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 applicant. (e) Violations In addition to any other liability to any per- son under this subchapter, a creditor found to have willfully failed to obtain an appraisal as re- quired in this section shall be liable to the appli- cant or borrower for the sum of $2,000. (f) Higher-risk mortgage defined For purposes of this section, the term ‘‘higher- risk mortgage’’ means a residential mortgage loan, other than a reverse mortgage loan that is a qualified mortgage, as defined in section 1639c of this title, secured by a principal dwelling— (1) that is not a qualified mortgage, as de- fined in section 1639c of this title; and (2) with an annual percentage rate that ex- ceeds the average prime offer rate for a com- parable transaction, as defined in section 1639c of this title, as of the date the interest rate is set— (A) by 1.5 or more percentage points, in the case of a first lien residential mortgage loan having an original principal obligation amount that does not exceed the amount of the maximum limitation on the original principal obligation of mortgage in effect for a residence of the applicable size, as of the date of such interest rate set, pursuant to the sixth sentence of section 1454(a)(2) of title 12; (B) by 2.5 or more percentage points, in the case of a first lien residential mortgage loan having an original principal obligation amount that exceeds the amount of the max- imum limitation on the original principal obligation of mortgage in effect for a resi- dence of the applicable size, as of the date of such interest rate set, pursuant to the sixth sentence of section 1454(a)(2) of title 12; and (C) by 3.5 or more percentage points for a subordinate lien residential mortgage loan. (Pub. L. 90–321, title I, § 129H, as added Pub. L. 111–203, title XIV, § 1471, July 21, 2010, 124 Stat. 2185.) Editorial Notes REFERENCES IN TEXT The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, referred to in subsec. (b)(3)(B), is Pub. L. 101–73, Aug. 9, 1989, 103 Stat. 183. Title XI of the Act is classified principally to chapter 34A (§ 3331 et seq.) of Title 12, Banks and Banking. For complete clas- sification of this Act to the Code, see Short Title of 1989 Amendment note set out under section 1811 of Title 12 and Tables. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective on the date on which final regula- tions implementing such section 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 an Effective Date of 2010 Amendment note under section 1601 of this title. § 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 re- quirement imposed under this part, including any requirement under section 1635 of this title, subsection (f) or (g) of section 1641 of this title, 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 per- son 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 con- sumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the li- ability 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 se- cured by real property or a dwelling, twice the Page 1522 TITLE 15—COMMERCE AND TRADE § 1640 1 So in original. The semicolon probably should be a comma. 2 So in original. Probably should be preceded by ‘‘section’’. 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 fail- ures; 1 or (iv) in the case of an individual ac- tion 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) in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum re- covery shall be applicable, and the total recov- ery under this subparagraph in any class ac- tion or series of class actions arising out of the same failure to comply by the same cred- itor shall not be more than the lesser of $1,000,000 or 1 per centum of the net worth of the creditor; (3) in the case of any successful action to en- force the foregoing liability or in any action in which a person is determined to have a right of rescission under section 1635 or 1638(e)(7) of this title, the costs of the action, together with a reasonable attorney’s fee as determined by the court; and (4) in the case of a failure to comply with any requirement under section 1639 of this title, paragraph (1) or (2) of section 1639b(c) of this title, or section 1639c(a) of this title, an amount equal to the sum of all finance charges and fees paid by the consumer, unless the creditor demonstrates that the failure to comply is not material. In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual dam- ages awarded, the frequency and persistence of failures of compliance by the creditor, the re- sources of the creditor, the number of persons adversely affected, and the extent to which the creditor’s failure of compliance was intentional. In connection with the disclosures referred to in subsections (a) and (b) of section 1637 of this title, a creditor shall have a liability determined under paragraph (2) only for failing to comply with the requirements of section 1635 of this title, 1637(a) 2 of this title, or any of paragraphs (4) through (13) of section 1637(b) of this title, or for failing to comply with disclosure require- ments under State law for any term or item that the Bureau has determined to be substantially the same in meaning under section 1610(a)(2) of this title as any of the terms or items referred to in section 1637(a) of this title, or any of para- graphs (4) through (13) of section 1637(b) of this title. In connection with the disclosures referred to in subsection (c) or (d) of section 1637 of this title, a card issuer shall have a liability under this section only to a cardholder who pays a fee described in section 1637(c)(1)(A)(ii)(I) or section 1637(c)(4)(A)(i) of this title or who uses the credit card or charge card. In connection with the dis- closures referred to in section 1638 of this title, a creditor shall have a liability determined under paragraph (2) only for failing to comply with the requirements of section 1635 of this title, of paragraph (2) (insofar as it requires a disclosure of the ‘‘amount financed’’), (3), (4), (5), (6), or (9) of section 1638(a) of this title, or sec- tion 1638(b)(2)(C)(ii) of this title, of subpara- graphs (A), (B), (D), (F), or (J) of section 1638(e)(2) of this title (for purposes of paragraph (2) or (4) of section 1638(e) of this title), or para- graph (4)(C), (6), (7), or (8) of section 1638(e) of this title, or for failing to comply with disclo- sure requirements under State law for any term which the Bureau has determined to be substan- tially the same in meaning under section 1610(a)(2) of this title as any of the terms re- ferred to in any of those paragraphs of section 1638(a) of this title or section 1638(b)(2)(C)(ii) of this title. With respect to any failure to make disclosures required under this part or part D or E of this subchapter, liability shall be imposed only upon the creditor required to make disclo- sure, except as provided in section 1641 of this title. (b) Correction of errors A creditor or assignee has no liability under this section or section 1607 of this title or sec- tion 1611 of this title for any failure to comply with any requirement imposed under this part or part E, if within sixty days after discovering an error, whether pursuant to a final written ex- amination report or notice issued under section 1607(e)(1) of this title or through the creditor’s or assignee’s own procedures, and prior to the institution of an action under this section or the receipt of written notice of the error from the obligor, the creditor or assignee notifies the per- son concerned of the error and makes whatever adjustments in the appropriate account are nec- essary to assure that the person will not be re- quired to pay an amount in excess of the charge actually disclosed, or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower. (c) Unintentional violations; bona fide errors A creditor or assignee may not be held liable in any action brought under this section or sec- tion 1635 of this title for a violation of this sub- chapter if the creditor or assignee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of a bona fide error in- clude, but are not limited to, clerical, calcula- tion, computer malfunction and programing, and printing errors, except that an error of legal judgment with respect to a person’s obligations under this subchapter is not a bona fide error. (d) Liability in transaction or lease involving multiple obligors When there are multiple obligors in a con- sumer credit transaction or consumer lease, there shall be no more than one recovery of damages under subsection (a)(2) for a violation of this subchapter. (e) Jurisdiction of courts; limitations on actions; State attorney general enforcement Except as provided in the subsequent sentence, any action under this section may be brought in any United States district court, or in any other Page 1523 TITLE 15—COMMERCE AND TRADE § 1640 court of competent jurisdiction, within one year from the date of the occurrence of the violation or, in the case of a violation involving a private education loan (as that term is defined in sec- tion 1650(a) of this title), 1 year from the date on which the first regular payment of principal is due under the loan. Any action under this sec- tion with respect to any violation of section 1639, 1639b, or 1639c of this title may be brought in any United States district court, or in any other court of competent jurisdiction, before the end of the 3-year period beginning on the date of the occurrence of the violation. This subsection does not bar a person from asserting a violation of this subchapter in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action, except as otherwise provided by State law. An action to enforce a violation of section 1639, 1639b, 1639c, 1639d, 1639e, 1639f, 1639g, or 1639h of this title may also be brought by the appropriate State attorney general in any ap- propriate United States district court, or any other court of competent jurisdiction, not later than 3 years after the date on which the viola- tion occurs. The State attorney general shall provide prior written notice of any such civil ac- tion to the Federal agency responsible for en- forcement under section 1607 of this title and shall provide the agency with a copy of the com- plaint. If prior notice is not feasible, the State attorney general shall provide notice to such agency immediately upon instituting the action. The Federal agency may— (1) intervene in the action; (2) upon intervening— (A) remove the action to the appropriate United States district court, if it was not originally brought there; and (B) be heard on all matters arising in the action; and (3) file a petition for appeal. (f) Good faith compliance with rule, regulation, or interpretation of Bureau or with interpre- tation or approval of duly authorized official or employee of Federal Reserve System No provision of this section, section 1607(b) of this title, section 1607(c) of this title, section 1607(e) of this title, or section 1611 of this title imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the Bureau or in conformity with any interpretation or approval by an official or em- ployee of the Federal Reserve System duly au- thorized by the Bureau to issue such interpreta- tions or approvals under such procedures as the Bureau may prescribe therefor, notwithstanding that after such act or omission has occurred, such rule, regulation, interpretation, or ap- proval is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. (g) Recovery for multiple failures to disclose The multiple failure to disclose to any person any information required under this part or part D or E of this subchapter to be disclosed in con- nection with a single account under an open end consumer credit plan, other single consumer credit sale, consumer loan, consumer lease, or other extension of consumer credit, shall entitle the person to a single recovery under this sec- tion but continued failure to disclose after a re- covery has been granted shall give rise to rights to additional recoveries. This subsection does not bar any remedy permitted by section 1635 of this title. (h) Offset from amount owed to creditor or as- signee; rights of defaulting consumer A person may not take any action to offset any amount for which a creditor or assignee is potentially liable to such person under sub- section (a)(2) against any amount owed by such person, unless the amount of the creditor’s or assignee’s liability under this subchapter has been determined by judgment of a court of com- petent jurisdiction in an action of which such person was a party. This subsection does not bar a consumer then in default on the obligation from asserting a violation of this subchapter as an original action, or as a defense or counter- claim to an action to collect amounts owed by the consumer brought by a person liable under this subchapter. (i) Class action moratorium (1) In general During the period beginning on May 18, 1995, and ending on October 1, 1995, no court may enter any order certifying any class in any ac- tion under this subchapter— (A) which is brought in connection with any credit transaction not under an open end credit plan which is secured by a first lien on real property or a dwelling and con- stitutes a refinancing or consolidation of an existing extension of credit; and (B) which is based on the alleged failure of a creditor— (i) to include a charge actually incurred (in connection with the transaction) in the finance charge disclosed pursuant to sec- tion 1638 of this title; (ii) to properly make any other disclo- sure required under section 1638 of this title as a result of the failure described in clause (i); or (iii) to provide proper notice of rescis- sion rights under section 1635(a) of this title due to the selection by the creditor of the incorrect form from among the model forms prescribed by the Bureau or from among forms based on such model forms. (2) Exceptions for certain alleged violations Paragraph (1) shall not apply with respect to any action— (A) described in clause (i) or (ii) of para- graph (1)(B), if the amount disclosed as the finance charge results in an annual percent- age rate that exceeds the tolerance provided in section 1606(c) of this title; or (B) described in paragraph (1)(B)(iii), if— (i) no notice relating to rescission rights under section 1635(a) of this title was pro- vided in any form; or (ii) proper notice was not provided for any reason other than the reason described in such paragraph. Page 1524 TITLE 15—COMMERCE AND TRADE § 1640 3 So in original. The closing parenthesis probably should not appear. (j) Private educational lender A private educational lender (as that term is defined in section 1650(a) of this title) has no li- ability under this section for failure to comply with section 1638(e)(3) of this title).3 (k) Defense to foreclosure (1) In general Notwithstanding any other provision of law, when a creditor, assignee, or other holder of a residential mortgage loan or anyone acting on behalf of such creditor, assignee, or holder, initiates a judicial or nonjudicial foreclosure of the residential mortgage loan, or any other action to collect the debt in connection with such loan, a consumer may assert a violation by a creditor of paragraph (1) or (2) of section 1639b(c) of this title, or of section 1639c(a) of this title, as a matter of defense by recoupment or set off without regard for the time limit on a private action for damages under subsection (e). (2) Amount of recoupment or setoff (A) In general The amount of recoupment or set-off under paragraph (1) shall equal the amount to which the consumer would be entitled under subsection (a) for damages for a valid claim brought in an original action against the creditor, plus the costs to the consumer of the action, including a reasonable attorney’s fee. (B) Special rule Where such judgment is rendered after the expiration of the applicable time limit on a private action for damages under subsection (e), the amount of recoupment or set-off under paragraph (1) derived from damages under subsection (a)(4) shall not exceed the amount to which the consumer would have been entitled under subsection (a)(4) for damages computed up to the day preceding the expiration of the applicable time limit. (l) Exemption from liability and rescission in case of borrower fraud or deception In addition to any other remedy available by law or contract, no creditor or assignee shall be liable to an obligor under this section, if such obligor, or co-obligor has been convicted of ob- taining by actual fraud such residential mort- gage loan. (Pub. L. 90–321, title I, § 130, May 29, 1968, 82 Stat. 157; Pub. L. 93–495, title IV, §§ 406, 407, 408(a)–(d), Oct. 28, 1974, 88 Stat. 1518; Pub. L. 94–222, § 3(b), Feb. 27, 1976, 90 Stat. 197; Pub. L. 94–240, § 4, Mar. 23, 1976, 90 Stat. 260; Pub. L. 96–221, title VI, § 615, Mar. 31, 1980, 94 Stat. 180; Pub. L. 100–583, § 3, Nov. 3, 1988, 102 Stat. 2966; Pub. L. 103–325, title I, § 153(a), (b), Sept. 23, 1994, 108 Stat. 2195; Pub. L. 104–12, § 2, May 18, 1995, 109 Stat. 161; Pub. L. 104–29, § 6, Sept. 30, 1995, 109 Stat. 274; Pub. L. 110–289, div. B, title V, § 2502(b), July 30, 2008, 122 Stat. 2857; Pub. L. 110–315, title X, § 1012(a), Aug. 14, 2008, 122 Stat. 3482; Pub. L. 111–22, div. A, title IV, § 404(b), May 20, 2009, 123 Stat. 1658; Pub. L. 111–24, title I, § 107, title II, § 201(b), May 22, 2009, 123 Stat. 1743, 1745; Pub. L. 111–203, title X, § 1100A(2), title XIV, §§ 1413, 1416, 1417, 1422, July 21, 2010, 124 Stat. 2107, 2148, 2153, 2157.) Editorial Notes AMENDMENTS 2010—Pub. L. 111–203, § 1100A(2), substituted ‘‘Bureau’’ for ‘‘Board’’ wherever appearing. Subsec. (a)(2)(A)(ii). Pub. L. 111–203, § 1416(a)(1), sub- stituted ‘‘$200’’ for ‘‘$100’’ and ‘‘$2,000’’ for ‘‘$1,000’’. Subsec. (a)(2)(B). Pub. L. 111–203, § 1416(a)(2), sub- stituted ‘‘$1,000,000’’ for ‘‘$500,000’’. Subsec. (a)(4). Pub. L. 111–203, § 1416(a)(3), inserted ‘‘, paragraph (1) or (2) of section 1639b(c) of this title, or section 1639c(a) of this title’’ after ‘‘section 1639 of this title’’. Subsec. (e). Pub. L. 111–203, § 1422, substituted ‘‘sec- tion 1639, 1639b, 1639c, 1639d, 1639e, 1639f, 1639g, or 1639h of this title may also’’ for ‘‘section 1639 of this title may also’’. Pub. L. 111–203, § 1416(b), in first sentence substituted ‘‘Except as provided in the subsequent sentence, any action’’ for ‘‘Any action’’ and inserted after first sen- tence ‘‘Any action under this section with respect to any violation of section 1639, 1639b, or 1639c of this title may be brought in any United States district court, or in any other court of competent jurisdiction, before the end of the 3-year period beginning on the date of the oc- currence of the violation.’’ Subsec. (k). Pub. L. 111–203, § 1413, added subsec. (k). Subsec. (l). Pub. L. 111–203, § 1417, added subsec. (l). 2009—Subsec. (a). Pub. L. 111–24, § 201(b), in concluding provisions, substituted ‘‘In connection with the disclo- sures referred to in subsections (a) and (b) of section 1637 of this title, a creditor shall have a liability deter- mined under paragraph (2) only for failing to comply with the requirements of section 1635 of this title, 1637(a) of this title, or any of paragraphs (4) through (13) of section 1637(b) of this title, or for failing to com- ply with disclosure requirements under State law for any term or item that the Board has determined to be substantially the same in meaning under section 1610(a)(2) of this title as any of the terms or items re- ferred to in section 1637(a) of this title, or any of para- graphs (4) through (13) of section 1637(b) of this title.’’ for ‘‘In connection with the disclosures referred to in subsections (a) and (b) of section 1637 of this title, a creditor shall have a liability determined under para- graph (2) only for failing to comply with the require- ments of section 1635 of this title, section 1637(a) of this title, or of paragraph (4), (5), (6), (7), (8), (9), or (10) of section 1637(b) of this title or for failing to comply with disclosure requirements under State law for any term or item which the Board has determined to be substan- tially the same in meaning under section 1610(a)(2) of this title as any of the terms or items referred to in section 1637(a) of this title or any of those paragraphs of section 1637(b) of this title.’’ Pub. L. 111–22, § 404(b), which directed insertion of ‘‘subsection (f) or (g) of section 1641 of this title,’’ after ‘‘section 1635 of this title,’’, was executed by making the insertion only in the introductory provisions to re- flect the probable intent of Congress. Subsec. (a)(2)(A)(iii), (iv). Pub. L. 111–24, § 107, added cl. (iii) and redesignated former cl. (iii) as (iv). 2008—Subsec. (a). Pub. L. 110–315, § 1012(a)(1)(B), in fourth sentence of concluding provisions, substituted ‘‘1635 of this title,’’ for ‘‘1635 of this title or’’ and in- serted ‘‘of subparagraphs (A), (B), (D), (F), or (J) of sec- tion 1638(e)(2) of this title (for purposes of paragraph (2) or (4) of section 1638(e) of this title), or paragraph (4)(C), (6), (7), or (8) of section 1638(e) of this title,’’ be- fore ‘‘or for failing’’. Pub. L. 110–289, § 2502(b)(2), in concluding provisions, inserted ‘‘or section 1638(b)(2)(C)(ii) of this title,’’ be- fore ‘‘or for failing to comply’’ and ‘‘or section 1638(b)(2)(C)(ii) of this title’’ before ‘‘. With respect to’’. Page 1525 TITLE 15—COMMERCE AND TRADE § 1640 Subsec. (a)(2)(A)(iii). Pub. L. 110–289, § 2502(b)(1), sub- stituted ‘‘not less than $400 or greater than $4,000’’ for ‘‘not less than $200 or greater than $2,000’’. Subsec. (a)(3). Pub. L. 110–315, § 1012(a)(1)(A), inserted ‘‘or 1638(e)(7)’’ after ‘‘section 1635’’. Subsec. (e). Pub. L. 110–315, § 1012(a)(2), inserted before period at end of first sentence ‘‘or, in the case of a vio- lation involving a private education loan (as that term is defined in section 1650(a) of this title), 1 year from the date on which the first regular payment of prin- cipal is due under the loan’’. Subsec. (j). Pub. L. 110–315, § 1012(a)(3), added subsec. (j). 1995—Subsec. (a)(2)(A)(iii). Pub. L. 104–29 added cl. (iii). Subsec. (i). Pub. L. 104–12 added subsec. (i). 1994—Subsec. (a)(4). Pub. L. 103–325, § 153(a), added par. (4). Subsec. (e). Pub. L. 103–325, § 153(b), inserted at end ‘‘An action to enforce a violation of section 1639 of this title may also be brought by the appropriate State at- torney general in any appropriate United States dis- trict court, or any other court of competent jurisdic- tion, not later than 3 years after the date on which the violation occurs. The State attorney general shall pro- vide prior written notice of any such civil action to the Federal agency responsible for enforcement under sec- tion 1607 of this title and shall provide the agency with a copy of the complaint. If prior notice is not feasible, the State attorney general shall provide notice to such agency immediately upon instituting the action. The Federal agency may— ‘‘(1) intervene in the action; ‘‘(2) upon intervening— ‘‘(A) remove the action to the appropriate United States district court, if it was not originally brought there; and ‘‘(B) be heard on all matters arising in the action; and ‘‘(3) file a petition for appeal.’’ 1988—Subsec. (a). Pub. L. 100–583 substituted ‘‘in sub- sections (a) and (b) of section 1637’’ for ‘‘in section 1637’’ in third sentence and inserted provisions limiting li- ability of card issuer under this section to cardholders who pay fee or use credit card or charge card. 1980—Subsec. (a). Pub. L. 96–221, § 615(b), in introduc- tory text inserted provisions respecting applicability of section 1635 of this title, and in text following num- bered pars. inserted provisions relating to disclosures required under sections 1637 and 1638 of this title. Subsec. (a)(2)(B). Pub. L. 96–221, § 615(a)(1), substituted provisions respecting recovery under this subparagraph in any class action or series of class actions, for provi- sions respecting recovery in a class action. Subsec. (a)(3). Pub. L. 96–221, § 615(a)(2), inserted pro- visions relating to right of rescission under section 1635 of this title. Subsec. (b). Pub. L. 96–221, § 615(a)(3), substituted pro- visions relating to correction of errors within sixty days by a creditor or assignee, for provisions relating to correction of errors within fifteen days by a creditor. Subsec. (c). Pub. L. 96–221, § 615(a)(3), substituted pro- visions relating to liability of a creditor or assignee in any action brought under this section or section 1635 of this title, for provisions relating to liability of a cred- itor in any action brought under this section. Subsec. (d). Pub. L. 96–221, § 615(a)(3), substituted pro- visions relating to liability in transaction or lease in- volving multiple obligors, for provisions relating to li- ability of subsequent assignees original creditor. Subsec. (e). Pub. L. 96–221, § 615(a)(4), inserted provi- sions relating to limitations on actions. Subsec. (f). Pub. L. 96–221, § 615(a)(5), inserted ref- erences to section 1607(b), (c), and (e) of this title. Subsec. (g). Pub. L. 96–221, § 615(a)(6), inserted provi- sions relating to remedy under section 1635 of this title. Subsec. (h). Pub. L. 96–221, § 615(a)(7), substituted pro- visions relating to offset from amounts owed to the creditor or assignee, and rights of defaulting consumer, for provisions relating to offset from amounts owed to the creditor. 1976—Subsec. (a). Pub. L. 94–240, § 4(1), inserted ‘‘or E’’ after ‘‘part D’’. Subsec. (a)(2)(A). Pub. L. 94–240, § 4(2), designated ex- isting provision as cl. (i) and added cl. (ii). Subsec. (a)(2)(B). Pub. L. 94–240, § 4(3), substituted ‘‘lesser of $500,000’’ for ‘‘lesser of $100,000’’. Subsec. (b). Pub. L. 94–240, § 4(4), inserted ‘‘or part E of this subchapter’’ after ‘‘this part’’ and struck out ‘‘finance’’ after ‘‘required to pay a’’. Subsec. (f). Pub. L. 94–222 inserted ‘‘or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System duly author- ized by the Board to issue such interpretations or ap- provals under such procedures as the Board may pre- scribe therefor’’ after ‘‘by the Board’’, and substituted ‘‘interpretation, or approval’’ for ‘‘or interpretation’’ before ‘‘is amended’’. Subsec. (g). Pub. L. 94–240, § 4(5), inserted ‘‘or part D or E of this subchapter’’ after ‘‘this part’’, and ‘‘con- sumer lease’’ after ‘‘consumer loan’’. 1974—Subsec. (a). Pub. L. 93–495, § 408(a), substituted provisions setting forth determination of amount of li- ability of any creditor failing to comply with any re- quirement imposed under part D of this subchapter or this part, for provisions setting forth determination of amount of liability of any creditor failing to disclose in connection with any consumer credit transaction any information required under this part to be disclosed to specified persons. Subsec. (b). Pub. L. 93–495, § 408(b), inserted ‘‘for any failure to comply with any requirement imposed under this part,’’ before ‘‘if within’’. Subsec. (c). Pub. L. 93–495, § 408(c), substituted ‘‘sub- chapter’’ for ‘‘part’’. Subsec. (f). Pub. L. 93–495, § 406, added subsec. (f). Subsec. (g). Pub. L. 93–495, § 407, added subsec. (g). Subsec. (h). Pub. L. 93–495, § 408(d), added subsec. (h). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 1100A(2) of Pub. L. 111–203 ef- fective 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 Employ- ees. Amendment by sections 1413, 1416, 1417, and 1422 of Pub. L. 111–203 effective on the date on which final reg- ulations implementing 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 this title. EFFECTIVE DATE OF 2009 AMENDMENT Amendment by Pub. L. 111–24 effective 9 months after May 22, 2009, except as otherwise specifically provided, see section 3 of Pub. L. 111–24, set out as a note under section 1602 of this title. EFFECTIVE DATE OF 2008 AMENDMENT Pub. L. 110–315, title X, § 1012(b), Aug. 14, 2008, 122 Stat. 3482, provided that: ‘‘The amendments made by this section [amending this section] shall have the same effective date as provisions referred to in section 1003(b) [set out as a note under section 1638 of this title].’’ 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 1976 AMENDMENT Amendment by Pub. L. 94–240 effective on expiration of one year after Mar. 23, 1976, see section 6 of Pub. L. Page 1526 TITLE 15—COMMERCE AND TRADE § 1641 1 See References in Text note below. 94–240, set out as an Effective Date note under section 1667 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. DETERMINATION OF LIABILITY PRIOR TO OCTOBER 28, 1974 Pub. L. 93–495, title IV, § 408(e), Oct. 28, 1974, 88 Stat. 1519, provided that: ‘‘The amendments made by sections 406, 407, and 408 [amending this section] shall apply in determining the liability of any person under chapter 2 or 4 of the Truth in Lending Act [this part or part D of this subchapter], unless prior to the date of enactment of this Act [Oct. 28, 1974] such liability has been deter- mined by final judgment of a court of competent juris- diction and no further review of such judgment may be had by appeal or otherwise.’’ § 1641. Liability of assignees (a) Prerequisites Except as otherwise specifically provided in this subchapter, any civil action for a violation of this subchapter or proceeding under section 1607 of this title which may be brought against a creditor may be maintained against any as- signee of such creditor only if the violation for which such action or proceeding is brought is apparent on the face of the disclosure state- ment, except where the assignment was involun- tary. For the purpose of this section, a violation apparent on the face of the disclosure statement includes, but is not limited to (1) a disclosure which can be determined to be incomplete or in- accurate from the face of the disclosure state- ment or other documents assigned, or (2) a dis- closure which does not use the terms required to be used by this subchapter. (b) Proof of compliance with statutory provisions Except as provided in section 1635(c) of this title, in any action or proceeding by or against any subsequent assignee of the original creditor without knowledge to the contrary by the as- signee when he acquires the obligation, written acknowledgement of receipt by a person to whom a statement is required to be given pursu- ant to this subchapter shall be conclusive proof of the delivery thereof and, except as provided in subsection (a), of compliance with this part. This section does not affect the rights of the ob- ligor in any action against the original creditor. (c) Right of rescission by consumer unaffected Any consumer who has the right to rescind a transaction under section 1635 of this title may rescind the transaction as against any assignee of the obligation. (d) Rights upon assignment of certain mortgages (1) In general Any person who purchases or is otherwise assigned a mortgage referred to in section 1602(aa) 1 of this title shall be subject to all claims and defenses with respect to that mort- gage that the consumer could assert against the creditor of the mortgage, unless the pur- chaser or assignee demonstrates, by a prepon- derance of the evidence, that a reasonable per- son exercising ordinary due diligence, could not determine, based on the documentation re- quired by this subchapter, the itemization of the amount financed, and other disclosure of disbursements that the mortgage was a mort- gage referred to in section 1602(aa) 1 of this title. The preceding sentence does not affect rights of a consumer under subsection (a), (b), or (c) of this section or any other provision of this subchapter. (2) Limitation on damages Notwithstanding any other provision of law, relief provided as a result of any action made permissible by paragraph (1) may not exceed— (A) with respect to actions based upon a violation of this subchapter, the amount specified in section 1640 of this title; and (B) with respect to all other causes of ac- tion, the sum of— (i) the amount of all remaining indebted- ness; and (ii) the total amount paid by the con- sumer in connection with the transaction. (3) Offset The amount of damages that may be award- ed under paragraph (2)(B) shall be reduced by the amount of any damages awarded under paragraph (2)(A). (4) Notice Any person who sells or otherwise assigns a mortgage referred to in section 1602(aa) 1 of this title shall include a prominent notice of the potential liability under this subsection as determined by the Bureau. (e) Liability of assignee for consumer credit transactions secured by real property (1) In general Except as otherwise specifically provided in this subchapter, any civil action against a creditor for a violation of this subchapter, and any proceeding under section 1607 of this title against a creditor, with respect to a consumer credit transaction secured by real property may be maintained against any assignee of such creditor only if— (A) the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement provided in con- nection with such transaction pursuant to this subchapter; and (B) the assignment to the assignee was voluntary. (2) Violation apparent on the face of the disclo- sure described For the purpose of this section, a violation is apparent on the face of the disclosure state- ment if— (A) the disclosure can be determined to be incomplete or inaccurate by a comparison among the disclosure statement, any itemization of the amount financed, the note, or any other disclosure of disburse- ment; or (B) the disclosure statement does not use the terms or format required to be used by this subchapter.