-CITE- 15 USC CHAPTER 41 - CONSUMER CREDIT PROTECTION 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION -MISC1- CHAPTER 41 - CONSUMER CREDIT PROTECTION -MISC1- SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE PART A - GENERAL PROVISIONS Sec. 1601. Congressional findings and declaration of purpose. (a) Informed use of credit. (b) Terms of personal property leases. 1602. Definitions and rules of construction. 1603. Exempted transactions. 1604. Disclosure guidelines. (a) Promulgation, contents, etc., of regulations. (b) Model disclosure forms and clauses; publication, criteria, compliance, etc. (c) Procedures applicable for adoption of model forms and clauses. (d) Effective dates of regulations containing new disclosure requirements. (f) Exemption authority. (g) Waiver for certain borrowers. 1605. Determination of finance charge. (a) "Finance charge" defined. (b) Life, accident, or health insurance premiums included in finance charge. (c) Property damage and liability insurance premiums included in finance charge. (d) Items exempted from computation of finance charge in all credit transactions. (e) Items exempted from computation of finance charge in extensions of credit secured by an interest in real property. (f) Tolerances for accuracy. 1606. Determination of annual percentage rate. (a) "Annual percentage rate" defined. (b) Computation of rate of finance charges for balances within a specified range. (c) Allowable tolerances for purposes of compliance with disclosure requirements. (d) Use of rate tables or charts having allowable variance from determined rates. (e) Authorization of tolerances in determining annual percentage rates. 1607. Administrative enforcement. (a) Enforcing agencies. (b) Violations of this subchapter deemed violations of pre-existing statutory requirements; additional agency powers. (c) Federal Trade Commission as overall enforcing agency. (d) Rules and regulations. (e) Adjustment of finance charges; procedures applicable, coverage, criteria, etc. 1608. Views of other agencies. 1609. Repealed. 1610. Effect on other laws. (a) Inconsistent provisions; procedures applicable for determination. (b) State credit charge statutes. (c) Disclosure as evidence. (d) Contract or other obligations under State or Federal law. (e) Certain credit and charge card application and solicitation disclosure provisions. 1611. Criminal liability for willful and knowing violation. 1612. Effect on government agencies. (a) Consultation requirements respecting compliance of credit instruments issued to participating creditor. (b) Inapplicability of Federal civil or criminal penalties to Federal, State, and local agencies. (c) Inapplicability of Federal civil or criminal penalties to participating creditor where violating instrument issued by United States. (d) Applicability of State penalties to violations by participating creditor. 1613. Annual reports to Congress by Board. 1614. Repealed. 1615. Prohibition on use of "Rule of 78's" in connection with mortgage refinancings and other consumer loans. (a) Prompt refund of unearned interest required. (b) Use of "Rule of 78's" prohibited. (c) Statement of prepayment amount. (d) Definitions. PART B - CREDIT TRANSACTIONS 1631. Disclosure requirements. (a) Duty of creditor or lessor respecting one or more than one obligor. (b) Creditor or lessor required to make disclosure. (c) Estimates as satisfying statutory requirements; basis of disclosure for per diem interest. (d) Tolerances for numerical disclosures. 1632. Form of disclosure; additional information. (a) Information clearly and conspicuously disclosed; "annual percentage rate" and "finance charge"; order of disclosures and use of different terminology. (b) Optional information by creditor or lessor. (c) Tabular format required for certain disclosures under section 1637(c). 1633. Exemption for State-regulated transactions. 1634. Effect of subsequent occurrence. 1635. Right of rescission as to certain transactions. (a) Disclosure of obligor's right to rescind. (b) Return of money or property following rescission. (c) Rebuttable presumption of delivery of required disclosures. (d) Modification and waiver of rights. (e) Exempted transactions; reapplication of provisions. (f) Time limit for exercise of right. (g) Additional relief. (h) Limitation on rescission. (i) Rescission rights in foreclosure. 1636. Repealed. 1637. Open end consumer credit plans. (a) Required disclosures by creditor. (b) Statement required with each billing cycle. (c) Disclosure in credit and charge card applications and solicitations. (d) Disclosure prior to renewal. (e) Other rules for disclosures under subsections (c) and (d). (f) Disclosure of range of certain fees which vary by State allowed. (g) Insurance in connection with certain open end credit card plans. 1637a. Disclosure requirements for open end consumer credit plans secured by consumer's principal dwelling. (a) Application disclosures. (b) Time and form of disclosures. (c) Third party applications. (d) "Principal dwelling" defined. (e) Pamphlet. 1638. Transactions other than under an open end credit plan. (a) Required disclosures by creditor. (b) Form and timing of disclosures; residential mortgage transaction requirements. (c) Timing of disclosures on unsolicited mailed or telephone purchase orders or loan requests. (d) Timing of disclosure in cases of an addition of a deferred payment price to an existing outstanding balance. 1639. Requirements for certain mortgages. (a) Disclosures. (b) Time of disclosures. (c) No prepayment penalty. (d) Limitations after default. (e) No balloon payments. (f) No negative amortization. (g) No prepaid payments. (h) Prohibition on extending credit without regard to payment ability of consumer. (i) Requirements for payments under home improvement contracts. (j) Consequence of failure to comply. (k) "Affiliate" defined. (l) Discretionary regulatory authority of Board. 1640. Civil liability. (a) Individual or class action for damages; amount of award; factors determining amount of award. (b) Correction of errors. (c) Unintentional violations; bona fide errors. (d) Liability in transaction or lease involving multiple obligors. (e) Jurisdiction of courts; limitations on actions; State attorney general enforcement. (f) Good faith compliance with rule, regulation, or interpretation of Board or with interpretation or approval of duly authorized official or employee of Federal Reserve System. (g) Recovery for multiple failures to disclose. (h) Offset from amount owed to creditor or assignee; rights of defaulting consumer. (i) Class action moratorium. 1641. Liability of assignees. (a) Prerequisites. (b) Proof of compliance with statutory provisions. (c) Right of rescission by consumer unaffected. (d) Rights upon assignment of certain mortgages. (e) Liability of assignee for consumer credit transactions secured by real property. (f) Treatment of servicer. 1642. Issuance of credit cards. 1643. Liability of holder of credit card. (a) Limits on liability. (b) Burden of proof. (c) Liability imposed by other laws or by agreement with issuer. (d) Exclusiveness of liability. 1644. Fraudulent use of credit cards; penalties. (a) Use, attempt or conspiracy to use card in transaction affecting interstate or foreign commerce. (b) Transporting, attempting or conspiring to transport card in interstate commerce. (c) Use of interstate commerce to sell or transport card. (d) Receipt, concealment, etc., of goods obtained by use of card. (e) Receipt, concealment, etc., of tickets for interstate or foreign transportation obtained by use of card. (f) Furnishing of money, etc., through use of card. 1645. Business credit cards; limits on liability of employees. 1646. Dissemination of annual percentage rates; implementation, etc. (a) Annual percentage rates. (b) Credit card price and availability information. (c) Implementation. 1647. Home equity plans. (a) Index requirement. (b) Grounds for acceleration of outstanding balance. (c) Change in terms. (d) Terms changed after application. (e) Additional requirements relating to refunds and imposition of nonrefundable fees. 1648. Reverse mortgages. (a) In general. (b) Projected total cost. 1649. Certain limitations on liability. (a) Limitations on liability. (b) Exceptions. PART C - CREDIT ADVERTISING 1661. Catalogs and multiple-page advertisements. 1662. Advertising of downpayments and installments. 1663. Advertising of open end credit plans. 1664. Advertising of credit other than open end plans. (a) Exclusion of open end credit plans. (b) Advertisements of residential real estate. (c) Rate of finance charge expressed as annual percentage rate. (d) Requisite disclosures in advertisement. 1665. Nonliability of advertising media. 1665a. Use of annual percentage rate in oral disclosures; exceptions. 1665b. Advertising of open end consumer credit plans secured by consumer's principal dwelling. (a) In general. (b) Tax deductibility. (c) Certain terms prohibited. (d) Discounted initial rate. (e) Balloon payment. (f) "Balloon payment" defined. PART D - CREDIT BILLING 1666. Correction of billing errors. (a) Written notice by obligor to creditor; time for and contents of notice; procedure upon receipt of notice by creditor. (b) Billing error. (c) Action by creditor to collect amount or any part thereof regarded by obligor to be a billing error. (d) Restricting or closing by creditor of account regarded by obligor to contain a billing error. (e) Effect of noncompliance with requirements by creditor. 1666a. Regulation of credit reports. (a) Reports by creditor on obligor's failure to pay amount regarded as billing error. (b) Reports by creditor on delinquent amounts in dispute; notification of obligor of parties notified of delinquency. (c) Reports by creditor of subsequent resolution of delinquent amounts. 1666b. Length of billing period in credit statement for imposition of finance charge; effect of failure of timely mailing or delivery of statement. (a) Additional finance charge. (b) Excusable cause. 1666c. Prompt crediting of payments; imposition of finance charge. 1666d. Treatment of credit balances. 1666e. Notification of credit card issuer by seller of return of goods, etc., by obligor; credit for account of obligor. 1666f. Inducements to cardholders by sellers of cash discounts for payments by cash, check or similar means; finance charge for sales transactions involving cash discounts. (a) Cash discounts. (b) Finance charge. 1666g. Tie-in services prohibited for issuance of credit card. 1666h. Offset of cardholder's indebtedness by issuer of credit card with funds deposited with issuer by cardholder; remedies of creditors under State law not affected. (a) Offset against consumer's funds. (b) Attachments and levies. 1666i. Assertion by cardholder against card issuer of claims and defenses arising out of credit card transaction; prerequisites; limitation on amount of claims or defenses. (a) Claims and defenses assertible. (b) Amount of claims and defenses assertible. 1666j. Applicability of State laws. (a) Consistency of provisions (b) Exemptions by Board from credit billing requirements. (c) Finance charge or other charge for credit for sales transactions involving cash discounts. PART E - CONSUMER LEASES 1667. Definitions. 1667a. Consumer lease disclosures. 1667b. Lessee's liability on expiration or termination of lease. (a) Estimated residual value of property as basis; presumptions; action by lessor for excess liability; mutually agreeable final adjustment. (b) Penalties and charges for delinquency, default, or early termination. (c) Independent professional appraisal of residual value of property at termination of lease; finality. 1667c. Consumer lease advertising; liability of advertising media. (a) In general. (b) Advertising medium not liable. (c) Radio advertisements. 1667d. Civil liability of lessors. (a) Grounds for maintenance of action. (b) Additional grounds for maintenance of action; "creditor" defined. (c) Jurisdiction of courts; time limitation. 1667e. Applicability of State laws; exemptions by Board from leasing requirements. 1667f. Regulations. (a) Regulations authorized. (b) Model disclosure. SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT 1671. Congressional findings and declaration of purpose. (a) Disadvantages of garnishment. (b) Necessity for regulation. 1672. Definitions. 1673. Restriction on garnishment. (a) Maximum allowable garnishment. (b) Exceptions. (c) Execution or enforcement of garnishment order or process prohibited. 1674. Restriction on discharge from employment by reason of garnishment. (a) Termination of employment. (b) Penalties. 1675. Exemption for State-regulated garnishments. 1676. Enforcement by Secretary of Labor. 1677. Effect on State laws. SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS 1679. Findings and purposes. (a) Findings. (b) Purposes. 1679a. Definitions. 1679b. Prohibited practices. (a) In general. (b) Payment in advance. 1679c. Disclosures. (a) Disclosure required. (b) Separate statement requirement. (c) Retention of compliance records. 1679d. Credit repair organizations contracts. (a) Written contracts required. (b) Terms and conditions of contract. 1679e. Right to cancel contract. (a) In general. (b) Cancellation form and other information. (c) Consumer copy of contract required. 1679f. Noncompliance with this subchapter. (a) Consumer waivers invalid. (b) Attempt to obtain waiver. (c) Contracts not in compliance. 1679g. Civil liability. (a) Liability established. (b) Factors to be considered in awarding punitive damages. 1679h. Administrative enforcement. (a) In general. (b) Violations of this subchapter treated as violations of Federal Trade Commission Act. (c) State action for violations. 1679i. Statute of limitations. 1679j. Relation to State law. SUBCHAPTER III - CREDIT REPORTING AGENCIES 1681. Congressional findings and statement of purpose. (a) Accuracy and fairness of credit reporting. (b) Reasonable procedures. 1681a. Definitions; rules of construction. 1681b. Permissible purposes of consumer reports. (a) In general. (b) Conditions for furnishing and using consumer reports for employment purposes. (c) Furnishing reports in connection with credit or insurance transactions that are not initiated by consumer. (d) Reserved. (e) Election of consumer to be excluded from lists. (f) Certain use or obtaining of information prohibited. (g) Protection of medical information. 1681c. Requirements relating to information contained in consumer reports. (a) Information excluded from consumer reports. (b) Exempted cases. (c) Running of reporting period. (d) Information required to be disclosed. (e) Indication of closure of account by consumer. (f) Indication of dispute by consumer. (g) Truncation of credit card and debit card numbers. (h) Notice of discrepancy in address. 1681c-1. Identity theft prevention; fraud alerts and active duty alerts. (a) One-call fraud alerts. (b) Extended alerts. (c) Active duty alerts. (d) Procedures. (e) Referrals of alerts. (f) Duty of reseller to reconvey alert. (g) Duty of other consumer reporting agencies to provide contact information. (h) Limitations on use of information for credit extensions. 1681c-2. Block of information resulting from identity theft. (a) Block. (b) Notification. (c) Authority to decline or rescind. (d) Exception for resellers. (e) Exception for verification companies. (f) Access to blocked information by law enforcement agencies. 1681d. Disclosure of investigative consumer reports. (a) Disclosure of fact of preparation. (b) Disclosure on request of nature and scope of investigation. (c) Limitation on liability upon showing of reasonable procedures for compliance with provisions. (d) Prohibitions. 1681e. Compliance procedures. (a) Identity and purposes of credit users. (b) Accuracy of report. (c) Disclosure of consumer reports by users allowed. (d) Notice to users and furnishers of information. (e) Procurement of consumer report for resale. 1681f. Disclosures to governmental agencies. 1681g. Disclosures to consumers. (a) Information on file; sources; report recipients. (b) Exempt information. (c) Summary of rights to obtain and dispute information in consumer reports and to obtain credit scores. (d) Summary of rights of identity theft victims. (e) Information available to victims. (f) Disclosure of credit scores. (g) Disclosure of credit scores by certain mortgage lenders. 1681h. Conditions and form of disclosure to consumers. (a) In general. (b) Other forms of disclosure. (c) Trained personnel. (d) Persons accompanying consumer. (e) Limitation of liability. 1681i. Procedure in case of disputed accuracy. (a) Reinvestigations of disputed information. (b) Statement of dispute. (c) Notification of consumer dispute in subsequent consumer reports. (d) Notification of deletion of disputed information. (e) Treatment of complaints and report to Congress. (f) Reinvestigation requirement applicable to resellers. 1681j. Charges for certain disclosures. (a) Free annual disclosure. (b) Free disclosure after adverse notice to consumer. (c) Free disclosure under certain other circumstances. (d) Free disclosures in connection with fraud alerts. (e) Other charges prohibited. (f) Reasonable charges allowed for certain disclosures. 1681k. Public record information for employment purposes. (a) In general. (b) Exemption for national security investigations. 1681l. Restrictions on investigative consumer reports. 1681m. Requirements on users of consumer reports. (a) Duties of users taking adverse actions on basis of information contained in consumer reports. (b) Adverse action based on information obtained from third parties other than consumer reporting agencies. (c) Reasonable procedures to assure compliance. (d) Duties of users making written credit or insurance solicitations on basis of information contained in consumer files. (e) Red flag guidelines and regulations required. (f) Prohibition on sale or transfer of debt caused by identity theft. (g) Debt collector communications concerning identity theft. (h) Duties of users in certain credit transactions. 1681n. Civil liability for willful noncompliance. (a) In general. (b) Civil liability for knowing noncompliance. (c) Attorney's fees. 1681o. Civil liability for negligent noncompliance. (a) In general. (b) Attorney's fees. 1681p. Jurisdiction of courts; limitation of actions. 1681q. Obtaining information under false pretenses. 1681r. Unauthorized disclosures by officers or employees. 1681s. Administrative enforcement. (a) Enforcement by Federal Trade Commission. (b) Enforcement by other agencies. (c) State action for violations. (d) Enforcement under other authority. (e) Regulatory authority. (f) Coordination of consumer complaint investigations. (g) FTC regulation of coding of trade names. 1681s-1. Information on overdue child support obligations. 1681s-2. Responsibilities of furnishers of information to consumer reporting agencies. (a) Duty of furnishers of information to provide accurate information. (b) Duties of furnishers of information upon notice of dispute. (c) Limitation on liability. (d) Limitation on enforcement. (e) Accuracy guidelines and regulations required. 1681s-3. Affiliate sharing. (a) Special rule for solicitation for purposes of marketing. (b) Notice for other purposes permissible. (c) User requirements. (d) Definitions. 1681t. Relation to State laws. (a) In general. (b) General exceptions. (c) "Firm offer of credit or insurance" defined. (d) Limitations. 1681u. Disclosures to FBI for counterintelligence purposes. (a) Identity of financial institutions. (b) Identifying information. (c) Court order for disclosure of consumer reports. (d) Confidentiality. (e) Payment of fees. (f) Limit on dissemination. (g) Rules of construction. (h) Reports to Congress. (i) Damages. (j) Disciplinary actions for violations. (k) Good-faith exception. (l) Limitation of remedies. (m) Injunctive relief. 1681v. Disclosures to governmental agencies for counterterrorism purposes. (a) Disclosure. (b) Form of certification. (c) Confidentiality. (d) Rule of construction. (e) Safe harbor. 1681w. Disposal of records. (a) Regulations. (b) Rule of construction. 1681x. Corporate and technological circumvention prohibited. SUBCHAPTER IV - EQUAL CREDIT OPPORTUNITY 1691. Scope of prohibition. (a) Activities constituting discrimination. (b) Activities not constituting discrimination. (c) Additional activities not constituting discrimination. (d) Reason for adverse action; procedure applicable; "adverse action" defined. (e) Appraisals; copies of reports to applicants; costs. 1691a. Definitions; rules of construction. 1691b. Promulgation of regulations by Board; establishment of Consumer Advisory Council by Board; duties, membership, etc., of Council. (a) Regulations. (b) Consumer Advisory Council. 1691c. Administrative enforcement. (a) Enforcing agencies. (b) Violations of subchapter deemed violations of pre-existing statutory requirements; additional agency powers. (c) Overall enforcement authority of Federal Trade Commission. (d) Rules and regulations by enforcing agencies. 1691c-1. Incentives for self-testing and self-correction. (a) Privileged information. (b) Results of self-testing. (c) Adjudication. 1691d. Applicability of other laws. (a) Requests for signature of husband and wife for creation of valid lien, etc. (b) State property laws affecting creditworthiness. (c) State laws prohibiting separate extension of consumer credit to husband and wife. (d) Combining credit accounts of husband and wife with same creditor to determine permissible finance charges or loan ceilings under Federal or State laws. (e) Election of remedies under subchapter or State law; nature of relief determining applicability. (f) Compliance with inconsistent State laws; determination of inconsistency. (g) Exemption by regulation of credit transactions covered by State law; failure to comply with State law. 1691e. Civil liability. (a) Individual or class action for actual damages. (b) Recovery of punitive damages in individual and class action for actual damages; exemptions; maximum amount of punitive damages in individual actions; limitation on total recovery in class actions; factors determining amount of award. (c) Action for equitable and declaratory relief. (d) Recovery of costs and attorney fees. (e) Good faith compliance with rule, regulation, or interpretation of Board or interpretation or approval by an official or employee of Federal Reserve System duly authorized by Board. (f) Jurisdiction of courts; time for maintenance of action; exceptions. (g) Request by responsible enforcement agency to Attorney General for civil action. (h) Authority for Attorney General to bring civil action; jurisdiction. (i) Recovery under both subchapter and fair housing enforcement provisions prohibited for violation based on same transaction. (j) Discovery of creditor's granting standards. (k) Notice to HUD of violations. 1691f. Annual reports to Congress; contents. SUBCHAPTER V - DEBT COLLECTION PRACTICES 1692. Congressional findings and declaration of purpose. (a) Abusive practices. (b) Inadequacy of laws. (c) Available non-abusive collection methods. (d) Interstate commerce. (e) Purposes. 1692a. Definitions. 1692b. Acquisition of location information. 1692c. Communication in connection with debt collection. (a) Communication with the consumer generally. (b) Communication with third parties. (c) Ceasing communication. (d) "Consumer" defined. 1692d. Harassment or abuse. 1692e. False or misleading representations. 1692f. Unfair practices. 1692g. Validation of debts. (a) Notice of debt; contents. (b) Disputed debts. (c) Admission of liability. 1692h. Multiple debts. 1692i. Legal actions by debt collectors. (a) Venue. (b) Authorization of actions. 1692j. Furnishing certain deceptive forms. 1692k. Civil liability. (a) Amount of damages. (b) Factors considered by court. (c) Intent. (d) Jurisdiction. (e) Advisory opinions of Commission. 1692l. Administrative enforcement. (a) Federal Trade Commission. (b) Applicable provisions of law. (c) Agency powers. (d) Rules and regulations. 1692m. Reports to Congress by the Commission; views of other Federal agencies. 1692n. Relation to State laws. 1692o. Exemption for State regulation. SUBCHAPTER VI - ELECTRONIC FUND TRANSFERS 1693. Congressional findings and declaration of purpose. (a) Rights and liabilities undefined. (b) Purposes. 1693a. Definitions. 1693b. Regulations. (a) Prescription by Board. (b) Issuance of model clauses. (c) Criteria; modification of requirements. (d) Applicability to service providers other than certain financial institutions. 1693c. Terms and conditions of transfers. (a) Disclosures; time; form; contents. (b) Notification of changes to consumer. (c) Time for disclosures respecting accounts accessible prior to effective date of this subchapter. 1693d. Documentation of transfers. (a) Availability of written documentation to consumer; contents. (b) Notice of credit to consumer. (c) Periodic statement; contents. (d) Consumer passbook accounts. (e) Accounts other than passbook accounts. (f) Documentation as evidence. 1693e. Preauthorized transfers. 1693f. Error resolution. (a) Notification to financial institution of error. (b) Correction of error; interest. (c) Provisional recredit of consumer's account. (d) Absence of error; finding; explanation. (e) Treble damages. (f) Acts constituting error. 1693g. Consumer liability. (a) Unauthorized electronic fund transfers; limit. (b) Burden of proof. (c) Determination of limitation on liability. (d) Restriction on liability. (e) Scope of liability. 1693h. Liability of financial institutions. (a) Action or failure to act proximately causing damages. (b) Acts of God and technical malfunctions. (c) Intent. (d) Exception for damaged notices. 1693i. Issuance of cards or other means of access. (a) Prohibition; proper issuance. (b) Exceptions. (c) Validation. 1693j. Suspension of obligations. 1693k. Compulsory use of electronic fund transfers. 1693l. Waiver of rights. 1693m. Civil liability. (a) Individual or class action for damages; amount of award. (b) Factors determining amount of award. (c) Unintentional violations; bona fide error. (d) Good faith compliance with rule, regulation, or interpretation of Board or approval of duly authorized official or employee of Federal Reserve System. (e) Notification to consumer prior to action; adjustment of consumer's account. (f) Action in bad faith or for harassment; attorney's fees. (g) Jurisdiction of courts; time for maintenance of action. 1693n. Criminal liability. (a) Violations respecting giving of false or inaccurate information, failure to provide information, and failure to comply with provisions of this subchapter. (b) Violations affecting interstate or foreign commerce. (c) "Debit instrument" defined. 1693o. Administrative enforcement. (a) Enforcing agencies. (b) Violations of subchapter deemed violations of pre-existing statutory requirements; additional powers. (c) Overall enforcement authority of Federal Trade Commission. 1693p. Reports to Congress. 1693q. Relation to State laws. 1693r. Exemption for State regulation. -End- -CITE- 15 USC SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE -HEAD- SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE -End- -CITE- 15 USC Part A - General Provisions 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- PART A - GENERAL PROVISIONS -End- -CITE- 15 USC Sec. 1601 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1601. Congressional findings and declaration of purpose -STATUTE- (a) Informed use of credit The Congress finds that economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit. The informed use of credit results from an awareness of the cost thereof by consumers. It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices. (b) Terms of personal property leases The Congress also finds that there has been a recent trend toward leasing automobiles and other durable goods for consumer use as an alternative to installment credit sales and that these leases have been offered without adequate cost disclosures. It is the purpose of this subchapter to assure a meaningful disclosure of the terms of leases of personal property for personal, family, or household purposes so as to enable the lessee to compare more readily the various lease terms available to him, limit balloon payments in consumer leasing, enable comparison of lease terms with credit terms where appropriate, and to assure meaningful and accurate disclosures of lease terms in advertisements. -SOURCE- (Pub. L. 90-321, title I, Sec. 102, May 29, 1968, 82 Stat. 146; Pub. L. 93-495, title III, Sec. 302, Oct. 28, 1974, 88 Stat. 1511; Pub. L. 94-240, Sec. 2, Mar. 23, 1976, 90 Stat. 257.) -MISC1- AMENDMENTS 1976 - Pub. L. 94-240 designated existing provisions as subsec. (a) and added subsec. (b). 1974 - Pub. L. 93-495 inserted provisions expanding purposes of subchapter to include protection of consumer against inaccurate and unfair credit billing and credit card practices. 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. 94-240, set out as an Effective Date note under section 1667 of this title. EFFECTIVE DATE OF 1974 AMENDMENT For effective date of amendment by Pub. L. 93-495, see section 308 of Pub. L. 93-495, set out as an Effective Date note under section 1666 of this title. EFFECTIVE DATE Section 504(a) of Pub. L. 90-321 provided that this part is effective May 29, 1968. SHORT TITLE OF 2003 AMENDMENT Pub. L. 108-159, Sec. 1(a), Dec. 4, 2003, 117 Stat. 1952, provided that: "This Act [enacting sections 1681c-1, 1681c-2, 1681s-3, 1681w, and 1681x of this title and sections 9701 to 9708 of Title 20, Education, amending sections 1681a, 1681b, 1681c, 1681g, 1681i, 1681j, 1681m, 1681o, 1681p, 1681s, 1681s-2, 1681t, 1681u, and 1681v of this title and section 5318 of Title 31, Money and Finance, enacting provisions set out as notes under this section, sections 1681, 1681a, 1681b, 1681c, 1681c-1, 1681i, 1681j, 1681m, 1681n, 1681s-2, 1681s-3 of this title, and section 9701 of Title 20, and amending provisions set out as a note under this section] may be cited as the 'Fair and Accurate Credit Transactions Act of 2003'." SHORT TITLE OF 1999 AMENDMENT Pub. L. 106-102, title VII, Sec. 701, Nov. 12, 1999, 113 Stat. 1463, provided that: "This subtitle [subtitle A (Secs. 701-705) of title VII of Pub. L. 106-102, amending sections 1693b, 1693c, and 1693h of this title] may be cited as the 'ATM Fee Reform Act of 1999'." SHORT TITLE OF 1998 AMENDMENT Pub. L. 105-347, Sec. 1, Nov. 2, 1998, 112 Stat. 3208, provided that: "This Act [amending sections 1681a to 1681c, 1681g, 1681i, 1681k, and 1681s of this title and enacting provisions set out as a note under section 1681a of this title] may be cited as the 'Consumer Reporting Employment Clarification Act of 1998'." SHORT TITLE OF 1996 AMENDMENT Pub. L. 104-208, div. A, title II, Sec. 2401, Sept. 30, 1996, 110 Stat. 3009-426, provided that: "This chapter [chapter 1 (Secs. 2401-2422) of subtitle D of title II of div. A of Pub. L. 104-208, enacting section 1681s-2 of this title, amending sections 1681a to 1681e, 1681g to 1681j, 1681m to 1681o, 1681q to 1681s, and 1681t of this title, and enacting provisions set out as notes under sections 1681a, 1681b, and 1681g of this title] may be cited as the 'Consumer Credit Reporting Reform Act of 1996'." SHORT TITLE OF 1995 AMENDMENTS Pub. L. 104-29, Sec. 1, Sept. 30, 1995, 109 Stat. 271, provided that: "This Act [enacting section 1649 of this title, amending sections 1605, 1631, 1635, 1640, and 1641 of this title, and enacting provisions set out as notes under section 1605 of this title] may be cited as the 'Truth in Lending Act Amendments of 1995'." Pub. L. 104-12, Sec. 1, May 18, 1995, 109 Stat. 161, provided that: "This Act [amending section 1640 of this title] may be cited as the 'Truth in Lending Class Action Relief Act of 1995'." SHORT TITLE OF 1994 AMENDMENT Pub. L. 103-325, title I, Sec. 151, Sept. 23, 1994, 108 Stat. 2190, provided that: "This subtitle [subtitle B (Secs. 151-158) of title I of Pub. L. 103-325, enacting sections 1639 and 1648 of this title, amending sections 1602, 1604, 1610, 1640, 1641, and 1647 of this title, and enacting provisions set out as notes under this section and section 1602 of this title] may be cited as the 'Home Ownership and Equity Protection Act of 1994'." SHORT TITLE OF 1992 AMENDMENT Pub. L. 102-537, Sec. 1, Oct. 27, 1992, 106 Stat. 3531, provided that: "This Act [enacting section 1681s-1 of this title, amending section 1681a of this title, and enacting provisions set out as a note under section 1681a of this title] may be cited as the 'Ted Weiss Child Support Enforcement Act of 1992'." SHORT TITLE OF 1988 AMENDMENTS Pub. L. 100-709, Sec. 1, Nov. 23, 1988, 102 Stat. 4725, provided that: "This Act [enacting sections 1637a, 1647, and 1665b of this title, amending sections 1632 and 1637 of this title, and enacting provisions set out as notes under section 1637a of this title] may be cited as the 'Home Equity Loan Consumer Protection Act of 1988'." Pub. L. 100-583, Sec. 1, Nov. 3, 1988, 102 Stat. 2960, provided that: "This Act [amending sections 1610, 1632, 1637, 1640, and 1646 of this title and enacting provisions set out as a note under section 1637 of this title] may be cited as the 'Fair Credit and Charge Card Disclosure Act of 1988'." SHORT TITLE OF 1981 AMENDMENT Pub. L. 97-25, Sec. 1, July 27, 1981, 95 Stat. 144, provided: "That this Act [amending sections 1602 and 1666f of this title, section 29 of Title 12, Banks and Banking, and sections 205 and 212 of Title 42, The Public Health and Welfare; enacting provisions set out as notes under this section and sections 1602 and 1666f of this title; and amending provisions set out as notes under sections 1602 and 1666f of this title] may be cited as the 'Cash Discount Act'." SHORT TITLE OF 1980 AMENDMENT Pub. L. 96-221, title VI, Sec. 601, Mar. 31, 1980, 94 Stat. 168, provided that: "This title [enacting section 1646 of this title, amending sections 57a, 1602 to 1607, 1610, 1612, 1613, 1631, 1632, 1635, 1637, 1638, 1640, 1641, 1643, 1663, 1664, 1665a, 1666, 1666d, 1667d, and 1691f of this title, repealing sections 1614, 1636, and 1639 of this title, and enacting provisions set out as notes under sections 1602 and 1607 of this title] may be cited as the 'Truth in Lending Simplification and Reform Act'." SHORT TITLE OF 1976 AMENDMENTS Section 1 of Pub. L. 94-240 provided that: "This Act [enacting sections 1667 to 1667e of this title, amending this section and section 1640 of this title, and enacting provisions set out as a note under section 1667 of this title] may be cited as the 'Consumer Leasing Act of 1976'." Pub. L. 94-239, Sec. 1(a), Mar. 23, 1976, 90 Stat. 251, provided that: "This Act [enacting section 1691f of this title, amending this section and sections 1691b, 1691c, 1691d, 1691e of this title, repealing section 1609 of this title, enacting provisions set out as notes under this section, and repealing provision set out as a note under this section] may be cited as the 'Equal Credit Opportunity Act Amendments of 1976'." Section 1(c) of Pub. L. 94-239 repealed section 501 of Pub. L. 93-495, title V, Oct. 28, 1974, 88 Stat. 1521, which provided that subchapter IV of this chapter and notes set out under section 1691 were to be cited as the "Equal Credit Opportunity Act". SHORT TITLE OF 1974 AMENDMENT Section 301 of title III of Pub. L. 93-495 provided that: "This title [enacting sections 1666 to 1666j of this title, amending this section and sections 1602, 1610, 1631, 1632, and 1637 of this title, and enacting provision set out as a note under section 1666 of this title] may be cited as the 'Fair Credit Billing Act'." SHORT TITLE Section 1 of Pub. L. 90-321 provided that: "This Act [enacting this chapter, sections 891 to 896 of Title 18, Crimes and Criminal Procedure, and provisions set out as notes under this section, sections 1631 and 1671 of this title, and section 891 of Title 18] may be cited as the 'Consumer Credit Protection Act'." Section 101 of title I of Pub. L. 90-321 provided that: "This title [enacting this subchapter] may be cited as the 'Truth in Lending Act'." Section 401 of title IV of Pub. L. 90-321, as added by Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-454, provided that: "This title [enacting subchapter II-A of this chapter] may be cited as the 'Credit Repair Organizations Act'." Section 601 of title VI of Pub. L. 90-321, as added by Pub. L. 91-508, title VI, Sec. 601, Oct. 26, 1970, 84 Stat. 1128, as amended by Pub. L. 108-159, title VIII, Sec. 811(a), Dec. 4, 2003, 117 Stat. 2011, provided that: "This title [enacting subchapter III of this chapter] may be cited as the 'Fair Credit Reporting Act'." Section 709 of title VII of Pub. L. 90-321, as added by section 1(b) of Pub. L. 94-239, Mar. 23, 1976, 90 Stat. 251, provided that: "This title [enacting subchapter IV of this chapter and notes set out under section 1691 of this title] may be cited as the 'Equal Credit Opportunity Act'." Section 801 of title VIII of Pub. L. 90-321, as added by Pub. L. 95-109, Sept. 20, 1977, 91 Stat. 874, provided that: "This title [enacting subchapter V of this chapter] may be cited as the 'Fair Debt Collection Practices Act'." Section 901 of title IX of Pub. L. 90-321, as added Pub. L. 95-630, title XX, Sec. 2001, Nov. 10, 1978, 92 Stat. 3728, provided that: "This title [enacting subchapter VI of this chapter] may be cited as the 'Electronic Fund Transfer Act'." SEVERABILITY Section 501 of Pub. L. 90-321 provided that: "If a provision enacted by this Act [see Short Title note above], is held invalid, all valid provisions that are severable from the invalid provision remain in effect. If a provision enacted by this Act is held invalid in one or more of its applications, the provision remains in effect in all valid applications that are severable from the invalid application or applications." ANALYSIS OF FURTHER RESTRICTIONS ON OFFERS OF CREDIT OR INSURANCE Pub. L. 108-159, title II, Sec. 213(e), Dec. 4, 2003, 117 Stat. 1979, provided that: "(1) In general. - The Board shall conduct a study of - "(A) the ability of consumers to avoid receiving written offers of credit or insurance in connection with transactions not initiated by the consumer; and "(B) the potential impact that any further restrictions on providing consumers with such written offers of credit or insurance would have on consumers. "(2) Report. - The Board shall submit a report summarizing the results of the study required under paragraph (1) to the Congress not later than 12 months after the date of enactment of this Act [Dec. 4, 2003], together with such recommendations for legislative or administrative action as the Board may determine to be appropriate. "(3) Content of report. - The report described in paragraph (2) shall address the following issues: "(A) The current statutory or voluntary mechanisms that are available to a consumer to notify lenders and insurance providers that the consumer does not wish to receive written offers of credit or insurance. "(B) The extent to which consumers are currently utilizing existing statutory and voluntary mechanisms to avoid receiving offers of credit or insurance. "(C) The benefits provided to consumers as a result of receiving written offers of credit or insurance. "(D) Whether consumers incur significant costs or are otherwise adversely affected by the receipt of written offers of credit or insurance. "(E) Whether further restricting the ability of lenders and insurers to provide written offers of credit or insurance to consumers would affect - "(i) the cost consumers pay to obtain credit or insurance; "(ii) the availability of credit or insurance; "(iii) consumers' knowledge about new or alternative products and services; "(iv) the ability of lenders or insurers to compete with one another; and "(v) the ability to offer credit or insurance products to consumers who have been traditionally underserved." [For definitions of terms used in section 213(e) of Pub. L. 108-159, set out above, see section 2 of Pub. L. 108-159, set out as a Definitions note under section 1681 of this title.] FEDERAL RESERVE STUDY OF HOME EQUITY LENDING AND APPROPRIATE INTEREST RATE INDEX Pub. L. 103-325, title I, Sec. 157, Sept. 23, 1994, 108 Stat. 2197, provided that: "During the period beginning 180 days after the date of enactment of this Act [Sept. 23, 1994] and ending 2 years after that date of enactment, the Board of Governors of the Federal Reserve System shall conduct a study and submit to the Congress a report, including recommendations for any appropriate legislation, regarding - "(1) whether a consumer engaging in an open end credit transaction (as defined in section 103 of the Truth in Lending Act [15 U.S.C. 1602]) secured by the consumer's principal dwelling is provided adequate protections under Federal law, including section 127A of the Truth in Lending Act [15 U.S.C. 1637a]; and "(2) whether a more appropriate interest rate index exists for purposes of subparagraph (A) of section 103(aa)(1) of the Truth in Lending Act (as added by section 152(a) of this Act [15 U.S.C. 1602(aa)(1)(A)]) than the yield on Treasury securities referred to in that subparagraph." HEARINGS ON HOME EQUITY LENDING Pub. L. 103-325, title I, Sec. 158, Sept. 23, 1994, 108 Stat. 2197, provided that: "(a) Hearings. - Not less than once during the 3-year period beginning on the date of enactment of this Act [Sept. 23, 1994], and regularly thereafter, the Board of Governors of the Federal Reserve System, in consultation with the Consumer Advisory Council of the Board, shall conduct a public hearing to examine the home equity loan market and the adequacy of existing regulatory and legislative provisions and the provisions of this subtitle [see Short Title of 1994 Amendment note above] in protecting the interests of consumers, and low-income consumers in particular. "(b) Participation. - In conducting hearings required by subsection (a), the Board of Governors of the Federal Reserve System shall solicit participation from consumers, representatives of consumers, lenders, and other interested parties." STUDY BY FEDERAL RESERVE BOARD OF GOVERNORS COVERING EFFECT OF CHARGE CARD TRANSACTIONS UPON CARD ISSUERS, MERCHANTS, AND CONSUMERS Pub. L. 97-25, title II, Sec. 202, July 27, 1981, 95 Stat. 145, directed Board of Governors of Federal Reserve System, not later than 2 years after July 27, 1981, to prepare a study and submit its findings to Congress on the effect of charge card transactions upon card issuers, merchants, and consumers. INFERENCE OF LEGISLATIVE INTENT IN SECTION CAPTIONS AND CATCHLINES Section 502 of Pub. L. 90-321 provided that: "Captions and catchlines are intended solely as aids to convenient reference, and no inference as to the legislative intent with respect to any provision enacted by this Act [enacting this chapter, section 891 to 896 of Title 18, Crimes and Criminal Procedure, and provisions set out as notes under this section, sections 1631 and 1671 of this title, and section 891 of Title 18] may be drawn from them." GRAMMATICAL USAGES Section 503 of Pub. L. 90-321 provided that: "In this Act [enacting this chapter, sections 891 to 896 of Title 18, Crimes and Criminal Procedure, and provisions set out as notes under sections 1601, 1631 and 1671 of this title, and section 891 of Title 18]: "(1) The word 'may' is used to indicate that an action either is authorized or is permitted. "(2) The word 'shall' is used to indicate that an action is both authorized and required. "(3) The phrase 'may not' is used to indicate that an action is both unauthorized and forbidden. "(4) Rules of law are stated in the indicative mood." -End- -CITE- 15 USC Sec. 1602 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1602. Definitions and rules of construction -STATUTE- (a) The definitions and rules of construction set forth in this section are applicable for the purposes of this subchapter. (b) The term "Board" refers to the Board of Governors of the Federal Reserve System. (c) The term "organization" means a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association. (d) The term "person" means a natural person or an organization. (e) The term "credit" means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment. (f) The term "creditor" refers only to a person who both (1) regularly extends, whether in connection with loans, sales of property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement. Notwithstanding the preceding sentence, in the case of an open-end credit plan involving a credit card, the card issuer and any person who honors the credit card and offers a discount which is a finance charge are creditors. For the purpose of the requirements imposed under part D of this subchapter and sections 1637(a)(5), 1637(a)(6), 1637(a)(7), 1637(b)(1), 1637(b)(2), 1637(b)(3), 1637(b)(8), and 1637(b)(10) of this title, the term "creditor" shall also include card issuers whether or not the amount due is payable by agreement in more than four installments or the payment of a finance charge is or may be required, and the Board shall, by regulation, apply these requirements to such card issuers, to the extent appropriate, even though the requirements are by their terms applicable only to creditors offering open-end credit plans. Any person who originates 2 or more mortgages referred to in subsection (aa) of this section in any 12-month period or any person who originates 1 or more such mortgages through a mortgage broker shall be considered to be a creditor for purposes of this subchapter. (g) The term "credit sale" refers to any sale in which the seller is a creditor. The term includes any contract in the form of a bailment or lease if the bailee or lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the property and services involved and it is agreed that the bailee or lessee will become, or for no other or a nominal consideration has the option to become, the owner of the property upon full compliance with his obligations under the contract. (h) The adjective "consumer", used with reference to a credit transaction, characterizes the transaction as one in which the party to whom credit is offered or extended is a natural person, and the money, property, or services which are the subject of the transaction are primarily for personal, family, or household purposes. (i) The term "open end credit plan" means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time. (j) The term "adequate notice," as used in section 1643 of this title, means a printed notice to a cardholder which sets forth the pertinent facts clearly and conspicuously so that a person against whom it is to operate could reasonably be expected to have noticed it and understood its meaning. Such notice may be given to a cardholder by printing the notice on any credit card, or on each periodic statement of account, issued to the cardholder, or by any other means reasonably assuring the receipt thereof by the cardholder. (k) The term "credit card" means any card, plate, coupon book or other credit device existing for the purpose of obtaining money, property, labor, or services on credit. (l) The term "accepted credit card" means any credit card which the cardholder has requested and received or has signed or has used, or authorized another to use, for the purpose of obtaining money, property, labor, or services on credit. (m) The term "cardholder" means any person to whom a credit card is issued or any person who has agreed with the card issuer to pay obligations arising from the issuance of a credit card to another person. (n) The term "card issuer" means any person who issues a credit card, or the agent of such person with respect to such card. (o) The term "unauthorized use," as used in section 1643 of this title, means a use of a credit card by a person other than the cardholder who does not have actual, implied, or apparent authority for such use and from which the cardholder receives no benefit. (p) The term "discount" as used in section 1666f of this title means a reduction made from the regular price. The term "discount" as used in section 1666f of this title shall not mean a surcharge. (q) The term "surcharge" as used in this section and section 1666f of this title means any means of increasing the regular price to a cardholder which is not imposed upon customers paying by cash, check, or similar means." (r) The term "State" refers to any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States. (s) The term "agricultural purposes" includes the production, harvest, exhibition, marketing, transportation, processing, or manufacture of agricultural products by a natural person who cultivates, plants, propagates, or nurtures those agricultural products, including but not limited to the acquisition of farmland, real property with a farm residence, and personal property and services used primarily in farming. (t) The term "agricultural products" includes agricultural, horticultural, viticultural, and dairy products, livestock, wildlife, poultry, bees, forest products, fish and shellfish, and any products thereof, including processed and manufactured products, and any and all products raised or produced on farms and any processed or manufactured products thereof. (u) The term "material disclosures" means the disclosure, as required by this subchapter, of the annual percentage rate, the method of determining the finance charge and the balance upon which a finance charge will be imposed, the amount of the finance charge, the amount to be financed, the total of payments, the number and amount of payments, the due dates or periods of payments scheduled to repay the indebtedness, and the disclosures required by section 1639(a) of this title. (v) The term "dwelling" means a residential structure or mobile home which contains one to four family housing units, or individual units of condominiums or cooperatives. (w) The term "residential mortgage transaction" means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer's dwelling to finance the acquisition or initial construction of such dwelling. (x) As used in this section and section 1666f of this title, the term "regular price" means the tag or posted price charged for the property or service if a single price is tagged or posted, or the price charged for the property or service when payment is made by use of an open-end credit plan or a credit card if either (1) no price is tagged or posted, or (2) two prices are tagged or posted, one of which is charged when payment is made by use of an open-end credit plan or a credit card and the other when payment is made by use of cash, check, or similar means. For purposes of this definition, payment by check, draft, or other negotiable instrument which may result in the debiting of an open-end credit plan or a credit cardholder's open-end account shall not be considered payment made by use of the plan or the account. (y) Any reference to any requirement imposed under this subchapter or any provision thereof includes reference to the regulations of the Board under this subchapter or the provision thereof in question. (z) The disclosure of an amount or percentage which is greater than the amount or percentage required to be disclosed under this subchapter does not in itself constitute a violation of this subchapter. (aa)(1) A mortgage referred to in this subsection means a consumer credit transaction that is secured by the consumer's principal dwelling, other than a residential mortgage transaction, a reverse mortgage transaction, or a transaction under an open end credit plan, if - (A) the annual percentage rate at consummation of the transaction will exceed by more than 10 percentage points the yield on Treasury securities having comparable periods of maturity on the fifteenth day of the month immediately preceding the month in which the application for the extension of credit is received by the creditor; or (B) the total points and fees payable by the consumer at or before closing will exceed the greater of - (i) 8 percent of the total loan amount; or (ii) $400. (2)(A) After the 2-year period beginning on the effective date of the regulations promulgated under section 155 of the Riegle Community Development and Regulatory Improvement Act of 1994, and no more frequently than biennially after the first increase or decrease under this subparagraph, the Board may by regulation increase or decrease the number of percentage points specified in paragraph (1)(A), if the Board determines that the increase or decrease is - (i) consistent with the consumer protections against abusive lending provided by the amendments made by subtitle B of title I of the Riegle Community Development and Regulatory Improvement Act of 1994; and (ii) warranted by the need for credit. (B) An increase or decrease under subparagraph (A) may not result in the number of percentage points referred to in subparagraph (A) being - (i) less that 8 percentage points; or (ii) greater than 12 percentage points. (C) In determining whether to increase or decrease the number of percentage points referred to in subparagraph (A), the Board shall consult with representatives of consumers, including low-income consumers, and lenders. (3) The amount specified in paragraph (1)(B)(ii) shall be adjusted annually on January 1 by the annual percentage change in the Consumer Price Index, as reported on June 1 of the year preceding such adjustment. (4) For purposes of paragraph (1)(B), points and fees shall include - (A) all items included in the finance charge, except interest or the time-price differential; (B) all compensation paid to mortgage brokers; (C) each of the charges listed in section 1605(e) of this title (except an escrow for future payment of taxes), unless - (i) the charge is reasonable; (ii) the creditor receives no direct or indirect compensation; and (iii) the charge is paid to a third party unaffiliated with the creditor; and (D) such other charges as the Board determines to be appropriate. (5) This subsection shall not be construed to limit the rate of interest or the finance charge that a person may charge a consumer for any extension of credit. (bb) The term "reverse mortgage transaction" means a nonrecourse transaction in which a mortgage, deed of trust, or equivalent consensual security interest is created against the consumer's principal dwelling - (1) securing one or more advances; and (2) with respect to which the payment of any principal, interest, and shared appreciation or equity is due and payable (other than in the case of default) only after - (A) the transfer of the dwelling; (B) the consumer ceases to occupy the dwelling as a principal dwelling; or (C) the death of the consumer. -SOURCE- (Pub. L. 90-321, title I, Sec. 103, May 29, 1968, 82 Stat. 147; Pub. L. 91-508, title V, Sec. 501, Oct. 26, 1970, 84 Stat. 1126; Pub. L. 93-495, title III, Sec. 303, Oct. 28, 1974, 88 Stat. 1511; Pub. L. 94-222, Sec. 3(a), Feb. 27, 1976, 90 Stat. 197; Pub. L. 96-221, title VI, Secs. 602, 603(a), (b), 604, 612(a)(2), (b), Mar. 31, 1980, 94 Stat. 168, 169, 175, 176; Pub. L. 97-25, title I, Sec. 102, July 27, 1981, 95 Stat. 144; Pub. L. 97-320, title VII, Sec. 702(a), Oct. 15, 1982, 96 Stat. 1538; Pub. L. 103-325, title I, Secs. 152(a)-(c), 154(a), Sept. 23, 1994, 108 Stat. 2190, 2191, 2196.) -REFTEXT- REFERENCES IN TEXT The Riegle Community Development and Regulatory Improvement Act of 1994, referred to in subsec. (aa)(2)(A)(i), is Pub. L. 103-325, Sept. 23, 1994, 108 Stat. 2160. Section 155 of the Act is set out below. For classification of subtitle B of title I of the Act, known as the "Home Ownership and Equity Protection Act of 1994", see Short Title of 1994 Amendment note set out under section 1601 of this title. For complete classification of this Act to the Code, see Short Title note set out under section 4701 of Title 12, Banks and Banking, and Tables. -MISC1- AMENDMENTS 1994 - Subsec. (f). Pub. L. 103-325, Sec. 152(c), inserted at end "Any person who originates 2 or more mortgages referred to in subsection (aa) of this section in any 12-month period or any person who originates 1 or more such mortgages through a mortgage broker shall be considered to be a creditor for purposes of this subchapter." Subsec. (u). Pub. L. 103-325, Sec. 152(b), substituted "the due dates" for "and the due dates" and inserted before period at end ", and the disclosures required by section 1639(a) of this title". Subsec. (aa). Pub. L. 103-325, Sec. 152(a), added subsec. (aa). Subsec. (bb). Pub. L. 103-325, Sec. 154(a), added subsec. (bb). 1982 - Subsec. (f). Pub. L. 97-320 struck out provision that a person who regularly arranged for the extension of consumer credit payable in more than four installments or for which the payment of a finance charge was or might have been required from persons not creditors was a creditor, and provision that this subchapter applied to any creditor, irrespective of his or its status as a natural person or any type of organization, who was a card issuer. 1981 - Subsecs. (x) to (z). Pub. L. 97-25 added subsec. (z) and, effective Apr. 10, 1982, redesignated subsecs. (x), (y), and (z) as (y), (z), and (x), respectively. 1980 - Subsec. (f). Pub. L. 96-221, Sec. 602(a), substituted provisions defining term "creditor" as referring only to a person who both regularly extends consumer credit, subject to specified conditions, and is the person to whom the debt arising is initially payable on the face of the indebtedness or by agreement, and notwithstanding such provisions, also refers to a person regularly arranging for the extension of consumer credit, and a card issuer and any person honoring the credit card, subject to specified conditions, for provisions defining term "creditor" as referring only to creditors who regularly extend, or arrange for the extension of credit payable in more than four installments or where a finance charge is or may be required, and substituted "(a)(5)" for "(a)(6)", "(a)(6)" for "(a)(7)", "(a)(7)" for "(a)(8)", "(b)(8)" for "(b)(9)", and "(b)(10)" for "(b)(11)". Subsec. (g). Pub. L. 96-221, Sec. 602(b), substituted "in which the seller is a creditor" for "with respect to which credit is extended or arranged by the seller". Subsec. (h). Pub. L. 96-221, Sec. 603(a), struck out applicability to agricultural purposes. Subsec. (i). Pub. L. 96-221, Sec. 604, inserted provisions respecting the reasonable contemplations of the creditor, and verification of credit information from time to time. Subsecs. (s), (t). Pub. L. 96-221, Sec. 603(b), added subsecs. (s) and (t). Former subsecs. (s) and (t) redesignated (x) and (y), respectively. Subsec. (u). Pub. L. 96-221, Sec. 612(a)(2), added subsec. (u). Subsecs. (v), (w). Pub. L. 96-221, Sec. 612(b), added subsecs. (v) and (w). Subsecs. (x), (y). Pub. L. 96-221, Sec. 603(b), redesignated former subsecs. (s) and (t) as (x) and (y), respectively. 1976 - Subsecs. (p) to (t). Pub. L. 94-222 added subsecs. (p) and (q) and redesignated former subsecs. (p) to (r) as (r) to (t), respectively. 1974 - Subsec. (f). Pub. L. 93-495 inserted provision requiring the credit to be payable by agreement in more than four installments and defining term "creditor" for the purposes of the requirements imposed under the enumerated sections of this chapter. 1970 - Subsecs. (j) to (r). Pub. L. 91-508 added subsecs. (j) to (o) and redesignated former subsecs. (j) to (l) as (p) to (r), respectively. EFFECTIVE DATE OF 1982 AMENDMENT Section 702(b) of Pub. L. 97-320 provided that: "The amendment made by subsection (a) [amending this section] shall take effect on the effective date of title VI of the Depository Institutions Deregulation and Monetary Control Act of 1980 [two years and six months after Mar. 31, 1980, see Effective Date of 1980 Amendment note below]." EFFECTIVE DATE OF 1981 AMENDMENT Section 102(b) of Pub. L. 97-25 provided that the amendment made by that section is effective Apr. 10, 1982. EFFECTIVE DATE OF 1980 AMENDMENT Section 625 of title VI of Pub. L. 96-221, as amended by Pub. L. 97-25, title III, Sec. 301, July 27, 1981, 95 Stat. 145; Pub. L. 97-110, title III, Sec. 301, Dec. 26, 1981, 95 Stat. 1515, provided that: "(a) Except as provided in section 608(b) [set out as an Effective Date of 1980 Amendment note under section 1607 of this title], the amendments made by this title [enacting section 1646 of this title, amending sections 57a, 1602 to 1606, 1610, 1612, 1613, 1631, 1632, 1635, 1637, 1638, 1640, 1641, 1643, 1663, 1664, 1665a, 1666, 1666d, 1667d, and 1691f of this title, repealing sections 1614, 1636, and 1639 of this title, and enacting provisions set out as a note under section 1601 of this title] shall take effect upon the expiration of two years and six months after the date of enactment of this title [Mar. 31, 1980]. "(b) All regulations, forms, and clauses required to be prescribed under the amendments made by this title shall be promulgated at least one year prior to such effective date. "(c) Notwithstanding subsections (a) and (b), any creditor may comply with the amendments made by this title, in accordance with the regulations, forms, and clauses prescribed by the Board, prior to such effective date. Any creditor who elects to comply with such amendments and any assignee of such a creditor shall be subject to the provisions of sections 130 and 131 of the Truth in Lending Act, as amended by sections 615 and 616, respectively, of this title [sections 1640 and 1641 of this title]." EFFECTIVE DATE OF 1974 AMENDMENT For effective date of amendment by Pub. L. 93-495, see section 308 of Pub. L. 93-495, set out as an Effective Date note under section 1666 of this title. REGULATIONS Section 155 of title I of Pub. L. 103-325 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 (Secs. 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 section 105(d) of the Truth in Lending Act [15 U.S.C. Sec. 1604(d)]." APPLICABILITY OF 1994 AMENDMENTS AND REGULATIONS TO SUBSECTION (AA) MORTGAGES Section 156 of title I of Pub. L. 103-325 provided that: "This subtitle [subtitle B (Secs. 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 [15 U.S.C. 1602(aa)] (as added by section 152(a) of this Act) consummated on or after the date on which regulations issued under section 155 [set out above] become effective." -End- -CITE- 15 USC Sec. 1603 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1603. Exempted transactions -STATUTE- This subchapter does not apply to the following: (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 commodities accounts by a broker-dealer registered with the Securities and Exchange Commission. (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 dwelling of the consumer, in which the total amount financed exceeds $25,000. (4) Transactions under public utility tariffs, if the Board determines that a State regulatory body regulates the charges for the public utility services involved, the charges for delayed payment, and any discount allowed for early payment. (5) Transactions for which the Board, by rule, determines that coverage under this subchapter is not necessary to carry out the purposes of this subchapter. (6) Repealed. Pub. L. 96-221, title VI, Sec. 603(c)(3), Mar. 31, 1980, 94 Stat. 169. (7) Loans made, insured, or guaranteed pursuant to a program authorized by title IV of the Higher Education Act of 1965 [20 U.S.C. 1070 et seq., 42 U.S.C. 2751 et seq.]. -SOURCE- (Pub. L. 90-321, title I, Sec. 104, May 29, 1968, 82 Stat. 147; Pub. L. 93-495, title IV, Sec. 402, Oct. 28, 1974, 88 Stat. 1517; Pub. L. 96-221, title VI, Sec. 603(c), Mar. 31, 1980, 94 Stat. 169; Pub. L. 97-320, title VII, Sec. 701(a), Oct. 15, 1982, 96 Stat. 1538; Pub. L. 104-208, div. A, title II, Sec. 2102(a), Sept. 30, 1996, 110 Stat. 3009-398.) -REFTEXT- 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, as amended. Title IV of the Higher Education Act of 1965 is classified generally to subchapter IV (Sec. 1070 et seq.) of chapter 28 of Title 20, Education, and part C (Sec. 2751 et seq.) of subchapter I of chapter 34 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 20 and Tables. -MISC1- AMENDMENTS 1996 - Pars. (5) to (7). Pub. L. 104-208 added par. (5) and redesignated former pars. (5) and (6) as (6) and (7), respectively. 1982 - Par. (6). Pub. L. 97-320 added par. (6). 1980 - Par. (1). Pub. L. 96-221, Sec. 603(c)(1), inserted provision relating to applicability to agricultural purposes. Par. (3). Pub. L. 96-221, Sec. 603(c)(2), substituted provision excepting security interest in real property, or in personal property used as the consumer's principal dwelling, for provisions excepting real property transactions. Par. (5). Pub. L. 96-221, Sec. 603(c)(3), struck out par. (5) which related to credit transactions primarily for agricultural purposes where the amount financed exceeds $25,000. 1974 - Par. (5). Pub. L. 93-495 added par. (5). EFFECTIVE DATE OF 1982 AMENDMENT Section 701(c) of Pub. L. 97-320, as amended by Pub. L. 97-457, Sec. 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 enactment 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 prescribed to be promulgated at least one year prior to such effective date, and allowing 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 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 authorized to make exceptions to requirements of this 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 outweigh possible adverse effects, see section 2 of Pub. L. 103-76, set out as a note under section 4008 of Title 12, Banks and Banking. -End- -CITE- 15 USC Sec. 1604 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1604. Disclosure guidelines -STATUTE- (a) Promulgation, contents, etc., of regulations The Board shall prescribe regulations to carry out the purposes of this subchapter. Except in the case of a mortgage referred to in section 1602(aa) of this title, these regulations may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Board are necessary or proper to effectuate the purposes of this subchapter, to prevent circumvention or evasion thereof, or to facilitate compliance therewith. (b) Model disclosure forms and clauses; publication, criteria, compliance, etc. The Board shall publish model disclosure forms and clauses for common transactions to facilitate compliance with the disclosure requirements of this subchapter and to aid the borrower or lessee in understanding the transaction by utilizing readily understandable language to simplify the technical nature of the disclosures. In devising such forms, the Board shall consider the use by creditors or lessors of data processing or similar automated equipment. Nothing in this subchapter may be construed to require a creditor or lessor to use any such model form or clause prescribed by the Board under this section. A creditor or lessor shall be deemed to be in compliance 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 Board, or (2) uses any such model form or clause and changes it by (A) deleting any information which is not required by this subchapter, or (B) rearranging the format, if in making such deletion or rearranging the format, the creditor or lessor does not affect the substance, 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 Board after notice duly given in the Federal Register and an opportunity for public comment in accordance with section 553 of title 5. (d) Effective dates of regulations containing new disclosure requirements Any regulation of the Board, or any amendment or interpretation thereof, requiring any disclosure which differs from the disclosures previously required by this part, part D, or part E of this subchapter or by any regulation of the Board promulgated thereunder shall have an effective date of that October 1 which follows by at least six months the date of promulgation, except that the Board may at its discretion take interim action by regulation, amendment, or interpretation to lengthen the period of time permitted for creditors or lessors to adjust their forms to accommodate new requirements or shorten the length of time for creditors or lessors to make such adjustments when it makes a specific finding 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. (f) (!1) Exemption authority (1) In general The Board may exempt, by regulation, from all or part of this subchapter any class of transactions, other than transactions involving any mortgage described in section 1602(aa) of this title, for which, in the determination of the Board, coverage under all or part of this subchapter does not provide a meaningful benefit to consumers in the form of useful information or protection. (2) Factors for consideration In determining which classes of transactions to exempt in whole or in part under paragraph (1), the Board shall consider the following factors and publish its rationale at the time a proposed exemption is published for comment: (A) The amount of the loan and whether the disclosures, right of rescission, and other provisions provide a benefit to the consumers who are parties to such transactions, as determined by the Board. (B) The extent to which the requirements of this subchapter complicate, hinder, or make more expensive the credit process for the class of transactions. (C) The status of the borrower, including - (i) any related financial arrangements of the borrower, as determined by the Board; (ii) the financial sophistication of the borrower relative to the type of transaction; and (iii) the importance to the borrower of the credit, related supporting property, and coverage under this subchapter, as determined by the Board; (D) whether the loan is secured by the principal residence of the consumer; and (E) whether the goal of consumer protection would be undermined by such an exemption. (g) Waiver for certain borrowers (1) In general The Board, by regulation, may exempt from the requirements of this subchapter certain credit transactions if - (A) the transaction involves a consumer - (i) with an annual earned income of more than $200,000; or (ii) having net assets in excess of $1,000,000 at the time of the transaction; and (B) a waiver that is handwritten, signed, and dated by the consumer is first obtained from the consumer. (2) Adjustments by the Board The Board, at its discretion, may adjust the annual earned income and net asset requirements of paragraph (1) for inflation. -SOURCE- (Pub. L. 90-321, title I, Sec. 105, May 29, 1968, 82 Stat. 148; Pub. L. 96-221, title VI, Sec. 605, Mar. 31, 1980, 94 Stat. 170; Pub. L. 103-325, title I, Sec. 152(e)(2)(A), Sept. 23, 1994, 108 Stat. 2194; Pub. L. 104-208, div. A, title II, Secs. 2102(b), 2104, Sept. 30, 1996, 110 Stat. 3009-399, 3009-401.) -MISC1- AMENDMENTS 1996 - Subsec. (f). Pub. L. 104-208, Sec. 2102(b), added subsec. (f). Subsec. (g). Pub. L. 104-208, Sec. 2104, added subsec. (g). 1994 - Subsec. (a). Pub. L. 103-325 substituted "Except in the case of a mortgage referred to in section 1602(aa) of this title, these" for "These" in second sentence. 1980 - Pub. L. 96-221 designated existing provisions as subsec. (a) and added subsecs. (b) to (d). 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 prescribed to be promulgated at least one year prior to such effective date, and allowing 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 a note under section 1602 of this title. -FOOTNOTE- (!1) So in original. No subsec. (e) has been enacted. -End- -CITE- 15 USC Sec. 1605 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1605. Determination of finance charge -STATUTE- (a) "Finance charge" defined Except as otherwise provided in this section, the amount of the finance charge in connection with any consumer credit transaction shall be determined as the sum of all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit. The finance charge does not include charges of a type payable in a comparable cash transaction. The finance charge shall not include fees and amounts imposed by third party closing agents (including settlement agents, attorneys, and escrow and title companies) if the creditor does not require the imposition of the charges or the services provided and does not retain the charges. Examples of charges which are included in the finance charge include any of the following types of charges which are applicable: (1) Interest, time price differential, and any amount payable under a point, discount, or other system or additional charges. (2) Service or carrying charge. (3) Loan fee, finder's fee, or similar charge. (4) Fee for an investigation or credit report. (5) Premium or other charge for any guarantee or insurance protecting the creditor against the obligor's default or other credit loss. (6) Borrower-paid mortgage broker fees, including fees paid directly to the broker or the lender (for delivery to the broker) whether such fees are paid in cash or financed. (b) Life, accident, or health insurance premiums included in finance charge Charges or premiums for credit life, accident, or health insurance written in connection with any consumer credit transaction shall be included in the finance charges unless (1) the coverage of the debtor by the insurance is not a factor in the approval by the creditor of the extension of credit, and this fact is clearly disclosed in writing to the person applying for or obtaining the extension of credit; and (2) in order to obtain the insurance in connection with the extension of credit, the person to whom the credit is extended must give specific affirmative written indication of his desire to do so after written disclosure to him of the cost thereof. (c) Property damage and liability insurance premiums included in finance charge Charges or premiums for insurance, written in connection with any consumer credit transaction, against loss of or damage to property or against liability arising out of the ownership or use of property, shall be included in the finance charge unless a clear and specific statement in writing is furnished by the creditor to the person to whom the credit is extended, setting forth the cost of the insurance if obtained from or through the creditor, and stating that the person to whom the credit is extended may choose the person through which the insurance is to be obtained. (d) Items exempted from computation of finance charge in all credit transactions If any of the following items is itemized and disclosed in accordance with the regulations of the Board in connection with any transaction, then the creditor need not include that item in the computation of the finance charge with respect to that transaction: (1) Fees and charges prescribed by law which actually are or will be paid to public officials for determining the existence of or for perfecting or releasing or satisfying any security related to the credit transaction. (2) The premium payable for any insurance in lieu of perfecting any security interest otherwise required by the creditor in connection with the transaction, if the premium does not exceed the fees and charges described in paragraph (1) which would otherwise be payable. (3) Any tax levied on security instruments or on documents evidencing indebtedness if the payment of such taxes is a precondition for recording the instrument securing the evidence of indebtedness. (e) Items exempted from computation of finance charge in extensions of credit secured by an interest in real property The following items, when charged in connection with any extension of credit secured by an interest in real property, shall not be included in the computation of the finance charge with respect to that transaction: (1) Fees or premiums for title examination, title insurance, or similar purposes. (2) Fees for preparation of loan-related documents. (3) Escrows for future payments of taxes and insurance. (4) Fees for notarizing deeds and other documents. (5) Appraisal fees, including fees related to any pest infestation or flood hazard inspections conducted prior to closing. (6) Credit reports. (f) Tolerances for accuracy In connection with credit transactions not under an open end credit plan that are secured by real property or a dwelling, the disclosure of the finance charge and other disclosures affected by any finance charge - (1) shall be treated as being accurate for purposes of this subchapter if the amount disclosed as the finance charge - (A) does not vary from the actual finance charge by more than $100; or (B) is greater than the amount required to be disclosed under this subchapter; and (2) shall be treated as being accurate for purposes of section 1635 of this title if - (A) except as provided in subparagraph (B), the amount disclosed as the finance charge does not vary from the actual finance charge by more than an amount equal to one-half of one percent of the total amount of credit extended; or (B) in the case of a transaction, other than a mortgage referred to in section 1602(aa) of this title, which - (i) is a refinancing of the principal balance then due and any accrued and unpaid finance charges of a residential mortgage transaction as defined in section 1602(w) of this title, or is any subsequent refinancing of such a transaction; and (ii) does not provide any new consolidation or new advance; if the amount disclosed as the finance charge does not vary from the actual finance charge by more than an amount equal to one percent of the total amount of credit extended. -SOURCE- (Pub. L. 90-321, title I, Sec. 106, May 29, 1968, 82 Stat. 148; Pub. L. 96-221, title VI Sec. 606, Mar. 31, 1980, 94 Stat. 170; Pub. L. 104-29, Secs. 2(a), (b)(1), (c)-(e), 3(a), Sept. 30, 1995, 109 Stat. 271, 272.) -MISC1- AMENDMENTS 1995 - Subsec. (a). Pub. L. 104-29, Sec. 2(a), in introductory provisions inserted after second sentence "The finance charge shall not include fees and amounts imposed by third party closing agents (including settlement agents, attorneys, and escrow and title companies) if the creditor does not require the imposition of the charges or the services provided and does not retain the charges." Subsec. (a)(6). Pub. L. 104-29, Sec. 2(b)(1), added par. (6). Subsec. (d)(3). Pub. L. 104-29, Sec. 2(c), added par. (3). Subsec. (e)(2). Pub. L. 104-29, Sec. 2(d), amended par. (2) generally, substituting "loan-related" for "a deed, settlement statement, or other". Subsec. (e)(5). Pub. L. 104-29, Sec. 2(e), inserted before period ", including fees related to any pest infestation or flood hazard inspections conducted prior to closing". Subsec. (f). Pub. L. 104-29, Sec. 3(a), added subsec. (f). 1980 - Subsec. (a). Pub. L. 96-221, Sec. 606(a), inserted provisions excluding charges of a type payable in comparable cash transactions and indicated that pars. (1) to (5) are examples of charges. Subsec. (d). Pub. L. 96-221, Sec. 606(b), struck out pars. (3) and (4) setting forth applicability to taxes and any other type of charge, respectively. EFFECTIVE DATE OF 1995 AMENDMENT Section 2(b)(2) of Pub. L. 104-29 provided that: "The amendment made by paragraph (1) [amending this section] shall take effect on the earlier of - "(A) 60 days after the date on which the Board of Governors of the Federal Reserve System issues final regulations under paragraph (3) [set out below]; or "(B) the date that is 12 months after the date of the enactment of this Act [Sept. 30, 1995]." 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 prescribed to be promulgated at least one year prior to such effective date, and allowing 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 a note under section 1602 of this title. REGULATIONS Section 2(b)(3) of Pub. L. 104-29 provided that: "The Board of Governors of the Federal Reserve System shall promulgate regulations implementing the amendment made by paragraph (1) [amending this section] by no later than 6 months after the date of the enactment of this Act [Sept. 30, 1995]." ENSURING THAT FINANCE CHARGES REFLECT COST OF CREDIT Section 2(f) of Pub. L. 104-29 provided that: "(1) Report. - "(A) In general. - Not later than 6 months after the date of the enactment of this Act [Sept. 30, 1995], the Board of Governors of the Federal Reserve System shall submit to the Congress a report containing recommendations on any regulatory or statutory changes necessary - "(i) to ensure that finance charges imposed in connection with consumer credit transactions more accurately reflect the cost of providing credit; and "(ii) to address abusive refinancing practices engaged in for the purpose of avoiding rescission. "(B) Report requirements. - In preparing the report under this paragraph, the Board shall - "(i) consider the extent to which it is feasible to include in finance charges all charges payable directly or indirectly by the consumer to whom credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit (especially those charges excluded from finance charges under section 106 of the Truth in Lending Act [15 U.S.C. 1605] as of the date of the enactment of this Act), excepting only those charges which are payable in a comparable cash transaction; and "(ii) consult with and consider the views of affected industries and consumer groups. "(2) Regulations. - The Board of Governors of the Federal Reserve System shall prescribe any appropriate regulation in order to effect any change included in the report under paragraph (1), and shall publish the regulation in the Federal Register before the end of the 1-year period beginning on the date of enactment of this Act." -End- -CITE- 15 USC Sec. 1606 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1606. Determination of annual percentage rate -STATUTE- (a) "Annual percentage rate" defined The annual percentage rate applicable to any extension of consumer credit shall be determined, in accordance with the regulations of the Board, (1) in the case of any extension of credit other than under an open end credit plan, as (A) that nominal annual percentage rate which will yield a sum equal to the amount of the finance charge when it is applied to the unpaid balances of the amount financed, calculated according to the actuarial method of allocating payments made on a debt between the amount financed and the amount of the finance charge, pursuant to which a payment is applied first to the accumulated finance charge and the balance is applied to the unpaid amount financed; or (B) the rate determined by any method prescribed by the Board as a method which materially simplifies computation while retaining reasonable accuracy as compared with the rate determined under subparagraph (A). (2) in the case of any extension of credit under an open end credit plan, as the quotient (expressed as a percentage) of the total finance charge for the period to which it relates divided by the amount upon which the finance charge for that period is based, multiplied by the number of such periods in a year. (b) Computation of rate of finance charges for balances within a specified range Where a creditor imposes the same finance charge for balances within a specified range, the annual percentage rate shall be computed on the median balance within the range, except that if the Board determines that a rate so computed would not be meaningful, or would be materially misleading, the annual percentage rate shall be computed on such other basis as the Board may be regulation require. (c) Allowable tolerances for purposes of compliance with disclosure requirements The disclosure of an annual percentage rate is accurate for the purpose of this subchapter if the rate disclosed is within a tolerance not greater than one-eighth of 1 per centum more or less than the actual rate or rounded to the nearest one-fourth of 1 per centum. The Board may allow a greater tolerance to simplify compliance where irregular payments are involved. (d) Use of rate tables or charts having allowable variance from determined rates The Board may authorize the use of rate tables or charts which may provide for the disclosure of annual percentage rates which vary from the rate determined in accordance with subsection (a)(1)(A) of this section by not more than such tolerances as the Board may allow. The Board may not allow a tolerance greater than 8 per centum of that rate except to simplify compliance where irregular payments are involved. (e) Authorization of tolerances in determining annual percentage rates In the case of creditors determining the annual percentage rate in a manner other than as described in subsection (d) of this section, the Board may authorize other reasonable tolerances. -SOURCE- (Pub. L. 90-321, title I, Sec. 107, May 29, 1968, 82 Stat. 149; Pub. L. 96-221, title VI, Sec. 607, Mar. 31, 1980, 94 Stat. 170.) -MISC1- AMENDMENTS 1980 - Subsec. (c). Pub. L. 96-221, Sec. 607(a), substituted provisions relating to allowable tolerances for purposes of compliance with disclosure requirements, for provisions relating to rounding off of annual percentage rates which are converted from single add-on or other rates. Subsec. (e). Pub. L. 96-221, Sec. 607(b), struck out reference to subsection (c) of this section. Subsec. (f). Pub. L. 96-221, Sec. 607(c), struck out subsec. (f) setting forth requirements for form of expressing percentage rates prior to Jan. 1, 1971. 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 prescribed to be promulgated at least one year prior to such effective date, and allowing 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 a note under section 1602 of this title. -End- -CITE- 15 USC Sec. 1607 01/03/05 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1607. Administrative enforcement -STATUTE- (a) Enforcing agencies Compliance with the requirements imposed under this subchapter shall be enforced under (1) section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818], in the case of - (A) national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency; (B) member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25(a) (!1) of the Federal Reserve Act [12 U.S.C. 601 et seq., 611 et seq.], by the Board; and (C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Feder