12 U.S.C. § 2605 — Servicing of mortgage loans and adminis-

Page 1447 TITLE 12—BANKS AND BANKING § 2605 L. 102–550, title IX, § 951, Oct. 28, 1992, 106 Stat. 3892; Pub. L. 111–203, title X, § 1098(3), title XIV, § 1450, July 21, 2010, 124 Stat. 2104, 2174; Pub. L. 112–141, div. F, title II, § 100222, July 6, 2012, 126 Stat. 934; Pub. L. 113–89, § 13(b), Mar. 21, 2014, 128 Stat. 1026.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (a), was in the original ‘‘this title’’ and was translated as reading ‘‘this Act’’, meaning Pub. L. 93–533, which is classified principally to this chapter, to reflect the probable in- tent of Congress, because Pub. L. 93–533 does not con- tain titles. The Truth in Lending Act, referred to in subsec. (b)(3), is title I of Pub. L. 90–321, May 29, 1968, 82 Stat. 146, which is classified generally to subchapter I (§ 1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. Two sections 129 of the Act have been enacted and are classified to sections 1639 and 1639a of Title 15. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables. AMENDMENTS 2014—Subsec. (b)(14). Pub. L. 113–89 inserted before pe- riod at end ‘‘, and the following statement: ‘Although you may not be required to maintain flood insurance on all structures, you may still wish to do so, and your mortgage lender may still require you to do so to pro- tect the collateral securing the mortgage. If you choose to not maintain flood insurance on a structure, and it floods, you are responsible for all flood losses relating to that structure.’ ’’ and transferred par. (14) to appear after par. (13). 2012—Subsec. (b)(14). Pub. L. 112–141 added par. (14) at end of subsec. (b). 2010—Pub. L. 111–203, § 1450(1), substituted ‘‘Home buying’’ for ‘‘Special’’ in section catchline. Pub. L. 111–203, § 1098(3)(A), substituted ‘‘Bureau’’ for ‘‘Secretary’’ wherever appearing. Subsec. (a). Pub. L. 111–203, § 1450(2), added subsec. (a) and struck out former subsec. (a). Prior to amendment, text read as follows: ‘‘The Bureau shall prepare and dis- tribute booklets jointly addressing compliance with the requirements of the Truth in Lending Act and the provisions of this chapter, in order to help persons bor- rowing money to finance the purchase of residential real estate better to understand the nature and costs of real estate settlement services. The Bureau shall dis- tribute such booklets to all lenders which make feder- ally related mortgage loans.’’ Pub. L. 111–203, § 1098(3)(B), substituted ‘‘The Bureau shall prepare and distribute booklets jointly addressing compliance with the requirements of the Truth in Lending Act and the provisions of this chapter, in order to help persons borrowing money to finance the pur- chase of residential real estate better to understand the nature and costs of real estate settlement services.’’ for ‘‘The Secretary shall prepare and distribute booklets to help persons borrowing money to finance the purchase of residential real estate better to understand the na- ture and costs of real estate settlement services.’’ Subsec. (b). Pub. L. 111–203, § 1450(2), added subsec. (b) and struck out former subsec. (b) which related to form and detail, cost elements, standard settlement form, escrow accounts, selection of persons for settlement services; and consideration of differences in settlement procedures. Subsec. (c). Pub. L. 111–203, § 1450(3), inserted at end ‘‘Each lender shall also include with the booklet a rea- sonably complete or updated list of homeownership counselors who are certified pursuant to section 1701x(e) of this title and located in the area of the lend- er.’’ Subsec. (d). Pub. L. 111–203, § 1450(4), inserted ‘‘The lender shall provide the booklet in the version that is most appropriate for the person receiving it.’’ after the first sentence. 1992—Subsec. (d). Pub. L. 102–550 substituted ‘‘Such booklet shall be provided by delivering it or placing it in the mail not later than 3 business days after the lender receives the application, but no booklet need be provided if the lender denies the application for credit before the end of the 3-day period.’’ for ‘‘Such booklet shall be provided at the time of receipt or preparation of such application.’’ 1976—Subsecs. (c) to (e). Pub. L. 94–205 added subsec. (c), redesignated former subsec. (c) as (d), substituted ‘‘or for whom it prepares a written application’’ for ‘‘an application’’ and inserted ‘‘or preparation’’ after ‘‘re- ceipt’’, and redesignated former subsec. (d) as (e). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 1098(3) of Pub. L. 111–203 effec- tive on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1450 of Pub. L. 111–203 effec- tive on the date on which final regulations imple- menting that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade. EFFECTIVE DATE OF 1976 AMENDMENT Amendment by Pub. L. 94–205 effective Jan. 2, 1976, with the Secretary authorized to suspend for up to 180 days from Jan. 2, 1976, any provision of this section as amended by Pub. L. 94–205, see section 12 of Pub. L. 94–205, set out as a note under section 2602 of this title. EFFECTIVE DATE Section effective 180 days after Dec. 22, 1974, see sec- tion 20 of Pub. L. 93–533, set out as a note under section 2601 of this title. § 2605. Servicing of mortgage loans and adminis- tration of escrow accounts (a) Disclosure to applicant relating to assign- ment, sale, or transfer of loan servicing Each person who makes a federally related mortgage loan shall disclose to each person who applies for the loan, at the time of application for the loan, whether the servicing of the loan may be assigned, sold, or transferred to any other person at any time while the loan is out- standing. (b) Notice by transferor of loan servicing at time of transfer (1) Notice requirement Each servicer of any federally related mort- gage loan shall notify the borrower in writing of any assignment, sale, or transfer of the servicing of the loan to any other person. (2) Time of notice (A) In general Except as provided under subparagraphs (B) and (C), the notice required under para- graph (1) shall be made to the borrower not less than 15 days before the effective date of transfer of the servicing of the mortgage loan (with respect to which such notice is made). (B) Exception for certain proceedings The notice required under paragraph (1) shall be made to the borrower not more than Page 1448 TITLE 12—BANKS AND BANKING § 2605 30 days after the effective date of assign- ment, sale, or transfer of the servicing of the mortgage loan (with respect to which such notice is made) in any case in which the as- signment, sale, or transfer of the servicing of the mortgage loan is preceded by— (i) termination of the contract for serv- icing the loan for cause; (ii) commencement of proceedings for bankruptcy of the servicer; or (iii) commencement of proceedings by the Federal Deposit Insurance Corporation or the Resolution Trust Corporation for conservatorship or receivership of the servicer (or an entity by which the servicer is owned or controlled). (C) Exception for notice provided at closing The provisions of subparagraphs (A) and (B) shall not apply to any assignment, sale, or transfer of the servicing of any mortgage loan if the person who makes the loan pro- vides to the borrower, at settlement (with respect to the property for which the mort- gage loan is made), written notice under paragraph (3) of such transfer. (3) Contents of notice The notice required under paragraph (1) shall include the following information: (A) The effective date of transfer of the servicing described in such paragraph. (B) The name, address, and toll-free or col- lect call telephone number of the transferee servicer. (C) A toll-free or collect call telephone number for (i) an individual employed by the transferor servicer, or (ii) the department of the transferor servicer, that can be con- tacted by the borrower to answer inquiries relating to the transfer of servicing. (D) The name and toll-free or collect call telephone number for (i) an individual em- ployed by the transferee servicer, or (ii) the department of the transferee servicer, that can be contacted by the borrower to answer inquiries relating to the transfer of serv- icing. (E) The date on which the transferor servicer who is servicing the mortgage loan before the assignment, sale, or transfer will cease to accept payments relating to the loan and the date on which the transferee servicer will begin to accept such payments. (F) Any information concerning the effect the transfer may have, if any, on the terms of or the continued availability of mortgage life or disability insurance or any other type of optional insurance and what action, if any, the borrower must take to maintain coverage. (G) A statement that the assignment, sale, or transfer of the servicing of the mortgage loan does not affect any term or condition of the security instruments other than terms directly related to the servicing of such loan. (c) Notice by transferee of loan servicing at time of transfer (1) Notice requirement Each transferee servicer to whom the serv- icing of any federally related mortgage loan is assigned, sold, or transferred shall notify the borrower of any such assignment, sale, or transfer. (2) Time of notice (A) In general Except as provided in subparagraphs (B) and (C), the notice required under paragraph (1) shall be made to the borrower not more than 15 days after the effective date of trans- fer of the servicing of the mortgage loan (with respect to which such notice is made). (B) Exception for certain proceedings The notice required under paragraph (1) shall be made to the borrower not more than 30 days after the effective date of assign- ment, sale, or transfer of the servicing of the mortgage loan (with respect to which such notice is made) in any case in which the as- signment, sale, or transfer of the servicing of the mortgage loan is preceded by— (i) termination of the contract for serv- icing the loan for cause; (ii) commencement of proceedings for bankruptcy of the servicer; or (iii) commencement of proceedings by the Federal Deposit Insurance Corporation or the Resolution Trust Corporation for conservatorship or receivership of the servicer (or an entity by which the servicer is owned or controlled). (C) Exception for notice provided at closing The provisions of subparagraphs (A) and (B) shall not apply to any assignment, sale, or transfer of the servicing of any mortgage loan if the person who makes the loan pro- vides to the borrower, at settlement (with respect to the property for which the mort- gage loan is made), written notice under paragraph (3) of such transfer. (3) Contents of notice Any notice required under paragraph (1) shall include the information described in sub- section (b)(3). (d) Treatment of loan payments during transfer period During the 60-day period beginning on the ef- fective date of transfer of the servicing of any federally related mortgage loan, a late fee may not be imposed on the borrower with respect to any payment on such loan and no such payment may be treated as late for any other purposes, if the payment is received by the transferor servicer (rather than the transferee servicer who should properly receive payment) before the due date applicable to such payment. (e) Duty of loan servicer to respond to borrower inquiries (1) Notice of receipt of inquiry (A) In general If any servicer of a federally related mort- gage loan receives a qualified written re- quest from the borrower (or an agent of the borrower) for information relating to the servicing of such loan, the servicer shall pro- vide a written response acknowledging re- ceipt of the correspondence within 5 days Page 1449 TITLE 12—BANKS AND BANKING § 2605 (excluding legal public holidays, Saturdays, and Sundays) unless the action requested is taken within such period. (B) Qualified written request For purposes of this subsection, a qualified written request shall be a written cor- respondence, other than notice on a payment coupon or other payment medium supplied by the servicer, that— (i) includes, or otherwise enables the servicer to identify, the name and account of the borrower; and (ii) includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower. (2) Action with respect to inquiry Not later than 30 days (excluding legal pub- lic holidays, Saturdays, and Sundays) after the receipt from any borrower of any qualified written request under paragraph (1) and, if ap- plicable, before taking any action with respect to the inquiry of the borrower, the servicer shall— (A) make appropriate corrections in the account of the borrower, including the cred- iting of any late charges or penalties, and transmit to the borrower a written notifica- tion of such correction (which shall include the name and telephone number of a rep- resentative of the servicer who can provide assistance to the borrower); (B) after conducting an investigation, pro- vide the borrower with a written explanation or clarification that includes— (i) to the extent applicable, a statement of the reasons for which the servicer be- lieves the account of the borrower is cor- rect as determined by the servicer; and (ii) the name and telephone number of an individual employed by, or the office or de- partment of, the servicer who can provide assistance to the borrower; or (C) after conducting an investigation, pro- vide the borrower with a written explanation or clarification that includes— (i) information requested by the bor- rower or an explanation of why the infor- mation requested is unavailable or cannot be obtained by the servicer; and (ii) the name and telephone number of an individual employed by, or the office or de- partment of, the servicer who can provide assistance to the borrower. (3) Protection of credit rating During the 60-day period beginning on the date of the servicer’s receipt from any bor- rower of a qualified written request relating to a dispute regarding the borrower’s payments, a servicer may not provide information re- garding any overdue payment, owed by such borrower and relating to such period or quali- fied written request, to any consumer report- ing agency (as such term is defined under sec- tion 1681a of title 15). (4) Limited extension of response time The 30-day period described in paragraph (2) may be extended for not more than 15 days if, before the end of such 30-day period, the servicer notifies the borrower of the extension and the reasons for the delay in responding. (f) Damages and costs Whoever fails to comply with any provision of this section shall be liable to the borrower for each such failure in the following amounts: (1) Individuals In the case of any action by an individual, an amount equal to the sum of— (A) any actual damages to the borrower as a result of the failure; and (B) any additional damages, as the court may allow, in the case of a pattern or prac- tice of noncompliance with the requirements of this section, in an amount not to exceed $2,000. (2) Class actions In the case of a class action, an amount equal to the sum of— (A) any actual damages to each of the bor- rowers in the class as a result of the failure; and (B) any additional damages, as the court may allow, in the case of a pattern or prac- tice of noncompliance with the requirements of this section, in an amount not greater than $2,000 for each member of the class, ex- cept that the total amount of damages under this subparagraph in any class action may not exceed the lesser of— (i) $1,000,000; or (ii) 1 percent of the net worth of the servicer. (3) Costs In addition to the amounts under paragraph (1) or (2), in the case of any successful action under this section, the costs of the action, to- gether with any attorneys fees incurred in connection with such action as the court may determine to be reasonable under the cir- cumstances. (4) Nonliability A transferor or transferee servicer shall not be liable under this subsection for any failure to comply with any requirement under this section if, within 60 days after discovering an error (whether pursuant to a final written ex- amination report or the servicer’s own proce- dures) and before the commencement of an ac- tion under this subsection and the receipt of written notice of the error from the borrower, the servicer notifies the person concerned of the error and makes whatever adjustments are necessary in the appropriate account to ensure that the person will not be required to pay an amount in excess of any amount that the per- son otherwise would have paid. (g) Administration of escrow accounts If the terms of any federally related mortgage loan require the borrower to make payments to the servicer of the loan for deposit into an es- crow account for the purpose of assuring pay- ment of taxes, insurance premiums, and other charges with respect to the property, the servicer shall make payments from the escrow account for such taxes, insurance premiums, and Page 1450 TITLE 12—BANKS AND BANKING § 2605 other charges in a timely manner as such pay- ments become due. Any balance in any such ac- count that is within the servicer’s control at the time the loan is paid off shall be promptly re- turned to the borrower within 20 business days or credited to a similar account for a new mort- gage loan to the borrower with the same lender. (h) Preemption of conflicting State laws Notwithstanding any provision of any law or regulation of any State, a person who makes a federally related mortgage loan or a servicer shall be considered to have complied with the provisions of any such State law or regulation requiring notice to a borrower at the time of ap- plication for a loan or transfer of the servicing of a loan if such person or servicer complies with the requirements under this section regard- ing timing, content, and procedures for notifica- tion of the borrower. (i) Definitions For purposes of this section: (1) Effective date of transfer The term ‘‘effective date of transfer’’ means the date on which the mortgage payment of a borrower is first due to the transferee servicer of a mortgage loan pursuant to the assign- ment, sale, or transfer of the servicing of the mortgage loan. (2) Servicer The term ‘‘servicer’’ means the person re- sponsible for servicing of a loan (including the person who makes or holds a loan if such per- son also services the loan). The term does not include— (A) the Federal Deposit Insurance Corpora- tion or the Resolution Trust Corporation, in connection with assets acquired, assigned, sold, or transferred pursuant to section 1823(c) of this title or as receiver or conser- vator of an insured depository institution; and (B) the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mort- gage Corporation, the Resolution Trust Cor- poration, or the Federal Deposit Insurance Corporation, in any case in which the assign- ment, sale, or transfer of the servicing of the mortgage loan is preceded by— (i) termination of the contract for serv- icing the loan for cause; (ii) commencement of proceedings for bankruptcy of the servicer; or (iii) commencement of proceedings by the Federal Deposit Insurance Corporation or the Resolution Trust Corporation for conservatorship or receivership of the servicer (or an entity by which the servicer is owned or controlled). (3) Servicing The term ‘‘servicing’’ means receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan, including amounts for escrow accounts described in sec- tion 2609 of this title, and making the pay- ments of principal and interest and such other payments with respect to the amounts re- ceived from the borrower as may be required pursuant to the terms of the loan. (j) Transition (1) Originator liability A person who makes a federally related mortgage loan shall not be liable to a bor- rower because of a failure of such person to comply with subsection (a) with respect to an application for a loan made by the borrower before the regulations referred to in paragraph (3) take effect. (2) Servicer liability A servicer of a federally related mortgage loan shall not be liable to a borrower because of a failure of the servicer to perform any duty under subsection (b), (c), (d), or (e) that arises before the regulations referred to in paragraph (3) take effect. (3) Regulations and effective date The Bureau shall establish any requirements necessary to carry out this section. Such regu- lations shall include the model disclosure statement required under subsection (a)(2). (k) Servicer prohibitions (1) In general A servicer of a federally related mortgage shall not— (A) obtain force-placed hazard insurance unless there is a reasonable basis to believe the borrower has failed to comply with the loan contract’s requirements to maintain property insurance; (B) charge fees for responding to valid qualified written requests (as defined in reg- ulations which the Bureau of Consumer Fi- nancial Protection shall prescribe) under this section; (C) fail to take timely action to respond to a borrower’s requests to correct errors relat- ing to allocation of payments, final balances for purposes of paying off the loan, or avoid- ing foreclosure, or other standard servicer’s duties; (D) fail to respond within 10 business days to a request from a borrower to provide the identity, address, and other relevant contact information about the owner or assignee of the loan; or (E) fail to comply with any other obliga- tion found by the Bureau of Consumer Fi- nancial Protection, by regulation, to be ap- propriate to carry out the consumer protec- tion purposes of this chapter. (2) Force-placed insurance defined For purposes of this subsection and sub- sections (l) and (m), the term ‘‘force-placed in- surance’’ means hazard insurance coverage ob- tained by a servicer of a federally related mortgage when the borrower has failed to maintain or renew hazard insurance on such property as required of the borrower under the terms of the mortgage. (l) Requirements for force-placed insurance A servicer of a federally related mortgage shall not be construed as having a reasonable basis for obtaining force-placed insurance unless the requirements of this subsection have been met. (1) Written notices to borrower A servicer may not impose any charge on any borrower for force-placed insurance with Page 1451 TITLE 12—BANKS AND BANKING § 2605 respect to any property securing a federally related mortgage unless— (A) the servicer has sent, by first-class mail, a written notice to the borrower con- taining— (i) a reminder of the borrower’s obliga- tion to maintain hazard insurance on the property securing the federally related mortgage; (ii) a statement that the servicer does not have evidence of insurance coverage of such property; (iii) a clear and conspicuous statement of the procedures by which the borrower may demonstrate that the borrower al- ready has insurance coverage; and (iv) a statement that the servicer may obtain such coverage at the borrower’s ex- pense if the borrower does not provide such demonstration of the borrower’s existing coverage in a timely manner; (B) the servicer has sent, by first-class mail, a second written notice, at least 30 days after the mailing of the notice under subparagraph (A) that contains all the infor- mation described in each clause of such sub- paragraph; and (C) the servicer has not received from the borrower any demonstration of hazard insur- ance coverage for the property securing the mortgage by the end of the 15-day period be- ginning on the date the notice under sub- paragraph (B) was sent by the servicer. (2) Sufficiency of demonstration A servicer of a federally related mortgage shall accept any reasonable form of written confirmation from a borrower of existing in- surance coverage, which shall include the ex- isting insurance policy number along with the identity of, and contact information for, the insurance company or agent, or as otherwise required by the Bureau of Consumer Financial Protection. (3) Termination of force-placed insurance Within 15 days of the receipt by a servicer of confirmation of a borrower’s existing insur- ance coverage, the servicer shall— (A) terminate the force-placed insurance; and (B) refund to the consumer all force-placed insurance premiums paid by the borrower during any period during which the bor- rower’s insurance coverage and the force- placed insurance coverage were each in ef- fect, and any related fees charged to the con- sumer’s account with respect to the force- placed insurance during such period. (4) Clarification with respect to Flood Disaster Protection Act No provision of this section shall be con- strued as prohibiting a servicer from providing simultaneous or concurrent notice of a lack of flood insurance pursuant to section 4012a(e) of title 42. (m) Limitations on force-placed insurance charges All charges, apart from charges subject to State regulation as the business of insurance, related to force-placed insurance imposed on the borrower by or through the servicer shall be bona fide and reasonable. (Pub. L. 93–533, § 6, as added Pub. L. 101–625, title IX, § 941, Nov. 28, 1990, 104 Stat. 4405; amended Pub. L. 102–27, title III, § 312(a), Apr. 10, 1991, 105 Stat. 154; Pub. L. 103–325, title III, § 345, Sept. 23, 1994, 108 Stat. 2239; Pub. L. 104–208, div. A, title II, § 2103(a), Sept. 30, 1996, 110 Stat. 3009–399; Pub. L. 111–203, title X, § 1098(4), title XIV, § 1463, July 21, 2010, 124 Stat. 2104, 2182.) Editorial Notes PRIOR PROVISIONS A prior section 2605, Pub. L. 93–533, § 6, Dec. 22, 1974, 88 Stat. 1726, related to advanced itemized disclosure of settlement costs by the lender and liability of the lend- er for failure to comply, prior to repeal by Pub. L. 94–205, § 5, Jan. 2, 1976, 89 Stat. 1158. AMENDMENTS 2010—Subsec. (e)(1)(A). Pub. L. 111–203, § 1463(c)(1), substituted ‘‘5 days’’ for ‘‘20 days’’. Subsec. (e)(2). Pub. L. 111–203, § 1463(c)(2), substituted ‘‘30 days’’ for ‘‘60 days’’ in introductory provisions. Subsec. (e)(4). Pub. L. 111–203, § 1463(c)(3), added par. (4). Subsec. (f)(1)(B), (2)(B). Pub. L. 111–203, § 1463(b)(1), substituted ‘‘$2,000’’ for ‘‘$1,000’’. Subsec. (f)(2)(B)(i). Pub. L. 111–203, § 1463(b)(2), sub- stituted ‘‘$1,000,000’’ for ‘‘$500,000’’. Subsec. (g). Pub. L. 111–203, § 1463(d), inserted at end ‘‘Any balance in any such account that is within the servicer’s control at the time the loan is paid off shall be promptly returned to the borrower within 20 busi- ness days or credited to a similar account for a new mortgage loan to the borrower with the same lender.’’ Subsec. (j)(3). Pub. L. 111–203, § 1098(4), substituted ‘‘Bureau’’ for ‘‘Secretary’’ and struck out ‘‘, by regula- tions that shall take effect not later than April 20, 1991,’’ before ‘‘establish’’. Subsecs. (k) to (m). Pub. L. 111–203, § 1463(a), added subsecs. (k) to (m). 1996—Subsec. (a). Pub. L. 104–208 amended heading and text of subsec. (a) generally. Prior to amendment, text consisted of pars. (1) to (3) relating to require- ments for lenders of federally related mortgage loans to disclose to applicants whether servicing of such loan may be assigned, sold, or transferred, directed Sec- retary to develop model disclosure statement, and re- quired signature of applicant on all such disclosure statements. 1994—Subsec. (a)(1)(B). Pub. L. 103–325 substituted ‘‘(B) at the choice of the person making a federally re- lated mortgage loan— ‘‘(i) for each of the most recent’’ for ‘‘(B) for each of the most recent’’, redesignated cls. (i) and (ii) as subcls. (I) and (II), respectively, and re- aligned margins, substituted ‘‘or’’ for ‘‘and’’ at end of subcl. (II), and added cl. (ii). 1991—Subsec. (j). Pub. L. 102–27 added subsec. (j). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 1098(4) of Pub. L. 111–203 effec- tive on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1463 of Pub. L. 111–203 effec- tive on the date on which final regulations imple- menting that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade. Page 1452 TITLE 12—BANKS AND BANKING § 2606 1 See References in Text note below. 1 So in original. § 2606. Exempted transactions (a) In general This chapter does not apply to credit trans- actions involving extensions of credit— (1) primarily for business, commercial, or agricultural purposes; or (2) to government or governmental agencies or instrumentalities. (b) Interpretation In prescribing regulations under section 2617(a) of this title, the Bureau shall ensure that, with respect to subsection (a) of this sec- tion, the exemption for credit transactions in- volving extensions of credit primarily for busi- ness, commercial, or agricultural purposes, as provided in subsection (a)(1) 1 of this section shall be the same as the exemption for such credit transactions under section 1603(1) of title 15. (Pub. L. 93–533, § 7, as added Pub. L. 103–325, title III, § 312, Sept. 23, 1994, 108 Stat. 2221; amended Pub. L. 104–208, div. A, title II, § 2103(b), Sept. 30, 1996, 110 Stat. 3009–399; Pub. L. 111–203, title X, § 1098(5), July 21, 2010, 124 Stat. 2104.) Editorial Notes REFERENCES IN TEXT Subsection (a)(1) of this section, referred to in subsec. (b), was in the original ‘‘section 7(1) of the Real Estate Settlement Procedures Act of 1974’’, and was translated as referring to section 7(a)(1) of that Act to reflect the probable intent of Congress. PRIOR PROVISIONS A prior section 2606, Pub. L. 93–533, § 7, Dec. 22, 1974, 88 Stat. 1727, related to seller or his agent confirming that information concerning an existing residence was disclosed to buyer in writing before a commitment for a mortgage loan was made, prior to repeal by Pub. L. 94–205, § 6, Jan. 2, 1976, 89 Stat. 1158. AMENDMENTS 2010–Subsec. (b). Pub. L. 111–203 substituted ‘‘Bureau’’ for ‘‘Secretary’’. 1996—Pub. L. 104–208 designated existing provisions as subsec. (a), inserted heading, and added subsec. (b). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the des- ignated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. § 2607. Prohibition against kickbacks and un- earned fees (a) Business referrals No person shall give and no person shall ac- cept any fee, kickback, or thing of value pursu- ant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a fed- erally related mortgage loan shall be referred to any person. (b) Splitting charges No person shall give and no person shall ac- cept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed. (c) Fees, salaries, compensation, or other pay- ments Nothing in this section shall be construed as prohibiting (1) the payment of a fee (A) to attor- neys at law for services actually rendered or (B) by a title company to its duly appointed agent for services actually performed in the issuance of a policy of title insurance or (C) by a lender to its duly appointed agent for services actually performed in the making of a loan, (2) the pay- ment to any person of a bona fide salary or com- pensation or other payment for goods or facili- ties actually furnished or for services actually performed, (3) payments pursuant to cooperative brokerage and referral arrangements or agree- ments between real estate agents and brokers, (4) affiliated business arrangements so long as (A) a disclosure is made of the existence of such an arrangement to the person being referred and, in connection with such referral, such per- son is provided a written estimate of the charge or range of charges generally made by the pro- vider to which the person is referred (i) in the case of a face-to-face referral or a referral made in writing or by electronic media, at or before the time of the referral (and compliance with this requirement in such case may be evidenced by a notation in a written, electronic, or similar system of records maintained in the regular course of business); (ii) in the case of a referral made by telephone, within 3 business days after the referral by telephone,1 (and in such case an abbreviated verbal disclosure of the existence of the arrangement and the fact that a written dis- closure will be provided within 3 business days shall be made to the person being referred dur- ing the telephone referral); or (iii) in the case of a referral by a lender (including a referral by a lender to an affiliated lender), at the time the estimates required under section 2604(c) of this title are provided (notwithstanding clause (i) or (ii)); and any required written receipt of such disclosure (without regard to the manner of the disclosure under clause (i), (ii), or (iii)) may be obtained at the closing or settlement (except that a person making a face-to-face referral who provides the written disclosure at or before the time of the referral shall attempt to obtain any required written receipt of such disclosure at such time and if the person being referred choos- es not to acknowledge the receipt of the disclo- sure at that time, that fact shall be noted in the written, electronic, or similar system of records maintained in the regular course of business by the person making the referral), (B) such person is not required to use any particular provider of settlement services, and (C) the only thing of value that is received from the arrangement, other than the payments permitted under this subsection, is a return on the ownership interest or franchise relationship, or (5) such other pay- ments or classes of payments or other transfers as are specified in regulations prescribed by the