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12 U.S.C. § 3806 — Adjustable rate mortgage caps

Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 3806 — Adjustable rate mortgage caps

**(a) In general** Any adjustable rate mortgage loan originated by a creditor shall include a limitation on the maximum interest rate that may apply during the term of the mortgage loan. **(b) Regulations** The Board of Governors of the Federal Reserve System shall prescribe regulations to carry out the purposes of this section. **(c) Enforcement** Any violation of this section shall be treated as a violation of the Truth in Lending Act [[15 U.S.C. 1601](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1601&num=0&edition=prelim) et seq.] and shall be subject to administrative enforcement under section 108 [[15 U.S.C. 1607](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1607&num=0&edition=prelim)] or civil damages under section 130 [[15 U.S.C. 1640](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1640&num=0&edition=prelim)] of such Act, or both. **(d) Definitions** For the purpose of this section— (1) the term “creditor” means a person who regularly extends credit for personal, family, or household purposes; and (2) the term “adjustable rate mortgage loan” means any consumer loan secured by a lien on a one- to four-family dwelling unit, including a condominium unit, cooperative housing unit, or mobile home, where the loan is made pursuant to an agreement under which the creditor may, from time to time, adjust the rate of interest. **(e) Effective date** This section shall take effect upon the expiration of 120 days after August 10, 1987.

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Source location: Title 12, Chapter 39, § 3806; chapter-039-alternative-mortgage-transactions.md

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 1601 — Congressional findings and declaration of purpose

**(a) Informed use of credit** The Congress finds that economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit. The informed use of credit results from an awareness of the cost thereof by consumers. It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices. **(b) Terms of personal property leases** The Congress also finds that there has been a recent trend toward leasing automobiles and other durable goods for consumer use as an alternative to installment credit sales and that these leases have been offered without adequate cost disclosures. It is the purpose of this subchapter to assure a meaningful disclosure of the terms of leases of personal property for personal, family, or household purposes so as to enable the lessee to compare more readily the various lease terms available to him, limit balloon payments in consumer leasing, enable comparison of lease terms with credit terms where appropriate, and to assure meaningful and accurate disclosures of lease terms in advertisements.

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15 U.S.C. § 1607 — Administrative enforcement

**(a) Enforcing agencies** Subject to subtitle B of the Consumer Financial Protection Act of 2010 [[12 U.S.C. 5511](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5511&num=0&edition=prelim) et seq.], compliance with the requirements imposed under this subchapter shall be enforced under— (1) section 8 of the Federal Deposit Insurance Act [[12 U.S.C. 1818](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1818&num=0&edition=prelim)], by the appropriate Federal banking agency, as defined in section 3(q) of the Federal Deposit Insurance Act ([12 U.S.C. 1813(q)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813/q&num=0&edition=prelim)), with respect to— (A) national banks, Federal savings associations, and Federal branches and Federal agencies of foreign banks; (B) member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act [[12 U.S.C. 601](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section601&num=0&edition=prelim) et seq., 611 et seq.]; and (C) banks and State savings associations insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), and insured State branches of foreign banks; (2) the Federal Credit Union Act [[12 U.S.C. 1751](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1751&num=0&edition=prelim) et seq.], by the Director of the National Credit Union Administration, with respect to any

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15 U.S.C. § 1640 — Civil liability

**(a) Individual or class action for damages; amount of award; factors determining amount of award** Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part, including any requirement under [section 1635 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1635&num=0&edition=prelim), subsection (f) or (g) of [section 1641 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1641&num=0&edition=prelim), or part D or E of this subchapter with respect to any person is liable to such person in an amount equal to the sum of— (1) any actual damage sustained by such person as a result of the failure; (2) (A) (i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $200 nor greater than $2,000, (iii) in the case of an individual action relating to an open end consumer credit plan that is not secured by real property or a dwelling, twice the amount of any finance charge in connection with the transaction, with a minimum of $500 and a maximum of $5,000, or such higher amount as may be appropriate in the case of an established pattern or practice of such failures; 11 So in original. The semicolon probably should be a comma. or (iv) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $400 or greater than $4,000; or (B)

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 1639 — Requirements for certain mortgages

**(a) Disclosures** (1) **Specific disclosures** — In addition to other disclosures required under this subchapter, for each mortgage referred to in section 1602(aa) 11 See References in Text note below. of this title, the creditor shall provide the following disclosures in conspicuous type size: (A) “You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application.”. (B) “If you obtain this loan, the lender will have a mortgage on your home. You could lose your home, and any money you have put into it, if you do not meet your obligations under the loan.”. (2) **Annual percentage rate** — In addition to the disclosures required under paragraph (1), the creditor shall disclose— (A) in the case of a credit transaction with a fixed rate of interest, the annual percentage rate and the amount of the regular monthly payment; or (B) in the case of any other credit transaction, the annual percentage rate of the loan, the amount of the regular monthly payment, a statement that the interest rate and monthly payment may increase, and the amount of the maximum monthly payment, based on the maximum interest rate allowed pursuant to [section 3806 of title 12](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section3806&num=0&edition=prelim). **(b) Time of disclosures** (1) **In general** — The disclosures required by this section shall be given not less than 3 business days prior to consummation of the transaction. (2) **New disclosures required** (A) *In general* — After providing the disclosures required by this section, a creditor may not change the terms of the extension of credit if such changes make the disclosures inaccurate, unless new disclosures are provided that meet

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 3806 — Adjustable rate mortgage caps

Page 1573 TITLE 12—BANKS AND BANKING § 3806 terms that such State does not want the pre- emption provided in section 3803 of this title to apply with respect to alternative mortgage transactions (or to any class or type of alter- native mortgage transaction) subject to the laws of such State, except that section 3803 of this title shall continue to apply to— (1) any alternative mortgage transaction un- dertaken on or after such date pursuant to an agreement to undertake such alternative mortgage transaction which was entered into on or after October 15, 1982, and prior to such later date (the ‘‘preemption period’’); and (2) any renewal, extension, refinancing, or other modification of an alternative mortgage transaction that was entered into during the preemption period. (b) An alternative mortgage transaction shall be deemed to have been undertaken during the preemption period to which this section applies if it— (1) is funded or extended in whole or in part during the preemption period, regardless of whether pursuant to a commitment or other agreement therefor made prior to that period; or (2) is a renewal, extension, refinancing, or other modification of an alternative mortgage transaction entered into before the preemp- tion period and such renewal, extension, or other modification is made during such period with the written consent of any person obli- gated to repay such credit. (Pub. L. 97–320, title VIII, § 805, Oct. 15, 1982, 96 Stat. 1547; Pub. L. 98–181, title I [title IV, § 472], Nov. 30, 1983, 97 Stat. 1237.) Editorial Notes AMENDMENTS 1983—Subsec. (a). Pub. L. 98–181 inserted ‘‘(or to any class or type of alternative mortgage transaction)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective Oct. 15, 19

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 1601 — Congressional findings and declaration of

Page 1452 TITLE 15—COMMERCE AND TRADE § 1601 Sec. 1679f. Noncompliance with this subchapter. 1679g. Civil liability. 1679h. Administrative enforcement. 1679i. Statute of limitations. 1679j. Relation to State law. SUBCHAPTER III—CREDIT REPORTING AGENCIES 1681. Congressional findings and statement of pur- pose. 1681a. Definitions; rules of construction. 1681b. Permissible purposes of consumer reports. 1681c. Requirements relating to information con- tained in consumer reports. 1681c–1. Identity theft prevention; fraud alerts and ac- tive duty alerts. 1681c–2. Block of information resulting from identity theft. 1681c–3. Adverse information in cases of trafficking. 1681d. Disclosure of investigative consumer reports. 1681e. Compliance procedures. 1681f. Disclosures to governmental agencies. 1681g. Disclosures to consumers. 1681h. Conditions and form of disclosure to con- sumers. 1681i. Procedure in case of disputed accuracy. 1681j. Charges for certain disclosures. 1681k. Public record information for employment purposes. 1681l. Restrictions on investigative consumer re- ports. 1681m. Requirements on users of consumer reports. 1681n. Civil liability for willful noncompliance. 1681o. Civil liability for negligent noncompliance. 1681p. Jurisdiction of courts; limitation of actions. 1681q. Obtaining information under false pretenses. 1681r. Unauthorized disclosures by officers or em- ployees. 1681s. Administrative enforcement. 1681s–1. Information on overdue child support obliga- tions. 1681s–2. Responsibilities of furnishers of information to consumer reporting agencies. 1681s–3. Affiliate sharing. 1681t. Relation to State laws. 1681u. Disclosures to FBI for counterintelligence purposes. 1681v. Disclosure

Source: Supplied 2024 U.S. Code historical extraction · 15 U.S.C. § 1601

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 1607 — Administrative enforcement

Page 1467 TITLE 15—COMMERCE AND TRADE § 1607 1 So in original. priate regulation in order to effect any change included in the report under paragraph (1), and shall publish the regulation in the Federal Register before the end of the 1-year period beginning on the date of enactment of this Act.’’ § 1606. Determination of annual percentage rate (a) ‘‘Annual percentage rate’’ defined The annual percentage rate applicable to any extension of consumer credit shall be deter- mined, in accordance with the regulations of the Bureau, (1) in the case of any extension of credit other than under an open end credit plan, as (A) that nominal annual percentage rate which will yield a sum equal to the amount of the finance charge when it is applied to the unpaid balances of the amount financed, calculated according to the actuarial meth- od of allocating payments made on a debt between the amount financed and the amount of the finance charge, pursuant to which a payment is applied first to the accu- mulated finance charge and the balance is applied to the unpaid amount financed; or (B) the rate determined by any method prescribed by the Bureau as a method which materially simplifies computation while re- taining reasonable accuracy as compared with the rate determined under subpara- graph (A).1 (2) in the case of any extension of credit under an open end credit plan, as the quotient (expressed as a percentage) of the total finance charge for the period to which it relates di- vided by the amount upon which the finance charge for that period is based, multiplied by the number of such periods in a year. (b) Computation of rate of finance charges for balances within a specified range Where a creditor imposes the same finance charge for balances within a s

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 1640 — Civil liability

Page 1521 TITLE 15—COMMERCE AND TRADE § 1640 (3) Certified or licensed appraiser defined For purposes of this section, the term ‘‘cer- tified or licensed appraiser’’ means a person who— (A) is, at a minimum, certified or licensed by the State in which the property to be ap- praised is located; and (B) performs each appraisal in conformity with the Uniform Standards of Professional Appraisal Practice and title XI of the Finan- cial Institutions Reform, Recovery, and En- forcement Act of 1989 [12 U.S.C. 3331 et seq.], and the regulations prescribed under such title, as in effect on the date of the ap- praisal. (4) Regulations (A) In general The Board, the Comptroller of the Cur- rency, the Federal Deposit Insurance Cor- poration, the National Credit Union Admin- istration Board, the Federal Housing Fi- nance Agency, and the Bureau shall jointly prescribe regulations to implement this sec- tion. (B) Exemption The agencies listed in subparagraph (A) may jointly exempt, by rule, a class of loans from the requirements of this subsection or subsection (a) if the agencies determine that the exemption is in the public interest and promotes the safety and soundness of credi- tors. (c) Free copy of appraisal A creditor shall provide 1 copy of each ap- praisal conducted in accordance with this sec- tion in connection with a higher-risk mortgage to the applicant without charge, and at least 3 days prior to the transaction closing date. (d) Consumer notification At the time of the initial mortgage applica- tion, the applicant shall be provided with a statement by the creditor that any appraisal prepared for the mortgage is for the sole use of the creditor, and that the applicant may choose to have a separate appraisal conducted at the expense of the appl

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