This publication is produced and published by Eide Bailly and distributed with the understanding that the information contained does not constitute legal, accounting or other professional advice. It is not intended to be responsive to any individual situation or concerns as the contents of the publication are intended for general informational purposes only. Readers are urged not to act upon the information contained in this publication without first consulting competent legal, accounting or other professional advice regarding implications of a particular factual situation. Questions and information for publication can be submitted to your Eide Bailly representative. MEET JASON KOHOUT Jason Kohout is a financial institution compliance associate who joined Eide Bailly earlier this year. He is a graduate of Minnesota State University Mankato and has two years of banking industry experience as part of First National Bank Minnesota in Mankato. As a financial institution compliance associate, Jason assists banks with meeting regulatory standards and brings his knowledge and excitement for his work into every interaction with clients. “What I love most about my job is working with the various clients and really learning what’s important to them and what is challenging them.

Getting to know our clients in this way helps us deliver the experience and results they need and deserve.” n COMPLIANCE REMINDERS/DUE DATES Regulation Effective Date: January 1, 2016 T  he 2016 adjustment for consumer credit transactions and consumer leases will remain at $54,600. This means any consumer credit and/or consumer lease transaction greater than $54,600 is NOT subject to Reg Z and Reg M requirements. However, private education loans and loans secured by real property (such as mortgages) are subject to the Truth in Lending Act regardless of the amount of the loan. Regulation Z – High Cost Mortgage (HCM) To view this and previous issues of Possibilities, visit www.eidebailly.com/publications An Independent Member Firm of HLB International Description Regulation Z – Truth in Lending Act & Regulation M – Consumer Leasing To request reprints of this publication, send a written request to ReprintRequest@eidebailly.com. © 2015 Eide Bailly LLP. Managing Editor: Liz Stabenow Send comments to: possibilities@eidebailly.com Jason Kohout FI Compliance Associate 507-304-6914 jkohout@eidebailly.com The points and fees test thresholds used to determine whether a loan is a High Cost Mortgage changed to the following: If the loan amount is at least $20,350 and the points and fees exceed 5% of the total loan amount; or the loan amount is less than $20,350 and the points and fees exceed the lesser of 8% of the total loan amount or $1,017. Regulation Z – Qualified Mortgage Points and Fees For the purpose of a creditor’s determination of a consumer’s ability to repay a transaction secured by a dwelling, a covered transaction is not a qualified mortgage unless the transaction’s total points and fees do not exceed the following revised thresholds: $101,749 and Up - 3 percent of the total loan amount $61,050 to $101,748.99 - $3,052 $20,350 to $61,049.99 - 5 percent of the total loan amount $12,719 to $20,349.99 - $1,017 Under $12,719 – 8 percent of the total loan amount Regulation Z – High Priced Mortgage Loans (HPML) The loan amount threshold used to determine whether a loan is exempt from the special appraisal requirements for HPMLs will remain at $25,500 for 2016. Regulation Z – Small Creditor and Rural and Underserved Areas The final rule expands the definition of “small creditor” by increasing the maximum number of first-lien mortgage loans from 500 to 2,000 and excludes from the count loans that are held in portfolio by the creditor and affiliates and include affiliates’ assets to calculate the asset size limit; expands rural to include census blocks that are not in an urban area; provides grace periods when parameters are exceeded; creates a one-year qualifying period for rural or underserved creditor status and amend the temporary exemption for eligible small creditors that are able to make balloon payment qualified mortgages by extending the exemption period to April 1, 2016. .