15 U.S.C. § 1646 — Dissemination of annual percentage rates;

Page 1529 TITLE 15—COMMERCE AND TRADE § 1646 Editorial Notes AMENDMENTS 1974—Pub. L. 93–495 generally reorganized provisions by designating former unlettered paragraph cls. (a) to (f), and as so designated, expanded prohibitions relating to fraudulent use of credit cards, decreased amount re- quired for fraudulent use from a retail value aggre- gating $5,000, or more, to enumerated amounts for par- ticular activities, and increased the punishment from a sentence of not more than five years to a sentence of not more than ten years. Statutory Notes and Related Subsidiaries 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. EFFECTIVE DATE Pub. L. 91–508, title V, § 503(3), Oct. 26, 1970, 84 Stat. 1127, provided that: ‘‘Section 134 of such Act [this sec- tion] applies to offenses committed on or after such date of enactment [Oct. 26, 1970].’’ § 1645. Business credit cards; limits on liability of employees The exemption provided by section 1603(1) of this title does not apply to the provisions of sec- tions 1642, 1643, and 1644 of this title, except that a card issuer and a business or other organiza- tion which provides credit cards issued by the same card issuer to ten or more of its employees may by contract agree as to liability of the busi- ness or other organization with respect to unau- thorized use of such credit cards without regard to the provisions of section 1643 of this title, but in no case may such business or other organiza- tion or card issuer impose liability upon any employee with respect to unauthorized use of such a credit card except in accordance with and subject to the limitations of section 1643 of this title. (Pub. L. 90–321, title I, § 135, as added Pub. L. 93–495, title IV, § 410(a), Oct. 28, 1974, 88 Stat. 1519.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective Oct. 28, 1974, see section 416 of Pub. L. 93–495, set out as a note under section 1665a of this title. § 1646. Dissemination of annual percentage rates; implementation, etc. (a) Annual percentage rates The Bureau shall collect, publish, and dissemi- nate to the public, on a demonstration basis in a number of standard metropolitan statistical areas to be determined by the Bureau, the an- nual percentage rates charged for representative types of nonsale credit by creditors in such areas. For the purpose of this section, the Bu- reau is authorized to require creditors in such areas to furnish information necessary for the Bureau to collect, publish, and disseminate such information. (b) Credit card price and availability informa- tion (1) Collection required The Bureau shall collect, on a semiannual basis, credit card price and availability infor- mation, including the information required to be disclosed under section 1637(c) of this title, from a broad sample of financial institutions which offer credit card services. (2) Sample requirements The broad sample of financial institutions required under paragraph (1) shall include— (A) the 25 largest issuers of credit cards; and (B) not less than 125 additional financial institutions selected by the Bureau in a manner that ensures— (i) an equitable geographical distribution within the sample; and (ii) the representation of a wide spec- trum of institutions within the sample. (3) Report of information from sample Each financial institution in the broad sam- ple established pursuant to paragraph (2) shall report the information to the Bureau in ac- cordance with such regulations or orders as the Bureau may prescribe. (4) Public availability of collected information; report to Congress The Bureau shall— (A) make the information collected pursu- ant to this subsection available to the public upon request; and (B) report such information semiannually to Congress. (c) Implementation The Bureau is authorized to enter into con- tracts or other arrangements with appropriate persons, organizations, or State agencies to carry out its functions under subsections (a) and (b) and to furnish financial assistance in support thereof. (Pub. L. 90–321, title I, § 136, as added Pub. L. 96–221, title VI, § 618(a), Mar. 31, 1980, 94 Stat. 183; amended Pub. L. 100–583, § 5, Nov. 3, 1988, 102 Stat. 2967; Pub. L. 111–203, title X, § 1100A(2), July 21, 2010, 124 Stat. 2107.) Editorial Notes AMENDMENTS 2010—Pub. L. 111–203 substituted ‘‘Bureau’’ for ‘‘Board’’ wherever appearing. 1988—Subsecs. (b), (c). Pub. L. 100–583 added subsec. (b), redesignated former subsec. (b) as (c), and sub- stituted ‘‘subsections (a) and (b)’’ for ‘‘subsection (a)’’. 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 Section effective on expiration of two years and six months after Mar. 31, 1980, with all regulations, forms, and clauses required to be prescribed to be promulgated at least one year prior to such effective date, and al- lowing any creditor to comply with any amendments, in accordance with the regulations, forms, and clauses prescribed by the Board prior to such effective date, see section 625 of Pub. L. 96–221, set out as an Effective Date of 1980 Amendment note under section 1602 of this title. Page 1530 TITLE 15—COMMERCE AND TRADE § 1647 1 So in original. Probably should be ‘‘paragraph’’. § 1647. Home equity plans (a) Index requirement In the case of extensions of credit under an open end consumer credit plan which are subject to a variable rate and are secured by a con- sumer’s principal dwelling, the index or other rate of interest to which changes in the annual percentage rate are related shall be based on an index or rate of interest which is publicly avail- able and is not under the control of the creditor. (b) Grounds for acceleration of outstanding bal- ance A creditor may not unilaterally terminate any account under an open end consumer credit plan under which extensions of credit are secured by a consumer’s principal dwelling and require the immediate repayment of any outstanding bal- ance at such time, except in the case of— (1) fraud or material misrepresentation on the part of the consumer in connection with the account; (2) failure by the consumer to meet the re- payment terms of the agreement for any out- standing balance; or (3) any other action or failure to act by the consumer which adversely affects the credi- tor’s security for the account or any right of the creditor in such security. This subsection does not apply to reverse mort- gage transactions. (c) Change in terms (1) In general No open end consumer credit plan under which extensions of credit are secured by a consumer’s principal dwelling may contain a provision which permits a creditor to change unilaterally any term required to be disclosed under section 1637a(a) of this title or any other term, except a change in insignificant terms such as the address of the creditor for billing purposes. (2) Certain changes not precluded Notwithstanding the provisions of sub- section 1 (1), a creditor may make any of the following changes: (A) Change the index and margin applica- ble to extensions of credit under such plan if the index used by the creditor is no longer available and the substitute index and mar- gin would result in a substantially similar interest rate. (B) Prohibit additional extensions of credit or reduce the credit limit applicable to an account under the plan during any period in which the value of the consumer’s principal dwelling which secures any outstanding bal- ance is significantly less than the original appraisal value of the dwelling. (C) Prohibit additional extensions of credit or reduce the credit limit applicable to the account during any period in which the cred- itor has reason to believe that the consumer will be unable to comply with the repayment requirements of the account due to a mate- rial change in the consumer’s financial cir- cumstances. (D) Prohibit additional extensions of cred- it or reduce the credit limit applicable to the account during any period in which the consumer is in default with respect to any material obligation of the consumer under the agreement. (E) Prohibit additional extensions of credit or reduce the credit limit applicable to the account during any period in which— (i) the creditor is precluded by govern- ment action from imposing the annual per- centage rate provided for in the account agreement; or (ii) any government action is in effect which adversely affects the priority of the creditor’s security interest in the account to the extent that the value of the credi- tor’s secured interest in the property is less than 120 percent of the amount of the credit limit applicable to the account. (F) Any change that will benefit the con- sumer. (3) Material obligations Upon the request of the consumer and at the time an agreement is entered into by a con- sumer to open an account under an open end consumer credit plan under which extensions of credit are secured by the consumer’s prin- cipal dwelling, the consumer shall be given a list of the categories of contract obligations which are deemed by the creditor to be mate- rial obligations of the consumer under the agreement for purposes of paragraph (2)(D). (4) Consumer benefit (A) In general For purposes of paragraph (2)(F), a change shall be deemed to benefit the consumer if the change is unequivocally beneficial to the borrower and the change is beneficial through the entire term of the agreement. (B) Bureau categorization The Bureau may, by regulation, determine categories of changes that benefit the con- sumer. (d) Terms changed after application If any term or condition described in section 1637a(a) of this title which is disclosed to a con- sumer in connection with an application to open an account under an open end consumer credit plan described in such section (other than a variable feature of the plan) changes before the account is opened, and if, as a result of such change, the consumer elects not to enter into the plan agreement, the creditor shall refund all fees paid by the consumer in connection with such application. (e) Additional requirements relating to refunds and imposition of nonrefundable fees (1) In general No nonrefundable fee may be imposed by a creditor or any other person in connection with any application by a consumer to estab- lish an account under any open end consumer credit plan which provides for extensions of credit which are secured by a consumer’s prin- cipal dwelling before the end of the 3-day pe- riod beginning on the date such consumer re-