15 U.S.C. § 1603 — Exempted transactions

Page 1462 TITLE 15—COMMERCE AND TRADE § 1603 1 See Adjustments for Inflation note below. System (in this Act [see Short Title of 2009 Amendment note set out under section 1601 of this title] referred to as the ‘Board’) may issue such rules and publish such model forms as it considers necessary to carry out this Act and the amendments made by this Act.’’ Pub. L. 103–325, title I, § 155, Sept. 23, 1994, 108 Stat. 2197, provided that: ‘‘Not later than 180 days after the date of enactment of this Act [Sept. 23, 1994], the Board of Governors of the Federal Reserve System shall issue such regulations as may be necessary to carry out this subtitle [subtitle B (§§ 151–158) of title I of Pub. L. 103–325, see Short Title of 1994 Amendment note set out under section 1601 of this title], and such regulations shall become effective on the date on which disclosure regulations are required to become effective under sec- tion 105(d) of the Truth in Lending Act [15 U.S.C. § 1604(d)].’’ APPLICABILITY OF 1994 AMENDMENTS AND REGULATIONS TO SUBSECTION (aa) MORTGAGES Pub. L. 103–325, title I, § 156, Sept. 23, 1994, 108 Stat. 2197, provided that: ‘‘This subtitle [subtitle B (§§ 151–158) of title I of Pub. L. 103–325, see Short Title of 1994 Amendment note set out under section 1601 of this title], and the amendments made by this subtitle, shall apply to every mortgage referred to in section 103(aa) of the Truth in Lending Act [now 15 U.S.C. 1602(bb)] (as added by section 152(a) of this Act) con- summated on or after the date on which regulations issued under section 155 [set out above] become effec- tive.’’ § 1603. Exempted transactions This subchapter does not apply to the fol- lowing: (1) Credit transactions involving extensions of credit primarily for business, commercial, or agricultural purposes, or to government or governmental agencies or instrumentalities, or to organizations. (2) Transactions in securities or commod- ities accounts by a broker-dealer registered with the Securities and Exchange Commis- sion. (3) Credit transactions, other than those in which a security interest is or will be acquired in real property, or in personal property used or expected to be used as the principal dwell- ing of the consumer and other than private education loans (as that term is defined in sec- tion 1650(a) of this title), in which the total amount financed exceeds $50,000.1 (4) Transactions under public utility tariffs, if the Bureau determines that a State regu- latory body regulates the charges for the pub- lic utility services involved, the charges for delayed payment, and any discount allowed for early payment. (5) Transactions for which the Bureau, by rule, determines that coverage under this sub- chapter is not necessary to carry out the pur- poses of this subchapter. (6) Repealed. Pub. L. 96–221, title VI, § 603(c)(3), Mar. 31, 1980, 94 Stat. 169. (7) Loans made, insured, or guaranteed pur- suant to a program authorized by title IV of the Higher Education Act of 1965 [20 U.S.C. 1070 et seq.]. (Pub. L. 90–321, title I, § 104, May 29, 1968, 82 Stat. 147; Pub. L. 93–495, title IV, § 402, Oct. 28, 1974, 88 Stat. 1517; Pub. L. 96–221, title VI, § 603(c), Mar. 31, 1980, 94 Stat. 169; Pub. L. 97–320, title VII, § 701(a), Oct. 15, 1982, 96 Stat. 1538; Pub. L. 104–208, div. A, title II, § 2102(a), Sept. 30, 1996, 110 Stat. 3009–398; Pub. L. 110–315, title X, § 1022, Aug. 14, 2008, 122 Stat. 3488; Pub. L. 111–203, title X, §§ 1100A(2), 1100E(a)(1), July 21, 2010, 124 Stat. 2107, 2111.) Editorial Notes REFERENCES IN TEXT The Higher Education Act of 1965, referred to in par. (7), is Pub. L. 89–329, Nov. 8, 1965, 79 Stat. 1219. Title IV of the Act is classified generally to subchapter IV (§ 1070 et seq.) of chapter 28 of Title 20, Education. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 20 and Tables. AMENDMENTS 2010—Par. (3). Pub. L. 111–203, § 1100E(a)(1), sub- stituted ‘‘$50,000’’ for ‘‘$25,000’’. Pars. (4), (5). Pub. L. 111–203, § 1100A(2), substituted ‘‘Bureau’’ for ‘‘Board’’. 2008—Par. (3). Pub. L. 110–315 inserted ‘‘and other than private education loans (as that term is defined in section 1650(a) of this title)’’ after ‘‘consumer’’. 1996—Pars. (5) to (7). Pub. L. 104–208 added par. (5) and redesignated former pars. (5) and (6) as (6) and (7), re- spectively. 1982—Par. (6). Pub. L. 97–320 added par. (6). 1980—Par. (1). Pub. L. 96–221, § 603(c)(1), inserted provi- sion relating to applicability to agricultural purposes. Par. (3). Pub. L. 96–221, § 603(c)(2), substituted provi- sion excepting security interest in real property, or in personal property used as the consumer’s principal dwelling, for provisions excepting real property trans- actions. Par. (5). Pub. L. 96–221, § 603(c)(3), struck out par. (5) which related to credit transactions primarily for agri- cultural purposes where the amount financed exceeds $25,000. 1974—Par. (5). Pub. L. 93–495 added par. (5). 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. EFFECTIVE DATE OF 1982 AMENDMENT Section 701(c) of Pub. L. 97–320, as amended by Pub. L. 97–457, § 31, Jan. 12, 1983, 96 Stat. 2511, provided that: ‘‘The amendment made by subsection (a) [amending this section] and subsection (b) [enacting section 1099 of Title 20, Education] shall be effective with respect to loans made prior to, on, and after the date of the enact- ment of this Act [Oct. 15, 1982].’’ EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–221 effective on expiration of two years and six months after Mar. 31, 1980, with all regulations, forms, and clauses required to be pre- scribed to be promulgated at least one year prior to such effective date, and allowing any creditor to com- ply with any amendments, in accordance with the regu- lations, forms, and clauses prescribed by the Board prior to such effective date, see section 625 of Pub. L. 96–221, set out as a note under section 1602 of this title. EFFECTIVE DATE OF 1974 AMENDMENT Amendment by Pub. L. 93–495 effective Oct. 28, 1974, see section 416 of Pub. L. 93–495, set out as an Effective Date note under section 1665a of this title. EXCEPTIONS IN AREAS WHERE MAJOR DISASTER EXISTS Board of Governors of Federal Reserve System au- thorized to make exceptions to requirements of this Page 1463 TITLE 15—COMMERCE AND TRADE § 1604 1 See References in Text note below. subchapter for transactions within an area in which the President has determined that a major disaster exists, if Board determines that exception can reasonably be expected to alleviate hardships to the public that out- weigh possible adverse effects, see section 50002 of Pub. L. 105–18, set out as a note under section 4008 of Title 12, Banks and Banking, and similar provisions listed thereunder. ADJUSTMENTS FOR INFLATION Pub. L. 111–203, title X, § 1100E(b), July 21, 2010, 124 Stat. 2111, provided that: ‘‘On and after December 31, 2011, the Bureau [of Consumer Financial Protection] shall adjust annually the dollar amounts described in sections 104(3) and 181(1) of the Truth in Lending Act [15 U.S.C. 1603(3), 1667(1)] (as amended by this section), by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, as published by the Bureau of Labor Statistics, rounded to the nearest multiple of $100, or $1,000, as applicable.’’ Threshold amounts in effect during particular periods of time can be found in Code of Federal Regulations, Title 12, Supplement I to Part 1013, under Section 1013.2—Definitions, under 2(e)—Consumer Lease, para- graph 11. § 1604. Disclosure guidelines (a) Promulgation, contents, etc., of regulations The Bureau shall prescribe regulations to carry out the purposes of this subchapter. Ex- cept with respect to the provisions of section 1639 of this title that apply to a mortgage re- ferred to in section 1602(aa) 1 of this title, such regulations may contain such additional re- quirements, classifications, differentiations, or other provisions, and may provide for such ad- justments and exceptions for all or any class of transactions, as in the judgment of the Bureau are necessary or proper to effectuate the pur- poses of this subchapter, to prevent circumven- tion or evasion thereof, or to facilitate compli- ance therewith. (b) Model disclosure forms and clauses; publica- tion, criteria, compliance, etc. The Bureau shall publish a single, integrated disclosure for mortgage loan transactions (in- cluding real estate settlement cost statements) which includes the disclosure requirements of this subchapter in conjunction with the disclo- sure requirements of the Real Estate Settlement Procedures Act of 1974 [12 U.S.C. 2601 et seq.] that, taken together, may apply to a trans- action that is subject to both or either provi- sions of law. The purpose of such model disclo- sure shall be to facilitate compliance with the disclosure requirements of this subchapter and the Real Estate Settlement Procedures Act of 1974, and to aid the borrower or lessee in under- standing the transaction by utilizing readily un- derstandable language to simplify the technical nature of the disclosures. In devising such forms, the Bureau shall consider the use by creditors or lessors of data processing or similar automated equipment. Nothing in this sub- chapter may be construed to require a creditor or lessor to use any such model form or clause prescribed by the Bureau under this section. A creditor or lessor shall be deemed to be in com- pliance with the disclosure provisions of this subchapter with respect to other than numerical disclosures if the creditor or lessor (1) uses any appropriate model form or clause as published by the Bureau, or (2) uses any such model form or clause and changes it by (A) deleting any in- formation which is not required by this sub- chapter, or (B) rearranging the format, if in making such deletion or rearranging the format, the creditor or lessor does not affect the sub- stance, clarity, or meaningful sequence of the disclosure. (c) Procedures applicable for adoption of model forms and clauses Model disclosure forms and clauses shall be adopted by the Bureau after notice duly given in the Federal Register and an opportunity for pub- lic comment in accordance with section 553 of title 5. (d) Effective dates of regulations containing new disclosure requirements Any regulation of the Bureau, or any amend- ment or interpretation thereof, requiring any disclosure which differs from the disclosures previously required by this part, part D, or part E or by any regulation of the Bureau promul- gated thereunder shall have an effective date of that October 1 which follows by at least six months the date of promulgation, except that the Bureau may at its discretion take interim action by regulation, amendment, or interpreta- tion to lengthen the period of time permitted for creditors or lessors to adjust their forms to ac- commodate new requirements or shorten the length of time for creditors or lessors to make such adjustments when it makes a specific find- ing that such action is necessary to comply with the findings of a court or to prevent unfair or deceptive disclosure practices. Notwithstanding the previous sentence, any creditor or lessor may comply with any such newly promulgated disclosure requirements prior to the effective date of the requirements. (e) Disclosure for charitable mortgage loan transactions With respect to a mortgage loan transaction involving a residential mortgage loan offered at 0 percent interest with only bonafide and rea- sonable fees and that is primarily for charitable purposes by an organization described in section 501(c)(3) of title 26 and exempt from taxation under section 501(a) of such title, forms HUD–1 and GFE (as defined under section 1024.2(b) of title 12, Code of Federal Regulations) together with a disclosure substantially in the form of the Loan Model Form H–2 (as depicted in Appen- dix H to part 1026 of title 12, Code of Federal Regulations) shall, collectively, be an appro- priate model form for purposes of subsection (b) of this section. (f) Exemption authority (1) In general The Bureau may exempt, by regulation, from all or part of this subchapter all or any class of transactions, other than transactions involving any mortgage described in section 1602(aa) 1 of this title, for which, in the deter- mination of the Bureau, coverage under all or part of this subchapter does not provide a meaningful benefit to consumers in the form of useful information or protection.