiction of the [PUC].”

Citibank (South Dakota), N.A. v. Mincks, 135 S.W.3d 545 (Mo. Ct. App. 2004). · cites it 2× “The Official Staff Commentary dealing with 12 C.F.R. § 226.3 (exempt transactions) notes that a creditor must determine in each case whether the extension of credit “is primarily for an exempt purpose.”

Tatone v. SunTrust Mortg., Inc., 857 F. Supp. 2d 821 (D. Minnesota 2012). “§ 1603 (1) and 12 C.F.R. § 226.3 (a)(1)). In addition, the rescission rights provided by TILA do not apply to Tatone’s mortgage because they apply only to refinance transactions.”

Ella Tower v. Paralee Moss, Plaintiff-Intervenor-Appellant v. Home Constr. Co. of Mobile, Inc., 625 F.2d 1161 (5th Cir. 1980). “See also 12 C.F.R. § 226.3 (a). Rather, the disclosure requirements of the Act only apply to consumer credit transactions — those “in which the party to whom credit is offered or extended is a natural person, and the money, property, or services which are the subject of the…”

Antanuos v. First Nat. Bank of Arizona, 508 F. Supp. 2d 466 (E.D. Va. 2007). · cites it 2× “” 12 C.F.R. § 226.3 (b) (2007). In light of § 1603 (and § 226.”

Henok v. Chase Home Fin., LLC, 947 F. Supp. 2d 6 (D.D.C. 2013). · cites it 2× “An extension of credit primarily for a business, commercial, or agricultural purpose, as defined by Regulation Z, 12 C.F.R. § 226.3 (a)(1). Persons may rely on Regulation Z in determining whether the exemption applies.”

Aronson v. Peoples Nat. Gas Co., 180 F.3d 558 (3rd Cir. 1999). · cites it 2× “See 12 C.F.R. § 226.3 (c). Aronson’s verified response, see Fed.”

Mauro v. Countrywide Home Loans, Inc., 727 F. Supp. 2d 145 (E.D.N.Y 2010). “§ 1603 (1); see also Regulation Z, 12 C.F.R. § 226.3 (a)(1) (stating that Regulation Z does not apply to “[a]n extension of credit primarily for a business, commercial or agricultural purpose”).”

Show all 69 citing cases →

— 12 C.F.R. § 226.3(a) — 1 case

Drakeford v. Capital Benefit, Inc. (N.D. Cal. 2020).

— 12 C.F.R. § 226.3(a)(1) — 6 cases

Johnson v. Wells Fargo Home Mortg., Inc., 635 F.3d 401 (9th Cir. 2011). “” 12 C.F.R. § 226.3 (a)(1). In other words, Regulation Z does not define “a business .”

Royal Host Realty, LLC v. 793 Ninth Avenue Realty, LLC, 192 F. Supp. 3d 348 (S.D.N.Y. 2016).

Henok v. Chase Home Fin., LLC, 947 F. Supp. 2d 6 (D.D.C. 2013). “An extension of credit primarily for a business, commercial, or agricultural purpose, as defined by Regulation Z, 12 C.F.R. § 226.3 (a)(1). Persons may rely on Regulation Z in determining whether the exemption applies.”

Henok v. Chase Home Fin., LLC, 950 F. Supp. 2d 96 (D.D.C. 2013).

Henok v. Chase Home Fin., LLC (D.D.C. 2013).

— 12 C.F.R. § 226.3(a)(2) — 1 case

Thorns v. Sundance Props., 562 F. Supp. 882 (D. Nev. 1983).

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