-CITE- 15 USC CHAPTER 41 - CONSUMER CREDIT PROTECTION 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION -HEAD- CHAPTER 41 - CONSUMER CREDIT PROTECTION -MISC1- SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE PART A - GENERAL PROVISIONS Sec. 1601. Congressional findings and declaration of purpose. 1602. Definitions and rules of construction. 1603. Exempted transactions. 1604. Disclosure guidelines. 1605. Determination of finance charge. 1606. Determination of annual percentage rate. 1607. Administrative enforcement. 1608. Views of other agencies. 1609. Repealed. 1610. Effect on other laws. 1611. Criminal liability for willful and knowing violation. 1612. Effect on government agencies. 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 Repealed. 1615.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. PART B - CREDIT TRANSACTIONS 1631. Disclosure requirements. 1632. Form of disclosure; additional information. 1633. Exemption for State-regulated transactions. 1634. Effect of subsequent occurrence. 1635. Right of rescission as to certain transactions. 1636. Repealed. 1637. Open end consumer credit plans. 1637a. Disclosure requirements for open end consumer credit plans secured by consumer's principal dwelling. 1638. Transactions other than under an open end credit plan. 1639. Requirements for certain mortgages. 1639a. Fiduciary duty of servicers of pooled residential mortgages. 1640. Civil liability. 1641. Liability of assignees. 1642. Issuance of credit cards. 1643. Liability of holder of credit card. 1644. Fraudulent use of credit cards; penalties. 1645. Business credit cards; limits on liability of employees. 1646. Dissemination of annual percentage rates; implementation, etc. 1647. Home equity plans. 1648. Reverse mortgages. 1649. Certain limitations on liability. 1650. Preventing unfair and deceptive private educational lending practices and eliminating conflicts of interest. 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. 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. PART D - CREDIT BILLING 1666. Correction of billing errors. 1666a. Regulation of credit reports. 1666b. Length of billing period in credit statement for imposition of finance charge; effect of failure of timely mailing or delivery of statement. 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. 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. 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. 1666j. Applicability of State laws. PART E - CONSUMER LEASES 1667. Definitions. 1667a. Consumer lease disclosures. 1667b. Lessee's liability on expiration or termination of lease. 1667c. Consumer lease advertising; liability of advertising media. 1667d. Civil liability of lessors. 1667e. Applicability of State laws; exemptions by Board from leasing requirements. 1667f. Regulations. SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT 1671. Congressional findings and declaration of purpose. 1672. Definitions. 1673. Restriction on garnishment. 1674. Restriction on discharge from employment by reason of garnishment. 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. 1679a. Definitions. 1679b. Prohibited practices. 1679c. Disclosures. 1679d. Credit repair organizations contracts. 1679e. Right to cancel contract. 1679f. Noncompliance with this subchapter. 1679g. Civil liability. 1679h. Administrative enforcement. 1679i. Statute of limitations. 1679j. Relation to State law. SUBCHAPTER III - CREDIT REPORTING AGENCIES 1681. Congressional findings and statement of purpose. 1681a. Definitions; rules of construction. 1681b. Permissible purposes of consumer reports. 1681c. Requirements relating to information contained in consumer reports. 1681c-1. Identity theft prevention; fraud alerts and active duty alerts. 1681c-2. Block of information resulting from identity theft. 1681d. Disclosure of investigative consumer reports. 1681e. Compliance procedures. 1681f. Disclosures to governmental agencies. 1681g. Disclosures to consumers. 1681h. Conditions and form of disclosure to consumers. 1681i. Procedure in case of disputed accuracy. 1681j. Charges for certain disclosures. 1681k. Public record information for employment purposes. 1681l. Restrictions on investigative consumer reports. 1681m. Requirements on users of consumer reports. 1681n. Civil liability for willful noncompliance. 1681o. Civil liability for negligent noncompliance. 1681p. Jurisdiction of courts; limitation of actions. 1681q. Obtaining information under false pretenses. 1681r. Unauthorized disclosures by officers or employees. 1681s. Administrative enforcement. 1681s-1. Information on overdue child support obligations. 1681s-2. Responsibilities of furnishers of information to consumer reporting agencies. 1681s-3. Affiliate sharing. 1681t. Relation to State laws. 1681u. Disclosures to FBI for counterintelligence purposes. 1681v. Disclosures to governmental agencies for counterterrorism purposes. 1681w. Disposal of records. 1681x. Corporate and technological circumvention prohibited. SUBCHAPTER IV - EQUAL CREDIT OPPORTUNITY 1691. Scope of prohibition. 1691a. Definitions; rules of construction. 1691b. Promulgation of regulations by Board; establishment of Consumer Advisory Council by Board; duties, membership, etc., of Council. 1691c. Administrative enforcement. 1691c-1. Incentives for self-testing and self-correction. 1691d. Applicability of other laws. 1691e. Civil liability. 1691f. Annual reports to Congress; contents. SUBCHAPTER V - DEBT COLLECTION PRACTICES 1692. Congressional findings and declaration of purpose. 1692a. Definitions. 1692b. Acquisition of location information. 1692c. Communication in connection with debt collection. 1692d. Harassment or abuse. 1692e. False or misleading representations. 1692f. Unfair practices. 1692g. Validation of debts. 1692h. Multiple debts. 1692i. Legal actions by debt collectors. 1692j. Furnishing certain deceptive forms. 1692k. Civil liability. 1692l. Administrative enforcement. 1692m. Reports to Congress by the Commission; views of other Federal agencies. 1692n. Relation to State laws. 1692o. Exemption for State regulation. 1692p Exception for certain bad check enforcement programs operated by private entities. SUBCHAPTER VI - ELECTRONIC FUND TRANSFERS 1693. Congressional findings and declaration of purpose. 1693a. Definitions. 1693b. Regulations. 1693c. Terms and conditions of transfers. 1693d. Documentation of transfers. 1693e. Preauthorized transfers. 1693f. Error resolution. 1693g. Consumer liability. 1693h. Liability of financial institutions. 1693i. Issuance of cards or other means of access. 1693j. Suspension of obligations. 1693k. Compulsory use of electronic fund transfers. 1693l. Waiver of rights. 1693m. Civil liability. 1693n. Criminal liability. 1693o. Administrative enforcement. 1693p. Reports to Congress. 1693q. Relation to State laws. 1693r. Exemption for State regulation. -End- -CITE- 15 USC SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE 01/05/2009 -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 01/05/2009 -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 01/05/2009 -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 2008 AMENDMENT Pub. L. 110-315, title X, Sec. 1001, Aug. 14, 2008, 122 Stat. 3478, provided that: "This title [enacting section 1650 of this title and sections 1019d and 9709 of Title 20, Education, amending sections 1602, 1603, 1638, and 1640 of this title, section 2903 of Title 12, Banks and Banking, and section 1092 of Title 20, and enacting provisions set out as notes under sections 1638 and 1640 of this title, section 2903 of Title 12, and section 9709 of Title 20] may be cited as the 'Private Student Loan Transparency and Improvement Act of 2008'." Pub. L. 110-289, div. B, title V, Sec. 2501, July 30, 2008, 122 Stat. 2855, provided that: "This title [amending sections 1638 and 1640 of this title and sections 24 and 338a of Title 12, Banks and Banking, and enacting provisions set out as a note under section 1638 of this title] may be cited as the 'Mortgage Disclosure Improvement Act of 2008'." Pub. L. 110-241, Sec. 1, June 3, 2008, 122 Stat. 1565, provided that: "This Act [amending section 1681n of this title and enacting provisions set out as notes under section 1681n of this title] may be cited as the 'Credit and Debit Card Receipt Clarification Act of 2007'." 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 01/05/2009 -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. The term "creditor" includes a private educational lender (as that term is defined in section 1650 of this title) 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; Pub. L. 110-315, title X, Sec. 1011(b), Aug. 14, 2008, 122 Stat. 3481.) -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 2008 - Subsec. (f). Pub. L. 110-315 inserted at end "The term 'creditor' includes a private educational lender (as that term is defined in section 1650 of this title) for purposes of this subchapter." 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 01/05/2009 -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 and other than private education loans (as that term is defined in section 1650(a) of this title), 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; Pub. L. 110-315, title X, Sec. 1022, Aug. 14, 2008, 122 Stat. 3488.) -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 2008 - Par. (3). Pub. L. 110-315 inserted "and other than private education loans (as that term is defined in section 1650(a) of this title)" after "consumer". 1996 - Pars. (5) to (7). Pub. L. 104-208 added par. (5) and redesignated former pars. (5) and (6) as (6) and (7), 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 01/05/2009 -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 01/05/2009 -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 01/05/2009 -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 01/05/2009 -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 Federal Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal Deposit Insurance Corporation; (2) section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818], by the Director of the Office of Thrift Supervision, in the case of a savings association the deposits of which are insured by the Federal Deposit Insurance Corporation. (3) the Federal Credit Union Act [12 U.S.C. 1751 et seq.], by the National Credit Union Administration Board with respect to any Federal credit union. (4) part A of subtitle VII of title 49, by the Secretary of Transportation with respect to any air carrier or foreign air carrier subject to that part. (5) the Packers and Stockyards Act, 1921 [7 U.S.C. 181 et seq.] (except as provided in section 406 of that Act [7 U.S.C. 226, 227]), by the Secretary of Agriculture with respect to any activities subject to that Act. (6) the Farm Credit Act of 1971 [12 U.S.C. 2001 et seq.] by the Farm Credit Administration with respect to any Federal land bank, Federal land bank association, Federal intermediate credit bank, or production credit association. The terms used in paragraph (1) that are not defined in this subchapter or otherwise defined in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them in section 1(b) of the International Banking Act of 1978 (12 U.S.C. 3101). (b) Violations of this subchapter deemed violations of pre-existing statutory requirements; additional agency powers For the purpose of the exercise by any agency referred to in subsection (a) of this section of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this subchapter shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (a) of this section, each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under this subchapter, any other authority conferred on it by law. (c) Federal Trade Commission as overall enforcing agency Except to the extent that enforcement of the requirements imposed under this subchapter is specifically committed to some other Government agency under subsection (a) of this section, the Federal Trade Commission shall enforce such requirements. For the purpose of the exercise by the Federal Trade Commission of its functions and powers under the Federal Trade Commission Act [15 U.S.C. 41 et seq.], a violation of any requirement imposed under this subchapter shall be deemed a violation of a requirement imposed under that Act. All of the functions and powers of the Federal Trade Commission under the Federal Trade Commission Act are available to the Commission to enforce compliance by any person with the requirements imposed under this subchapter, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests in the Federal Trade Commission Act. (d) Rules and regulations The authority of the Board to issue regulations under this subchapter does not impair the authority of any other agency designated in this section to make rules respecting its own procedures in enforcing compliance with requirements imposed under this subchapter. (e) Adjustment of finance charges; procedures applicable, coverage, criteria, etc. (1) In carrying out its enforcement activities under this section, each agency referred to in subsection (a) or (c) of this section, in cases where an annual percentage rate or finance charge was inaccurately disclosed, shall notify the creditor of such disclosure error and is authorized in accordance with the provisions of this subsection to require the creditor to make an adjustment to the account of the person to whom credit was extended, to assure that such person will not be required to pay a finance charge in excess of the finance charge actually disclosed or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower. For the purposes of this subsection, except where such disclosure error resulted from a willful violation which was intended to mislead the person to whom credit was extended, in determining whether a disclosure error has occurred and in calculating any adjustment, (A) each agency shall apply (i) with respect to the annual percentage rate, a tolerance of one-quarter of 1 percent more or less than the actual rate, determined without regard to section 1606(c) of this title, and (ii) with respect to the finance charge, a corresponding numerical tolerance as generated by the tolerance provided under this subsection for the annual percentage rate; except that (B) with respect to transactions consummated after two years following March 31, 1980, each agency shall apply (i) for transactions that have a scheduled amortization of ten years or less, with respect to the annual percentage rate, a tolerance not to exceed one-quarter of 1 percent more or less than the actual rate, determined without regard to section 1606(c) of this title, but in no event a tolerance of less than the tolerances allowed under section 1606(c) of this title, (ii) for transactions that have a scheduled amortization of more than ten years, with respect to the annual percentage rate, only such tolerances as are allowed under section 1606(c) of this title, and (iii) for all transactions, with respect to the finance charge, a corresponding numerical tolerance as generated by the tolerances provided under this subsection for the annual percentage rate. (2) Each agency shall require such an adjustment when it determines that such disclosure error resulted from (A) a clear and consistent pattern or practice of violations, (B) gross negligence, or (C) a willful violation which was intended to mislead the person to whom the credit was extended. Notwithstanding the preceding sentence, except where such disclosure error resulted from a willful violation which was intended to mislead the person to whom credit was extended, an agency need not require such an adjustment if it determines that such disclosure error - (A) resulted from an error involving the disclosure of a fee or charge that would otherwise be excludable in computing the finance charge, including but not limited to violations involving the disclosures described in sections 1605(b), (c) and (d) of this title, in which event the agency may require such remedial action as it determines to be equitable, except that for transactions consummated after two years after March 31, 1980, such an adjustment shall be ordered for violations of section 1605(b) of this title; (B) involved a disclosed amount which was 10 per centum or less of the amount that should have been disclosed and (i) in cases where the error involved a disclosed finance charge, the annual percentage rate was disclosed correctly, and (ii) in cases where the error involved a disclosed annual percentage rate, the finance charge was disclosed correctly; in which event the agency may require such adjustment as it determines to be equitable; (C) involved a total failure to disclose either the annual percentage rate or the finance charge, in which event the agency may require such adjustment as it determines to be equitable; or (D) resulted from any other unique circumstance involving clearly technical and nonsubstantive disclosure violations that do not adversely affect information provided to the consumer and that have not misled or otherwise deceived the consumer. In the case of other such disclosure errors, each agency may require such an adjustment. (3) Notwithstanding paragraph (2), no adjustment shall be ordered - (A) if it would have a significantly adverse impact upon the safety or soundness of the creditor, but in any such case, the agency may - (i) require a partial adjustment in an amount which does not have such an impact; or (ii) require the full adjustment, but permit the creditor to make the required adjustment in partial payments over an extended period of time which the agency considers to be reasonable, if (in the case of an agency referred to in paragraph (1), (2), or (3) of subsection (a) of this section), the agency determines that a partial adjustment or making partial payments over an extended period is necessary to avoid causing the creditor to become undercapitalized pursuant to section 38 of the Federal Deposit Insurance Act [12 U.S.C. 1831o]; (B) the (!2) amount of the adjustment would be less than $1, except that if more than one year has elapsed since the date of the violation, the agency may require that such amount be paid into the Treasury of the United States, or (C) except where such disclosure error resulted from a willful violation which was intended to mislead the person to whom credit was extended, in the case of an open-end credit plan, more than two years after the violation, or in the case of any other extension of credit, as follows: (i) with respect to creditors that are subject to examination by the agencies referred to in paragraphs (1) through (3) of subsection (a) of this section, except in connection with violations arising from practices identified in the current examination and only in connection with transactions that are consummated after the date of the immediately preceding examination, except that where practices giving rise to violations identified in earlier examinations have not been corrected, adjustments for those violations shall be required in connection with transactions consummated after the date of examination in which such practices were first identified; (ii) with respect to creditors that are not subject to examination by such agencies, except in connection with transactions that are consummated after May 10, 1978; and (iii) in no event after the later of (I) the expiration of the life of the credit extension, or (II) two years after the agreement to extend credit was consummated. (4)(A) Notwithstanding any other provision of this section, an adjustment under this subsection may be required by an agency referred to in subsection (a) or (c) of this section only by an order issued in accordance with cease and desist procedures provided by the provision of law referred to in such subsections. (B) In case of an agency which is not authorized to conduct cease and desist proceedings, such an order may be issued after an agency hearing on the record conducted at least thirty but not more than sixty days after notice of the alleged violation is served on the creditor. Such a hearing shall be deemed to be a hearing which is subject to the provisions of section 8(h) of the Federal Deposit Insurance Act [12 U.S.C. 1818(h)] and shall be subject to judicial review as provided therein. (5) Except as otherwise specifically provided in this subsection and notwithstanding any provision of law referred to in subsection (a) or (c) of this section, no agency referred to in subsection (a) or (c) of this section may require a creditor to make dollar adjustments for errors in any requirements under this subchapter, except with regard to the requirements of section 1666d of this title. (6) A creditor shall not be subject to an order to make an adjustment, if within sixty days after discovering a disclosure error, whether pursuant to a final written examination report or through the creditor's own procedures, the creditor notifies the person concerned of the error and adjusts the account so as to assure that such person will not be required to pay a finance charge in excess of the finance charge actually disclosed or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower. (7) Notwithstanding the second sentence of subsection (e)(1), subsection (e)(3)(C)(i), and subsection (e)(3)(C)(ii) of this section, each agency referred to in subsection (a) or (c) of this section shall require an adjustment for an annual percentage rate disclosure error that exceeds a tolerance of one quarter of one percent less than the actual rate, determined without regard to section 1606(c) of this title, with respect to any transaction consummated between January 1, 1977, and March 31, 1980. -SOURCE- (Pub. L. 90-321, title I, Sec. 108, May 29, 1968, 82 Stat. 150; Pub. L. 91-206, Sec. 3, Mar. 10, 1970, 84 Stat. 49; Pub. L. 93-495, title IV, Sec. 403, Oct. 28, 1974, 88 Stat. 1517; Pub. L. 95-630, title V, Sec. 501, Nov. 10, 1978, 92 Stat. 3680; Pub. L. 96-221, title VI, Sec. 608(a), (c), Mar. 21, 1980, 94 Stat. 171, 173; Pub. L. 98-443, Sec. 9(n), Oct. 4, 1984, 98 Stat. 1708; Pub. L. 101-73, title VII, Sec. 744(k), Aug. 9, 1989, 103 Stat. 439; Pub. L. 102- 242, title II, Sec. 212(b), Dec. 19, 1991, 105 Stat. 2299; Pub. L. 102-550, title XVI, Sec. 1604(a)(5), Oct. 28, 1992, 106 Stat. 4082; Pub. L. 104-208, div. A, title II, Sec. 2106, Sept. 30, 1996, 110 Stat. 3009-402.) -REFTEXT- REFERENCES IN TEXT Section 25(a) of the Federal Reserve Act, referred to in subsec. (a)(1)(B), which is classified to subchapter II (Sec. 611 et seq.) of chapter 6 of Title 12, Banks and Banking, was renumbered section 25A of that act by Pub. L. 102-242, title I, Sec. 142(e)(2), Dec. 19, 1991, 105 Stat. 2281. Section 25 of the Federal Reserve Act is classified to subchapter I (Sec. 601 et seq.) of chapter 6 of Title 12. The Federal Credit Union Act, referred to in subsec. (a)(3), is act June 26, 1934, ch. 750, 48 Stat. 1216, as amended, which is classified generally to chapter 14 (Sec. 1751 et seq.) of Title 12. For complete classification of this Act to the Code, see section 1751 of Title 12 and Tables. The Packers and Stockyards Act, 1921, referred to in subsec. (a)(5), is act Aug. 15, 1921, ch. 64, 42 Stat. 159, as amended, which is classified to chapter 9 (Sec. 181 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 181 of Title 7 and Tables. The Farm Credit Act of 1971, referred to in subsec. (a)(6), is Pub. L. 92-181, Dec. 10, 1971, 85 Stat. 583, as amended, which is classified generally to chapter 23 (Sec. 2001 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title note set out under section 2001 of Title 12 and Tables. The Federal Trade Commission Act, referred to in subsec. (c), is act Sept. 26, 1914, ch. 311, 38 Stat. 717, as amended, which is classified generally to subchapter I (Sec. 41 et seq.) of chapter 2 of this title. For complete classification of this Act to the Code, see section 58 of this title and Tables. -COD- CODIFICATION In subsec. (a)(4), "part A of subtitle VII of title 49" substituted for "the Federal Aviation Act of 1958 [49 App. U.S.C. 1301 et seq.]" and "that part" substituted for "that Act" on authority of Pub. L. 103-272, Sec. 6(b), July 5, 1994, 108 Stat. 1378, the first section of which enacted subtitles II, III, and V to X of Title 49, Transportation. -MISC1- AMENDMENTS 1996 - Subsec. (e)(3). Pub. L. 104-208 struck out "ordered (A) if" and inserted "ordered - "(A) if"; struck out "may require a partial" and inserted "may - "(i) require a partial"; struck out ", except that with respect to any transaction consumated after March 31, 1980, the agency shall require" and inserted "; or "(ii) require"; directed the substitution of "reasonable, if (in the case of an agency referred to in paragraph (1), (2), or (3) of subsection (a) of this section), the agency determines that a partial adjustment or making partial payments over an extended period is necessary to avoid causing the creditor to become undercapitalized pursuant to section 38 of the Federal Deposit Insurance Act; "(B) the"; for "reasonable, (B) the", which was executed by making the substitution for "reasonable, (B) if the"; and struck out "(C) except" and inserted "(C) except". 1992 - Subsec. (a)(1)(C). Pub. L. 102-550 substituted semicolon for period at end. 1991 - Subsec. (a). Pub. L. 102-242, Sec. 212(b)(2), inserted at end "The terms used in paragraph (1) that are not defined in this subchapter or otherwise defined in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them in section 1(b) of the International Banking Act of 1978 (12 U.S.C. 3101)." Pub. L. 102-242, Sec. 212(b)(1), added par. (1) and struck out former par. (1) which read as follows: "section 8 of the Federal Deposit Insurance Act, in the case of "(A) national banks, by the Comptroller of the Currency. "(B) member banks of the Federal Reserve System (other than national banks), by the Board. "(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), by the Board of Directors of the Federal Deposit Insurance Corporation." 1989 - Subsec. (a)(2). Pub. L. 101-73 amended par. (2) generally. Prior to amendment, par. (2) read as follows: "section 5(d) of the Home Owner's Loan Act of 1933, section 407 of the National Housing Act, and sections 6(i) and 17 of the Federal Home Loan Bank Act, by the Federal Home Loan Bank Board (acting directly or through the Federal Savings and Loan Insurance Corporation), in the case of any institution subject to any of those provisions." 1984 - Subsec. (a)(4). Pub. L. 98-443 substituted "Secretary of Transportation" for "Civil Aeronautics Board". 1980 - Subsec. (e). Pub. L. 96-221, Sec. 608(a), added subsec. (e). Pub. L. 96-221, Sec. 608(c), struck out in pars. (1)(A)(i) and (7) ", except in the case of an irregular mortgage lending transaction" after "section 1606(c) of this title". See Effective Date of 1980 Amendment note below. 1974 - Subsec. (a)(4) to (6). Pub. L. 93-495 redesignated pars. (5) and (6) as (4) and (5), respectively. Former par. (4), which related to enforcement by the Interstate Commerce Commission, was struck out. EFFECTIVE DATE OF 1992 AMENDMENT Amendment by Pub. L. 102-550 effective as if included in the Federal Deposit Insurance Corporation Improvement Act of 1991, Pub. L. 102-242, as of Dec. 19, 1991, see section 1609(a) of Pub. L. 102- 550, set out as a note under section 191 of Title 12, Banks and Banking. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98-443 effective Jan. 1, 1985, see section 9(v) of Pub. L. 98-443, set out as a note under section 5314 of Title 5, Government Organization and Employees. EFFECTIVE DATE OF 1980 AMENDMENT Section 608(b) of Pub. L. 96-221 provided that: "This section [amending this section] shall take effect on the date of enactment of the Truth in Lending Simplification and Reform Act [Mar. 31, 1980]." Section 608(c) of Pub. L. 96-221 provided that the amendment made by that section is effective one year after Mar. 31, 1980. 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. -TRANS- TRANSFER OF FUNCTIONS "National Credit Union Administration Board" substituted for "Director of the Bureau of Federal Credit Unions" in subsec. (a)(3) pursuant to section 3 of Pub. L. 91-206 and section 501 of Pub. L. 95-630 [12 U.S.C. 1752a] which transferred functions of Bureau of Federal Credit Unions, and Director thereof, to National Credit Union Administration and vested authority for management of Administration in National Credit Union Administration Board. -FOOTNOTE- (!1) See References in Text note below. (!2) So in original. Probably should be preceded by "if". -End- -CITE- 15 USC Sec. 1608 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1608. Views of other agencies -STATUTE- In the exercise of its functions under this subchapter, the Board may obtain upon requests the views of any other Federal agency which, in the judgment of the Board, exercises regulatory or supervisory functions with respect to any class of creditors subject to this subchapter. -SOURCE- (Pub. L. 90-321, title I, Sec. 109, May 29, 1968, 82 Stat. 150.) -End- -CITE- 15 USC Sec. 1609 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1609. Repealed. -MISC1- Sec. 1609. Repealed. Pub. L. 94-239, Sec. 3(b)(1), Mar. 23, 1976, 90 Stat. 253. Section, Pub. L. 90-321, title I, Sec. 110, May 29, 1968, 82 Stat. 151, provided for establishment of an advisory committee authorized to seek to achieve a fair representation of interests of sellers of merchandise on credit, lenders, and the public. EFFECTIVE DATE OF REPEAL Repeal effective Mar. 23, 1976, see section 708 of Pub. L. 90- 321, set out as an Effective Date note under section 1691 of this title. -End- -CITE- 15 USC Sec. 1610 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1610. Effect on other laws -STATUTE- (a) Inconsistent provisions; procedures applicable for determination (1) Except as provided in subsection (e) of this section, this part and parts B and C of this subchapter, do not annul, alter, or affect the laws of any State relating to the disclosure of information in connection with credit transactions, except to the extent that those laws are inconsistent with the provisions of this subchapter and then only to the extent of the inconsistency. Upon its own motion or upon the request of any creditor, State or other interested party which is submitted in accordance with procedures prescribed in regulations of the Board, the Board shall determine whether any such inconsistency exists. If the Board determines that a State-required disclosure is inconsistent, creditors located in that State may not make disclosures using the inconsistent term or form, and shall incur no liability under the law of that State for failure to use such term or form, notwithstanding that such determination is subsequently amended, rescinded, or determined by judicial or other authority to be invalid for any reason. (2) Upon its own motion or upon the request of any creditor, State, or other interested party which is submitted in accordance with procedures prescribed in regulations of the Board, the Board shall determine whether any disclosure required under the law of any State is substantially the same in meaning as a disclosure required under this subchapter. If the Board determines that a State-required disclosure is substantially the same in meaning as a disclosure required by this subchapter, then creditors located in that State may make such disclosure in compliance with such State law in lieu of the disclosure required by this subchapter, except that the annual percentage rate and finance charge shall be disclosed as required by section 1632 of this title, and such State- required disclosure may not be made in lieu of the disclosures applicable to certain mortgages under section 1639 of this title. (b) State credit charge statutes Except as provided in section 1639 of this title, this subchapter does not otherwise annul, alter or affect in any manner the meaning, scope or applicability of the laws of any State, including, but not limited to, laws relating to the types, amounts or rates of charges, or any element or elements of charges, permissible under such laws in connection with the extension or use of credit, nor does this subchapter extend the applicability of those laws to any class of persons or transactions to which they would not otherwise apply. The provisions of section 1639 of this title do not annul, alter, or affect the applicability of the laws of any State or exempt any person subject to the provisions of section 1639 of this title from complying with the laws of any State, with respect to the requirements for mortgages referred to in section 1602(aa) of this title, except to the extent that those State laws are inconsistent with any provisions of section 1639 of this title, and then only to the extent of the inconsistency. (c) Disclosure as evidence In any action or proceeding in any court involving a consumer credit sale, the disclosure of the annual percentage rate as required under this subchapter in connection with that sale may not be received as evidence that the sale was a loan or any type of transaction other than a credit sale. (d) Contract or other obligations under State or Federal law Except as specified in sections 1635, 1640, and 1666e of this title, this subchapter and the regulations issued thereunder do not affect the validity or enforceability of any contract or obligation under State or Federal law. (e) Certain credit and charge card application and solicitation disclosure provisions The provisions of subsection (c) of section 1632 of this title and subsections (c), (d), (e), and (f) of section 1637 of this title shall supersede any provision of the law of any State relating to the disclosure of information in any credit or charge card application or solicitation which is subject to the requirements of section 1637(c) of this title or any renewal notice which is subject to the requirements of section 1637(d) of this title, except that any State may employ or establish State laws for the purpose of enforcing the requirements of such sections. -SOURCE- (Pub. L. 90-321, title I, Sec. 111, May 29, 1968, 82 Stat. 151; Pub. L. 93-495, title III, Sec. 307(b), Oct. 28, 1974, 88 Stat. 1516; Pub. L. 96-221, title VI, Sec. 609, Mar. 31, 1980, 94 Stat. 173; Pub. L. 100-583, Sec. 4, Nov. 3, 1988, 102 Stat. 2967; Pub. L. 103-325, title I, Sec. 152(e)(2)(B), (C), Sept. 23, 1994, 108 Stat. 2194.) -MISC1- AMENDMENTS 1994 - Subsec. (a)(2). Pub. L. 103-325, Sec. 152(e)(2)(B), which directed the amendment of par. (2) by inserting ", and such State- required disclosure may not be made in lieu of the disclosures applicable to certain mortgages under section 1639 of this title" before period, was executed by making the insertion before period at end of par. (2), to reflect the probable intent of Congress. Subsec. (b). Pub. L. 103-325, Sec. 152(e)(2)(C), substituted "Except as provided in section 1639 of this title, this subchapter" for "This subchapter" and inserted at end "The provisions of section 1639 of this title do not annul, alter, or affect the applicability of the laws of any State or exempt any person subject to the provisions of section 1639 of this title from complying with the laws of any State, with respect to the requirements for mortgages referred to in section 1602(aa) of this title, except to the extent that those State laws are inconsistent with any provisions of section 1639 of this title, and then only to the extent of the inconsistency." 1988 - Subsec. (a)(1). Pub. L. 100-583, Sec. 4(1), substituted "Except as provided in subsection (e) of this section, this part" for "This part". Subsec. (e). Pub. L. 100-583, Sec. 4(2), added subsec. (e). 1980 - Subsec. (a). Pub. L. 96-221 designated existing provisions as par. (1), substituted provisions respecting the effect of this part and parts B and C of this subchapter, and procedures applicable for determination, for provisions respecting the effect of this subchapter, and added par. (2). 1974 - Subsec. (d). Pub. L. 93-495 inserted reference to section 1666e of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96-221 effective on expiration of two years and six months after Mar. 31, 1980, with all regulations, forms, and clauses required to be 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 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. -End- -CITE- 15 USC Sec. 1611 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1611. Criminal liability for willful and knowing violation -STATUTE- Whoever willfully and knowingly (1) gives false or inaccurate information or fails to provide information which he is required to disclose under the provisions of this subchapter or any regulation issued thereunder, (2) uses any chart or table authorized by the Board under section 1606 of this title in such a manner as to consistently understate the annual percentage rate determined under section 1606(a)(1)(A) of this title, or (3) otherwise fails to comply with any requirement imposed under this subchapter, shall be fined not more than $5,000 or imprisoned not more than one year, or both. -SOURCE- (Pub. L. 90-321, title I, Sec. 112, May 29, 1968, 82 Stat. 151.) -End- -CITE- 15 USC Sec. 1612 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1612. Effect on government agencies -STATUTE- (a) Consultation requirements respecting compliance of credit instruments issued to participating creditor Any department or agency of the United States which administers a credit program in which it extends, insures, or guarantees consumer credit and in which it provides instruments to a creditor which contain any disclosures required by this subchapter shall, prior to the issuance or continued use of such instruments, consult with the Board to assure that such instruments comply with this subchapter. (b) Inapplicability of Federal civil or criminal penalties to Federal, State, and local agencies No civil or criminal penalty provided under this subchapter for any violation thereof may be imposed upon the United States or any department or agency thereof, or upon any State or political subdivision thereof, or any agency of any State of political subdivision. (c) Inapplicability of Federal civil or criminal penalties to participating creditor where violating instrument issued by United States A creditor participating in a credit program administered, insured, or guaranteed by any department or agency or the United States shall not be held liable for a civil or criminal penalty under this subchapter in any case in which the violation results from the use of an instrument required by any such department or agency. (d) Applicability of State penalties to violations by participating creditor A creditor participating in a credit program administered, insured, or guaranteed by any department or agency of the United States shall not be held liable for a civil or criminal penalty under the laws of any State (other than laws determined under section 1610 of this title to be inconsistent with this subchapter) for any technical or procedural failure, such as a failure to use a specific form, to make information available at a specific place on an instrument, or to use a specific typeface, as required by State law, which is caused by the use of an instrument required to be used by such department or agency. -SOURCE- (Pub. L. 90-321, title I, Sec. 113, May 29, 1968, 82 Stat. 151; Pub. L. 96-221, title VI, Sec. 622(a), Mar. 31, 1980, 94 Stat. 184.) -MISC1- AMENDMENTS 1980 - Pub. L. 96-221 amended section generally, designating existing provisions as subsec. (b) and adding subsecs. (a), (c), and (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. -End- -CITE- 15 USC Sec. 1613 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1613. Annual reports to Congress by Board -STATUTE- Each year the Board shall make a report to the Congress concerning the administration of its functions under this subchapter, including such recommendations as the Board deems necessary or appropriate. In addition, each report of the Board shall include its assessment of the extent to which compliance with the requirements imposed under this subchapter is being achieved. -SOURCE- (Pub. L. 90-321, title I, Sec. 114, May 29, 1968, 82 Stat. 151; Pub. L. 96-221, title VI, Sec. 610(a), Mar. 31, 1980, 94 Stat. 174; Pub. L. 97-375, title II, Sec. 209(b), Dec. 21, 1982, 96 Stat. 1825.) -MISC1- AMENDMENTS 1982 - Pub. L. 97-375 struck out requirement that the Attorney General make a report on the same terms as the Board. 1980 - Pub. L. 96-221 substituted "Each year" for "Not later than January 3 of each year after 1969,". 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. 1614 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1614. Repealed. -MISC1- Sec. 1614. Repealed. Pub. L. 96-221, title VI, Sec. 616(b), Mar. 31, 1980, 94 Stat. 182. Section, Pub. L. 90-321, title I, Sec. 115, as added Pub. L. 93- 495, title IV, Sec. 413(a), Oct. 28, 1974, 88 Stat. 1520, related to liability of assignees. See section 1641 of this title. EFFECTIVE DATE OF REPEAL Repeal 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 an Effective Date of 1980 Amendment note under section 1602 of this title. -End- -CITE- 15 USC Sec. 1615 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part A - General Provisions -HEAD- Sec. 1615. Prohibition on use of "Rule of 78's" in connection with mortgage refinancings and other consumer loans -STATUTE- (a) Prompt refund of unearned interest required (1) In general If a consumer prepays in full the financed amount under any consumer credit transaction, the creditor shall promptly refund any unearned portion of the interest charge to the consumer. (2) Exception for refund of de minimus (!1) amount No refund shall be required under paragraph (1) with respect to the prepayment of any consumer credit transaction if the total amount of the refund would be less than $1. (3) Applicability to refinanced transactions and acceleration by the creditor This subsection shall apply with respect to any prepayment of a consumer credit transaction described in paragraph (1) without regard to the manner or the reason for the prepayment, including - (A) any prepayment made in connection with the refinancing, consolidation, or restructuring of the transaction; and (B) any prepayment made as a result of the acceleration of the obligation to repay the amount due with respect to the transaction. (b) Use of "Rule of 78's" prohibited For the purpose of calculating any refund of interest required under subsection (a) of this section for any precomputed consumer credit transaction of a term exceeding 61 months which is consummated after September 30, 1993, the creditor shall compute the refund based on a method which is at least as favorable to the consumer as the actuarial method. (c) Statement of prepayment amount (1) In general Before the end of the 5-day period beginning on the date an oral or written request is received by a creditor from a consumer for the disclosure of the amount due on any precomputed consumer credit account, the creditor or assignee shall provide the consumer with a statement of - (A) the amount necessary to prepay the account in full; and (B) if the amount disclosed pursuant to subparagraph (A) includes an amount which is required to be refunded under this section with respect to such prepayment, the amount of such refund. (2) Written statement required if request is in writing If the customer's request is in writing, the statement under paragraph (1) shall be in writing. (3) 1 free annual statement A consumer shall be entitled to obtain 1 statement under paragraph (1) each year without charge. (4) Additional statements subject to reasonable fees Any creditor may impose a reasonable fee to cover the cost of providing any statement under paragraph (1) to any consumer in addition to the 1 free annual statement required under paragraph (3) if the amount of the charge for such additional statement is disclosed to the consumer before furnishing such statement. (d) Definitions For the purpose of this section - (1) Actuarial method The term "actuarial method" means the method of allocating payments made on a debt between the amount financed and the finance charge pursuant to which a payment is applied first to the accumulated finance charge and any remainder is subtracted from, or any deficiency is added to, the unpaid balance of the amount financed. (2) Consumer, credit The terms "consumer" and "creditor" have the meanings given to such terms in section 1602 of this title. (3) Creditor The term "creditor" - (A) has the meaning given to such term in section 1602 of this title; and (B) includes any assignee of any creditor with respect to credit extended in connection with any consumer credit transaction and any subsequent assignee with respect to such credit. -SOURCE- (Pub. L. 102-550, title IX, Sec. 933, Oct. 28, 1992, 106 Stat. 3891.) -COD- CODIFICATION Section was enacted as part of the Housing and Community Development Act of 1992, and not as part of the Consumer Credit Protection Act which comprises this chapter. -FOOTNOTE- (!1) So in original. Probably should be "de minimis". -End- -CITE- 15 USC Part B - Credit Transactions 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- PART B - CREDIT TRANSACTIONS -End- -CITE- 15 USC Sec. 1631 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1631. Disclosure requirements -STATUTE- (a) Duty of creditor or lessor respecting one or more than one obligor Subject to subsection (b) of this section, a creditor or lessor shall disclose to the person who is obligated on a consumer lease or a consumer credit transaction the information required under this subchapter. In a transaction involving more than one obligor, a creditor or lessor, except in a transaction under section 1635 of this title, need not disclose to more than one of such obligors if the obligor given disclosure is a primary obligor. (b) Creditor or lessor required to make disclosure If a transaction involves one creditor as defined in section 1602(f) of this title, or one lessor as defined in section 1667(3) of this title, such creditor or lessor shall make the disclosures. If a transaction involves more than one creditor or lessor, only one creditor or lessor shall by required to make the disclosures. The Board shall by regulation specify which creditor or lessor shall make the disclosures. (c) Estimates as satisfying statutory requirements; basis of disclosure for per diem interest The Board may provide by regulation that any portion of the information required to be disclosed by this subchapter may be given in the form of estimates where the provider of such information is not in a position to know exact information. In the case of any consumer credit transaction a portion of the interest on which is determined on a per diem basis and is to be collected upon the consummation of such transaction, any disclosure with respect to such portion of interest shall be deemed to be accurate for purposes of this subchapter if the disclosure is based on information actually known to the creditor at the time that the disclosure documents are being prepared for the consummation of the transaction. (d) Tolerances for numerical disclosures The Board shall determine whether tolerances for numerical disclosures other than the annual percentage rate are necessary to facilitate compliance with this subchapter, and if it determines that such tolerances are necessary to facilitate compliance, it shall by regulation permit disclosures within such tolerances. The Board shall exercise its authority to permit tolerances for numerical disclosures other than the annual percentage rate so that such tolerances are narrow enough to prevent such tolerances from resulting in misleading disclosures or disclosures that circumvent the purposes of this subchapter. -SOURCE- (Pub. L. 90-321, title I, Sec. 121, May 29, 1968, 82 Stat. 152; Pub. L. 93-495, title III, Sec. 307(c), (d), title IV, Sec. 409, Oct. 28, 1974, 88 Stat. 1516, 1519; Pub. L. 94-205, Sec. 11, Jan. 2, 1976, 89 Stat. 1159; Pub. L. 96-221, title VI, Sec. 611, Mar. 31, 1980, 94 Stat. 174; Pub. L. 104-29, Sec. 3(b), Sept. 30, 1995, 109 Stat. 273.) -MISC1- AMENDMENTS 1995 - Subsec. (c). Pub. L. 104-29 inserted at end "In the case of any consumer credit transaction a portion of the interest on which is determined on a per diem basis and is to be collected upon the consummation of such transaction, any disclosure with respect to such portion of interest shall be deemed to be accurate for purposes of this subchapter if the disclosure is based on information actually known to the creditor at the time that the disclosure documents are being prepared for the consummation of the transaction." 1980 - Subsec. (a). Pub. L. 96-221 substituted provisions respecting to which obligor duty of creditor or lessor, where one or more than one obligor is involved, is owed, for provisions setting forth clear and conspicuous disclosure requirements for creditors to persons extended consumer credit. Subsec. (b). Pub. L. 96-221 substituted provisions relating to disclosure requirements of creditor or lessor, for provisions relating to statement of information where more than one obligor is involved. Subsecs. (c), (d). Pub. L. 96-221 added subsecs. (c) and (d). 1976 - Subsec. (c). Pub. L. 94-205 struck out subsec. (c) which related to disclosure including a full statement of closing costs incurred and permitted estimates of such information where the lender was not in a position to know exact information. 1974 - Subsec. (a). Pub. L. 93-495, Sec. 307(c), inserted reference to part D of this subchapter and struck out "and upon whom a finance charge is or may be imposed" after "extended". Subsec. (b). Pub. L. 93-495, Sec. 307(d), inserted reference to part D of this subchapter. Subsec. (c). Pub. L. 93-495, Sec. 409, added subsec (c). 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 1976 AMENDMENT Amendment by Pub. L. 94-205 effective Jan. 2, 1976, see section 12 of Pub. L. 94-205, set out as a note under section 2602 of Title 12, Banks and Banking. EFFECTIVE DATE OF 1974 AMENDMENT For effective date of amendment by section 307(c), (d) of 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. For effective date of amendment by section 409 of Pub. L. 93-495, see section 416 of Pub. L. 93-495, set out as an Effective Date note under section 1665a of this title. EFFECTIVE DATE Section 504(b) of Pub. L. 90-321 provided in part that chapter 2 of title I, which enacted sections 1631 to 1641 of this title, is effective July 1, 1969. REAL ESTATE SETTLEMENT PROCEDURES Provisions of Real Estate Settlement Procedures Act of 1974, as superseding provisions of subsec. (c) of this section insofar as applying to federally related mortgage loans, see section 2605 of Title 12, Banks and Banking. -End- -CITE- 15 USC Sec. 1632 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1632. Form of disclosure; additional information -STATUTE- (a) Information clearly and conspicuously disclosed; "annual percentage rate" and "finance charge"; order of disclosures and use of different terminology Information required by this subchapter shall be disclosed clearly and conspicuously, in accordance with regulations of the Board. The terms "annual percentage rate" and "finance charge" shall be disclosed more conspicuously than other terms, data, or information provided in connection with a transaction, except information relating to the identify of the creditor. Except as provided in subsection (c) of this section, regulations of the Board need not require that disclosures pursuant to this subchapter be made in the order set forth in this subchapter and, except as otherwise provided, may permit the use of terminology different from that employed in this subchapter if it conveys substantially the same meaning. (b) Optional information by creditor or lessor Any creditor or lessor may supply additional information or explanation with any disclosures required under parts D and E of this subchapter and, except as provided in sections 1637a(b)(3) and 1638(b)(1) of this title, under this part. (c) Tabular format required for certain disclosures under section 1637(c) (1) In general The information described in paragraphs (1)(A), (3)(B)(i)(I), (4)(A), and (4)(C)(i)(I) of section 1637(c) of this title shall be - (A) disclosed in the form and manner which the Board shall prescribe by regulations; and (B) placed in a conspicuous and prominent location on or with any written application, solicitation, or other document or paper with respect to which such disclosure is required. (2) Tabular format (A) Form of table to be prescribed In the regulations prescribed under paragraph (1)(A) of this subsection, the Board shall require that the disclosure of such information shall, to the extent the Board determines to be practicable and appropriate, be in the form of a table which - (i) contains clear and concise headings for each item of such information; and (ii) provides a clear and concise form for stating each item of information required to be disclosed under each such heading. (B) Board discretion in prescribing order and wording of table In prescribing the form of the table under subparagraph (A), the Board may - (i) list the items required to be included in the table in a different order than the order in which such items are set forth in paragraph (1)(A) or (4)(A) of section 1637(c) of this title; and (ii) subject to subparagraph (C), employ terminology which is different than the terminology which is employed in section 1637(c) of this title if such terminology conveys substantially the same meaning. (C) Grace period Either the heading or the statement under the heading which relates to the time period referred to in section 1637(c)(1)(A)(iii) of this title shall contain the term "grace period". -SOURCE- (Pub. L. 90-321, title I, Sec. 122, May 29, 1968, 82 Stat. 152; Pub. L. 93-495, title III, Sec. 307(e), (f), Oct. 28, 1974, 88 Stat. 1516, 1517; Pub. L. 96-221, title VI, Sec. 611, Mar. 31, 1980, 94 Stat. 175; Pub. L. 100-583, Sec. 2(b), Nov. 3, 1988, 102 Stat. 2966; Pub. L. 100-709, Sec. 2(d), Nov. 23, 1988, 102 Stat. 4731.) -MISC1- AMENDMENTS 1988 - Subsec. (a). Pub. L. 100-583, Sec. 2(b)(1), substituted "Except as provided in subsection (c) of this section, regulations" for "Regulations". Subsec. (b). Pub. L. 100-709 substituted "sections 1637a(b)(3) and 1638(b)(1)" for "section 1638(b)(1)". Subsec. (c). Pub. L. 100-583, Sec. 2(b)(2), added subsec. (c). 1980 - Subsec. (a). Pub. L. 96-221 substituted provisions setting forth form of disclosure to meet requirements of this subchapter, for provisions setting forth form of disclosure authorized under this part or part D of this subchapter. Subsec. (b). Pub. L. 96-221 substituted provisions setting forth disclosure requirements for additional information by creditors or lessors, for provisions setting forth disclosure requirements for additional information by creditors. 1974 - Subsecs. (a), (b). Pub. L. 93-495 inserted references to part D of this subchapter. EFFECTIVE DATE OF 1988 AMENDMENT For effective date of amendments by Pub. L. 100-709, see Regulations; Effective Date note below. 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 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; EFFECTIVE DATE For provisions relating to promulgation of regulations to implement amendment by Pub. L. 100-709, and effective date of such amendment in connection with those regulations, see section 7 of Pub. L. 100-709, set out as a note under section 1637a of this title. For provisions relating to promulgation of regulations to implement amendment by Pub. L. 100-583, and effective date of such amendment in connection with those regulations, see section 7 of Pub. L. 100-583, set out as a note under section 1637 of this title. -End- -CITE- 15 USC Sec. 1633 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1633. Exemption for State-regulated transactions -STATUTE- The Board shall by regulation exempt from the requirements of this part any class of credit transactions within any State if it determines that under the law of that State that class of transactions is subject to requirements substantially similar to those imposed under this part, and that there is adequate provision for enforcement. -SOURCE- (Pub. L. 90-321, title I, Sec. 123, May 29, 1968, 82 Stat. 152.) -End- -CITE- 15 USC Sec. 1634 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1634. Effect of subsequent occurrence -STATUTE- If information disclosed in accordance with this part is subsequently rendered inaccurate as the result of any act, occurrence, or agreement subsequent to the delivery of the required disclosures, the inaccuracy resulting therefrom does not constitute a violation of this part. -SOURCE- (Pub. L. 90-321, title I, Sec. 124, May 29, 1968, 82 Stat. 152.) -End- -CITE- 15 USC Sec. 1635 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1635. Right of rescission as to certain transactions -STATUTE- (a) Disclosure of obligor's right to rescind Except as otherwise provided in this section, in the case of any consumer credit transaction (including opening or increasing the credit limit for an open end credit plan) in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter, whichever is later, by notifying the creditor, in accordance with regulations of the Board, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Board, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Board, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section. (b) Return of money or property following rescission When an obligor exercises his right to rescind under subsection (a) of this section, he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within 20 days after receipt of a notice of rescission, the creditor shall return to the boligor any money or property given as earnest money, downpayment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor's obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it. The procedures prescribed by this subsection shall apply except when otherwise ordered by a court. (c) Rebuttable presumption of delivery of required disclosures Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under this subchapter by a person to whom information, forms, and a statement is required to be given pursuant to this section does no more than create a rebuttable presumption of delivery thereof. (d) Modification and waiver of rights The Board may, if it finds that such action is necessary in order to permit homeowners to meet bona fide personal financial emergencies, prescribe regulations authorizing the modification or waiver of any rights created under this section to the extent and under the circumstances set forth in those regulations. (e) Exempted transactions; reapplication of provisions This section does not apply to - (1) a residential mortgage transaction as defined in section 1602(w) of this title; (2) a transaction which constitutes a refinancing or consolidation (with no new advances) of the principal balance then due and any accrued and unpaid finance charges of an existing extension of credit by the same creditor secured by an interest in the same property; (3) a transaction in which an agency of a State is the creditor; or (4) advances under a preexisting open end credit plan if a security interest has already been retained or acquired and such advances are in accordance with a previously established credit limit for such plan. (f) Time limit for exercise of right An obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first, notwithstanding the fact that the information and forms required under this section or any other disclosures required under this part have not been delivered to the obligor, except that if (1) any agency empowered to enforce the provisions of this subchapter institutes a proceeding to enforce the provisions of this section within three years after the date of consummation of the transaction, (2) such agency finds a violation of this section, and (3) the obligor's right to rescind is based in whole or in part on any matter involved in such proceeding, then the obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the earlier sale of the property, or upon the expiration of one year following the conclusion of the proceeding, or any judicial review or period for judicial review thereof, whichever is later. (g) Additional relief In any action in which it is determined that a creditor has violated this section, in addition to rescission the court may award relief under section 1640 of this title for violations of this subchapter not relating to the right to rescind. (h) Limitation on rescission An obligor shall have no rescission rights arising solely from the form of written notice used by the creditor to inform the obligor of the rights of the obligor under this section, if the creditor provided the obligor the appropriate form of written notice published and adopted by the Board, or a comparable written notice of the rights of the obligor, that was properly completed by the creditor, and otherwise complied with all other requirements of this section regarding notice. (i) Rescission rights in foreclosure (1) In general Notwithstanding section 1649 of this title, and subject to the time period provided in subsection (f) of this section, in addition to any other right of rescission available under this section for a transaction, after the initiation of any judicial or nonjudicial foreclosure process on the primary dwelling of an obligor securing an extension of credit, the obligor shall have a right to rescind the transaction equivalent to other rescission rights provided by this section, if - (A) a mortgage broker fee is not included in the finance charge in accordance with the laws and regulations in effect at the time the consumer credit transaction was consummated; or (B) the form of notice of rescission for the transaction is not the appropriate form of written notice published and adopted by the Board or a comparable written notice, and otherwise complied with all the requirements of this section regarding notice. (2) Tolerance for disclosures Notwithstanding section 1605(f) of this title, and subject to the time period provided in subsection (f) of this section, for the purposes of exercising any rescission rights after the initiation of any judicial or nonjudicial foreclosure process on the principal dwelling of the obligor securing an extension of credit, the disclosure of the finance charge and other disclosures affected by any finance charge shall be treated as being accurate for purposes of this section if the amount disclosed as the finance charge does not vary from the actual finance charge by more than $35 or is greater than the amount required to be disclosed under this subchapter. (3) Right of recoupment under State law Nothing in this subsection affects a consumer's right of rescission in recoupment under State law. (4) Applicability This subsection shall apply to all consumer credit transactions in existence or consummated on or after September 30, 1995. -SOURCE- (Pub. L. 90-321, title I, Sec. 125, May 29, 1968, 82 Stat. 153; Pub. L. 93-495, title IV, Secs. 404, 405, 412, Oct. 28, 1974, 88 Stat. 1517, 1519; Pub. L. 96-221, title VI, Sec. 612(a)(1), (3)- (6), Mar. 31, 1980, 94 Stat. 175, 176; Pub. L. 98-479, title II, Sec. 205, Oct. 17, 1984, 98 Stat. 2234; Pub. L. 104-29, Secs. 5, 8, Sept. 30, 1995, 109 Stat. 274, 275.) -MISC1- AMENDMENTS 1995 - Subsec. (h). Pub. L. 104-29, Sec. 5, added subsec. (h). Subsec. (i). Pub. L. 104-29, Sec. 8, added subsec. (i). 1984 - Subsec. (e). Pub. L. 98-479 redesignated par. (1) as subsec. (e), redesignated subpars. (A), (B), (C), and (D) of par. (1) as pars. (1), (2), (3), and (4), respectively, and struck out par. (2) which read as follows: "The provisions of paragraph (1)(D) shall cease to be effective 3 years after the effective date of the Truth in Lending Simplification Reform Act." 1980 - Subsec. (a). Pub. L. 96-221, Sec. 612(a)(1), substituted provisions relating to the right of rescission until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required together with the statement containing the material disclosures required under this subchapter, whichever is later, for provisions relating to right of rescission until midnight of the third business day following the consummation of the transaction or the delivery of the required disclosures and all other material disclosures required under this part, whichever is later. Subsec. (b). Pub. L. 96-221, Sec. 612(a)(3), (4), inserted provisions setting forth applicability of procedures prescribed by this subsection, and substituted "20" for "ten" in two places. Subsec. (c). Pub. L. 96-221, Sec. 612(a)(5), inserted "information, forms, and" after "whom". Subsec. (e). Pub. L. 96-221, Sec. 612(a)(6), substituted provisions relating to nonapplicability to residential mortgage transactions, refinancing or consolidation transactions, etc., for provisions relating to nonapplicability to creation or retention of first liens. Subsec. (f). Pub. L. 96-221, Sec. 612(a)(6), substituted provisions setting forth duration of right of rescission where the required information and forms or other disclosures required under this part have not been delivered to the obligor, and exceptions to such term, for provisions setting forth duration of right of rescission where the required disclosures or any other material disclosures required under this part have not been delivered to the obligor. Subsec. (g). Pub. L. 96-221, Sec. 612(a)(6), added subsec. (g). 1974 - Subsecs. (a), (b). Pub. L. 93-495, Sec. 404, inserted provisions relating to security interest arising by operation of law. Subsec. (e). Pub. L. 93-495, Sec. 412, inserted exemption for consumer credit transactions where a State agency is the creditor. Subsec. (f). Pub. L. 93-495, Sec. 405, added subsec. (f). 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. -End- -CITE- 15 USC Sec. 1636 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1636. Repealed. -MISC1- Sec. 1636. Repealed. Pub. L. 96-221, title VI, Sec. 614(e)(1), Mar. 31, 1980, 94 Stat. 180. Section, Pub. L. 90-321, title I, Sec. 126, May 29, 1968, 82 Stat. 153, related to contents of periodic statements. EFFECTIVE DATE OF REPEAL Repeal 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 an Effective Date of 1980 Amendment note under section 1602 of this title. -End- -CITE- 15 USC Sec. 1637 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1637. Open end consumer credit plans -STATUTE- (a) Required disclosures by creditor Before opening any account under an open end consumer credit plan, the creditor shall disclose to the person to whom credit is to be extended each of the following items, to the extent applicable: (1) The conditions under which a finance charge may be imposed, including the time period (if any) within which any credit extended may be repaid without incurring a finance charge, except that the creditor may, at his election and without disclosure, impose no such finance charge if payment is received after the termination of such time period. If no such time period is provided, the creditor shall disclose such fact. (2) The method of determining the balance upon which a finance charge will be imposed. (3) The method of determining the amount of the finance charge, including any minimum or fixed amount imposed as a finance charge. (4) Where one or more periodic rates may be used to compute the finance charge, each such rate, the range of balances to which it is applicable, and the corresponding nominal annual percentage rate determined by multiplying the periodic rate by the number of periods in a year. (5) Identification of other charges which may be imposed as part of the plan, and their method of computation, in accordance with regulations of the Board. (6) In cases where the credit is or will be secured, a statement that a security interest has been or will be taken in (A) the property purchased as part of the credit transaction, or (B) property not purchased as part of the credit transaction identified by item or type. (7) A statement, in a form prescribed by regulations of the Board of the protection provided by sections 1666 and 1666i of this title to an obligor and the creditor's responsibilities under sections 1666a and 1666i of this title. With respect to one billing cycle per calendar year, at intervals of not less than six months or more than eighteen months, the creditor shall transmit such statement to each obligor to whom the creditor is required to transmit a statement pursuant to subsection (b) of this section for such billing cycle. (8) In the case of any account under an open end consumer credit plan which provides for any extension of credit which is secured by the consumer's principal dwelling, any information which - (A) is required to be disclosed under section 1637a(a) of this title; and (B) the Board determines is not described in any other paragraph of this subsection. (b) Statement required with each billing cycle The creditor of any account under an open end consumer credit plan shall transmit to the obligor, for each billing cycle at the end of which there is an outstanding balance in that account or with respect to which a finance charge is imposed, a statement setting forth each of the following items to the extent applicable: (1) The outstanding balance in the account at the beginning of the statement period. (2) The amount and date of each extension of credit during the period, and a brief identification, on or accompanying the statement of each extension of credit in a form prescribed by the Board sufficient to enable the obligor either to identify the transaction or to relate it to copies of sales vouchers or similar instruments previously furnished, except that a creditor's failure to disclose such information in accordance with this paragraph shall not be deemed a failure to comply with this part or this subchapter if (A) the creditor maintains procedures reasonably adapted to procure and provide such information, and (B) the creditor responds to and treats any inquiry for clarification or documentation as a billing error and an erroneously billed amount under section 1666 of this title. In lieu of complying with the requirements of the previous sentence, in the case of any transaction in which the creditor and seller are the same person, as defined by the Board, and such person's open end credit plan has fewer than 15,000 accounts, the creditor may elect to provide only the amount and date of each extension of credit during the period and the seller's name and location where the transaction took place if (A) a brief identification of the transaction has been previously furnished, and (B) the creditor responds to and treats any inquiry for clarification or documentation as a billing error and an erroneously billed amount under section 1666 of this title. (3) The total amount credited to the account during the period. (4) The amount of any finance charge added to the account during the period, itemized to show the amounts, if any, due to the application of percentage rates and the amount, if any, imposed as a minimum or fixed charge. (5) Where one or more periodic rates may be used to compute the finance charge, each such rate, the range of balances to which it is applicable, and, unless the annual percentage rate (determined under section 1606(a)(2) of this title) is required to be disclosed pursuant to paragraph (6), the corresponding nominal annual percentage rate determined by multiplying the periodic rate by the number of periods in a year. (6) Where the total finance charge exceeds 50 cents for a monthly or longer billing cycle, or the pro rata part of 50 cents for a billing cycle shorter than monthly, the total finance charge expressed as an annual percentage rate (determined under section 1606(a)(2) of this title), except that if the finance charge is the sum of two or more products of a rate times a portion of the balance, the creditor may, in lieu of disclosing a single rate for the total charge, disclose each such rate expressed as an annual percentage rate, and the part of the balance to which it is applicable. (7) The balance on which the finance charge was computed and a statement of how the balance was determined. If the balance is determined without first deducting all credits during the period, that fact and the amount of such payments shall also be disclosed. (8) The outstanding balance in the account at the end of the period. (9) The date by which or the period (if any) within which, payment must be made to avoid additional finance charges, except that the creditor may, at his election and without disclosure, impose no such additional finance charge if payment is received after such date or the termination of such period. (10) The address to be used by the creditor for the purpose of receiving billing inquiries from the obligor. (11)(A) In the case of an open end credit plan that requires a minimum monthly payment of not more than 4 percent of the balance on which finance charges are accruing, the following statement, located on the front of the billing statement, disclosed clearly and conspicuously: "Minimum Payment Warning: Making only the minimum payment will increase the interest you pay and the time it takes to repay your balance. For example, making only the typical 2% minimum monthly payment on a balance of $1,000 at an interest rate of 17% would take 88 months to repay the balance in full. For an estimate of the time it would take to repay your balance, making only minimum payments, call this toll-free number: ______." (the blank space to be filled in by the creditor). (B) In the case of an open end credit plan that requires a minimum monthly payment of more than 4 percent of the balance on which finance charges are accruing, the following statement, in a prominent location on the front of the billing statement, disclosed clearly and conspicuously: "Minimum Payment Warning: Making only the required minimum payment will increase the interest you pay and the time it takes to repay your balance. Making a typical 5% minimum monthly payment on a balance of $300 at an interest rate of 17% would take 24 months to repay the balance in full. For an estimate of the time it would take to repay your balance, making only minimum monthly payments, call this toll-free number: ______." (the blank space to be filled in by the creditor). (C) Notwithstanding subparagraphs (A) and (B), in the case of a creditor with respect to which compliance with this subchapter is enforced by the Federal Trade Commission, the following statement, in a prominent location on the front of the billing statement, disclosed clearly and conspicuously: "Minimum Payment Warning: Making only the required minimum payment will increase the interest you pay and the time it takes to repay your balance. For example, making only the typical 5% minimum monthly payment on a balance of $300 at an interest rate of 17% would take 24 months to repay the balance in full. For an estimate of the time it would take to repay your balance, making only minimum monthly payments, call the Federal Trade Commission at this toll-free number: ______." (the blank space to be filled in by the creditor). A creditor who is subject to this subparagraph shall not be subject to subparagraph (A) or (B). (D) Notwithstanding subparagraph (A), (B), or (C), in complying with any such subparagraph, a creditor may substitute an example based on an interest rate that is greater than 17 percent. Any creditor that is subject to subparagraph (B) may elect to provide the disclosure required under subparagraph (A) in lieu of the disclosure required under subparagraph (B). (E) The Board shall, by rule, periodically recalculate, as necessary, the interest rate and repayment period under subparagraphs (A), (B), and (C). (F)(i) The toll-free telephone number disclosed by a creditor or the Federal Trade Commission under subparagraph (A), (B), or (G), as appropriate, may be a toll-free telephone number established and maintained by the creditor or the Federal Trade Commission, as appropriate, or may be a toll-free telephone number established and maintained by a third party for use by the creditor or multiple creditors or the Federal Trade Commission, as appropriate. The toll-free telephone number may connect consumers to an automated device through which consumers may obtain information described in subparagraph (A), (B), or (C), by inputting information using a touch-tone telephone or similar device, if consumers whose telephones are not equipped to use such automated device are provided the opportunity to be connected to an individual from whom the information described in subparagraph (A), (B), or (C), as applicable, may be obtained. A person that receives a request for information described in subparagraph (A), (B), or (C) from an obligor through the toll- free telephone number disclosed under subparagraph (A), (B), or (C), as applicable, shall disclose in response to such request only the information set forth in the table promulgated by the Board under subparagraph (H)(i). (ii)(I) The Board shall establish and maintain for a period not to exceed 24 months following the effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a toll-free telephone number, or provide a toll-free telephone number established and maintained by a third party, for use by creditors that are depository institutions (as defined in section 1813 of title 12), including a Federal credit union or State credit union (as defined in section 1752 of title 12), with total assets not exceeding $250,000,000. The toll-free telephone number may connect consumers to an automated device through which consumers may obtain information described in subparagraph (A) or (B), as applicable, by inputting information using a touch-tone telephone or similar device, if consumers whose telephones are not equipped to use such automated device are provided the opportunity to be connected to an individual from whom the information described in subparagraph (A) or (B), as applicable, may be obtained. A person that receives a request for information described in subparagraph (A) or (B) from an obligor through the toll-free telephone number disclosed under subparagraph (A) or (B), as applicable, shall disclose in response to such request only the information set forth in the table promulgated by the Board under subparagraph (H)(i). The dollar amount contained in this subclause shall be adjusted according to an indexing mechanism established by the Board. (II) Not later than 6 months prior to the expiration of the 24- month period referenced in subclause (I), the Board shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on the program described in subclause (I). (G) The Federal Trade Commission shall establish and maintain a toll-free number for the purpose of providing to consumers the information required to be disclosed under subparagraph (C). (H) The Board shall - (i) establish a detailed table illustrating the approximate number of months that it would take to repay an outstanding balance if a consumer pays only the required minimum monthly payments and if no other advances are made, which table shall clearly present standardized information to be used to disclose the information required to be disclosed under subparagraph (A), (B), or (C), as applicable; (ii) establish the table required under clause (i) by assuming - (I) a significant number of different annual percentage rates; (II) a significant number of different account balances; (III) a significant number of different minimum payment amounts; and (IV) that only minimum monthly payments are made and no additional extensions of credit are obtained; and (iii) promulgate regulations that provide instructional guidance regarding the manner in which the information contained in the table established under clause (i) should be used in responding to the request of an obligor for any information required to be disclosed under subparagraph (A), (B), or (C). (I) The disclosure requirements of this paragraph do not apply to any charge card account, the primary purpose of which is to require payment of charges in full each month. (J) A creditor that maintains a toll-free telephone number for the purpose of providing customers with the actual number of months that it will take to repay the customer's outstanding balance is not subject to the requirements of subparagraph (A) or (B). (K) A creditor that maintains a toll-free telephone number for the purpose of providing customers with the actual number of months that it will take to repay an outstanding balance shall include the following statement on each billing statement: "Making only the minimum payment will increase the interest you pay and the time it takes to repay your balance. For more information, call this toll-free number: ______." (the blank space to be filled in by the creditor). (12) If a late payment fee is to be imposed due to the failure of the obligor to make payment on or before a required payment due date, the following shall be stated clearly and conspicuously on the billing statement: (A) The date on which that payment is due or, if different, the earliest date on which a late payment fee may be charged. (B) The amount of the late payment fee to be imposed if payment is made after such date. (c) Disclosure in credit and charge card applications and solicitations (1) Direct mail applications and solicitations (A) Information in tabular format Any application to open a credit card account for any person under an open end consumer credit plan, or a solicitation to open such an account without requiring an application, that is mailed to consumers shall disclose the following information, subject to subsection (e) of this section and section 1632(c) of this title: (i) Annual percentage rates (I) Each annual percentage rate applicable to extensions of credit under such credit plan. (II) Where an extension of credit is subject to a variable rate, the fact that the rate is variable, the annual percentage rate in effect at the time of the mailing, and how the rate is determined. (III) Where more than one rate applies, the range of balances to which each rate applies. (ii) Annual and other fees (I) Any annual fee, other periodic fee, or membership fee imposed for the issuance or availability of a credit card, including any account maintenance fee or other charge imposed based on activity or inactivity for the account during the billing cycle. (II) Any minimum finance charge imposed for each period during which any extension of credit which is subject to a finance charge is outstanding. (III) Any transaction charge imposed in connection with use of the card to purchase goods or services. (iii) Grace period (I) The date by which or the period within which any credit extended under such credit plan for purchases of goods or services must be repaid to avoid incurring a finance charge, and, if no such period is offered, such fact shall be clearly stated. (II) If the length of such "grace period" varies, the card issuer may disclose the range of days in the grace period, the minimum number of days in the grace period, or the average number of days in the grace period, if the disclosure is identified as such. (iv) Balance calculation method (I) The name of the balance calculation method used in determining the balance on which the finance charge is computed if the method used has been defined by the Board, or a detailed explanation of the balance calculation method used if the method has not been so defined. (II) In prescribing regulations to carry out this clause, the Board shall define and name not more than the 5 balance calculation methods determined by the Board to be the most commonly used methods. (B) Other information In addition to the information required to be disclosed under subparagraph (A), each application or solicitation to which such subparagraph applies shall disclose clearly and conspicuously the following information, subject to subsections (e) and (f) of this section: (i) Cash advance fee Any fee imposed for an extension of credit in the form of cash. (ii) Late fee Any fee imposed for a late payment. (iii) Over-the-limit fee Any fee imposed in connection with an extension of credit in excess of the amount of credit authorized to be extended with respect to such account. (2) Telephone solicitations (A) In general In any telephone solicitation to open a credit card account for any person under an open end consumer credit plan, the person making the solicitation shall orally disclose the information described in paragraph (1)(A). (B) Exception Subparagraph (A) shall not apply to any telephone solicitation if - (i) the credit card issuer - (I) does not impose any fee described in paragraph (1)(A)(ii)(I); or (II) does not impose any fee in connection with telephone solicitations unless the consumer signifies acceptance by using the card; (ii) the card issuer discloses clearly and conspicuously in writing the information described in paragraph (1) within 30 days after the consumer requests the card, but in no event later than the date of delivery of the card; and (iii) the card issuer discloses clearly and conspicuously that the consumer is not obligated to accept the card or account and the consumer will not be obligated to pay any of the fees or charges disclosed unless the consumer elects to accept the card or account by using the card. (3) Applications and solicitations by other means (A) In general Any application to open a credit card account for any person under an open end consumer credit plan, and any solicitation to open such an account without requiring an application, that is made available to the public or contained in catalogs, magazines, or other publications shall meet the disclosure requirements of subparagraph (B), (C), or (D). (B) Specific information An application or solicitation described in subparagraph (A) meets the requirement of this subparagraph if such application or solicitation contains - (i) the information - (I) described in paragraph (1)(A) in the form required under section 1632(c) of this title, subject to subsection (e) of this section, and (II) described in paragraph (1)(B) in a clear and conspicuous form, subject to subsections (e) and (f) of this section; (ii) a statement, in a conspicuous and prominent location on the application or solicitation, that - (I) the information is accurate as of the date the application or solicitation was printed; (II) the information contained in the application or solicitation is subject to change after such date; and (III) the applicant should contact the creditor for information on any change in the information contained in the application or solicitation since it was printed; (iii) a clear and conspicuous disclosure of the date the application or solicitation was printed; and (iv) a disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll free telephone number or a mailing address at which the applicant may contact the creditor to obtain any change in the information provided in the application or solicitation since it was printed. (C) General information without any specific term An application or solicitation described in subparagraph (A) meets the requirement of this subparagraph if such application or solicitation - (i) contains a statement, in a conspicuous and prominent location on the application or solicitation, that - (I) there are costs associated with the use of credit cards; and (II) the applicant may contact the creditor to request disclosure of specific information of such costs by calling a toll free telephone number or by writing to an address, specified in the application; (ii) contains a disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll free telephone number and a mailing address at which the applicant may contact the creditor to obtain such information; and (iii) does not contain any of the items described in paragraph (1). (D) Applications or solicitations containing subsection (a) disclosures An application or solicitation meets the requirement of this subparagraph if it contains, or is accompanied by - (i) the disclosures required by paragraphs (1) through (6) of subsection (a) of this section; (ii) the disclosures required by subparagraphs (A) and (B) of paragraph (1) of this subsection included clearly and conspiciously (!1) (except that the provisions of section 1632(c) of this title shall not apply); and (iii) a toll free telephone number or a mailing address at which the applicant may contact the creditor to obtain any change in the information provided. (E) Prompt response to information requests Upon receipt of a request for any of the information referred to in subparagraph (B), (C), or (D), the card issuer or the agent of such issuer shall promptly disclose all of the information described in paragraph (1). (4) Charge card applications and solicitations (A) In general Any application or solicitation to open a charge card account shall disclose clearly and conspicuously the following information in the form required by section 1632(c) of this title, subject to subsection (e) of this section: (i) Any annual fee, other periodic fee, or membership fee imposed for the issuance or availability of the charge card, including any account maintenance fee or other charge imposed based on activity or inactivity for the account during the billing cycle. (ii) Any transaction charge imposed in connection with use of the card to purchase goods or services. (iii) A statement that charges incurred by use of the charge card are due and payable upon receipt of a periodic statement rendered for such charge card account. (B) Other information In addition to the information required to be disclosed under subparagraph (A), each written application or solicitation to which such subparagraph applies shall disclose clearly and conspicuously the following information, subject to subsections (e) and (f) of this section: (i) Cash advance fee Any fee imposed for an extension of credit in the form of cash. (ii) Late fee Any fee imposed for a late payment. (iii) Over-the-limit fee Any fee imposed in connection with an extension of credit in excess of the amount of credit authorized to be extended with respect to such account. (C) Applications and solicitations by other means Any application to open a charge card account, and any solicitation to open such an account without requiring an application, that is made available to the public or contained in catalogs, magazines, or other publications shall contain - (i) the information - (I) described in subparagraph (A) in the form required under section 1632(c) of this title, subject to subsection (e) of this section, and (II) described in subparagraph (B) in a clear and conspicuous form, subject to subsections (e) and (f) of this section; (ii) a statement, in a conspicuous and prominent location on the application or solicitation, that - (I) the information is accurate as of the date the application or solicitation was printed; (II) the information contained in the application or solicitation is subject to change after such date; and (III) the applicant should contact the creditor for information on any change in the information contained in the application or solicitation since it was printed; (iii) a clear and conspicuous disclosure of the date the application or solicitation was printed; and (iv) a disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll free telephone number or a mailing address at which the applicant may contact the creditor to obtain any change in the information provided in the application or solicitation since it was printed. (D) Issuers of charge cards which provide access to open end consumer credit plans If a charge card permits the card holder to receive an extension of credit under an open end consumer credit plan, which is not maintained by the charge card issuer, the charge card issuer may provide the information described in subparagraphs (A) and (B) in the form required by such subparagraphs in lieu of the information required to be provided under paragraph (1), (2), or (3) with respect to any credit extended under such plan, if the charge card issuer discloses clearly and conspicuously to the consumer in the application or solicitation that - (i) the charge card issuer will make an independent decision as to whether to issue the card; (ii) the charge card may arrive before the decision is made with respect to an extension of credit under an open end consumer credit plan; and (iii) approval by the charge card issuer does not constitute approval by the issuer of the extension of credit. The information required to be disclosed under paragraph (1) shall be provided to the charge card holder by the creditor which maintains such open end consumer credit plan before the first extension of credit under such plan. (E) Charge card defined For the purposes of this subsection, the term "charge card" means a card, plate, or other single credit device that may be used from time to time to obtain credit which is not subject to a finance charge. (5) Regulatory authority of the Board The Board may, by regulation, require the disclosure of information in addition to that otherwise required by this subsection or subsection (d) of this section, and modify any disclosure of information required by this subsection or subsection (d) of this section, in any application to open a credit card account for any person under an open end consumer credit plan or any application to open a charge card account for any person, or a solicitation to open any such account without requiring an application, if the Board determines that such action is necessary to carry out the purposes of, or prevent evasions of, any paragraph of this subsection. (6) Additional notice concerning "introductory rates" (A) In general Except as provided in subparagraph (B), an application or solicitation to open a credit card account and all promotional materials accompanying such application or solicitation for which a disclosure is required under paragraph (1), and that offers a temporary annual percentage rate of interest, shall - (i) use the term "introductory" in immediate proximity to each listing of the temporary annual percentage rate applicable to such account, which term shall appear clearly and conspicuously; (ii) if the annual percentage rate of interest that will apply after the end of the temporary rate period will be a fixed rate, state in a clear and conspicuous manner in a prominent location closely proximate to the first listing of the temporary annual percentage rate (other than a listing of the temporary annual percentage rate in the tabular format described in section 1632(c) of this title), the time period in which the introductory period will end and the annual percentage rate that will apply after the end of the introductory period; and (iii) if the annual percentage rate that will apply after the end of the temporary rate period will vary in accordance with an index, state in a clear and conspicuous manner in a prominent location closely proximate to the first listing of the temporary annual percentage rate (other than a listing in the tabular format prescribed by section 1632(c) of this title), the time period in which the introductory period will end and the rate that will apply after that, based on an annual percentage rate that was in effect within 60 days before the date of mailing the application or solicitation. (B) Exception Clauses (ii) and (iii) of subparagraph (A) do not apply with respect to any listing of a temporary annual percentage rate on an envelope or other enclosure in which an application or solicitation to open a credit card account is mailed. (C) Conditions for introductory rates An application or solicitation to open a credit card account for which a disclosure is required under paragraph (1), and that offers a temporary annual percentage rate of interest shall, if that rate of interest is revocable under any circumstance or upon any event, clearly and conspicuously disclose, in a prominent manner on or with such application or solicitation - (i) a general description of the circumstances that may result in the revocation of the temporary annual percentage rate; and (ii) if the annual percentage rate that will apply upon the revocation of the temporary annual percentage rate - (I) will be a fixed rate, the annual percentage rate that will apply upon the revocation of the temporary annual percentage rate; or (II) will vary in accordance with an index, the rate that will apply after the temporary rate, based on an annual percentage rate that was in effect within 60 days before the date of mailing the application or solicitation. (D) Definitions In this paragraph - (i) the terms "temporary annual percentage rate of interest" and "temporary annual percentage rate" mean any rate of interest applicable to a credit card account for an introductory period of less than 1 year, if that rate is less than an annual percentage rate that was in effect within 60 days before the date of mailing the application or solicitation; and (ii) the term "introductory period" means the maximum time period for which the temporary annual percentage rate may be applicable. (E) Relation to other disclosure requirements Nothing in this paragraph may be construed to supersede subsection (a) of section 1632 of this title, or any disclosure required by paragraph (1) or any other provision of this subsection. (7) Internet-based solicitations (A) In general In any solicitation to open a credit card account for any person under an open end consumer credit plan using the Internet or other interactive computer service, the person making the solicitation shall clearly and conspicuously disclose - (i) the information described in subparagraphs (A) and (B) of paragraph (1); and (ii) the information described in paragraph (6). (B) Form of disclosure The disclosures required by subparagraph (A) shall be - (i) readily accessible to consumers in close proximity to the solicitation to open a credit card account; and (ii) updated regularly to reflect the current policies, terms, and fee amounts applicable to the credit card account. (C) Definitions For purposes of this paragraph - (i) the term "Internet" means the international computer network of both Federal and non-Federal interoperable packet switched data networks; and (ii) the term "interactive computer service" means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions. (d) Disclosure prior to renewal (1) In general Except as provided in paragraph (2), a card issuer that imposes any fee described in subsection (c)(1)(A)(ii)(I) or (c)(4)(A)(i) of this section shall transmit to a consumer at least 30 days prior to the scheduled renewal date of the consumer's credit or charge card account a clear and conspicuous disclosure of - (A) the date by which, the month by which, or the billing period at the close of which, the account will expire if not renewed; (B) the information described in subsection (c)(1)(A) or (c)(4)(A) of this section that would apply if the account were renewed, subject to subsection (e) of this section; and (C) the method by which the consumer may terminate continued credit availability under the account. (2) Special rule for certain disclosures (A) In general The disclosures required by this subsection may be provided - (i) prior to posting a fee described in subsection (c)(1)(A)(ii)(I) or (c)(4)(A)(i) of this section to the account, or (ii) with the periodic billing statement first disclosing that the fee has been posted to the account. (B) Limitation on use of special rule Disclosures may be provided under subparagraph (A) only if - (i) the consumer is given a 30-day period to avoid payment of the fee or to have the fee recredited to the account in any case where the consumer does not wish to continue the availability of the credit; and (ii) the consumer is permitted to use the card during such period without incurring an obligation to pay such fee. (3) Short-term renewals The Board may by regulation provide for fewer disclosures than are required by paragraph (1) in the case of an account which is renewable for a period of less than 6 months. (e) Other rules for disclosures under subsections (c) and (d) (1) Fees determined on the basis of a percentage If the amount of any fee required to be disclosed under subsection (c) or (d) of this section is determined on the basis of a percentage of another amount, the percentage used in making such determination and the identification of the amount against which such percentage is applied shall be disclosed in lieu of the amount of such fee. (2) Disclosure only of fees actually imposed If a credit or charge card issuer does not impose any fee required to be disclosed under any provision of subsection (c) or (d) of this section, such provision shall not apply with respect to such issuer. (f) Disclosure of range of certain fees which vary by State allowed If the amount of any fee required to be disclosed by a credit or charge card issuer under paragraph (1)(B), (3)(B)(i)(II), (4)(B), or (4)(C)(i)(II) of subsection (c) of this section varies from State to State, the card issuer may disclose the range of such fees for purposes of subsection (c) of this section in lieu of the amount for each applicable State, if such disclosure includes a statement that the amount of such fee varies from State to State. (g) Insurance in connection with certain open end credit card plans (1) Change in insurance carrier Whenever a card issuer that offers any guarantee or insurance for repayment of all or part of the outstanding balance of an open end credit card plan proposes to change the person providing that guarantee or insurance, the card issuer shall send each insured consumer written notice of the proposed change not less than 30 days prior to the change, including notice of any increase in the rate or substantial decrease in coverage or service which will result from such change. Such notice may be included on or with the monthly statement provided to the consumer prior to the month in which the proposed change would take effect. (2) Notice of new insurance coverage In any case in which a proposed change described in paragraph (1) occurs, the insured consumer shall be given the name and address of the new guarantor or insurer and a copy of the policy or group certificate containing the basic terms and conditions, including the premium rate to be charged. (3) Right to discontinue guarantee or insurance The notices required under paragraphs (1) and (2) shall each include a statement that the consumer has the option to discontinue the insurance or guarantee. (4) No preemption of State law No provision of this subsection shall be construed as superseding any provision of State law which is applicable to the regulation of insurance. (5) Board definition of substantial decrease in coverage or service The Board shall define, in regulations, what constitutes a "substantial decrease in coverage or service" for purposes of paragraph (1). (h) Prohibition on certain actions for failure to incur finance charges A creditor of an account under an open end consumer credit plan may not terminate an account prior to its expiration date solely because the consumer has not incurred finance charges on the account. Nothing in this subsection shall prohibit a creditor from terminating an account for inactivity in 3 or more consecutive months. -SOURCE- (Pub. L. 90-321, title I, Sec. 127, May 29, 1968, 82 Stat. 153; Pub. L. 93-495, title III, Secs. 304, 305, title IV, Secs. 411, 415, Oct. 28, 1974, 88 Stat. 1511, 1519, 1521; Pub. L. 96-221, title VI, Sec. 613(a)-(e), Mar. 31, 1980, 94 Stat. 176, 177; Pub. L. 100-583, Secs. 2(a), 6, Nov. 3, 1988, 102 Stat. 2960, 2968; Pub. L. 100-709, Sec. 2(b), Nov. 23, 1988, 102 Stat. 4729; Pub. L. 109- 8, title XIII, Secs. 1301(a), 1303(a), 1304(a), 1305(a), 1306(a), Apr. 20, 2005, 119 Stat. 204, 209, 211, 212.) -STATAMEND- ENACTMENT OF SUBSECTIONS (B)(11), (12), (C)(6), (7), AND (H) Subsections (b)(11), (12), (c)(6), (7), and (h) of this section not effective until 12 months after Jan. 29, 2009, see Effective Date of 2005 Amendment note below. -REFTEXT- REFERENCES IN TEXT For effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, referred to in subsec. (b)(11)(F)(ii)(I), as being 180 days after Apr. 20, 2005, except as otherwise provided, see section 1501 of Pub. L. 109-8, set out as an Effective Date of 2005 Amendment note under section 101 of Title 11, Bankruptcy. For effective date of subsec. (b)(11) of this section, see Effective Date of 2005 Amendment note below. -MISC1- AMENDMENTS 2005 - Subsec. (b)(11). Pub. L. 109-8, Sec. 1301(a), added par. (11). Subsec. (b)(12). Pub. L. 109-8, Sec. 1305(a), added par. (12). Subsec. (c)(6). Pub. L. 109-8, Sec. 1303(a), added par. (6). Subsec. (c)(7). Pub. L. 109-8, Sec. 1304(a), added par. (7). Subsec. (h). Pub. L. 109-8, Sec. 1306(a), added subsec. (h). 1988 - Subsec. (a)(8). Pub. L. 100-709 added par. (8). Subsecs. (c) to (f). Pub. L. 100-583, Sec. 2(a), added subsecs. (c) to (f). Subsec. (g). Pub. L. 100-583, Sec. 6, added subsec. (g). 1980 - Subsec. (a)(1). Pub. L. 96-221, Sec. 613(a)(1), inserted provisions requiring the creditor to disclose that no time period is provided. Subsec. (a)(5). Pub. L. 96-221, Sec. 613(a)(2), (3), redesignated par. (6) as (5) and inserted provisions relating to identification of other charges, and regulations by the Board. Former par. (5), relating to elective rights of the creditor, was struck out. Subsec. (a)(6). Pub. L. 96-221, Sec. 613(a)(2), (3), redesignated par. (7) as (6) and revised nomenclature and expanded statement requirements. Former par. (6) redesignated (5). Subsec. (a)(7), (8). Pub. L. 96-221, Sec. 613(a)(2), (d), redesignated par. (8) as (7) and substituted provisions relating to one billing cycle per calendar year, for provisions relating to each of two billing cycles per year. Former par. (7) redesignated (6). Subsec. (b)(2). Pub. L. 96-221, Sec. 613(b), inserted provisions relating to failure of the creditor to disclose information in accordance with this paragraph, and made minor changes in phraseology. Subsec. (b)(7) to (11). Pub. L. 96-221, Sec. 613(c), struck out par. (7) which related to elective rights of the creditor, and redesignated pars. (8) to (11) as (7) to (10), respectively. Subsec. (c). Pub. L. 96-221, Sec. 613(e), struck out subsec. (c) which related to the time for making disclosures with respect to open end consumer credit plans having an outstanding balance of more than $1 at or after the close of the first full billing cycle. 1974 - Subsec. (a)(1). Pub. L. 93-495, Sec. 415(1), inserted exception relating to nonimposition of a finance charge at the election of the creditor and without disclosure. Subsec. (a)(8). Pub. L. 93-495, Sec. 304(a), added par. (8). Subsec. (b)(2). Pub. L. 93-495, Sec. 411, substituted provisions requiring a brief identification on or accompanying the statement of credit extension sufficient to enable the obligor to identify the transaction or relate it to copies of sales vouchers or similar instruments previously furnished, for provisions requiring for purchases a brief identification, unless previously furnished, of the goods or services purchased. Subsec. (b)(10). Pub. L. 93-495, Sec. 415(2), inserted exception relating to nonimposition of additional finance charge at the election of the creditor and without disclosure. Subsec. (b)(11). Pub. L. 93-495, Sec. 305, added par. (11). Subsec. (c). Pub. L. 93-495, Sec. 304(b), substituted provisions relating to disclosure requirements in a notice mailed or delivered to the obligor not later than the time of mailing the next statement required by subsec. (b) of this section, for provisions relating to disclosure requirements in a notice mailed or delivered to the obligor not later than thirty days after July 1, 1969. EFFECTIVE DATE OF 2005 AMENDMENT Pub. L. 109-8, title XIII, Sec. 1301(b)(2), Apr. 20, 2005, 119 Stat. 207, provided that: "Section 127(b)(11) of the Truth in Lending Act [subsec. (b)(11) of this section], as added by subsection (a) of this section, and the regulations issued under paragraph (1) of this subsection [set out as a note under this section] shall not take effect until the later of - "(A) 18 months after the date of enactment of this Act [Apr. 20, 2005]; or "(B) 12 months after the publication of such final regulations by the Board [of Governors of the Federal Reserve System] [Jan. 29, 2009, see 74 F.R. 5244]." Pub. L. 109-8, title XIII, Sec. 1303(b)(2), Apr. 20, 2005, 119 Stat. 211, provided that: "Section 127(c)(6) of the Truth in Lending Act [subsec. (c)(6) of this section], as added by this section, and regulations issued under paragraph (1) of this subsection [set out as a note under this section] shall not take effect until the later of - "(A) 12 months after the date of enactment of this Act [Apr. 20, 2005]; or "(B) 12 months after the date of publication of such final regulations by the Board [of Governors of the Federal Reserve System] [Jan. 29, 2009, see 74 F.R. 5244]." Pub. L. 109-8, title XIII, Sec. 1304(b)(2), Apr. 20, 2005, 119 Stat. 212, provided that: "The amendment made by subsection (a) [amending this section] and the regulations issued under paragraph (1) of this subsection [set out as a note under this section] shall not take effect until the later of - "(A) 12 months after the date of enactment of this Act [Apr. 20, 2005]; or "(B) 12 months after the date of publication of such final regulations by the Board [of Governors of the Federal Reserve System] [Jan. 29, 2009, see 74 F.R. 5244]." Pub. L. 109-8, title XIII, Sec. 1305(b)(2), Apr. 20, 2005, 119 Stat. 212, provided that: "The amendment made by subsection (a) [amending this section] and regulations issued under paragraph (1) of this subsection [set out as a note under this section] shall not take effect until the later of - "(A) 12 months after the date of enactment of this Act [Apr. 20, 2005]; or "(B) 12 months after the date of publication of such final regulations by the Board [of Governors of the Federal Reserve System] [Jan. 29, 2009, see 74 F.R. 5244]." Pub. L. 109-8, title XIII, Sec. 1306(b)(2), Apr. 20, 2005, 119 Stat. 212, provided that: "The amendment made by subsection (a) [amending this section] and regulations issued under paragraph (1) of this subsection [set out as a note under this section] shall not take effect until the later of - "(A) 12 months after the date of enactment of this Act [Apr. 20, 2005]; or "(B) 12 months after the date of publication of such final regulations by the Board [of Governors of the Federal Reserve System] [Jan. 29, 2009, see 74 F.R. 5244]." EFFECTIVE DATE OF 1988 AMENDMENT For effective date of amendments by Pub. L. 100-709, see Regulations; Effective Date note below. 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 For effective date of amendment by sections 304 and 305 of 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. For effective date of amendment by section 411 of Pub. L. 93-495, see section 416 of Pub. L. 93-495, set out as an Effective Date note under section 1665a of this title. Amendment by section 415 of 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. REGULATIONS Pub. L. 109-8, title XIII, Sec. 1301(b)(1), Apr. 20, 2005, 119 Stat. 207, provided that: "The Board of Governors of the Federal Reserve System (hereafter in this title [amending this section and sections 1637a, 1638, 1664, and 1665b of this title and enacting provisions set out as notes under this section and section 1637a of this title] referred to as the 'Board') shall promulgate regulations implementing the requirements of section 127(b)(11) of the Truth in Lending Act [subsec. (b)(11) of this section], as added by subsection (a) of this section." Pub. L. 109-8, title XIII, Sec. 1303(b)(1), Apr. 20, 2005, 119 Stat. 211, provided that: "The Board [of Governors of the Federal Reserve System] shall promulgate regulations implementing the requirements of section 127(c)(6) of the Truth in Lending Act [subsec. (c)(6) of this section], as added by this section." Pub. L. 109-8, title XIII, Sec. 1304(b)(1), Apr. 20, 2005, 119 Stat. 211, provided that: "The Board [of Governors of the Federal Reserve System] shall promulgate regulations implementing the requirements of section 127(c)(7) of the Truth in Lending Act [subsec. (c)(7) of this section], as added by this section." Pub. L. 109-8, title XIII, Sec. 1305(b)(1), Apr. 20, 2005, 119 Stat. 212, provided that: "The Board [of Governors of the Federal Reserve System] shall promulgate regulations implementing the requirements of section 127(b)(12) of the Truth in Lending Act [subsec. (b)(12) of this section], as added by this section." Pub. L. 109-8, title XIII, Sec. 1306(b)(1), Apr. 20, 2005, 119 Stat. 212, provided that: "The Board [of Governors of the Federal Reserve System] shall promulgate regulations implementing the requirements of section 127(h) of the Truth in Lending Act [subsec. (h) of this section], as added by this section." Pub. L. 109-8, title XIII, Sec. 1309, Apr. 20, 2005, 119 Stat. 213, provided that: "(a) Regulations. - Not later than 6 months after the date of enactment of this Act [Apr. 20, 2005], the Board [of Governors of the Federal Reserve System], in consultation with the other Federal banking agencies (as defined in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 1813]), the National Credit Union Administration Board, and the Federal Trade Commission, shall promulgate regulations to provide guidance regarding the meaning of the term 'clear and conspicuous', as used in subparagraphs (A), (B), and (C) of section 127(b)(11) and clauses (ii) and (iii) of section 127(c)(6)(A) of the Truth in Lending Act [subsecs. (b)(11) and (c)(6)(A) of this section]. "(b) Examples. - Regulations promulgated under subsection (a) shall include examples of clear and conspicuous model disclosures for the purposes of disclosures required by the provisions of the Truth in Lending Act [15 U.S.C. 1601 et seq.] referred to in subsection (a). "(c) Standards. - In promulgating regulations under this section, the Board [of Governors of the Federal Reserve System] shall ensure that the clear and conspicuous standard required for disclosures made under the provisions of the Truth in Lending Act referred to in subsection (a) can be implemented in a manner which results in disclosures which are reasonably understandable and designed to call attention to the nature and significance of the information in the notice." REGULATIONS; EFFECTIVE DATE For provisions relating to promulgation of regulations to implement amendment by Pub. L. 100-709, and effective date of such amendment in connection with those regulations, see section 7 of Pub. L. 100-709, set out as a note under section 1637a of this title. Section 7 of Pub. L. 100-583 provided that: "Any regulation required to be prescribed by the Board under the amendments made by section 2 [amending this section and section 1632 of this title] shall - "(1) take effect not later than the end of the 150-day period beginning on the date of the enactment of this Act [Nov. 3, 1988]; and "(2) apply only with respect to applications, solicitations, and other material distributed after the end of the 150-day period beginning after the end of the period referred to in paragraph (1), except that - "(A) in the case of applications and solicitations subject to paragraph (3) or (4)(C) of section 127(c) of the Truth in Lending Act [15 U.S.C. 1637(c)(3), (4)(C)] (as added by section 2), such period shall be 240 days; and "(B) any card issuer may, at its option, comply with the requirements of the amendments made by this Act [see Short Title of 1988 Amendment note under section 1601 of this title] prior to the applicable effective date, in which case the amendments made by this Act shall be fully applicable to such card issuer." REPORTS TO CONGRESS Section 8 of Pub. L. 100-583 provided that: "Not later than 1 year after the regulations prescribed under section 7 of this Act [set out as a note above] become effective and annually thereafter, the Board of Governors of the Federal Reserve System shall transmit to the Congress a report containing an assessment by the Board of the profitability of credit card operations of depository institutions, including an analysis of any impact of the amendments made by this Act [see Short Title of 1988 Amendment note under section 1601 of this title] on such profitability." -FOOTNOTE- (!1) So in original. Probably should be "conspicuously". -End- -CITE- 15 USC Sec. 1637a 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1637a. Disclosure requirements for open end consumer credit plans secured by consumer's principal dwelling -STATUTE- (a) Application disclosures In the case of any open end consumer credit plan which provides for any extension of credit which is secured by the consumer's principal dwelling, the creditor shall make the following disclosures in accordance with subsection (b) of this section: (1) Fixed annual percentage rate Each annual percentage rate imposed in connection with extensions of credit under the plan and a statement that such rate does not include costs other than interest. (2) Variable percentage rate In the case of a plan which provides for variable rates of interest on credit extended under the plan - (A) a description of the manner in which such rate will be computed and a statement that such rate does not include costs other than interest; (B) a description of the manner in which any changes in the annual percentage rate will be made, including - (i) any negative amortization and interest rate carryover; (ii) the timing of any such changes; (iii) any index or margin to which such changes in the rate are related; and (iv) a source of information about any such index; (C) if an initial annual percentage rate is offered which is not based on an index - (i) a statement of such rate and the period of time such initial rate will be in effect; and (ii) a statement that such rate does not include costs other than interest; (D) a statement that the consumer should ask about the current index value and interest rate; (E) a statement of the maximum amount by which the annual percentage rate may change in any 1-year period or a statement that no such limit exists; (F) a statement of the maximum annual percentage rate that may be imposed at any time under the plan; (G) subject to subsection (b)(3) of this section, a table, based on a $10,000 extension of credit, showing how the annual percentage rate and the minimum periodic payment amount under each repayment option of the plan would have been affected during the preceding 15-year period by changes in any index used to compute such rate; (H) a statement of - (i) the maximum annual percentage rate which may be imposed under each repayment option of the plan; (ii) the minimum amount of any periodic payment which may be required, based on a $10,000 outstanding balance, under each such option when such maximum annual percentage rate is in effect; and (iii) the earliest date by which such maximum annual interest rate may be imposed; and (I) a statement that interest rate information will be provided on or with each periodic statement. (3) Other fees imposed by the creditor An itemization of any fees imposed by the creditor in connection with the availability or use of credit under such plan, including annual fees, application fees, transaction fees, and closing costs (including costs commonly described as "points"), and the time when such fees are payable. (4) Estimates of fees which may be imposed by third parties (A) Aggregate amount An estimate, based on the creditor's experience with such plans and stated as a single amount or as a reasonable range, of the aggregate amount of additional fees that may be imposed by third parties (such as governmental authorities, appraisers, and attorneys) in connection with opening an account under the plan. (B) Statement of availability A statement that the consumer may ask the creditor for a good faith estimate by the creditor of the fees that may be imposed by third parties. (5) Statement of risk of loss of dwelling A statement that - (A) any extension of credit under the plan is secured by the consumer's dwelling; and (B) in the event of any default, the consumer risks the loss of the dwelling. (6) Conditions to which disclosed terms are subject (A) Period during which such terms are available A clear and conspicuous statement - (i) of the time by which an application must be submitted to obtain the terms disclosed; or (ii) if applicable, that the terms are subject to change. (B) Right of refusal if certain terms change A statement that - (i) the consumer may elect not to enter into an agreement to open an account under the plan if any term changes (other than a change contemplated by a variable feature of the plan) before any such agreement is final; and (ii) if the consumer makes an election described in clause (i), the consumer is entitled to a refund of all fees paid in connection with the application. (C) Retention of information A statement that the consumer should make or otherwise retain a copy of information disclosed under this subparagraph. (7) Rights of creditor with respect to extensions of credit A statement that - (A) under certain conditions, the creditor may terminate any account under the plan and require immediate repayment of any outstanding balance, prohibit any additional extension of credit to the account, or reduce the credit limit applicable to the account; and (B) the consumer may receive, upon request, more specific information about the conditions under which the creditor may take any action described in subparagraph (A). (8) Repayment options and minimum periodic payments The repayment options under the plan, including - (A) if applicable, any differences in repayment options with regard to - (i) any period during which additional extensions of credit may be obtained; and (ii) any period during which repayment is required to be made and no additional extensions of credit may be obtained; (B) the length of any repayment period, including any differences in the length of any repayment period with regard to the periods described in clauses (i) and (ii) of subparagraph (A); and (C) an explanation of how the amount of any minimum monthly or periodic payment will be determined under each such option, including any differences in the determination of any such amount with regard to the periods described in clauses (i) and (ii) of subparagraph (A). (9) Example of minimum payments and maximum repayment period An example, based on a $10,000 outstanding balance and the interest rate (other than a rate not based on the index under the plan) which is, or was recently, in effect under such plan, showing the minimum monthly or periodic payment, and the time it would take to repay the entire $10,000 if the consumer paid only the minimum periodic payments and obtained no additional extensions of credit. (10) Statement concerning balloon payments If, under any repayment option of the plan, the payment of not more than the minimum periodic payments required under such option over the length of the repayment period - (A) would not repay any of the principal balance; or (B) would repay less than the outstanding balance by the end of such period, as the case may be, a statement of such fact, including an explicit statement that at the end of such repayment period a balloon payment (as defined in section 1665b(f) of this title) would result which would be required to be paid in full at that time. (11) Negative amortization If applicable, a statement that - (A) any limitation in the plan on the amount of any increase in the minimum payments may result in negative amortization; (B) negative amortization increases the outstanding principal balance of the account; and (C) negative amortization reduces the consumer's equity in the consumer's dwelling. (12) Limitations and minimum amount requirements on extensions of credit (A) Number and dollar amount limitations Any limitation contained in the plan on the number of extensions of credit and the amount of credit which may be obtained during any month or other defined time period. (B) Minimum balance and other transaction amount requirements Any requirement which establishes a minimum amount for - (i) the initial extension of credit to an account under the plan; (ii) any subsequent extension of credit to an account under the plan; or (iii) any outstanding balance of an account under the plan. (13) Statement regarding tax deductibility A statement that - (A) the consumer should consult a tax advisor regarding the deductibility of interest and charges under the plan; and (B) in any case in which the extension of credit exceeds the fair market value (as defined under title 26) of the dwelling, the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes. (14) Disclosure requirements established by Board Any other term which the Board requires, in regulations, to be disclosed. (b) Time and form of disclosures (1) Time of disclosure (A) In general The disclosures required under subsection (a) of this section with respect to any open end consumer credit plan which provides for any extension of credit which is secured by the consumer's principal dwelling and the pamphlet required under subsection (e) of this section shall be provided to any consumer at the time the creditor distributes an application to establish an account under such plan to such consumer. (B) Telephone, publications, and third party applications In the case of telephone applications, applications contained in magazines or other publications, or applications provided by a third party, the disclosures required under subsection (a) of this section and the pamphlet required under subsection (e) of this section shall be provided by the creditor before the end of the 3-day period beginning on the date the creditor receives a completed application from a consumer. (2) Form (A) In general Except as provided in paragraph (1)(B), the disclosures required under subsection (a) of this section shall be provided on or with any application to establish an account under an open end consumer credit plan which provides for any extension of credit which is secured by the consumer's principal dwelling. (B) Segregation of required disclosures from other information The disclosures required under subsection (a) of this section shall be conspicuously segregated from all other terms, data, or additional information provided in connection with the application, either by grouping the disclosures separately on the application form or by providing the disclosures on a separate form, in accordance with regulations of the Board. (C) Precedence of certain information The disclosures required by paragraphs (5), (6), and (7) of subsection (a) of this section shall precede all of the other required disclosures. (D) Special provision relating to variable interest rate information Whether or not the disclosures required under subsection (a) of this section are provided on the application form, the variable rate information described in subsection (a)(2) of this section may be provided separately from the other information required to be disclosed. (3) Requirement for historical table In preparing the table required under subsection (a)(2)(G) of this section, the creditor shall consistently select one rate of interest for each year and the manner of selecting the rate from year to year shall be consistent with the plan. (c) Third party applications In the case of an application to open an account under any open end consumer credit plan described in subsection (a) of this section which is provided to a consumer by any person other than the creditor - (1) such person shall provide such consumer with - (A) the disclosures required under subsection (a) of this section with respect to such plan, in accordance with subsection (b) of this section; and (B) the pamphlet required under subsection (e) of this section; or (2) if such person cannot provide specific terms about the plan because specific information about the plan terms is not available, no nonrefundable fee may be imposed in connection with such application before the end of the 3-day period beginning on the date the consumer receives the disclosures required under subsection (a) of this section with respect to the application. (d) "Principal dwelling" defined For purposes of this section and sections 1647 and 1665b of this title, the term "principal dwelling" includes any second or vacation home of the consumer. (e) Pamphlet In addition to the disclosures required under subsection (a) of this section with respect to an application to open an account under any open end consumer credit plan described in such subsection, the creditor or other person providing such disclosures to the consumer shall provide - (1) a pamphlet published by the Board pursuant to section 4 of the Home Equity Consumer Protection Act of 1988; or (2) any pamphlet which provides substantially similar information to the information described in such section, as determined by the Board. -SOURCE- (Pub. L. 90-321, title I, Sec. 127A, as added Pub. L. 100-709, Sec. 2(a), Nov. 23, 1988, 102 Stat. 4725; amended Pub. L. 109-8, title XIII, Sec. 1302(a)(1), Apr. 20, 2005, 119 Stat. 208.) -REFTEXT- REFERENCES IN TEXT Section 4 of the Home Equity Consumer Protection Act of 1988, referred to in subsec. (e)(1), is section 4 of Pub. L. 100-709, which is set out as a note below. -MISC1- AMENDMENTS 2005 - Subsec. (a)(13). Pub. L. 109-8 substituted "tax deductibility" for "consultation of tax advisor" in heading, designated existing provisions as introductory provisions and subpar. (A), inserted dash, substituted "; and" for period at end of subpar. (A), and added subpar. (B). EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109-8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under Title 11, Bankruptcy, before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109-8, set out as a note under section 101 of Title 11. EFFECTIVE DATE For effective date of section, see Regulations; Effective Date note below. REGULATIONS Pub. L. 109-8, title XIII, Sec. 1302(c), Apr. 20, 2005, 119 Stat. 209, provided that: "(1) In general. - The Board [of Governors of the Federal Reserve System] shall promulgate regulations implementing the amendments made by this section [amending this section and sections 1638, 1664, and 1665b of this title]. "(2) Effective date. - Regulations issued under paragraph (1) shall not take effect until the later of - "(A) 12 months after the date of enactment of this Act [Apr. 20, 2005]; or "(B) 12 months after the date of publication of such final regulations by the Board." REGULATIONS; EFFECTIVE DATE Section 7 of Pub. L. 100-709 provided that: "(a) Regulations. - Before the end of the 60-day period beginning on the date of the enactment of this Act [Nov. 23, 1988], the Board of Governors of the Federal Reserve System shall prescribe such regulations as may be necessary to carry out the proposes [sic] of the amendments made by this Act [enacting this section and sections 1647 and 1665b of this title, amending sections 1632 and 1637 of this title, and enacting provisions set out as notes under this section and section 1601 of this title]. "(b) Effective Date. - The amendments made by this Act, and the regulations prescribed pursuant to subsection (a) with respect to such amendments, shall apply to - "(1) any agreement to open an account under an open end consumer credit plan under which extensions of credit are secured by a consumer's principal dwelling which is entered into after the end of the 5-month period beginning on the date on which the regulations prescribed under subsection (a) become final; and "(2) any application to open such an account which is distributed by, or received by a creditor, after the end of such 5-month period. "(c) Voluntary Compliance. - Notwithstanding subsection (b), any creditor may comply with the amendments made by this Act, in accordance with the regulations prescribed by the Board, before the effective date established under such subsection." CONSUMER EDUCATION Section 4 of Pub. L. 100-709 provided that: "The Board of Governors of the Federal Reserve System shall develop and prepare a pamphlet for distribution to consumers which contains - "(1) a general description of open end consumer credit plans secured by the consumer's principal dwelling and the terms and conditions under which such loans are generally extended; and "(2) a discussion of the potential advantages and disadvantages of such plans, including how to compare among home equity plans and between home equity and closed end credit plans." -End- -CITE- 15 USC Sec. 1638 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1638. Transactions other than under an open end credit plan -STATUTE- (a) Required disclosures by creditor For each consumer credit transaction other than under an open end credit plan, the creditor shall disclose each of the following items, to the extent applicable: (1) The identity of the creditor required to make disclosure. (2)(A) The "amount financed", using that term, which shall be the amount of credit of which the consumer has actual use. This amount shall be computed as follows, but the computations need not be disclosed and shall not be disclosed with the disclosures conspicuously segregated in accordance with subsection (b)(1) of this section: (i) take the principal amount of the loan or the cash price less downpayment and trade-in; (ii) add any charges which are not part of the finance charge or of the principal amount of the loan and which are financed by the consumer, including the cost of any items excluded from the finance charge pursuant to section 1605 of this title; and (iii) subtract any charges which are part of the finance charge but which will be paid by the consumer before or at the time of the consummation of the transaction, or have been withheld from the proceeds of the credit. (B) In conjunction with the disclosure of the amount financed, a creditor shall provide a statement of the consumer's right to obtain, upon a written request, a written itemization of the amount financed. The statement shall include spaces for a "yes" and "no" indication to be initialed by the consumer to indicate whether the consumer wants a written itemization of the amount financed. Upon receiving an affirmative indication, the creditor shall provide, at the time other disclosures are required to be furnished, a written itemization of the amount financed. For the purposes of this subparagraph, "itemization of the amount financed" means a disclosure of the following items, to the extent applicable: (i) the amount that is or will be paid directly to the consumer; (ii) the amount that is or will be credited to the consumer's account to discharge obligations owed to the creditor; (iii) each amount that is or will be paid to third persons by the creditor on the consumer's behalf, together with an identification of or reference to the third person; and (iv) the total amount of any charges described in the preceding subparagraph (A)(iii). (3) The "finance charge", not itemized, using that term. (4) The finance charge expressed as an "annual percentage rate", using that term. This shall not be required if the amount financed does not exceed $75 and the finance charge does not exceed $5, or if the amount financed exceeds $75 and the finance charge does not exceed $7.50. (5) The sum of the amount financed and the finance charge, which shall be termed the "total of payments". (6) The number, amount, and due dates or period of payments scheduled to repay the total of payments. (7) In a sale of property or services in which the seller is the creditor required to disclose pursuant to section 1631(b) of this title, the "total sale price", using that term, which shall be the total of the cash price of the property or services, additional charges, and the finance charge. (8) Descriptive explanations of the terms "amount financed", "finance charge", "annual percentage rate", "total of payments", and "total sale price" as specified by the Board. The descriptive explanation of "total sale price" shall include reference to the amount of the downpayment. (9) Where the credit is secured, a statement that a security interest has been taken in (A) the property which is purchased as part of the credit transaction, or (B) property not purchased as part of the credit transaction identified by item or type. (10) Any dollar charge or percentage amount which may be imposed by a creditor solely on account of a late payment, other than a deferral or extension charge. (11) A statement indicating whether or not the consumer is entitled to a rebate of any finance charge upon refinancing or prepayment in full pursuant to acceleration or otherwise, if the obligation involves a precomputed finance charge. A statement indicating whether or not a penalty will be imposed in those same circumstances if the obligation involves a finance charge computed from time to time by application of a rate to the unpaid principal balance. (12) A statement that the consumer should refer to the appropriate contract document for any information such document provides about nonpayment, default, the right to accelerate the maturity of the debt, and prepayment rebates and penalties. (13) In any residential mortgage transaction, a statement indicating whether a subsequent purchaser or assignee of the consumer may assume the debt obligation on its original terms and conditions. (14) In the case of any variable interest rate residential mortgage transaction, in disclosures provided at application as prescribed by the Board for a variable rate transaction secured by the consumer's principal dwelling, at the option of the creditor, a statement that the periodic payments may increase or decrease substantially, and the maximum interest rate and payment for a $10,000 loan originated at a recent interest rate, as determined by the Board, assuming the maximum periodic increases in rates and payments under the program, or a historical example illustrating the effects of interest rate changes implemented according to the loan program. (15) In the case of a consumer credit transaction that is secured by the principal dwelling of the consumer, in which the extension of credit may exceed the fair market value of the dwelling, a clear and conspicuous statement that - (A) the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and (B) the consumer should consult a tax adviser for further information regarding the deductibility of interest and charges. (b) Form and timing of disclosures; residential mortgage transaction requirements (1) Except as otherwise provided in this part, the disclosures required under subsection (a) of this section shall be made before the credit is extended. Except for the disclosures required by subsection (a)(1) of this section, all disclosures required under subsection (a) of this section and any disclosure provided for in subsection (b), (c), or (d) of section 1605 of this title shall be conspicuously segregated from all other terms, data, or information provided in connection with a transaction, including any computations or itemization. (2) In the case of a residential mortgage transaction, as defined in section 1602(w) of this title, which is also subject to the Real Estate Settlement Procedures Act [12 U.S.C. 2601 et seq.], good faith estimates of the disclosures required under subsection (a) of this section shall be made in accordance with regulations of the Board under section 1631(c) of this title before the credit is extended, or shall be delivered or placed in the mail not later than three business days after the creditor receives the consumer's written application, which ever is earlier. If the disclosure statement furnished within three days of the written application contains an annual percentage rate which is subsequently rendered inaccurate within the meaning of section 1606(c) of this title, the creditor shall furnish another statement at the time of settlement or consummation. (3) In the case of a credit transaction described in paragraph (15) of subsection (a) of this section, disclosures required by that paragraph shall be made to the consumer at the time of application for such extension of credit. (c) Timing of disclosures on unsolicited mailed or telephone purchase orders or loan requests (1) If a creditor receives a purchase order by mail or telephone without personal solicitation, and the cash price and the total sale price and the terms of financing, including the annual percentage rate, are set forth in the creditor's catalog or other printed material distributed to the public, then the disclosures required under subsection (a) of this section may be made at any time not later than the date the first payment is due. (2) If a creditor receives a request for a loan by mail or telephone without personal solicitation and the terms of financing, including the annual percentage rate for representative amounts of credit, are set forth in the creditor's printed material distributed to the public, or in the contract of loan or other printed material delivered to the obligor, then the disclosures required under subsection (a) of this section may be made at any time not later than the date the first payment is due. (d) Timing of disclosure in cases of an addition of a deferred payment price to an existing outstanding balance If a consumer credit sale is one of a series of consumer credit sales transactions made pursuant to an agreement providing for the addition of the deferred payment price of that sale to an existing outstanding balance, and the person to whom the credit is extended has approved in writing both the annual percentage rate or rates and the method of computing the finance charge or charges, and the creditor retains no security interest in any property as to which he has received payments aggregating the amount of the sales price including any finance charges attributable thereto, then the disclosure required under subsection (a) of this section for the particular sale may be made at any time not later than the date the first payment for that sale is due. For the purposes of this subsection, in the case of items purchased on different dates, the first purchased shall be deemed first paid for, and in the case of items purchased on the same date, the lowest price shall be deemed first paid for. (e) Terms and disclosure with respect to private education loans (1) Disclosures required in private education loan applications and solicitations In any application for a private education loan, or a solicitation for a private education loan without requiring an application, the private educational lender shall disclose to the borrower, clearly and conspicuously - (A) the potential range of rates of interest applicable to the private education loan; (B) whether the rate of interest applicable to the private education loan is fixed or variable; (C) limitations on interest rate adjustments, both in terms of frequency and amount, or the lack thereof, if applicable; (D) requirements for a co-borrower, including any changes in the applicable interest rates without a co-borrower; (E) potential finance charges, late fees, penalties, and adjustments to principal, based on defaults or late payments of the borrower; (F) fees or range of fees applicable to the private education loan; (G) the term of the private education loan; (H) whether interest will accrue while the student to whom the private education loan relates is enrolled at a covered educational institution; (I) payment deferral options; (J) general eligibility criteria for the private education loan; (K) an example of the total cost of the private education loan over the life of the loan - (i) which shall be calculated using the principal amount and the maximum rate of interest actually offered by the private educational lender; and (ii) calculated both with and without capitalization of interest, if an option exists for postponing interest payments; (L) that a covered educational institution may have school- specific education loan benefits and terms not detailed on the disclosure form; (M) that the borrower may qualify for Federal student financial assistance through a program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) [and 42 U.S.C. 2751 et seq.], in lieu of, or in addition to, a loan from a non-Federal source; (N) the interest rates available with respect to such Federal student financial assistance through a program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) [and 42 U.S.C. 2751 et seq.]; (O) that, as provided in paragraph (6) - (i) the borrower shall have the right to accept the terms of the loan and consummate the transaction at any time within 30 calendar days (or such longer period as the private educational lender may provide) following the date on which the application for the private education loan is approved and the borrower receives the disclosure documents required under this subsection for the loan; and (ii) except for changes based on adjustments to the index used for a loan, the rates and terms of the loan may not be changed by the private educational lender during the period described in clause (i); (P) that, before a private education loan may be consummated, the borrower must obtain from the relevant institution of higher education the form required under paragraph (3), and complete, sign, and return such form to the private educational lender; (Q) that the consumer may obtain additional information concerning such Federal student financial assistance from their institution of higher education, or at the website of the Department of Education; and (R) such other information as the Board shall prescribe, by rule, as necessary or appropriate for consumers to make informed borrowing decisions. (2) Disclosures at the time of private education loan approval Contemporaneously with the approval of a private education loan application, and before the loan transaction is consummated, the private educational lender shall disclose to the borrower, clearly and conspicuously - (A) the applicable rate of interest in effect on the date of approval; (B) whether the rate of interest applicable to the private education loan is fixed or variable; (C) limitations on interest rate adjustments, both in terms of frequency and amount, or the lack thereof, if applicable; (D) the initial approved principal amount; (E) applicable finance charges, late fees, penalties, and adjustments to principal, based on borrower defaults or late payments, including limitations on the discharge of a private education loan in bankruptcy; (F) fees or range of fees applicable to the private education loan; (G) the maximum term under the private education loan program; (H) an estimate of the total amount for repayment, at both the interest rate in effect on the date of approval and at the maximum possible rate of interest offered by the private educational lender and applicable to the borrower, to the extent that such maximum rate may be determined, or if not, a good faith estimate thereof; (I) any principal and interest payments required while the student for whom the private education loan is intended is enrolled at a covered educational institution and unpaid interest that will accrue during such enrollment; (J) payment deferral options applicable to the borrower; (K) whether monthly payments are graduated; (L) that, as provided in paragraph (6) - (i) the borrower shall have the right to accept the terms of the loan and consummate the transaction at any time within 30 calendar days (or such longer period as the private educational lender may provide) following the date on which the application for the private education loan is approved and the borrower receives the disclosure documents required under this subsection for the loan; and (ii) except for changes based on adjustments to the index used for a loan, the rates and terms of the loan may not be changed by the private educational lender during the period described in clause (i); (M) that the borrower - (i) may qualify for Federal financial assistance through a program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) [and 42 U.S.C. 2751 et seq.], in lieu of, or in addition to, a loan from a non-Federal source; and (ii) may obtain additional information concerning such assistance from their institution of higher education or the website of the Department of Education; (N) the interest rates available with respect to such Federal financial assistance through a program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) [and 42 U.S.C. 2751 et seq.]; (O) the maximum monthly payment, calculated using the maximum rate of interest actually offered by the private educational lender and applicable to the borrower, to the extent that such maximum rate may be determined, or if not, a good faith estimate thereof; and (P) such other information as the Board shall prescribe, by rule, as necessary or appropriate for consumers to make informed borrowing decisions. (3) Self-certification of information (A) In general Before a private educational lender may consummate a private education loan with respect to a student attending an institution of higher education, the lender shall obtain from the applicant for the private education loan the form developed by the Secretary of Education under section 155 of the Higher Education Act of 1965 [20 U.S.C. 1019d], signed by the applicant, in written or electronic form. (B) Rule of construction No other provision of this subsection shall be construed to require a private educational lender to perform any additional duty under this paragraph, other than collecting the form required under subparagraph (A). (4) Disclosures at the time of private education loan consummation Contemporaneously with the consummation of a private education loan, a private educational lender shall make to the borrower each of the disclosures described in - (A) paragraph (2)(A) (adjusted, as necessary, for the rate of interest in effect on the date of consummation, based on the index used for the loan); (B) subparagraphs (B) through (K) and (M) through (P) of paragraph (2); and (C) paragraph (7). (5) Format of disclosures (A) Model form Not later than 2 years after August 14, 2008, the Board shall, based on consumer testing, and in consultation with the Secretary of Education, develop and issue model forms that may be used, at the option of the private educational lender, for the provision of disclosures required under this subsection. (B) Format Model forms developed under this paragraph shall - (i) be comprehensible to borrowers, with a clear format and design; (ii) provide for clear and conspicuous disclosures; (iii) enable borrowers easily to identify material terms of the loan and to compare such terms among private education loans; and (iv) be succinct, and use an easily readable type font. (C) Safe harbor Any private educational lender that elects to provide a model form developed under this subsection that accurately reflects the practices of the private educational lender shall be deemed to be in compliance with the disclosures required under this subsection. (6) Effective period of approved rate of interest and loan terms (A) In general With respect to a private education loan, the borrower shall have the right to accept the terms of the loan and consummate the transaction at any time within 30 calendar days (or such longer period as the private educational lender may provide) following the date on which the application for the private education loan is approved and the borrower receives the disclosure documents required under this subsection for the loan, and the rates and terms of the loan may not be changed by the private educational lender during that period. (B) Prohibition on changes Except for changes based on adjustments to the index used for a loan, the rates and terms of the loan may not be changed by the private educational lender prior to the earlier of - (i) the date of acceptance of the terms of the loan and consummation of the transaction by the borrower, as described in subparagraph (A); or (ii) the expiration of the period described in subparagraph (A). (7) Right to cancel With respect to a private education loan, the borrower may cancel the loan, without penalty to the borrower, at any time within 3 business days of the date on which the loan is consummated, and the private educational lender shall disclose such right to the borrower in accordance with paragraph (4). (8) Prohibition on disbursement No funds may be disbursed with respect to a private education loan until the expiration of the 3-day period described in paragraph (7). (9) Board regulations In issuing regulations under this subsection, the Board shall prevent, to the extent possible, duplicative disclosure requirements for private educational lenders that are otherwise required to make disclosures under this subchapter, except that in any case in which the disclosure requirements of this subsection differ or conflict with the disclosure requirements of any other provision of this subchapter, the requirements of this subsection shall be controlling. (10) Definitions For purposes of this subsection, the terms "covered educational institution", "private educational lender", and "private education loan" have the same meanings as in section 1650 of this title. (11) Duties of lenders participating in preferred lender arrangements Each private educational lender that has a preferred lender arrangement with a covered educational institution shall annually, by a date determined by the Board, in consultation with the Secretary of Education, provide to the covered educational institution such information as the Board determines to include in the model form developed under paragraph (5) for each type of private education loan that the lender plans to offer to students attending the covered educational institution, or to the families of such students, for the next award year (as that term is defined in section 481 of the Higher Education Act of 1965 [20 U.S.C. 1088]). -SOURCE- (Pub. L. 90-321, title I, Sec. 128, May 29, 1968, 82 Stat. 155; Pub. L. 96-221, title VI, Sec. 614(a)-(c), Mar. 31, 1980, 94 Stat. 178, 179; Pub. L. 104-208, div. A, title II, Sec. 2105, Sept. 30, 1996, 110 Stat. 3009-402; Pub. L. 109-8, title XIII, Sec. 1302(b)(1), Apr. 20, 2005, 119 Stat. 208; Pub. L. 110-289, div. B, title V, Sec. 2502(a), July 30, 2008, 122 Stat. 2855; Pub. L. 110- 315, title X, Sec. 1021(a), Aug. 14, 2008, 122 Stat. 3483; Pub. L. 110-343, div. A, title I, Sec. 130(a), Oct. 3, 2008, 122 Stat. 3797.) -STATAMEND- AMENDMENT OF SUBSECTION (B)(2) Pub. L. 110-289, div. B, title V, Sec. 2502(a), (c), July 30, 2008, 122 Stat. 2855, 2857, provided that, effective 12 months after July 30, 2008, subsection (b)(2) of this section is amended as follows, except that subparagraph (C) of subsection (b)(2) of this section shall become effective on the earlier of either the compliance date established by the Board for such purpose, by regulation, or 30 months after July 30, 2008: (1) by inserting "(A)" before "In the"; (2) by striking "a residential mortgage transaction, as defined in section 1602(w) of this title" and inserting "any extension of credit that is secured by the dwelling of a consumer"; (3) by striking "before the credit is extended, or" and inserting "and"; (4) by inserting ", which shall be at least 7 business days before consummation of the transaction" after "written application"; (5) by striking ", whichever is earlier"; and (6) by striking "If the" and all that follows through the end of the paragraph and inserting the following: "(B) In the case of an extension of credit that is secured by the dwelling of a consumer, the disclosures provided under subparagraph (A), shall be in addition to the other disclosures required by subsection (a), and shall - "(i) state in conspicuous type size and format, the following: 'You are not required to complete this agreement merely because you have received these disclosures or signed a loan application.'; and "(ii) be provided in the form of final disclosures at the time of consummation of the transaction, in the form and manner prescribed by this section. "(C) In the case of an extension of credit that is secured by the dwelling of a consumer, under which the annual rate of interest is variable, or with respect to which the regular payments may otherwise be variable, in addition to the other disclosures required by subsection (a), the disclosures provided under this subsection shall do the following: "(i) Label the payment schedule as follows: 'Payment Schedule: Payments Will Vary Based on Interest Rate Changes'. "(ii) State in conspicuous type size and format examples of adjustments to the regular required payment on the extension of credit based on the change in the interest rates specified by the contract for such extension of credit. Among the examples required to be provided under this clause is an example that reflects the maximum payment amount of the regular required payments on the extension of credit, based on the maximum interest rate allowed under the contract, in accordance with the rules of the Board. Prior to issuing any rules pursuant to this clause, the Board shall conduct consumer testing to determine the appropriate format for providing the disclosures required under this subparagraph to consumers so that such disclosures can be easily understood, including the fact that the initial regular payments are for a specific time period that will end on a certain date, that payments will adjust afterwards potentially to a higher amount, and that there is no guarantee that the borrower will be able to refinance to a lower amount. "(D) In any case in which the disclosure statement under subparagraph (A) contains an annual percentage rate of interest that is no longer accurate, as determined under section 1606(c) of this title, the creditor shall furnish an additional, corrected statement to the borrower, not later than 3 business days before the date of consummation of the transaction. "(E) The consumer shall receive the disclosures required under this paragraph before paying any fee to the creditor or other person in connection with the consumer's application for an extension of credit that is secured by the dwelling of a consumer. If the disclosures are mailed to the consumer, the consumer is considered to have received them 3 business days after they are mailed. A creditor or other person may impose a fee for obtaining the consumer's credit report before the consumer has received the disclosures under this paragraph, provided the fee is bona fide and reasonable in amount. "(F) Waiver of timeliness of disclosures. - To expedite consummation of a transaction, if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency, the consumer may waive or modify the timing requirements for disclosures under subparagraph (A), provided that - "(i) the term 'bona fide personal emergency' may be further defined in regulations issued by the Board; "(ii) the consumer provides to the creditor a dated, written statement describing the emergency and specifically waiving or modifying those timing requirements, which statement shall bear the signature of all consumers entitled to receive the disclosures required by this paragraph; and "(iii) the creditor provides to the consumers at or before the time of such waiver or modification, the final disclosures required by paragraph (1). "(G) The requirements of subparagraphs (B), (C), (D) and (E) shall not apply to extensions of credit relating to plans described in section 101(53D) of title 11.". Pub. L. 110-343, div. A, title I, Sec. 130, Oct. 3, 2008, 122 Stat. 3797, provided that, effective as if included in the amendments made by section 2502 of Pub. L. 110-289, subsection (b)(2) of this section is amended: (1) in subparagraph (A), by striking "In the case" and inserting "Except as provided in subparagraph (G), in the case"; and (2) by amending subparagraph (G) to read as follows: "(G)(i) In the case of an extension of credit relating to a plan described in section 101(53D) of title 11 - "(I) the requirements of subparagraphs (A) through (E) shall not apply; and "(II) a good faith estimate of the disclosures required under subsection (a) shall be made in accordance with regulations of the Board under section 1631(c) of this title before such credit is extended, or shall be delivered or placed in the mail not later than 3 business days after the date on which the creditor receives the written application of the consumer for such credit, whichever is earlier. "(ii) If a disclosure statement furnished within 3 business days of the written application (as provided under clause (i)(II)) contains an annual percentage rate which is subsequently rendered inaccurate, within the meaning of section 1606(c) of this title, the creditor shall furnish another disclosure statement at the time of settlement or consummation of the transaction.". -REFTEXT- REFERENCES IN TEXT The Real Estate Settlement Procedures Act, referred to in subsec. (b)(2), probably refers to the Real Estate Settlement Procedures Act of 1974, Pub. L. 93-533, Dec. 22, 1974, 88 Stat. 1724, as amended, which is classified principally to chapter 27 (Sec. 2601 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title note set out under section 2601 of Title 12 and Tables. The Higher Education Act of 1965, referred to in subsec. (e)(1)(M), (N), (2)(M)(i), (N), is Pub. L. 89-329, Nov. 8, 1965, 79 Stat. 1219. Title IV of the Act 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 2008 - Subsec. (e). Pub. L. 110-315 added subsec. (e). 2005 - Subsec. (a)(15). Pub. L. 109-8, Sec. 1302(b)(1)(A), added par. (15). Subsec. (b)(3). Pub. L. 109-8, Sec. 1302(b)(1)(B), added par. (3). 1996 - Subsec. (a)(14). Pub. L. 104-208 added par. (14). 1980 - Subsec. (a). Pub. L. 96-221, Sec. 614(a), substituted provisions setting forth required disclosures by the creditor for transactions other than under an open end credit plan, for provisions setting forth required disclosures by the creditor for sales not under open end credit plans. Subsec. (b). Pub. L. 96-221, Sec. 614(b), designated existing provisions as par. (1), inserted provisions relating to the conspicuous segregation of required disclosures, and struck out provisions authorizing the required information to be disclosed in the signed evidence of indebtedness, and added par. (2). Subsec. (c). Pub. L. 96-221, Sec. 614(c), designated existing provisions as par. (1), substituted "total sale" for "deferred payment", and added par. (2). EFFECTIVE DATE OF 2008 AMENDMENT Pub. L. 110-343, div. A, title I, Sec. 130(b), Oct. 3, 2008, 122 Stat. 3797, provided that: "The amendments made by subsection (a) [amending this section] shall take effect as if included in the amendments made by section 2502 of the Mortgage Disclosure Improvement Act of 2008 (Public Law 110-289) [amending this section and section 1640 of this title]." Pub. L. 110-315, title X, Sec. 1003, Aug. 14, 2008, 122 Stat. 3478, provided that: "(a) In General. - Except as provided in subsection (b) and as otherwise provided in this title [see Short Title of 2008 Amendment note set out under section 1601 of this title], this title and the amendments made by this title shall become effective on the date of enactment of this Act [Aug. 14, 2008]. "(b) Effect Notwithstanding Regulations. - Paragraphs (1), (2), (3), (4), (6), (7), and (8) of section 128(e) [15 U.S.C. 1638(e)] and section 140(c) of the Truth in Lending Act [15 U.S.C. 1650(c)], as added by this title, shall become effective on the earlier of the date on which regulations issued under section 1002 [set out as a note below] become effective or 18 months after the date of enactment of this Act [Aug. 14, 2008]." Pub. L. 110-289, div. B, title V, Sec. 2502(c), July 30, 2008, 122 Stat. 2857, provided that: "(1) General disclosures. - Except as provided in paragraph (2), the amendments made by subsection (a) [amending this section] shall become effective 12 months after the date of enactment of this Act [July 30, 2008]. "(2) Variable interest rates. - Subparagraph (C) of section 128(b)(2) of the Truth in Lending Act (15 U.S.C. 1638(b)(2)(C)), as added by subsection (a) of this section, shall become effective on the earlier of - "(A) the compliance date established by the Board for such purpose, by regulation; or "(B) 30 months after the date of enactment of this Act [July 30, 2008]." EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109-8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under Title 11, Bankruptcy, before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109-8, set out as a note under section 101 of Title 11. 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 Pub. L. 110-315, title X, Sec. 1002, Aug. 14, 2008, 122 Stat. 3478, provided that: "Not later than 365 days after the date of enactment of this Act [Aug. 14, 2008], the Board of Governors of the Federal Reserve System shall issue regulations in final form to implement paragraphs (1), (2), (3), (4), (6), (7), and (8) of section 128(e) [15 U.S.C. 1638(e)] and section 140(c) of the Truth in Lending Act [15 U.S.C. 1650(c)], as added by this title, which regulations shall become effective not later than 6 months after their date of issuance." -End- -CITE- 15 USC Sec. 1639 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1639. Requirements for certain mortgages -STATUTE- (a) Disclosures (1) Specific disclosures In addition to other disclosures required under this subchapter, for each mortgage referred to in section 1602(aa) of this title, the creditor shall provide the following disclosures in conspicuous type size: (A) "You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application.". (B) "If you obtain this loan, the lender will have a mortgage on your home. You could lose your home, and any money you have put into it, if you do not meet your obligations under the loan.". (2) Annual percentage rate In addition to the disclosures required under paragraph (1), the creditor shall disclose - (A) in the case of a credit transaction with a fixed rate of interest, the annual percentage rate and the amount of the regular monthly payment; or (B) in the case of any other credit transaction, the annual percentage rate of the loan, the amount of the regular monthly payment, a statement that the interest rate and monthly payment may increase, and the amount of the maximum monthly payment, based on the maximum interest rate allowed pursuant to section 3806 of title 12. (b) Time of disclosures (1) In general The disclosures required by this section shall be given not less than 3 business days prior to consummation of the transaction. (2) New disclosures required (A) In general After providing the disclosures required by this section, a creditor may not change the terms of the extension of credit if such changes make the disclosures inaccurate, unless new disclosures are provided that meet the requirements of this section. (B) Telephone disclosure A creditor may provide new disclosures pursuant to subparagraph (A) by telephone, if - (i) the change is initiated by the consumer; and (ii) at the consummation of the transaction under which the credit is extended - (I) the creditor provides to the consumer the new disclosures, in writing; and (II) the creditor and consumer certify in writing that the new disclosures were provided by telephone, by not later than 3 days prior to the date of consummation of the transaction. (3) Modifications The Board may, if it finds that such action is necessary to permit homeowners to meet bona fide personal financial emergencies, prescribe regulations authorizing the modification or waiver of rights created under this subsection, to the extent and under the circumstances set forth in those regulations. (c) No Prepayment penalty (1) In general (A) Limitation on terms A mortgage referred to in section 1602(aa) of this title may not contain terms under which a consumer must pay a prepayment penalty for paying all or part of the principal before the date on which the principal is due. (B) Construction For purposes of this subsection, any method of computing a refund of unearned scheduled interest is a prepayment penalty if it is less favorable to the consumer than the actuarial method (as that term is defined in section 1615(d) of this title). (2) Exception Notwithstanding paragraph (1), a mortgage referred to in section 1602(aa) of this title may contain a prepayment penalty (including terms calculating a refund by a method that is not prohibited under section 1615(b) of this title for the transaction in question) if - (A) at the time the mortgage is consummated - (i) the consumer is not liable for an amount of monthly indebtedness payments (including the amount of credit extended or to be extended under the transaction) that is greater than 50 percent of the monthly gross income of the consumer; and (ii) the income and expenses of the consumer are verified by a financial statement signed by the consumer, by a credit report, and in the case of employment income, by payment records or by verification from the employer of the consumer (which verification may be in the form of a copy of a pay stub or other payment record supplied by the consumer); (B) the penalty applies only to a prepayment made with amounts obtained by the consumer by means other than a refinancing by the creditor under the mortgage, or an affiliate of that creditor; (C) the penalty does not apply after the end of the 5-year period beginning on the date on which the mortgage is consummated; and (D) the penalty is not prohibited under other applicable law. (d) Limitations after default A mortgage referred to in section 1602(aa) of this title may not provide for an interest rate applicable after default that is higher than the interest rate that applies before default. If the date of maturity of a mortgage referred to in subsection (!1) 1602(aa) of this title is accelerated due to default and the consumer is entitled to a rebate of interest, that rebate shall be computed by any method that is not less favorable than the actuarial method (as that term is defined in section 1615(d) of this title). (e) No balloon payments A mortgage referred to in section 1602(aa) of this title having a term of less than 5 years may not include terms under which the aggregate amount of the regular periodic payments would not fully amortize the outstanding principal balance. (f) No negative amortization A mortgage referred to in section 1602(aa) of this title may not include terms under which the outstanding principal balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of interest due. (g) No prepaid payments A mortgage referred to in section 1602(aa) of this title may not include terms under which more than 2 periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the consumer. (h) Prohibition on extending credit without regard to payment ability of consumer A creditor shall not engage in a pattern or practice of extending credit to consumers under mortgages referred to in section 1602(aa) of this title based on the consumers' collateral without regard to the consumers' repayment ability, including the consumers' current and expected income, current obligations, and employment. (i) Requirements for payments under home improvement contracts A creditor shall not make a payment to a contractor under a home improvement contract from amounts extended as credit under a mortgage referred to in section 1602(aa) of this title, other than - (1) in the form of an instrument that is payable to the consumer or jointly to the consumer and the contractor; or (2) at the election of the consumer, by a third party escrow agent in accordance with terms established in a written agreement signed by the consumer, the creditor, and the contractor before the date of payment. (j) Consequence of failure to comply Any mortgage that contains a provision prohibited by this section shall be deemed a failure to deliver the material disclosures required under this subchapter, for the purpose of section 1635 of this title. (k) "Affiliate" defined For purposes of this section, the term "affiliate" has the same meaning as in section 1841(k) of title 12. (l) Discretionary regulatory authority of Board (1) Exemptions The Board may, by regulation or order, exempt specific mortgage products or categories of mortgages from any or all of the prohibitions specified in subsections (c) through (i) of this section, if the Board finds that the exemption - (A) is in the interest of the borrowing public; and (B) will apply only to products that maintain and strengthen home ownership and equity protection. (2) Prohibitions The Board, by regulation or order, shall prohibit acts or practices in connection with - (A) mortgage loans that the Board finds to be unfair, deceptive, or designed to evade the provisions of this section; and (B) refinancing of mortgage loans that the Board finds to be associated with abusive lending practices, or that are otherwise not in the interest of the borrower. -SOURCE- (Pub. L. 90-321, title I, Sec. 129, as added Pub. L. 103-325, title I, Sec. 152(d), Sept. 23, 1994, 108 Stat. 2191.) -MISC1- PRIOR PROVISIONS A prior section 1639, Pub. L. 90-321, title I, Sec. 129, May 29, 1968, 82 Stat. 156, related to consumer loans not under open end credit plans, prior to repeal by Pub. L. 96-221, title VI, Sec. 614(d)(1), Mar. 31, 1980, 94 Stat. 180. Repeal 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 an Effective Date of 1980 Amendment note under section 1602 of this title. -FOOTNOTE- (!1) So in original. Probably should be "section". -End- -CITE- 15 USC Sec. 1639a 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1639a. Fiduciary duty of servicers of pooled residential mortgages -STATUTE- (a) In general Except as may be established in any investment contract between a servicer of pooled residential mortgages and an investor, a servicer of pooled residential mortgages - (1) owes any duty to maximize the net present value of the pooled mortgages in an investment to all investors and parties having a direct or indirect interest in such investment, not to any individual party or group of parties; and (2) shall be deemed to act in the best interests of all such investors and parties if the servicer agrees to or implements a modification or workout plan, including any modification or refinancing undertaken pursuant to the HOPE for Homeowners Act of 2008, for a residential mortgage or a class of residential mortgages that constitute a part or all of the pooled mortgages in such investment, provided that any mortgage so modified meets the following criteria: (A) Default on the payment of such mortgage has occurred or is reasonably foreseeable. (B) The property securing such mortgage is occupied by the mortgagor of such mortgage. (C) The anticipated recovery on the principal outstanding obligation of the mortgage under the modification or workout plan exceeds, on a net present value basis, the anticipated recovery on the principal outstanding obligation of the mortgage through foreclosure. (b) Definition As used in this section, the term "servicer" means the person responsible for servicing of a loan (including the person who makes or holds a loan if such person also services the loan). -SOURCE- (Pub. L. 90-321, title I, Sec. 129A, as added Pub. L. 110-289, div. A, title IV, Sec. 1403, July 30, 2008, 122 Stat. 2809.) -REFTEXT- REFERENCES IN TEXT The HOPE for Homeowners Act of 2008, referred to in subsec. (a)(2), is title IV of div. A of Pub. L. 110-289, July 30, 2008, 122 Stat. 2800, which enacted this section and section 1715z-23 of Title 12, Banks and Banking, and amended section 1708 of Title 12. For complete classification of this Act to the Code, see Short Title of 2008 Amendment note set out under section 1701 of Title 12 and Tables. -End- -CITE- 15 USC Sec. 1640 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1640. Civil liability -STATUTE- (a) Individual or class action for damages; amount of award; factors determining amount of award Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part, including any requirement under section 1635 of this title, or part D or E of this subchapter with respect to any person is liable to such person in an amount equal to the sum of - (1) any actual damage sustained by such person as a result of the failure; (2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $100 nor greater than $1,000, or (iii) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $400 or greater than $4,000; or (B) in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same creditor shall not be more than the lesser of $500,000 or 1 per centum of the net worth of the creditor; (3) in the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of rescission under section 1635 of this title, the costs of the action, together with a reasonable attorney's fee as determined by the court; and (4) in the case of a failure to comply with any requirement under section 1639 of this title, an amount equal to the sum of all finance charges and fees paid by the consumer, unless the creditor demonstrates that the failure to comply is not material. In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor's failure of compliance was intentional. In connection with the disclosures referred to in subsections (a) and (b) of section 1637 of this title, a creditor shall have a liability determined under paragraph (2) only for failing to comply with the requirements of section 1635 of this title, section 1637(a) of this title, or of paragraph (4), (5), (6), (7), (8), (9), or (10) of section 1637(b) of this title or for failing to comply with disclosure requirements under State law for any term or item which the Board has determined to be substantially the same in meaning under section 1610(a)(2) of this title as any of the terms or items referred to in section 1637(a) of this title or any of those paragraphs of section 1637(b) of this title. In connection with the disclosures referred to in subsection (c) or (d) of section 1637 of this title, a card issuer shall have a liability under this section only to a cardholder who pays a fee described in section 1637(c)(1)(A)(ii)(I) or section 1637(c)(4)(A)(i) of this title or who uses the credit card or charge card. In connection with the disclosures referred to in section 1638 of this title, a creditor shall have a liability determined under paragraph (2) only for failing to comply with the requirements of section 1635 of this title or of paragraph (2) (insofar as it requires a disclosure of the "amount financed"), (3), (4), (5), (6), or (9) of section 1638(a) of this title, or section 1638(b)(2)(C)(ii) of this title, or for failing to comply with disclosure requirements under State law for any term which the Board has determined to be substantially the same in meaning under section 1610(a)(2) of this title as any of the terms referred to in any of those paragraphs of section 1638(a) of this title or section 1638(b)(2)(C)(ii) of this title. With respect to any failure to make disclosures required under this part or part D or E of this subchapter, liability shall be imposed only upon the creditor required to make disclosure, except as provided in section 1641 of this title. (b) Correction of errors A creditor or assignee has no liability under this section or section 1607 of this title or section 1611 of this title for any failure to comply with any requirement imposed under this part or part E of this subchapter, if within sixty days after discovering an error, whether pursuant to a final written examination report or notice issued under section 1607(e)(1) of this title or through the creditor's or assignee's own procedures, and prior to the institution of an action under this section or the receipt of written notice of the error from the obligor, the creditor or assignee notifies the person concerned of the error and makes whatever adjustments in the appropriate account are necessary to assure that the person will not be required to pay an amount in excess of the charge actually disclosed, or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower. (c) Unintentional violations; bona fide errors A creditor or assignee may not be held liable in any action brought under this section or section 1635 of this title for a violation of this subchapter if the creditor or assignee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programing, and printing errors, except that an error of legal judgment with respect to a person's obligations under this subchapter is not a bona fide error. (d) Liability in transaction or lease involving multiple obligors When there are multiple obligors in a consumer credit transaction or consumer lease, there shall be no more than one recovery of damages under subsection (a)(2) of this section for a violation of this subchapter. (e) Jurisdiction of courts; limitations on actions; State attorney general enforcement Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation. This subsection does not bar a person from asserting a violation of this subchapter in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action, except as otherwise provided by State law. An action to enforce a violation of section 1639 of this title may also be brought by the appropriate State attorney general in any appropriate United States district court, or any other court of competent jurisdiction, not later than 3 years after the date on which the violation occurs. The State attorney general shall provide prior written notice of any such civil action to the Federal agency responsible for enforcement under section 1607 of this title and shall provide the agency with a copy of the complaint. If prior notice is not feasible, the State attorney general shall provide notice to such agency immediately upon instituting the action. The Federal agency may - (1) intervene in the action; (2) upon intervening - (A) remove the action to the appropriate United States district court, if it was not originally brought there; and (B) be heard on all matters arising in the action; and (3) file a petition for appeal. (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 No provision of this section, section 1607(b) of this title, section 1607(c) of this title, section 1607(e) of this title, or section 1611 of this title imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the Board or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System duly authorized by the Board to issue such interpretations or approvals under such procedures as the Board may prescribe therefor, notwithstanding that after such act or omission has occurred, such rule, regulation, interpretation, or approval is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. (g) Recovery for multiple failures to disclose The multiple failure to disclose to any person any information required under this part or part D or E of this subchapter to be disclosed in connection with a single account under an open end consumer credit plan, other single consumer credit sale, consumer loan, consumer lease, or other extension of consumer credit, shall entitle the person to a single recovery under this section but continued failure to disclose after a recovery has been granted shall give rise to rights to additional recoveries. This subsection does not bar any remedy permitted by section 1635 of this title. (h) Offset from amount owed to creditor or assignee; rights of defaulting consumer A person may not take any action to offset any amount for which a creditor or assignee is potentially liable to such person under subsection (a)(2) of this section against any amount owed by such person, unless the amount of the creditor's or assignee's liability under this subchapter has been determined by judgment of a court of competent jurisdiction in an action of which such person was a party. This subsection does not bar a consumer then in default on the obligation from asserting a violation of this subchapter as an original action, or as a defense or counterclaim to an action to collect amounts owed by the consumer brought by a person liable under this subchapter. (i) Class action moratorium (1) In general During the period beginning on May 18, 1995, and ending on October 1, 1995, no court may enter any order certifying any class in any action under this subchapter - (A) which is brought in connection with any credit transaction not under an open end credit plan which is secured by a first lien on real property or a dwelling and constitutes a refinancing or consolidation of an existing extension of credit; and (B) which is based on the alleged failure of a creditor - (i) to include a charge actually incurred (in connection with the transaction) in the finance charge disclosed pursuant to section 1638 of this title; (ii) to properly make any other disclosure required under section 1638 of this title as a result of the failure described in clause (i); or (iii) to provide proper notice of rescission rights under section 1635(a) of this title due to the selection by the creditor of the incorrect form from among the model forms prescribed by the Board or from among forms based on such model forms. (2) Exceptions for certain alleged violations Paragraph (1) shall not apply with respect to any action - (A) described in clause (i) or (ii) of paragraph (1)(B), if the amount disclosed as the finance charge results in an annual percentage rate that exceeds the tolerance provided in section 1606(c) of this title; or (B) described in paragraph (1)(B)(iii), if - (i) no notice relating to rescission rights under section 1635(a) of this title was provided in any form; or (ii) proper notice was not provided for any reason other than the reason described in such paragraph. -SOURCE- (Pub. L. 90-321, title I, Sec. 130, May 29, 1968, 82 Stat. 157; Pub. L. 93-495, title IV, Secs. 406, 407, 408(a)-(d), Oct. 28, 1974, 88 Stat. 1518; Pub. L. 94-222, Sec. 3(b), Feb. 27, 1976, 90 Stat. 197; Pub. L. 94-240, Sec. 4, Mar. 23, 1976, 90 Stat. 260; Pub. L. 96-221, title VI, Sec. 615, Mar. 31, 1980, 94 Stat. 180; Pub. L. 100-583, Sec. 3, Nov. 3, 1988, 102 Stat. 2966; Pub. L. 103- 325, title I, Sec. 153(a), (b), Sept. 23, 1994, 108 Stat. 2195; Pub. L. 104-12, Sec. 2, May 18, 1995, 109 Stat. 161; Pub. L. 104- 29, Sec. 6, Sept. 30, 1995, 109 Stat. 274; Pub. L. 110-289, div. B, title V, Sec. 2502(b), July 30, 2008, 122 Stat. 2857; Pub. L. 110-315, title X, Sec. 1012(a), Aug. 14, 2008, 122 Stat. 3482.) -STATAMEND- AMENDMENT OF SECTION Pub. L. 110-315, title X, Sec. 1012, Aug. 14, 2008, 122 Stat. 3482, provided that, effective on the same date as the effective date of provisions referred to in section 1003(b) of Pub. L. 110- 315 (set out as an Effective Date of 2008 Amendment note under section 1638 of this title), this section is amended as follows: (1) in subsection (a) - (A) in paragraph (3), by inserting "or 1638(e)(7) of this title" after "section 1635 of this title"; and (B) in the fourth sentence of concluding provisions, by striking "1635 of this title or" and inserting "1635 of this title," and by inserting "of subparagraphs (A), (B), (D), (F), or (J) of section 1638(e)(2) of this title (for purposes of paragraph (2) or (4) of section 1638(e) of this title), or paragraph (4)(C), (6), (7), or (8) of section 1638(e) of this title," before "or for failing"; (2) in subsection (e), by inserting before the first period "or, in the case of a violation involving a private education loan (as that term is defined in section 1650(a) of this title), 1 year from the date on which the first regular payment of principal is due under the loan"; and (3) by adding at the end the following: (j) Private educational lender A private educational lender (as that term is defined in section 1650(a) of this title) has no liability under this section for failure to comply with section 1638(e)(3) of this title. -MISC1- AMENDMENTS 2008 - Subsec. (a). Pub. L. 110-289, Sec. 2502(b)(2), in concluding provisions, inserted "or section 1638(b)(2)(C)(ii) of this title," before "or for failing to comply" and "or section 1638(b)(2)(C)(ii) of this title" before ". With respect to". Subsec. (a)(2)(A)(iii). Pub. L. 110-289, Sec. 2502(b)(1), substituted "not less than $400 or greater than $4,000" for "not less than $200 or greater than $2,000". 1995 - Subsec. (a)(2)(A)(iii). Pub. L. 104-29 added cl. (iii). Subsec. (i). Pub. L. 104-12 added subsec. (i). 1994 - Subsec. (a)(4). Pub. L. 103-325, Sec. 153(a), added par. (4). Subsec. (e). Pub. L. 103-325, Sec. 153(b), inserted at end "An action to enforce a violation of section 1639 of this title may also be brought by the appropriate State attorney general in any appropriate United States district court, or any other court of competent jurisdiction, not later than 3 years after the date on which the violation occurs. The State attorney general shall provide prior written notice of any such civil action to the Federal agency responsible for enforcement under section 1607 of this title and shall provide the agency with a copy of the complaint. If prior notice is not feasible, the State attorney general shall provide notice to such agency immediately upon instituting the action. The Federal agency may - "(1) intervene in the action; "(2) upon intervening - "(A) remove the action to the appropriate United States district court, if it was not originally brought there; and "(B) be heard on all matters arising in the action; and "(3) file a petition for appeal." 1988 - Subsec. (a). Pub. L. 100-583 substituted "in subsections (a) and (b) of section 1637" for "in section 1637" in third sentence and inserted provisions limiting liability of card issuer under this section to cardholders who pay fee or use credit card or charge card. 1980 - Subsec. (a). Pub. L. 96-221, Sec. 615(b), in introductory text inserted provisions respecting applicability of section 1635 of this title, and in text following numbered pars. inserted provisions relating to disclosures required under sections 1637 and 1638 of this title. Subsec. (a)(2)(B). Pub. L. 96-221, Sec. 615(a)(1), substituted provisions respecting recovery under this subparagraph in any class action or series of class actions, for provisions respecting recovery in a class action. Subsec. (a)(3). Pub. L. 96-221, Sec. 615(a)(2), inserted provisions relating to right of rescission under section 1635 of this title. Subsec. (b). Pub. L. 96-221, Sec. 615(a)(3), substituted provisions relating to correction of errors within sixty days by a creditor or assignee, for provisions relating to correction of errors within fifteen days by a creditor. Subsec. (c). Pub. L. 96-221, Sec. 615(a)(3), substituted provisions relating to liability of a creditor or assignee in any action brought under this section or section 1635 of this title, for provisions relating to liability of a creditor in any action brought under this section. Subsec. (d). Pub. L. 96-221, Sec. 615(a)(3), substituted provisions relating to liability in transaction or lease involving multiple obligors, for provisions relating to liability of subsequent assignees original creditor. Subsec. (e). Pub. L. 96-221, Sec. 615(a)(4), inserted provisions relating to limitations on actions. Subsec. (f). Pub. L. 96-221, Sec. 615(a)(5), inserted references to section 1607(b), (c), and (e) of this title. Subsec. (g). Pub. L. 96-221, Sec. 615(a)(6), inserted provisions relating to remedy under section 1635 of this title. Subsec. (h). Pub. L. 96-221, Sec. 615(a)(7), substituted provisions relating to offset from amounts owed to the creditor or assignee, and rights of defaulting consumer, for provisions relating to offset from amounts owed to the creditor. 1976 - Subsec. (a). Pub. L. 94-240, Sec. 4(1), inserted "or E" after "part D". Subsec. (a)(2)(A). Pub. L. 94-240, Sec. 4(2), designated existing provision as cl. (i) and added cl. (ii). Subsec. (a)(2)(B). Pub. L. 94-240, Sec. 4(3), substituted "lesser of $500,000" for "lesser of $100,000". Subsec. (b). Pub. L. 94-240, Sec. 4(4), inserted "or part E of this subchapter" after "this part" and struck out "finance" after "required to pay a". Subsec. (f). Pub. L. 94-222 inserted "or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System duly authorized by the Board to issue such interpretations or approvals under such procedures as the Board may prescribe therefor" after "by the Board", and substituted "interpretation, or approval" for "or interpretation" before "is amended". Subsec. (g). Pub. L. 94-240, Sec. 4(5), inserted "or part D or E of this subchapter" after "this part", and "consumer lease" after "consumer loan". 1974 - Subsec. (a). Pub. L. 93-495, Sec. 408(a), substituted provisions setting forth determination of amount of liability of any creditor failing to comply with any requirement imposed under part D of this subchapter or this part, for provisions setting forth determination of amount of liability of any creditor failing to disclose in connection with any consumer credit transaction any information required under this part to be disclosed to specified persons. Subsec. (b). Pub. L. 93-495, Sec. 408(b), inserted "for any failure to comply with any requirement imposed under this part," before "if within". Subsec. (c). Pub. L. 93-495, Sec. 408(c), substituted "subchapter" for "part". Subsec. (f). Pub. L. 93-495, Sec. 406, added subsec. (f). Subsec. (g). Pub. L. 93-495, Sec. 407, added subsec. (g). Subsec. (h). Pub. L. 93-495, Sec. 408(d), added subsec. (h). EFFECTIVE DATE OF 2008 AMENDMENT Pub. L. 110-315, title X, Sec. 1012(b), Aug. 14, 2008, 122 Stat. 3482, provided that: "The amendments made by this section [amending this section] shall have the same effective date as provisions referred to in section 1003(b) [set out as a note under section 1638 of this title]." EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96-221 effective on expiration of two years and six months after Mar. 31, 1980, with all regulations, forms, and clauses required to be 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 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 Amendment by Pub. L. 93-495 effective Oct. 28, 1974, see section 416 of Pub. L. 93-495, set out as an Effective Date note under section 1665a of this title. DETERMINATION OF LIABILITY PRIOR TO OCTOBER 28, 1974 Section 408(e) of Pub. L. 93-495 provided that: "The amendments made by sections 406, 407, and 408 [amending this section] shall apply in determining the liability of any person under chapter 2 or 4 of the Truth in Lending Act [this part or part D of this subchapter], unless prior to the date of enactment of this Act [Oct. 28, 1974] such liability has been determined by final judgment of a court of competent jurisdiction and no further review of such judgment may be had by appeal or otherwise." -End- -CITE- 15 USC Sec. 1641 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1641. Liability of assignees -STATUTE- (a) Prerequisites Except as otherwise specifically provided in this subchapter, any civil action for a violation of this subchapter or proceeding under section 1607 of this title which may be brought against a creditor may be maintained against any assignee of such creditor only if the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement, except where the assignment was involuntary. For the purpose of this section, a violation apparent on the face of the disclosure statement includes, but is not limited to (1) a disclosure which can be determined to be incomplete or inaccurate from the face of the disclosure statement or other documents assigned, or (2) a disclosure which does not use the terms required to be used by this subchapter. (b) Proof of compliance with statutory provisions Except as provided in section 1635(c) of this title, in any action or proceeding by or against any subsequent assignee of the original creditor without knowledge to the contrary by the assignee when he acquires the obligation, written acknowledgement of receipt by a person to whom a statement is required to be given pursuant to this subchapter shall be conclusive proof of the delivery thereof and, except as provided in subsection (a) of this section, of compliance with this part. This section does not affect the rights of the obligor in any action against the original creditor. (c) Right of rescission by consumer unaffected Any consumer who has the right to rescind a transaction under section 1635 of this title may rescind the transaction as against any assignee of the obligation. (d) Rights upon assignment of certain mortgages (1) In general Any person who purchases or is otherwise assigned a mortgage referred to in section 1602(aa) of this title shall be subject to all claims and defenses with respect to that mortgage that the consumer could assert against the creditor of the mortgage, unless the purchaser or assignee demonstrates, by a preponderance of the evidence, that a reasonable person exercising ordinary due diligence, could not determine, based on the documentation required by this subchapter, the itemization of the amount financed, and other disclosure of disbursements that the mortgage was a mortgage referred to in section 1602(aa) of this title. The preceding sentence does not affect rights of a consumer under subsection (a), (b), or (c) of this section or any other provision of this subchapter. (2) Limitation on damages Notwithstanding any other provision of law, relief provided as a result of any action made permissible by paragraph (1) may not exceed - (A) with respect to actions based upon a violation of this subchapter, the amount specified in section 1640 of this title; and (B) with respect to all other causes of action, the sum of - (i) the amount of all remaining indebtedness; and (ii) the total amount paid by the consumer in connection with the transaction. (3) Offset The amount of damages that may be awarded under paragraph (2)(B) shall be reduced by the amount of any damages awarded under paragraph (2)(A). (4) Notice Any person who sells or otherwise assigns a mortgage referred to in section 1602(aa) of this title shall include a prominent notice of the potential liability under this subsection as determined by the Board. (e) Liability of assignee for consumer credit transactions secured by real property (1) In general Except as otherwise specifically provided in this subchapter, any civil action against a creditor for a violation of this subchapter, and any proceeding under section 1607 of this title against a creditor, with respect to a consumer credit transaction secured by real property may be maintained against any assignee of such creditor only if - (A) the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement provided in connection with such transaction pursuant to this subchapter; and (B) the assignment to the assignee was voluntary. (2) Violation apparent on the face of the disclosure described For the purpose of this section, a violation is apparent on the face of the disclosure statement if - (A) the disclosure can be determined to be incomplete or inaccurate by a comparison among the disclosure statement, any itemization of the amount financed, the note, or any other disclosure of disbursement; or (B) the disclosure statement does not use the terms or format required to be used by this subchapter. (f) Treatment of servicer (1) In general A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as an assignee of such obligation for purposes of this section unless the servicer is or was the owner of the obligation. (2) Servicer not treated as owner on basis of assignment for administrative convenience A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as the owner of the obligation for purposes of this section on the basis of an assignment of the obligation from the creditor or another assignee to the servicer solely for the administrative convenience of the servicer in servicing the obligation. Upon written request by the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address, and telephone number of the owner of the obligation or the master servicer of the obligation. (3) "Servicer" defined For purposes of this subsection, the term "servicer" has the same meaning as in section 2605(i)(2) of title 12. (4) Applicability This subsection shall apply to all consumer credit transactions in existence or consummated on or after September 30, 1995. -SOURCE- (Pub. L. 90-321, title I, Sec. 131, May 29, 1968, 82 Stat. 157; Pub. L. 96-221, title VI, Sec. 616(a), Mar. 31, 1980, 94 Stat. 182; Pub. L. 103-325, title I, Sec. 153(c), Sept. 23, 1994, 108 Stat. 2195; Pub. L. 104-29, Sec. 7, Sept. 30, 1995, 109 Stat. 274.) -MISC1- AMENDMENTS 1995 - Subsec. (e). Pub. L. 104-29, Sec. 7(a), added subsec. (e). Subsec. (f). Pub. L. 104-29, Sec. 7(b), added subsec. (f). 1994 - Subsec. (d). Pub. L. 103-325 added subsec. (d). 1980 - Pub. L. 96-221 added subsecs. (a) and (c), designated existing provisions as subsec. (b), substituted "excepted as provided in subsection (a) of this section" for "unless the violation is apparent on the face of the statement", and struck out exception for actions under section 1640(d) of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96-221 effective on expiration of two years and six months after Mar. 31, 1980, with all regulations, forms, and clauses required to be 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. 1642 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1642. Issuance of credit cards -STATUTE- No credit card shall be issued except in response to a request or application therefor. This prohibition does not apply to the issuance of a credit card in renewal of, or in substitution for, an accepted credit card. -SOURCE- (Pub. L. 90-321, title I, Sec. 132, as added Pub. L. 91-508, title V, Sec. 502(a), Oct. 26, 1970, 84 Stat. 1126.) -MISC1- EFFECTIVE DATE Section 503(1) of Pub. L. 91-508 provided that: "Section 132 of such Act [this section] takes effect on date of enactment of this title [Oct. 26, 1970]." -End- -CITE- 15 USC Sec. 1643 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1643. Liability of holder of credit card -STATUTE- (a) Limits on liability (1) A cardholder shall be liable for the unauthorized use of a credit card only if - (A) the card is an accepted credit card; (B) the liability is not in excess of $50; (C) the card issuer gives adequate notice to the cardholder of the potential liability; (D) the card issuer has provided the cardholder with a description of a means by which the card issuer may be notified of loss or theft of the card, which description may be provided on the face or reverse side of the statement required by section 1637(b) of this title or on a separate notice accompanying such statement; (E) the unauthorized use occurs before the card issuer has been notified that an unauthorized use of the credit card has occurred or may occur as the result of loss, theft, or otherwise; and (F) the card issuer has provided a method whereby the user of such card can be identified as the person authorized to use it. (2) For purposes of this section, a card issuer has been notified when such steps as may be reasonably required in the ordinary course of of business to provide the card issuer with the pertinent information have been taken, whether or not any particular officer, employee, or agent of the card issuer does in fact receive such information. (b) Burden of proof In any action by a card issuer to enforce liability for the use of a credit card, the burden of proof is upon the card issuer to show that the use was authorized or, if the use was unauthorized, then the burden of proof is upon the card issuer to show that the conditions of liability for the unauthorized use of a credit card, as set forth in subsection (a) of this section, have been met. (c) Liability imposed by other laws or by agreement with issuer Nothing in this section imposes liability upon a cardholder for the unauthorized use of a credit card in excess of his liability for such use under other applicable law or under any agreement with the card issuer. (d) Exclusiveness of liability Except as provided in this section, a cardholder incurs no liability from the unauthorized use of a credit card. -SOURCE- (Pub. L. 90-321, title I, Sec. 133, as added Pub. L. 91-508, title V, Sec. 502(a), Oct. 26, 1970, 84 Stat. 1126; amended Pub. L. 96- 221, title VI, Sec. 617, Mar. 31, 1980, 94 Stat. 182.) -MISC1- AMENDMENTS 1980 - Subsec. (a). Pub. L. 96-221 revised existing provisions into pars. (1) and (2) and, as so revised, in par. (1) made changes in structure and phraseology and revised means of notice and verification, and in par. (2) made changes in phraseology. 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 Section 503(2) of Pub. L. 91-508 provided that: "Section 133 of such Act [this section] takes effect upon the expiration of 90 days after such date of enactment [Oct. 26, 1970]." -End- -CITE- 15 USC Sec. 1644 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1644. Fraudulent use of credit cards; penalties -STATUTE- (a) Use, attempt or conspiracy to use card in transaction affecting interstate or foreign commerce Whoever knowingly in a transaction affecting interstate or foreign commerce, uses or attempts or conspires to use any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card to obtain money, goods, services, or anything else of value which within any one-year period has a value aggregating $1,000 or more; or (b) Transporting, attempting or conspiring to transport card in interstate commerce Whoever, with unlawful or fraudulent intent, transports or attempts or conspires to transport in interstate or foreign commerce a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained; or (c) Use of interstate commerce to sell or transport card Whoever, with unlawful or fraudulent intent, uses any instrumentality of interstate or foreign commerce to sell or transport a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained; or (d) Receipt, concealment, etc., of goods obtained by use of card Whoever knowingly receives, conceals, uses, or transports money, goods, services, or anything else of value (except tickets for interstate or foreign transportation) which (1) within any one-year period has a value aggregating $1,000 or more, (2) has moved in or is part of, or which constitutes interstate or foreign commerce, and (3) has been obtained with a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card; or (e) Receipt, concealment, etc., of tickets for interstate or foreign transportation obtained by use of card Whoever knowingly receives, conceals, uses, sells, or transports in interstate or foreign commerce one or more tickets for interstate or foreign transportation, which (1) within any one-year period have a value aggregating $500 or more, and (2) have been purchased or obtained with one or more counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit cards; or (f) Furnishing of money, etc., through use of card Whoever in a transaction affecting interstate or foreign commerce furnishes money, property, services, or anything else of value, which within any one-year period has a value aggregating $1,000 or more, through the use of any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained - shall be fined not more than $10,000 or imprisoned not more than ten years, or both. -SOURCE- (Pub. L. 90-321, title I, Sec. 134, as added Pub. L. 91-508, title V, Sec. 502(a), Oct. 26, 1970, 84 Stat. 1127; amended Pub. L. 93- 495, title IV, Sec. 414, Oct. 28, 1974, 88 Stat. 1520.) -MISC1- AMENDMENTS 1974 - Pub. L. 93-495 generally reorganized provisions by designating former unlettered paragraph cls. (a) to (f), and as so designated, expanded prohibitions relating to fraudulent use of credit cards, decreased amount required for fraudulent use from a retail value aggregating $5,000, or more, to enumerated amounts for particular activities, and increased the punishment from a sentence of not more than five years to a sentence of not more than ten years. EFFECTIVE DATE OF 1974 AMENDMENT Amendment by Pub. L. 93-495 effective Oct. 28, 1974, see section 416 of Pub. L. 93-495, set out as an Effective Date note under section 1665a of this title. EFFECTIVE DATE Section 503(3) of Pub. L. 91-508 provided that: "Section 134 of such Act [this section] applies to offenses committed on or after such date of enactment [Oct. 26, 1970]." -End- -CITE- 15 USC Sec. 1645 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1645. Business credit cards; limits on liability of employees -STATUTE- The exemption provided by section 1603(1) of this title does not apply to the provisions of sections 1642, 1643, and 1644 of this title, except that a card issuer and a business or other organization which provides credit cards issued by the same card issuer to ten or more of its employees may by contract agree as to liability of the business or other organization with respect to unauthorized use of such credit cards without regard to the provisions of section 1643 of this title, but in no case may such business or other organization or card issuer impose liability upon any employee with respect to unauthorized use of such a credit card except in accordance with and subject to the limitations of section 1643 of this title. -SOURCE- (Pub. L. 90-321, title I, Sec. 135, as added Pub. L. 93-495, title IV, Sec. 410(a), Oct. 28, 1974, 88 Stat. 1519.) -MISC1- EFFECTIVE DATE Section effective Oct. 28, 1974, see section 416 of Pub. L. 93- 495, set out as a note under section 1665a of this title. -End- -CITE- 15 USC Sec. 1646 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1646. Dissemination of annual percentage rates; implementation, etc. -STATUTE- (a) Annual percentage rates The Board shall collect, publish, and disseminate to the public, on a demonstration basis in a number of standard metropolitan statistical areas to be determined by the Board, the annual percentage rates charged for representative types of nonsale credit by creditors in such areas. For the purpose of this section, the Board is authorized to require creditors in such areas to furnish information necessary for the Board to collect, publish, and disseminate such information. (b) Credit card price and availability information (1) Collection required The Board shall collect, on a semiannual basis, credit card price and availability information, including the information required to be disclosed under section 1637(c) of this title, from a broad sample of financial institutions which offer credit card services. (2) Sample requirements The broad sample of financial institutions required under paragraph (1) shall include - (A) the 25 largest issuers of credit cards; and (B) not less than 125 additional financial institutions selected by the Board in a manner that ensures - (i) an equitable geographical distribution within the sample; and (ii) the representation of a wide spectrum of institutions within the sample. (3) Report of information from sample Each financial institution in the broad sample established pursuant to paragraph (2) shall report the information to the Board in accordance with such regulations or orders as the Board may prescribe. (4) Public availability of collected information; report to Congress The Board shall - (A) make the information collected pursuant to this subsection available to the public upon request; and (B) report such information semiannually to Congress. (c) Implementation The Board is authorized to enter into contracts or other arrangements with appropriate persons, organizations, or State agencies to carry out its functions under subsections (a) and (b) of this section and to furnish financial assistance in support thereof. -SOURCE- (Pub. L. 90-321, title I, Sec. 136, as added Pub. L. 96-221, title VI, Sec. 618(a), Mar. 31, 1980, 94 Stat. 183; amended Pub. L. 100- 583, Sec. 5, Nov. 3, 1988, 102 Stat. 2967.) -MISC1- AMENDMENTS 1988 - Subsecs. (b), (c). Pub. L. 100-583 added subsec. (b), redesignated former subsec. (b) as (c), and substituted "subsections (a) and (b)" for "subsection (a)". EFFECTIVE DATE Section effective on expiration of two years and six months after Mar. 31, 1980, with all regulations, forms, and clauses required to be prescribed to be promulgated at least one year prior to such effective date, and 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 an Effective Date of 1980 Amendment note under section 1602 of this title. -End- -CITE- 15 USC Sec. 1647 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1647. Home equity plans -STATUTE- (a) Index requirement In the case of extensions of credit under an open end consumer credit plan which are subject to a variable rate and are secured by a consumer's principal dwelling, the index or other rate of interest to which changes in the annual percentage rate are related shall be based on an index or rate of interest which is publicly available and is not under the control of the creditor. (b) Grounds for acceleration of outstanding balance A creditor may not unilaterally terminate any account under an open end consumer credit plan under which extensions of credit are secured by a consumer's principal dwelling and require the immediate repayment of any outstanding balance at such time, except in the case of - (1) fraud or material misrepresentation on the part of the consumer in connection with the account; (2) failure by the consumer to meet the repayment terms of the agreement for any outstanding balance; or (3) any other action or failure to act by the consumer which adversely affects the creditor's security for the account or any right of the creditor in such security. This subsection does not apply to reverse mortgage transactions. (c) Change in terms (1) In general No open end consumer credit plan under which extensions of credit are secured by a consumer's principal dwelling may contain a provision which permits a creditor to change unilaterally any term required to be disclosed under section 1637a(a) of this title or any other term, except a change in insignificant terms such as the address of the creditor for billing purposes. (2) Certain changes not precluded Notwithstanding the provisions of subsection (!1) (1), a creditor may make any of the following changes: (A) Change the index and margin applicable to extensions of credit under such plan if the index used by the creditor is no longer available and the substitute index and margin would result in a substantially similar interest rate. (B) Prohibit additional extensions of credit or reduce the credit limit applicable to an account under the plan during any period in which the value of the consumer's principal dwelling which secures any outstanding balance is significantly less than the original appraisal value of the dwelling. (C) Prohibit additional extensions of credit or reduce the credit limit applicable to the account during any period in which the creditor has reason to believe that the consumer will be unable to comply with the repayment requirements of the account due to a material change in the consumer's financial circumstances. (D) Prohibit additional extensions of credit or reduce the credit limit applicable to the account during any period in which the consumer is in default with respect to any material obligation of the consumer under the agreement. (E) Prohibit additional extensions of credit or reduce the credit limit applicable to the account during any period in which - (i) the creditor is precluded by government action from imposing the annual percentage rate provided for in the account agreement; or (ii) any government action is in effect which adversely affects the priority of the creditor's security interest in the account to the extent that the value of the creditor's secured interest in the property is less than 120 percent of the amount of the credit limit applicable to the account. (F) Any change that will benefit the consumer. (3) Material obligations Upon the request of the consumer and at the time an agreement is entered into by a consumer to open an account under an open end consumer credit plan under which extensions of credit are secured by the consumer's principal dwelling, the consumer shall be given a list of the categories of contract obligations which are deemed by the creditor to be material obligations of the consumer under the agreement for purposes of paragraph (2)(D). (4) Consumer benefit (A) In general For purposes of paragraph (2)(F), a change shall be deemed to benefit the consumer if the change is unequivocally beneficial to the borrower and the change is beneficial through the entire term of the agreement. (B) Board categorization The Board may, by regulation, determine categories of changes that benefit the consumer. (d) Terms changed after application If any term or condition described in section 1637a(a) of this title which is disclosed to a consumer in connection with an application to open an account under an open end consumer credit plan described in such section (other than a variable feature of the plan) changes before the account is opened, and if, as a result of such change, the consumer elects not to enter into the plan agreement, the creditor shall refund all fees paid by the consumer in connection with such application. (e) Additional requirements relating to refunds and imposition of nonrefundable fees (1) In general No nonrefundable fee may be imposed by a creditor or any other person in connection with any application by a consumer to establish an account under any open end consumer credit plan which provides for extensions of credit which are secured by a consumer's principal dwelling before the end of the 3-day period beginning on the date such consumer receives the disclosure required under section 1637a(a) of this title and the pamphlet required under section 1637a(e) of this title with respect to such application. (2) Constructive receipt For purposes of determining when a nonrefundable fee may be imposed in accordance with this subsection if the disclosures and pamphlet referred to in paragraph (1) are mailed to the consumer, the date of the receipt of the disclosures by such consumer shall be deemed to be 3 business days after the date of mailing by the creditor. -SOURCE- (Pub. L. 90-321, title I, Sec. 137, as added Pub. L. 100-709, Sec. 3, Nov. 23, 1988, 102 Stat. 4731; amended Pub. L. 103-325, title I, Sec. 154(c), Sept. 23, 1994, 108 Stat. 2197.) -MISC1- AMENDMENTS 1994 - Subsec. (b). Pub. L. 103-325 inserted at end "This subsection does not apply to reverse mortgage transactions." EFFECTIVE DATE For effective date of section, see Regulations; Effective Date note below. REGULATIONS; EFFECTIVE DATE For provisions relating to promulgation of regulations to implement amendment by Pub. L. 100-709 [enacting this section], and effective date of such amendment in connection with those regulations, see section 7 of Pub. L. 100-709, set out as a note under section 1637a of this title. -FOOTNOTE- (!1) So in original. Probably should be "paragraph". -End- -CITE- 15 USC Sec. 1648 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1648. Reverse mortgages -STATUTE- (a) In general In addition to the disclosures required under this subchapter, for each reverse mortgage, the creditor shall, not less than 3 days prior to consummation of the transaction, disclose to the consumer in conspicuous type a good faith estimate of the projected total cost of the mortgage to the consumer expressed as a table of annual interest rates. Each annual interest rate shall be based on a projected total future credit extension balance under a projected appreciation rate for the dwelling and a term for the mortgage. The disclosure shall include - (1) statements of the annual interest rates for not less than 3 projected appreciation rates and not less than 3 credit transaction periods, as determined by the Board, including - (A) a short-term reverse mortgage; (B) a term equaling the actuarial life expectancy of the consumer; and (C) such longer term as the Board deems appropriate; and (2) a statement that the consumer is not obligated to complete the reverse mortgage transaction merely because the consumer has received the disclosure required under this section or has signed an application for the reverse mortgage. (b) Projected total cost In determining the projected total cost of the mortgage to be disclosed to the consumer under subsection (a) of this section, the creditor shall take into account - (1) any shared appreciation or equity that the lender will, by contract, be entitled to receive; (2) all costs and charges to the consumer, including the costs of any associated annuity that the consumer elects or is required to purchase as part of the reverse mortgage transaction; (3) all payments to and for the benefit of the consumer, including, in the case in which an associated annuity is purchased (whether or not required by the lender as a condition of making the reverse mortgage), the annuity payments received by the consumer and financed from the proceeds of the loan, instead of the proceeds used to finance the annuity; and (4) any limitation on the liability of the consumer under reverse mortgage transactions (such as nonrecourse limits and equity conservation agreements). -SOURCE- (Pub. L. 90-321, title I, Sec. 138, as added Pub. L. 103-325, title I, Sec. 154(b), Sept. 23, 1994, 108 Stat. 2196.) -End- -CITE- 15 USC Sec. 1649 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1649. Certain limitations on liability -STATUTE- (a) Limitations on liability For any closed end consumer credit transaction that is secured by real property or a dwelling, that is subject to this subchapter, and that is consummated before September 30, 1995, a creditor or any assignee of a creditor shall have no civil, administrative, or criminal liability under this subchapter for, and a consumer shall have no extended rescission rights under section 1635(f) of this title with respect to - (1) the creditor's treatment, for disclosure purposes, of - (A) taxes described in section 1605(d)(3) of this title; (B) fees described in section 1605(e)(2) and (5) of this title; (C) fees and amounts referred to in the 3rd sentence of section 1605(a) of this title; or (D) borrower-paid mortgage broker fees referred to in section 1605(a)(6) of this title; (2) the form of written notice used by the creditor to inform the obligor of the rights of the obligor under section 1635 of this title if the creditor provided the obligor with a properly dated form of written notice published and adopted by the Board or a comparable written notice, and otherwise complied with all the requirements of this section regarding notice; or (3) any disclosure relating to the finance charge imposed with respect to the transaction if the amount or percentage actually disclosed - (A) may be treated as accurate for purposes of this subchapter if the amount disclosed as the finance charge does not vary from the actual finance charge by more than $200; (B) may, under section 1605(f)(2) of this title, be treated as accurate for purposes of section 1635 of this title; or (C) is greater than the amount or percentage required to be disclosed under this subchapter. (b) Exceptions Subsection (a) of this section shall not apply to - (1) any individual action or counterclaim brought under this subchapter which was filed before June 1, 1995; (2) any class action brought under this subchapter for which a final order certifying a class was entered before January 1, 1995; (3) the named individual plaintiffs in any class action brought under this subchapter which was filed before June 1, 1995; or (4) any consumer credit transaction with respect to which a timely notice of rescission was sent to the creditor before June 1, 1995. -SOURCE- (Pub. L. 90-321, title I, Sec. 139, as added Pub. L. 104-29, Sec. 4(a), Sept. 30, 1995, 109 Stat. 273; amended Pub. L. 104-208, div. A, title II, Sec. 2107(a), Sept. 30, 1996, 110 Stat. 3009-402.) -MISC1- AMENDMENTS 1996 - Subsec. (a). Pub. L. 104-208 substituted "For any closed end consumer credit transaction that is secured by real property or a dwelling, that is subject to this subchapter, and" for "For any consumer credit transaction subject to this subchapter". EFFECTIVE DATE OF 1996 AMENDMENT Section 2107(b) of div. A of Pub. L. 104-208 provided that: "The amendment made by subsection (a) [amending this section] shall be effective as of September 30, 1995." -End- -CITE- 15 USC Sec. 1650 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part B - Credit Transactions -HEAD- Sec. 1650. Preventing unfair and deceptive private educational lending practices and eliminating conflicts of interest -STATUTE- (a) Definitions As used in this section - (1) the term "covered educational institution" - (A) means any educational institution that offers a postsecondary educational degree, certificate, or program of study (including any institution of higher education); and (B) includes an agent, officer, or employee of the educational institution; (2) the term "gift" - (A)(i) means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having more than a de minimis monetary value, including services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred; and (ii) includes an item described in clause (i) provided to a family member of an officer, employee, or agent of a covered educational institution, or to any other individual based on that individual's relationship with the officer, employee, or agent, if - (I) the item is provided with the knowledge and acquiescence of the officer, employee, or agent; and (II) the officer, employee, or agent has reason to believe the item was provided because of the official position of the officer, employee, or agent; and (B) does not include - (i) standard informational material related to a loan, default aversion, default prevention, or financial literacy; (ii) food, refreshments, training, or informational material furnished to an officer, employee, or agent of a covered educational institution, as an integral part of a training session or through participation in an advisory council that is designed to improve the service of the private educational lender to the covered educational institution, if such training or participation contributes to the professional development of the officer, employee, or agent of the covered educational institution; (iii) favorable terms, conditions, and borrower benefits on a private education loan provided to a student employed by the covered educational institution, if such terms, conditions, or benefits are not provided because of the student's employment with the covered educational institution; (iv) the provision of financial literacy counseling or services, including counseling or services provided in coordination with a covered educational institution, to the extent that such counseling or services are not undertaken to secure - (I) applications for private education loans or private education loan volume; (II) applications or loan volume for any loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) [and 42 U.S.C. 2751 et seq.]; or (III) the purchase of a product or service of a specific private educational lender; (v) philanthropic contributions to a covered educational institution from a private educational lender that are unrelated to private education loans and are not made in exchange for any advantage related to private education loans; or (vi) State education grants, scholarships, or financial aid funds administered by or on behalf of a State; (3) the term "institution of higher education" has the same meaning as in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002); (4) the term "postsecondary educational expenses" means any of the expenses that are included as part of the cost of attendance of a student, as defined under section 472 of the Higher Education Act of 1965 (20 U.S.C. 1087ll); (5) the term "preferred lender arrangement" has the same meaning as in section 151 of the Higher Education Act of 1965 [20 U.S.C. 1019]; (6) the term "private educational lender" means - (A) a financial institution, as defined in section 1813 of title 12 that solicits, makes, or extends private education loans; (B) a Federal credit union, as defined in section 1752 of title 12 that solicits, makes, or extends private education loans; and (C) any other person engaged in the business of soliciting, making, or extending private education loans; (7) the term "private education loan" - (A) means a loan provided by a private educational lender that - (i) is not made, insured, or guaranteed under of (!1) title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) [and 42 U.S.C. 2751 et seq.]; and (ii) is issued expressly for postsecondary educational expenses to a borrower, regardless of whether the loan is provided through the educational institution that the subject student attends or directly to the borrower from the private educational lender; and (B) does not include an extension of credit under an open end consumer credit plan, a reverse mortgage transaction, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling; and (8) the term "revenue sharing" means an arrangement between a covered educational institution and a private educational lender under which - (A) a private educational lender provides or issues private education loans with respect to students attending the covered educational institution; (B) the covered educational institution recommends to students or others the private educational lender or the private education loans of the private educational lender; and (C) the private educational lender pays a fee or provides other material benefits, including profit sharing, to the covered educational institution in connection with the private education loans provided to students attending the covered educational institution or a borrower acting on behalf of a student. (b) Prohibition on certain gifts and arrangements A private educational lender may not, directly or indirectly - (1) offer or provide any gift to a covered educational institution in exchange for any advantage or consideration provided to such private educational lender related to its private education loan activities; or (2) engage in revenue sharing with a covered educational institution. (c) Prohibition on co-branding A private educational lender may not use the name, emblem, mascot, or logo of the covered educational institution, or other words, pictures, or symbols readily identified with the covered educational institution, in the marketing of private education loans in any way that implies that the covered educational institution endorses the private education loans offered by the private educational lender. (d) Advisory Board compensation Any person who is employed in the financial aid office of a covered educational institution, or who otherwise has responsibilities with respect to private education loans or other financial aid of the institution, and who serves on an advisory board, commission, or group established by a private educational lender or group of such lenders shall be prohibited from receiving anything of value from the private educational lender or group of lenders. Nothing in this subsection prohibits the reimbursement of reasonable expenses incurred by an employee of a covered educational institution as part of their service on an advisory board, commission, or group described in this subsection. (e) Prohibition on prepayment or repayment fees or penalty It shall be unlawful for any private educational lender to impose a fee or penalty on a borrower for early repayment or prepayment of any private education loan. -SOURCE- (Pub. L. 90-321, title I, Sec. 140, as added Pub. L. 110-315, title X, Sec. 1011(a), Aug. 14, 2008, 122 Stat. 3479.) -REFTEXT- REFERENCES IN TEXT The Higher Education Act of 1965, referred to in subsec. (a)(2)(B)(iv)(II), (7)(A)(i), is Pub. L. 89-329, Nov. 8, 1965, 79 Stat. 1219. Title IV of the Act 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- EFFECTIVE DATE Subsec. (c) of this section effective on the earlier of the date on which regulations issued under section 1002 of Pub. L. 110-315 (set out as a note under section 1638 of this title) become effective or 18 months after Aug. 14, 2008, see section 1003 of Pub. L. 110-315, set out as an Effective Date of 2008 Amendment note under section 1638 of this title. -FOOTNOTE- (!1) So in original. The word "of" probably should not appear. -End- -CITE- 15 USC Part C - Credit Advertising 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part C - Credit Advertising -HEAD- PART C - CREDIT ADVERTISING -End- -CITE- 15 USC Sec. 1661 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part C - Credit Advertising -HEAD- Sec. 1661. Catalogs and multiple-page advertisements -STATUTE- For the purposes of this part, a catalog or other multiple-page advertisement shall be considered a single advertisement if it clearly and conspicuously displays a credit terms table on which the information required to be stated under this part is clearly set forth. -SOURCE- (Pub. L. 90-321, title I, Sec. 141, May 29, 1968, 82 Stat. 158.) -MISC1- EFFECTIVE DATE Section 504(b) of Pub. L. 90-321 provided that chapter 3 of title I, which enacted sections 1661 to 1665 of this title, is effective July 1, 1969. -End- -CITE- 15 USC Sec. 1662 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part C - Credit Advertising -HEAD- Sec. 1662. Advertising of downpayments and installments -STATUTE- No advertisement to aid, promote, or assist directly or indirectly any extension of consumer credit may state (1) that a specific periodic consumer credit amount or installment amount can be arranged, unless the creditor usually and customarily arranges credit payments or installments for that period and in that amount. (2) that a specified downpayment is required in connection with any extension of consumer credit, unless the creditor usually and customarily arranges downpayments in that amount. -SOURCE- (Pub. L. 90-321, title I, Sec. 142, May 29, 1968, 82 Stat. 158.) -End- -CITE- 15 USC Sec. 1663 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part C - Credit Advertising -HEAD- Sec. 1663. Advertising of open end credit plans -STATUTE- No advertisement to aid, promote, or assist directly or indirectly the extension of consumer credit under an open end credit plan may set forth any of the specific terms of that plan unless it also clearly and conspicuously sets forth all of the following items: (1) Any minimum or fixed amount which could be imposed. (2) In any case in which periodic rates may be used to compute the finance charge, the periodic rates expressed as annual percentage rates. (3) Any other term that the Board may by regulation require to be disclosed. -SOURCE- (Pub. L. 90-321, title I, Sec. 143, May 29, 1968, 82 Stat. 158; Pub. L. 96-221, title VI, Secs. 613(f), 619(a), Mar. 31, 1980, 94 Stat. 177, 183.) -MISC1- AMENDMENTS 1980 - Pub. L. 96-221 in existing introductory text struck out applicability of rate determined under section 1637(a)(5) of this title, and amended section generally substituting items setting forth minimum or fixed amount, etc., set out in pars. (1) to (3), for items time period, etc., set out in pars. (1) to (5). 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. 1664 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part C - Credit Advertising -HEAD- Sec. 1664. Advertising of credit other than open end plans -STATUTE- (a) Exclusion of open end credit plans Except as provided in subsection (b) of this section, this section applies to any advertisement to aid, promote, or assist directly or indirectly any consumer credit sale, loan, or other extension of credit subject to the provisions of this subchapter, other than an open end credit plan. (b) Advertisements of residential real estate The provisions of this section do not apply to advertisements of residential real estate except to the extent that the Board may by regulation require. (c) Rate of finance charge expressed as annual percentage rate If any advertisement to which this section applies states the rate of a finance charge, the advertisement shall state the rate of that charge expressed as an annual percentage rate. (d) Requisite disclosures in advertisement If any advertisement to which this section applies states the amount of the downpayment, if any, the amount of any installment payment, the dollar amount of any finance charge, or the number of installments or the period of repayment, then the advertisement shall state all of the following items: (1) The downpayment, if any. (2) The terms of repayment. (3) The rate of the finance charge expressed as an annual percentage rate. (e) Credit transaction secured by principal dwelling of consumer Each advertisement to which this section applies that relates to a consumer credit transaction that is secured by the principal dwelling of a consumer in which the extension of credit may exceed the fair market value of the dwelling, and which advertisement is disseminated in paper form to the public or through the Internet, as opposed to by radio or television, shall clearly and conspicuously state that - (1) the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and (2) the consumer should consult a tax adviser for further information regarding the deductibility of interest and charges. -SOURCE- (Pub. L. 90-321, title I, Sec. 144, May 29, 1968, 82 Stat. 158; Pub. L. 96-221, title VI, Sec. 619(b), Mar. 31, 1980, 94 Stat. 183; Pub. L. 109-8, title XIII, Sec. 1302(b)(2), Apr. 20, 2005, 119 Stat. 209.) -MISC1- AMENDMENTS 2005 - Subsec. (e). Pub. L. 109-8 added subsec. (e). 1980 - Subsec. (d). Pub. L. 97-221 substituted items setting forth downpayment, etc., set out in pars. (1) to (3), for items setting forth cash price or amount of loan, etc., set out in pars. (1) to (4). EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109-8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under Title 11, Bankruptcy, before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109-8, set out as a note under section 101 of Title 11. 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. 1665 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part C - Credit Advertising -HEAD- Sec. 1665. Nonliability of advertising media -STATUTE- There is no liability under this part on the part of any owner or personnel, as such, of any medium in which an advertisement appears or through which it is disseminated. -SOURCE- (Pub. L. 90-321, title I, Sec. 145, May 29, 1968, 82 Stat. 159.) -End- -CITE- 15 USC Sec. 1665a 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part C - Credit Advertising -HEAD- Sec. 1665a. Use of annual percentage rate in oral disclosures; exceptions -STATUTE- In responding orally to any inquiry about the cost of credit, a creditor, regardless of the method used to compute finance charges, shall state rates only in terms of the annual percentage rate, except that in the case of an open end credit plan, the periodic rate also may be stated and, in the case of an other than open end credit plan where a major component of the finance charge consists of interest computed at a simple annual rate, the simple annual rate also may be stated. The Board may, by regulation, modify the requirements of this section or provide an exception from this section for a transaction or class of transactions for which the creditor cannot determine in advance the applicable annual percentage rate. -SOURCE- (Pub. L. 90-321, title I, Sec. 146, as added Pub. L. 93-495, title IV, Sec. 401(a), Oct. 28, 1974, 88 Stat. 1517; amended Pub. L. 96- 221, title VI, Sec. 623(a), Mar. 31, 1980, 94 Stat. 185.) -MISC1- AMENDMENTS 1980 - Pub. L. 96-221 substituted provisions relating to use of annual percentage rate in oral disclosures by creditors, for provisions setting forth requirements for advertisements concerning consumer credit repayable in more than four installments. 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 Section 416 of title IV of Pub. L. 93-495 provided that: "This title [enacting this section and sections 1614 and 1645 of this title, amending sections 1603, 1607, 1635, 1637, 1640, and 1644 of this title, and enacting provision set out as a note under section 1640 of this title] takes effect upon the date of its enactment [Oct. 28, 1974], except that sections 409 [amending section 1631 of this title] and 411 [amending section 1637 of this title] take effect upon the expiration of one year after the date of its enactment [Oct. 28, 1974]." -End- -CITE- 15 USC Sec. 1665b 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part C - Credit Advertising -HEAD- Sec. 1665b. Advertising of open end consumer credit plans secured by consumer's principal dwelling -STATUTE- (a) In general If any advertisement to aid, promote, or assist, directly or indirectly, the extension of consumer credit through an open end consumer credit plan under which extensions of credit are secured by the consumer's principal dwelling states, affirmatively or negatively, any of the specific terms of the plan, including any periodic payment amount required under such plan, such advertisement shall also clearly and conspicuously set forth the following information, in such form and manner as the Board may require: (1) Loan fees and opening cost estimates Any loan fee the amount of which is determined as a percentage of the credit limit applicable to an account under the plan and an estimate of the aggregate amount of other fees for opening the account, based on the creditor's experience with the plan and stated as a single amount or as a reasonable range. (2) Periodic rates In any case in which periodic rates may be used to compute the finance charge, the periodic rates expressed as an annual percentage rate. (3) Highest annual percentage rate The highest annual percentage rate which may be imposed under the plan. (4) Other information Any other information the Board may by regulation require. (b) Tax deductibility (1) In general If any advertisement described in subsection (a) of this section contains a statement that any interest expense incurred with respect to the plan is or may be tax deductible, the advertisement shall not be misleading with respect to such deductibility. (2) Credit in excess of fair market value Each advertisement described in subsection (a) of this section that relates to an extension of credit that may exceed the fair market value of the dwelling, and which advertisement is disseminated in paper form to the public or through the Internet, as opposed to by radio or television, shall include a clear and conspicuous statement that - (A) the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and (B) the consumer should consult a tax adviser for further information regarding the deductibility of interest and charges. (c) Certain terms prohibited No advertisement described in subsection (a) of this section with respect to any home equity account may refer to such loan as "free money" or use other terms determined by the Board by regulation to be misleading. (d) Discounted initial rate (1) In general If any advertisement described in subsection (a) of this section includes an initial annual percentage rate that is not determined by the index or formula used to make later interest rate adjustments, the advertisement shall also state with equal prominence the current annual percentage rate that would have been applied using the index or formula if such initial rate had not been offered. (2) Quoted rate must be reasonably current The annual percentage rate required to be disclosed under the paragraph (1) rate must be current as of a reasonable time given the media involved. (3) Period during which initial rate is in effect Any advertisement to which paragraph (1) applies shall also state the period of time during which the initial annual percentage rate referred to in such paragraph will be in effect. (e) Balloon payment If any advertisement described in subsection (a) of this section contains a statement regarding the minimum monthly payment under the plan, the advertisement shall also disclose, if applicable, the fact that the plan includes a balloon payment. (f) "Balloon payment" defined For purposes of this section and section 1637a of this title, the term "balloon payment" means, with respect to any open end consumer credit plan under which extensions of credit are secured by the consumer's principal dwelling, any repayment option under which - (1) the account holder is required to repay the entire amount of any outstanding balance as of a specified date or at the end of a specified period of time, as determined in accordance with the terms of the agreement pursuant to which such credit is extended; and (2) the aggregate amount of the minimum periodic payments required would not fully amortize such outstanding balance by such date or at the end of such period. -SOURCE- (Pub. L. 90-321, title I, Sec. 147, as added Pub. L. 100-709, Sec. 2(c), Nov. 23, 1988, 102 Stat. 4730; amended Pub. L. 109-8, title XIII, Sec. 1302(a)(2), Apr. 20, 2005, 119 Stat. 208.) -MISC1- AMENDMENTS 2005 - Subsec. (b). Pub. L. 109-8 designated existing provisions as par. (1), inserted par. heading, and added par. (2). EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109-8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under Title 11, Bankruptcy, before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109-8, set out as a note under section 101 of Title 11. EFFECTIVE DATE For effective date of section, see Regulations; Effective Date note below. REGULATIONS; EFFECTIVE DATE For provisions relating to promulgation of regulations to implement amendment by Pub. L. 100-709 [enacting this section], and effective date of such amendment in connection with those regulations, see section 7 of Pub. L. 100-709, set out as a note under section 1637a of this title. -End- -CITE- 15 USC Part D - Credit Billing 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- PART D - CREDIT BILLING -End- -CITE- 15 USC Sec. 1666 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 1666. Correction of billing errors -STATUTE- (a) Written notice by obligor to creditor; time for and contents of notice; procedure upon receipt of notice by creditor If a creditor, within sixty days after having transmitted to an obligor a statement of the obligor's account in connection with an extension of consumer credit, receives at the address disclosed under section 1637(b)(10) of this title a written notice (other than notice on a payment stub or other payment medium supplied by the creditor if the creditor so stipulates with the disclosure required under section 1637(a)(7) of this title) from the obligor in which the obligor - (1) sets forth or otherwise enables the creditor to identify the name and account number (if any) of the obligor, (2) indicates the obligor's belief that the statement contains a billing error and the amount of such billing error, and (3) sets forth the reasons for the obligor's belief (to the extent applicable) that the statement contains a billing error, the creditor shall, unless the obligor has, after giving such written notice and before the expiration of the time limits herein specified, agreed that the statement was correct - (A) not later than thirty days after the receipt of the notice, send a written acknowledgment thereof to the obligor, unless the action required in subparagraph (B) is taken within such thirty- day period, and (B) not later than two complete billing cycles of the creditor (in no event later than ninety days) after the receipt of the notice and prior to taking any action to collect the amount, or any part thereof, indicated by the obligor under paragraph (2) either - (i) make appropriate corrections in the account of the obligor, including the crediting of any finance charges on amounts erroneously billed, and transmit to the obligor a notification of such corrections and the creditor's explanation of any change in the amount indicated by the obligor under paragraph (2) and, if any such change is made and the obligor so requests, copies of documentary evidence of the obligor's indebtedness; or (ii) send a written explanation or clarification to the obligor, after having conducted an investigation, setting forth to the extent applicable the reasons why the creditor believes the account of the obligor was correctly shown in the statement and, upon request of the obligor, provide copies of documentary evidence of the obligor's indebtedness. In the case of a billing error where the obligor alleges that the creditor's billing statement reflects goods not delivered to the obligor or his designee in accordance with the agreement made at the time of the transaction, a creditor may not construe such amount to be correctly shown unless he determines that such goods were actually delivered, mailed, or otherwise sent to the obligor and provides the obligor with a statement of such determination. After complying with the provisions of this subsection with respect to an alleged billing error, a creditor has no further responsibility under this section if the obligor continues to make substantially the same allegation with respect to such error. (b) Billing error For the purpose of this section, a "billing error" consists of any of the following: (1) A reflection on a statement of an extension of credit which was not made to the obligor or, if made, was not in the amount reflected on such statement. (2) A reflection on a statement of an extension of credit for which the obligor requests additional clarification including documentary evidence thereof. (3) A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction. (4) The creditor's failure to reflect properly on a statement a payment made by the obligor or a credit issued to the obligor. (5) A computation error or similar error of an accounting nature of the creditor on a statement. (6) Failure to transmit the statement required under section 1637(b) of this title to the last address of the obligor which has been disclosed to the creditor, unless that address was furnished less than twenty days before the end of the billing cycle for which the statement is required. (7) Any other error described in regulations of the Board. (c) Action by creditor to collect amount or any part thereof regarded by obligor to be a billing error For the purposes of this section, "action to collect the amount, or any part thereof, indicated by an obligor under paragraph (2)" does not include the sending of statements of account, which may include finance charges on amounts in dispute, to the obligor following written notice from the obligor as specified under subsection (a) of this section, if - (1) the obligor's account is not restricted or closed because of the failure of the obligor to pay the amount indicated under paragraph (2) of subsection (a) of this section, and (2) the creditor indicates the payment of such amount is not required pending the creditor's compliance with this section. Nothing in this section shall be construed to prohibit any action by a creditor to collect any amount which has not been indicated by the obligor to contain a billing error. (d) Restricting or closing by creditor of account regarded by obligor to contain a billing error Pursuant to regulations of the Board, a creditor operating an open end consumer credit plan may not, prior to the sending of the written explanation or clarification required under paragraph (B)(ii), restrict or close an account with respect to which the obligor has indicated pursuant to subsection (a) of this section that he believes such account to contain a billing error solely because of the obligor's failure to pay the amount indicated to be in error. Nothing in this subsection shall be deemed to prohibit a creditor from applying against the credit limit on the obligor's account the amount indicated to be in error. (e) Effect of noncompliance with requirements by creditor Any creditor who fails to comply with the requirements of this section or section 1666a of this title forfeits any right to collect from the obligor the amount indicated by the obligor under paragraph (2) of subsection (a) of this section, and any finance charges thereon, except that the amount required to be forfeited under this subsection may not exceed $50. -SOURCE- (Pub. L. 90-321, title I, Sec. 161, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1512; amended Pub. L. 96- 221, title VI Secs. 613(g), 620, Mar. 31, 1980, 94 Stat. 177, 184.) -MISC1- AMENDMENTS 1980 - Subsec. (a). Pub. L. 96-221, Sec. 613(g), substituted "(b)(10)" for "(b)(11)" and "(a)(7)" for "(a)(8)". Subsec. (b)(6), (7). Pub. L. 96-221, Sec. 620(a), added par. (6) and redesignated former par. (6) as (7). Subsec. (c). Pub. L. 96-221, Sec. 620(b), inserted provisions respecting finance charges on amounts in dispute. EFFECTIVE DATE OF 1980 AMENDMENT Amendment buy 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 Section 308 of title III of Pub. L. 93-495 provided that: "This title [enacting this section and sections 1666a to 1666j of this title, amending sections 1601, 1602, 1610, 1631, 1632, and 1637 of this title, and enacting provision set out as a note under section 1601 of this title] takes effect upon the expiration of one year after the date of its enactment [Oct. 28, 1974]." SHORT TITLE Title III of Pub. L. 93-495, which is classified principally to this part, is known as the "Fair Credit Billing Act". For complete classification of Title III to the Code, see Short Title of 1974 Amendment note set out under section 1601 of this title and Tables. -End- -CITE- 15 USC Sec. 1666a 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 1666a. Regulation of credit reports -STATUTE- (a) Reports by creditor on obligor's failure to pay amount regarded as billing error After receiving a notice from an obligor as provided in section 1666(a) of this title, a creditor or his agent may not directly or indirectly threaten to report to any person adversely on the obligor's credit rating or credit standing because of the obligor's failure to pay the amount indicated by the obligor under section 1666(a)(2) of this title, and such amount may not be reported as delinquent to any third party until the creditor has met the requirements of section 1666 of this title and has allowed the obligor the same number of days (not less than ten) thereafter to make payment as is provided under the credit agreement with the obligor for the payment of undisputed amounts. (b) Reports by creditor on delinquent amounts in dispute; notification of obligor of parties notified of delinquency If a creditor receives a further written notice from an obligor that an amount is still in dispute within the time allowed for payment under subsection (a) of this section, a creditor may not report to any third party that the amount of the obligor is delinquent because the obligor has failed to pay an amount which he has indicated under section 1666(a)(2) of this title, unless the creditor also reports that the amount is in dispute and, at the same time, notifies the obligor of the name and address of each party to whom the creditor is reporting information concerning the delinquency. (c) Reports by creditor of subsequent resolution of delinquent amounts A creditor shall report any subsequent resolution of any delinquencies reported pursuant to subsection (b) of this section to the parties to whom such delinquencies were initially reported. -SOURCE- (Pub. L. 90-321, title I, Sec. 162, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1513.) -End- -CITE- 15 USC Sec. 1666b 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 1666b. Length of billing period in credit statement for imposition of finance charge; effect of failure of timely mailing or delivery of statement -STATUTE- (a) Additional finance charge If an open end consumer credit plan provides a time period within which an obligor may repay any portion of the credit extended without incurring an additional finance charge, such additional finance charge may not be imposed with respect to such portion of the credit extended for the billing cycle of which such period is a part unless a statement which includes the amount upon which the finance charge for that period is based was mailed at least fourteen days prior to the date specified in the statement by which payment must be made in order to avoid imposition of that finance charge. (b) Excusable cause Subsection (a) of this section does not apply in any case where a creditor has been prevented, delayed, or hindered in making timely mailing or delivery of such periodic statement within the time period specified in such subsection because of an act of God, war, natural disaster, strike, or other excusable or justifiable cause, as determined under regulations of the Board. -SOURCE- (Pub. L. 90-321, title I, Sec. 163, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1514.) -End- -CITE- 15 USC Sec. 1666c 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 1666c. Prompt crediting of payments; imposition of finance charge -STATUTE- Payments received from an obligor under an open end consumer credit plan by the creditor shall be posted promptly to the obligor's account as specified in regulations of the Board. Such regulations shall prevent a finance charge from being imposed on any obligor if the creditor has received the obligor's payment in readily identifiable form in the amount, manner, location, and time indicated by the creditor to avoid the imposition thereof. -SOURCE- (Pub. L. 90-321, title I, Sec. 164, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1514.) -End- -CITE- 15 USC Sec. 1666d 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 1666d. Treatment of credit balances -STATUTE- Whenever a credit balance in excess of $1 is created in connection with a consumer credit transaction through (1) transmittal of funds to a creditor in excess of the total balance due on an account, (2) rebates of unearned finance charges or insurance premiums, or (3) amounts otherwise owed to or held for the benefit of an obligor, the creditor shall - (A) credit the amount of the credit balance to the consumer's account; (B) refund any part of the amount of the remaining credit balance, upon request of the consumer; and (C) make a good faith effort to refund to the consumer by cash, check, or money order any part of the amount of the credit balance remaining in the account for more than six months, except that no further action is required in any case in which the consumer's current location is not known by the creditor and cannot be traced through the consumer's last known address or telephone number. -SOURCE- (Pub. L. 90-321, title I, Sec. 165, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1514; amended Pub. L. 96- 221, title VI, Sec. 621(a), Mar. 31, 1980, 94 Stat. 184.) -MISC1- AMENDMENTS 1980 - Pub. L. 96-221 substituted provisions relating to duties of creditor whenever a credit balance in excess of $1 is created in connection with a consumer credit transaction, for provisions relating to duties of creditor whenever an obligor transmits funds to creditor in excess of the total balance due on an open end consumer credit account. 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. 1666e 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 1666e. Notification of credit card issuer by seller of return of goods, etc., by obligor; credit for account of obligor -STATUTE- With respect to any sales transaction where a credit card has been used to obtain credit, where the seller is a person other than the card issuer, and where the seller accepts or allows a return of the goods or forgiveness of a debit for services which were the subject of such sale, the seller shall promptly transmit to the credit card issuer, a credit statement with respect thereto and the credit card issuer shall credit the account of the obligor for the amount of the transaction. -SOURCE- (Pub. L. 90-321, title I, Sec. 166, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1514.) -End- -CITE- 15 USC Sec. 1666f 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 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 -STATUTE- (a) Cash discounts With respect to credit card which may be used for extensions of credit in sales transactions in which the seller is a person other than the card issuer, the card issuer may not, by contract, or otherwise, prohibit any such seller from offering a discount to a cardholder to induce the cardholder to pay by cash, check, or similar means rather than use a credit card. (b) Finance charge With respect to any sales transaction, any discount from the regular price offered by the seller for the purpose of inducing payment by cash, checks, or other means not involving the use of an open-end credit plan or a credit card shall not constitute a finance charge as determined under section 1605 of this title if such discount is offered to all prospective buyers and its availability is disclosed clearly and conspicuously. -SOURCE- (Pub. L. 90-321, title I, Sec. 167, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1515; amended Pub. L. 94- 222, Sec. 3(c)(1), Feb. 27, 1976, 90 Stat. 197; Pub. L. 97-25, title I, Sec. 101, July 27, 1981, 95 Stat. 144.) -MISC1- AMENDMENTS 1981 - Subsec. (b). Pub. L. 97-25 substituted "With respect to any sales transaction, any discount from the regular price offered by the seller for the purpose of inducing payment by cash, checks, or other means not involving the use of an open-end credit plan or a credit card shall not constitute a finance charge as determined under section 1605 of this title if such discount is offered to all prospective buyers and its availability is disclosed clearly and conspicuously" for "With respect to any sales transaction, any discount not in excess of 5 per centum offered by the seller for the purpose of inducing payment by cash, check, or other means not involving the use of a credit card shall not constitute a finance charge as determined under section 1605 of this title, if such discount is offered to all prospective buyers and its availability is disclosed to all prospective buyers clearly and conspicuously in accordance with regulations of the Board". 1976 - Subsec. (a). Pub. L. 94-222 temporarily designated existing provisions as par. (1) and added par. (2). See Termination Date of 1976 Amendment note below. TERMINATION DATE OF 1976 AMENDMENT Section 3(c)(2) of Pub. L. 94-222, as amended by Pub. L. 95-630, title XV, Sec. 1501, Nov. 10, 1978, 92 Stat. 3713; Pub. L. 97-25, title II, Sec. 201, July 27, 1981, 95 Stat. 44, provided that: "The amendments made by paragraph (1) [amending this section] shall cease to be effective on February 27, 1984." NULLIFICATION OF BOARD RULES AND REGULATIONS UNDER SUBSECTION (B) OF THIS SECTION IN EFFECT ON JULY 26, 1981 Section 103 of Pub. L. 97-25 provided that: "Any rule or regulation of the Board of Governors of the Federal Reserve System pursuant to section 167(b) of the Truth in Lending Act [subsec. (b) of this section], as such section was in effect on the day before the date of enactment of this Act [July 27, 1981], is null and void." -End- -CITE- 15 USC Sec. 1666g 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 1666g. Tie-in services prohibited for issuance of credit card -STATUTE- Notwithstanding any agreement to the contrary, a card issuer may not require a seller, as a condition to participating in a credit card plan, to open an account with or procure any other service from the card issuer or its subsidiary or agent. -SOURCE- (Pub. L. 90-321, title I, Sec. 168, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1515.) -End- -CITE- 15 USC Sec. 1666h 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 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 -STATUTE- (a) Offset against consumer's funds A card issuer may not take any action to offset a cardholder's indebtedness arising in connection with a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer unless - (1) such action was previously authorized in writing by the cardholder in accordance with a credit plan whereby the cardholder agrees periodically to pay debts incurred in his open end credit account by permitting the card issuer periodically to deduct all or a portion of such debt from the cardholder's deposit account, and (2) such action with respect to any outstanding disputed amount not be taken by the card issuer upon request of the cardholder. In the case of any credit card account in existence on the effective date of this section, the previous written authorization referred to in clause (1) shall not be required until the date (after such effective date) when such account is renewed, but in no case later than one year after such effective date. Such written authorization shall be deemed to exist if the card issuer has previously notified the cardholder that the use of his credit card account will subject any funds which the card issuer holds in deposit accounts of such cardholder to offset against any amounts due and payable on his credit card account which have not been paid in accordance with the terms of the agreement between the card issuer and the cardholder. (b) Attachments and levies This section does not alter or affect the right under State law of a card issuer to attach or otherwise levy upon funds of a cardholder held on deposit with the card issuer if that remedy is constitutionally available to creditors generally. -SOURCE- (Pub. L. 90-321, title I, Sec. 169, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1515.) -REFTEXT- REFERENCES IN TEXT For effective date of this section, referred to in subsec. (a), see Effective Date note set out under section 1666 of this title. -End- -CITE- 15 USC Sec. 1666i 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 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 -STATUTE- (a) Claims and defenses assertible Subject to the limitation contained in subsection (b) of this section, a card issuer who has issued a credit card to a cardholder pursuant to an open end consumer credit plan shall be subject to all claims (other than tort claims) and defenses arising out of any transaction in which the credit card is used as a method of payment or extension of credit if (1) the obligor has made a good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction from the person honoring the credit card; (2) the amount of the initial transaction exceeds $50; and (3) the place where the initial transaction occurred was in the same State as the mailing address previously provided by the cardholder or was within 100 miles from such address, except that the limitations set forth in clauses (2) and (3) with respect to an obligor's right to assert claims and defenses against a card issuer shall not be applicable to any transaction in which the person honoring the credit card (A) is the same person as the card issuer, (B) is controlled by the card issuer, (C) is under direct or indirect common control with the card issuer, (D) is a franchised dealer in the card issuer's products or services, or (E) has obtained the order for such transaction through a mail solicitation made by or participated in by the card issuer in which the cardholder is solicited to enter into such transaction by using the credit card issued by the card issuer. (b) Amount of claims and defenses assertible The amount of claims or defenses asserted by the cardholder may not exceed the amount of credit outstanding with respect to such transaction at the time the cardholder first notifies the card issuer or the person honoring the credit card of such claim or defense. For the purpose of determining the amount of credit outstanding in the preceding sentence, payments and credits to the cardholder's account are deemed to have been applied, in the order indicated, to the payment of: (1) late charges in the order of their entry to the account; (2) finance charges in order of their entry to the account; and (3) debits to the account other than those set forth above, in the order in which each debit entry to the account was made. -SOURCE- (Pub. L. 90-321, title I, Sec. 170, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1515.) -End- -CITE- 15 USC Sec. 1666j 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part D - Credit Billing -HEAD- Sec. 1666j. Applicability of State laws -STATUTE- (a) Consistency of provisions This part does not annul, alter, or affect, or exempt any person subject to the provisions of this part from complying with, the laws of any State with respect to credit billing practices, except to the extent that those laws are inconsistent with any provision of this part, and then only to the extent of the inconsistency. The Board is authorized to determine whether such inconsistencies exist. The Board may not determine that any State law is inconsistent with any provision of this part if the Board determines that such law gives greater protection to the consumer. (b) Exemptions by Board from credit billing requirements The Board shall by regulation exempt from the requirements of this part any class of credit transactions within any State if it determines that under the law of that State that class of transactions is subject to requirements substantially similar to those imposed under this part or that such law gives greater protection to the consumer, and that there is adequate provision for enforcement. (c) Finance charge or other charge for credit for sales transactions involving cash discounts Notwithstanding any other provisions of this subchapter, any discount offered under section 1666f(b) of this title shall not be considered a finance charge or other charge for credit under the usury laws of any State or under the laws of any State relating to disclosure of information in connection with credit transactions, or relating to the types, amounts or rates of charges, or to any element or elements of charges permissible under such laws in connection with the extension or use of credit. -SOURCE- (Pub. L. 90-321, title I, Sec. 171, as added Pub. L. 93-495, title III, Sec. 306, Oct. 28, 1974, 88 Stat. 1516; amended Pub. L. 94- 222, Sec. 3(d), Feb. 27, 1976, 90 Stat. 198.) -MISC1- AMENDMENTS 1976 - Subsec. (c). Pub. L. 94-222 added subsec. (c). -End- -CITE- 15 USC Part E - Consumer Leases 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part E - Consumer Leases -HEAD- PART E - CONSUMER LEASES -End- -CITE- 15 USC Sec. 1667 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part E - Consumer Leases -HEAD- Sec. 1667. Definitions -STATUTE- For purposes of this part - (1) The term "consumer lease" means a contract in the form of a lease or bailment for the use of personal property by a natural person for a period of time exceeding four months, and for a total contractual obligation not exceeding $25,000, primarily for personal, family, or household purposes, whether or not the lessee has the option to purchase or otherwise become the owner of the property at the expiration of the lease, except that such term shall not include any credit sale as defined in section 1602(g) of this title. Such term does not include a lease for agricultural, business, or commercial purposes, or to a government or governmental agency or instrumentality, or to an organization. (2) The term "lessee" means a natural person who leases or is offered a consumer lease. (3) The term "lessor" means a person who is regularly engaged in leasing, offering to lease, or arranging to lease under a consumer lease. (4) The term "personal property" means any property which is not real property under the laws of the State where situated at the time offered or otherwise made available for lease. (5) The terms "security" and "security interest" mean any interest in property which secures payment or performance of an obligation. -SOURCE- (Pub. L. 90-321, title I, Sec. 181, as added Pub. L. 94-240, Sec. 3, Mar. 23, 1976, 90 Stat. 257.) -MISC1- EFFECTIVE DATE Section 6 of Pub. L. 94-240 provided that: "This Act [enacting this section and sections 1667a to 1667e of this title, amending sections 1601 and 1640 of this title, and enacting provisions set out as a note under section 1601 of this title] takes effect one year after the date of its enactment [Mar. 23, 1976]." -End- -CITE- 15 USC Sec. 1667a 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part E - Consumer Leases -HEAD- Sec. 1667a. Consumer lease disclosures -STATUTE- Each lessor shall give a lessee prior to the consummation of the lease a dated written statement on which the lessor and lessee are identified setting out accurately and in a clear and conspicuous manner the following information with respect to that lease, as applicable: (1) A brief description or identification of the leased property; (2) The amount of any payment by the lessee required at the inception of the lease; (3) The amount paid or payable by the lessee for official fees, registration, certificate of title, or license fees or taxes; (4) The amount of other charges payable by the lessee not included in the periodic payments, a description of the charges and that the lessee shall be liable for the differential, if any, between the anticipated fair market value of the leased property and its appraised actual value at the termination of the lease, if the lessee has such liability; (5) A statement of the amount or method of determining the amount of any liabilities the lease imposes upon the lessee at the end of the term and whether or not the lessee has the option to purchase the leased property and at what price and time; (6) A statement identifying all express warranties and guarantees made by the manufacturer or lessor with respect to the leased property, and identifying the party responsible for maintaining or servicing the leased property together with a description of the responsibility; (7) A brief description of insurance provided or paid for by the lessor or required of the lessee, including the types and amounts of the coverages and costs; (8) A description of any security interest held or to be retained by the lessor in connection with the lease and a clear identification of the property to which the security interest relates; (9) The number, amount, and due dates or periods of payments under the lease and the total amount of such periodic payments; (10) Where the lease provides that the lessee shall be liable for the anticipated fair market value of the property on expiration of the lease, the fair market value of the property at the inception of the lease, the aggregate cost of the lease on expiration, and the differential between them; and (11) A statement of the conditions under which the lessee or lessor may terminate the lease prior to the end of the term and the amount or method of determining any penalty or other charge for delinquency, default, late payments, or early termination. The disclosures required under this section may be made in the lease contract to be signed by the lessee. The Board may provide by regulation that any portion of the information required to be disclosed under this section may be given in the form of estimates where the lessor is not in a position to know exact information. -SOURCE- (Pub. L. 90-321, title I, Sec. 182, as added Pub. L. 94-240, Sec. 3, Mar. 23, 1976, 90 Stat. 258.) -End- -CITE- 15 USC Sec. 1667b 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part E - Consumer Leases -HEAD- Sec. 1667b. Lessee's liability on expiration or termination of lease -STATUTE- (a) Estimated residual value of property as basis; presumptions; action by lessor for excess liability; mutually agreeable final adjustment Where the lessee's liability on expiration of a consumer lease is based on the estimated residual value of the property such estimated residual value shall be a reasonable approximation of the anticipated actual fair market value of the property on lease expiration. There shall be a rebuttable presumption that the estimated residual value is unreasonable to the extent that the estimated residual value exceeds the actual residual value by more than three times the average payment allocable to a monthly period under the lease. In addition, where the lessee has such liability on expiration of a consumer lease there shall be a rebuttable presumption that the lessor's estimated residual value is not in good faith to the extent that the estimated residual value exceeds the actual residual value by more than three times the average payment allocable to a monthly period under the lease and such lessor shall not collect from the lessee the amount of such excess liability on expiration of a consumer lease unless the lessor brings a successful action with respect to such excess liability. In all actions, the lessor shall pay the lessee's reasonable attorney's fees. The presumptions stated in this section shall not apply to the extent the excess of estimated over actual residual value is due to physical damage to the property beyond reasonable wear and use, or to excessive use, and the lease may set standards for such wear and use if such standards are not unreasonable. Nothing in this subsection shall preclude the right of a willing lessee to make any mutually agreeable final adjustment with respect to such excess residual liability, provided such an agreement is reached after termination of the lease. (b) Penalties and charges for delinquency, default, or early termination Penalties or other charges for delinquency, default, or early termination may be specified in the lease but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the delinquency, default, or early termination, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. (c) Independent professional appraisal of residual value of property at termination of lease; finality If a lease has a residual value provision at the termination of the lease, the lessee may obtain at his expense, a professional appraisal of the leased property by an independent third party agreed to by both parties. Such appraisal shall be final and binding on the parties. -SOURCE- (Pub. L. 90-321, title I, Sec. 183, as added Pub. L. 94-240, Sec. 3, Mar. 23, 1976, 90 Stat. 259.) -End- -CITE- 15 USC Sec. 1667c 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part E - Consumer Leases -HEAD- Sec. 1667c. Consumer lease advertising; liability of advertising media -STATUTE- (a) In general If an advertisement for a consumer lease includes a statement of the amount of any payment or a statement that any or no initial payment is required, the advertisement shall clearly and conspicuously state, as applicable - (1) the transaction advertised is a lease; (2) the total amount of any initial payments required on or before consummation of the lease or delivery of the property, whichever is later; (3) that a security deposit is required; (4) the number, amount, and timing of scheduled payments; and (5) with respect to a lease in which the liability of the consumer at the end of the lease term is based on the anticipated residual value of the property, that an extra charge may be imposed at the end of the lease term. (b) Advertising medium not liable No owner or employee of any entity that serves as a medium in which an advertisement appears or through which an advertisement is disseminated, shall be liable under this section. (c) Radio advertisements (1) In general An advertisement by radio broadcast to aid, promote, or assist, directly or indirectly, any consumer lease shall be deemed to be in compliance with the requirements of subsection (a) of this section if such advertisement clearly and conspicuously - (A) states the information required by paragraphs (1) and (2) of subsection (a) of this section; (B) states the number, amounts, due dates or periods of scheduled payments, and the total of such payments under the lease; (C) includes - (i) a referral to - (I) a toll-free telephone number established in accordance with paragraph (2) that may be used by consumers to obtain the information required under subsection (a) of this section; or (II) a written advertisement that - (aa) appears in a publication in general circulation in the community served by the radio station on which such advertisement is broadcast during the period beginning 3 days before any such broadcast and ending 10 days after such broadcast; and (bb) includes the information required to be disclosed under subsection (a) of this section; and (ii) the name and dates of any publication referred to in clause (i)(II); and (D) includes any other information which the Board determines necessary to carry out this part. (2) Establishment of toll-free number (A) In general In the case of a radio broadcast advertisement described in paragraph (1) that includes a referral to a toll-free telephone number, the lessor who offers the consumer lease shall - (i) establish such a toll-free telephone number not later than the date on which the advertisement including the referral is broadcast; (ii) maintain such telephone number for a period of not less than 10 days, beginning on the date of any such broadcast; and (iii) provide the information required under subsection (a) of this section with respect to the lease to any person who calls such number. (B) Form of information The information required to be provided under subparagraph (A)(iii) shall be provided verbally or, if requested by the consumer, in written form. (3) No effect on other law Nothing in this subsection shall affect the requirements of Federal law as such requirements apply to advertisement by any medium other than radio broadcast. -SOURCE- (Pub. L. 90-321, title I, Sec. 184, as added Pub. L. 94-240, Sec. 3, Mar. 23, 1976, 90 Stat. 259; amended Pub. L. 103-325, title III, Sec. 336(a), Sept. 23, 1994, 108 Stat. 2234; Pub. L. 104-208, div. A, title II, Sec. 2605(c), Sept. 30, 1996, 110 Stat. 3009-473.) -MISC1- AMENDMENTS 1996 - Subsec. (a). Pub. L. 104-208, Sec. 2605(c)(1), (3), added subsec. (a) and struck out former subsec. (a) consisting of introductory provisions and 5 pars. relating to contents of lease agreements required if consumer lease advertisement stated amount of payment, number of required payments, or that any or no payments were required at lease inception. Subsec. (b). Pub. L. 104-208, Sec. 2605(c)(3), added subsec. (b). Former subsec. (b) redesignated (c). Subsec. (c). Pub. L. 104-208, Sec. 2605(c)(1), (2), redesignated subsec. (b) as (c) and struck out former subsec. (c) which read as follows: "There is no liability under this section on the part of any owner or personnel, as such, of any medium in which an advertisement appears or through which it is disseminated." 1994 - Subsecs. (b), (c). Pub. L. 103-325 added subsec. (b) and redesignated former subsec. (b) as (c). STUDY OF ADVERTISING RULES Section 336(b) of Pub. L. 103-325 provided that: "Not later than 365 days after the date of enactment of this Act [Sept. 23, 1994], the Board of Governors of the Federal Reserve System shall submit a report to the Congress on - "(1) the current rules applicable to credit advertising; "(2) how such rules could be modified to increase consumer benefit and decrease creditor costs; and "(3) how such rules could be modified, if at all, for radio advertisements without diminishing consumer protection." -End- -CITE- 15 USC Sec. 1667d 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part E - Consumer Leases -HEAD- Sec. 1667d. Civil liability of lessors -STATUTE- (a) Grounds for maintenance of action Any lessor who fails to comply with any requirement imposed under section 1667a or 1667b of this title with respect to any person is liable to such person as provided in section 1640 of this title. (b) Additional grounds for maintenance of action; "creditor" defined Any lessor who fails to comply with any requirement imposed under section 1667c of this title with respect to any person who suffers actual damage from the violation is liable to such person as provided in section 1640 of this title. For the purposes of this section, the term "creditor" as used in sections 1640 and 1641 of this title shall include a lessor as defined in this part. (c) Jurisdiction of courts; time limitation Notwithstanding section 1640(e) of this title, any action under this section may be brought in any United States district court or in any other court of competent jurisdiction. Such actions alleging a failure to disclose or otherwise comply with the requirements of this part shall be brought within one year of the termination of the lease agreement. -SOURCE- (Pub. L. 90-321, title I, Sec. 185, as added Pub. L. 94-240, Sec. 3, Mar. 23, 1976, 90 Stat. 260; amended Pub. L. 96-221, title VI, Sec. 624, Mar. 31, 1980, 94 Stat. 185.) -MISC1- AMENDMENTS 1980 - Subsec. (b). Pub. L. 96-221 struck out applicability of section 1614 of this title to term "creditor". 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. 1667e 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part E - Consumer Leases -HEAD- Sec. 1667e. Applicability of State laws; exemptions by Board from leasing requirements -STATUTE- (a) This part does not annul, alter, or affect, or exempt any person subject to the provisions of this part from complying with, the laws of any State with respect to consumer leases, except to the extent that those laws are inconsistent with any provision of this part, and then only to the extent of the inconsistency. The Board is authorized to determine whether such inconsistencies exist. The Board may not determine that any State law is inconsistent with any provision of this part if the Board determines that such law gives greater protection and benefit to the consumer. (b) The Board shall by regulation exempt from the requirements of this part any class of lease transactions within any State if it determines that under the law of that State that class of transactions is subject to requirements substantially similar to those imposed under this part or that such law gives greater protection and benefit to the consumer, and that there is adequate provision for enforcement. -SOURCE- (Pub. L. 90-321, title I, Sec. 186, as added Pub. L. 94-240, Sec. 3, Mar. 23, 1976, 90 Stat. 260.) -End- -CITE- 15 USC Sec. 1667f 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE Part E - Consumer Leases -HEAD- Sec. 1667f. Regulations -STATUTE- (a) Regulations authorized (1) In general The Board shall prescribe regulations to update and clarify the requirements and definitions applicable to lease disclosures and contracts, and any other issues specifically related to consumer leasing, to the extent that the Board determines such action to be necessary - (A) to carry out this part; (B) to prevent any circumvention of this part; or (C) to facilitate compliance with the requirements of the (!1) part. (2) Classifications, adjustments Any regulations prescribed under paragraph (1) may contain classifications and differentiations, and may provide for adjustments and exceptions for any class of transactions, as the Board considers appropriate. (b) Model disclosure (1) Publication The Board shall establish and publish model disclosure forms to facilitate compliance with the disclosure requirements of this part and to aid the consumer in understanding the transaction to which the subject disclosure form relates. (2) Use of automated equipment In establishing model forms under this subsection, the Board shall consider the use by lessors of data processing or similar automated equipment. (3) Use optional A lessor may utilize a model disclosure form established by the Board under this subsection for purposes of compliance with this part, at the discretion of the lessor. (4) Effect of use Any lessor who properly uses the material aspects of any model disclosure form established by the Board under this subsection shall be deemed to be in compliance with the disclosure requirements to which the form relates. -SOURCE- (Pub. L. 90-321, title I, Sec. 187, as added Pub. L. 104-208, div. A, title II, Sec. 2605(b)(1), Sept. 30, 1996, 110 Stat. 3009-471.) -MISC1- EFFECTIVE DATE Section 2605(b)(2) of div. A of Pub. L. 104-208 provided that: "(A) In general. - Any regulation of the Board, or any amendment or interpretation of any regulation of the Board issued pursuant to section 187 of the Truth in Lending Act [15 U.S.C. 1667f] (as added by paragraph (1) of this subsection), shall become effective on the first October 1 that follows the date of promulgation of that regulation, amendment, or interpretation by not less than 6 months. "(B) Longer period. - The Board may, at the discretion of the Board, extend the time period referred to in subparagraph (A) in accordance with subparagraph (C), to permit lessors to adjust their disclosure forms to accommodate the requirements of section 127 [187] of the Truth in Lending Act (as added by paragraph (1) of this subsection). "(C) Shorter period. - The Board may shorten the time period referred to in subparagraph (A), if the Board makes a specific finding that such action is necessary to comply with the findings of a court or to prevent an unfair or deceptive practice. "(D) Compliance before effective date. - Any lessor may comply with any means of disclosure provided for in section 127 [187] of the Truth in Lending Act (as added by paragraph (1) of this subsection) before the effective date of such requirement. "(E) Definitions. - For purposes of this subsection, the term 'lessor' has the same meaning as in section 181 of the Truth in Lending Act [15 U.S.C. 1667]." CONGRESSIONAL FINDINGS AND DECLARATION OF PURPOSES Section 2605(a) of div. A of Pub. L. 104-208 provided that: "(1) Findings. - The Congress finds that - "(A) competition among the various financial institutions and other firms engaged in the business of consumer leasing is greatest when there is informed use of leasing; "(B) the informed use of leasing results from an awareness of the cost of leasing by consumers; and "(C) there has been a continued trend toward leasing automobiles and other durable goods for consumer use as an alternative to installment credit sales and that leasing product advances have occurred such that lessors have been unable to provide consistent industry-wide disclosures to fully account for the competitive progress that has occurred. "(2) Purposes. - The purposes of this section are - "(A) to assure a simple, meaningful disclosure of leasing terms so that the consumer will be able to compare more readily the various leasing terms available to the consumer and avoid the uninformed use of leasing, and to protect the consumer against inaccurate and unfair leasing practices; "(B) to provide for adequate cost disclosures that reflect the marketplace without impairing competition and the development of new leasing products; and "(C) to provide the Board with the regulatory authority to assure a simplified, meaningful definition and disclosure of the terms of certain leases of personal property for personal, family, or household purposes so as to - "(i) enable the lessee to compare more readily the various lease terms available to the lessee; "(ii) enable comparison of lease terms with credit terms, as appropriate; and "(iii) assure meaningful and accurate disclosures of lease terms in advertisements." -FOOTNOTE- (!1) So in original. Probably should be "this". -End- -CITE- 15 USC SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT -HEAD- SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT -End- -CITE- 15 USC Sec. 1671 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT -HEAD- Sec. 1671. Congressional findings and declaration of purpose -STATUTE- (a) Disadvantages of garnishment The Congress finds: (1) The unrestricted garnishment of compensation due for personal services encourages the making of predatory extensions of credit. Such extensions of credit divert money into excessive credit payments and thereby hinder the production and flow of goods in interstate commerce. (2) The application of garnishment as a creditors' remedy frequently results in loss of employment by the debtor, and the resulting disruption of employment, production, and consumption constitutes a substantial burden on interstate commerce. (3) The great disparities among the laws of the several States relating to garnishment have, in effect, destroyed the uniformity of the bankruptcy laws and frustrated the purposes thereof in many areas of the country. (b) Necessity for regulation On the basis of the findings stated in subsection (a) of this section, the Congress determines that the provisions of this subchapter are necessary and proper for the purpose of carrying into execution the powers of the Congress to regulate commerce and to establish uniform bankruptcy laws. -SOURCE- (Pub. L. 90-321, title III, Sec. 301, May 29, 1968, 82 Stat. 163.) -REFTEXT- REFERENCES IN TEXT The bankruptcy laws, referred to in subsec. (b), are generally classified to Title 11 (Sec. 101 et seq.), Bankruptcy. -MISC1- EFFECTIVE DATE Section 504(c) of Pub. L. 90-321 provided that: "Title III [enacting this section and sections 1672 to 1677 of this title] takes effect on July 1, 1970." -End- -CITE- 15 USC Sec. 1672 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT -HEAD- Sec. 1672. Definitions -STATUTE- For the purposes of this subchapter: (a) The term "earnings" means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program. (b) The term "disposable earnings" means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld. (c) The term "garnishment" means any legal or equitable procedure through which the earnings of any individual are required to be withheld for payment of any debt. -SOURCE- (Pub. L. 90-321, title III, Sec. 302, May 29, 1968, 82 Stat. 163.) -End- -CITE- 15 USC Sec. 1673 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT -HEAD- Sec. 1673. Restriction on garnishment -STATUTE- (a) Maximum allowable garnishment Except as provided in subsection (b) of this section and in section 1675 of this title, the maximum part of the aggregate disposable earnings of an individual for any workweek which is subjected to garnishment may not exceed (1) 25 per centum of his disposable earnings for that week, or (2) the amount by which his disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206(a)(1) of title 29 in effect at the time the earnings are payable, whichever is less. In the case of earnings for any pay period other than a week, the Secretary of Labor shall by regulation prescribe a multiple of the Federal minimum hourly wage equivalent in effect to that set forth in paragraph (2). (b) Exceptions (1) The restrictions of subsection (a) of this section do not apply in the case of (A) any order for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative procedure, which is established by State law, which affords substantial due process, and which is subject to judicial review. (B) any order of any court of the United States having jurisdiction over cases under chapter 13 of title 11. (C) any debt due for any State or Federal tax. (2) The maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment to enforce any order for the support of any person shall not exceed - (A) where such individual is supporting his spouse or dependent child (other than a spouse or child with respect to whose support such order is used), 50 per centum of such individual's disposable earnings for that week; and (B) where such individual is not supporting such a spouse or dependent child described in clause (A), 60 per centum of such individual's disposable earnings for that week; except that, with respect to the disposable earnings of any individual for any workweek, the 50 per centum specified in clause (A) shall be deemed to be 55 per centum and the 60 per centum specified in clause (B) shall be deemed to be 65 per centum, if and to the extent that such earnings are subject to garnishment to enforce a support order with respect to a period which is prior to the twelve-week period which ends with the beginning of such workweek. (c) Execution or enforcement of garnishment order or process prohibited No court of the United States or any State, and no State (or officer or agency thereof), may make, execute, or enforce any order or process in violation of this section. -SOURCE- (Pub. L. 90-321, title III, Sec. 303, May 29, 1968, 82 Stat. 163; Pub. L. 95-30, title V, Sec. 501(e)(1)-(3), May 23, 1977, 91 Stat. 161, 162; Pub. L. 95-598, title III, Sec. 312(a), Nov. 6, 1978, 92 Stat. 2676.) -MISC1- AMENDMENTS 1978 - Subsec. (b)(1)(B). Pub. L. 95-598 substituted "court of the United States having jurisdiction over cases under chapter 13 of title 11" for "court of bankruptcy under chapter XIII of the Bankruptcy Act". 1977 - Subsec. (b). Pub. L. 95-30, Sec. 501(e)(1), (2), designated existing provisions as par. (1) and existing pars. (1), (2), and (3) as subpars. (A), (B), and (C) thereof, substituted "for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative procedure, which is established by State law, which affords substantial due process, and which is subject to judicial review" for "of any court for the support of any person" in subpar. (A) as so redesignated, and added par. (2). Subsec. (c). Pub. L. 95-30, Sec. 501(e)(3), inserted ", and no State (or officer or agency thereof)," after "or any State". EFFECTIVE DATE OF 1978 AMENDMENT Amendment by Pub. L. 95-598 effective Oct. 1, 1979, see section 402(a) of Pub. L. 95-598, set out as an Effective Date note preceding section 101 of Title 11, Bankruptcy. EFFECTIVE DATE OF 1977 AMENDMENT Section 501(e)(5) of Pub. L. 95-30 provided that: "The amendments made by this subsection [amending this section and section 1675 of this title] shall take effect on the first day of the first calendar month which begins after the date of enactment of this Act [May 23, 1977]." -End- -CITE- 15 USC Sec. 1674 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT -HEAD- Sec. 1674. Restriction on discharge from employment by reason of garnishment -STATUTE- (a) Termination of employment No employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness. (b) Penalties Whoever willfully violates subsection (a) of this section shall be fined not more than $1,000, or imprisoned not more than one year, or both. -SOURCE- (Pub. L. 90-321, title III, Sec. 304, May 29, 1968, 82 Stat. 163.) -End- -CITE- 15 USC Sec. 1675 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT -HEAD- Sec. 1675. Exemption for State-regulated garnishments -STATUTE- The Secretary of Labor may by regulation exempt from the provisions of section 1673(a) and (b)(2) of this title garnishments issued under the laws of any State if he determines that the laws of that State provide restrictions on garnishment which are substantially similar to those provided in section 1673(a) and (b)(2) of this title. -SOURCE- (Pub. L. 90-321, title III, Sec. 305, May 29, 1968, 82 Stat. 164; Pub. L. 95-30, title V, Sec. 501(e)(4), May 23, 1977, 91 Stat. 162.) -MISC1- AMENDMENTS 1977 - Pub. L. 95-30 substituted "section 1673(a) and (b)(2) of this title" for "section 1673(a) of this title" in two places. -End- -CITE- 15 USC Sec. 1676 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT -HEAD- Sec. 1676. Enforcement by Secretary of Labor -STATUTE- The Secretary of Labor, acting through the Wage and Hour Division of the Department of Labor, shall enforce the provisions of this subchapter. -SOURCE- (Pub. L. 90-321, title III, Sec. 306, May 29, 1968, 82 Stat. 164.) -End- -CITE- 15 USC Sec. 1677 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT -HEAD- Sec. 1677. Effect on State laws -STATUTE- This subchapter does not annul, alter, or affect, or exempt any person from complying with, the laws of any State (1) prohibiting garnishments or providing for more limited garnishment than are allowed under this subchapter, or (2) prohibiting the discharge of any employee by reason of the fact that his earnings have been subjected to garnishment for more than one indebtedness. -SOURCE- (Pub. L. 90-321, title III, Sec. 307, May 29, 1968, 82 Stat. 164.) -End- -CITE- 15 USC SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -End- -CITE- 15 USC Sec. 1679 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679. Findings and purposes -STATUTE- (a) Findings The Congress makes the following findings: (1) Consumers have a vital interest in establishing and maintaining their credit worthiness (!1) and credit standing in order to obtain and use credit. As a result, consumers who have experienced credit problems may seek assistance from credit repair organizations which offer to improve the credit standing of such consumers. (2) Certain advertising and business practices of some companies engaged in the business of credit repair services have worked a financial hardship upon consumers, particularly those of limited economic means and who are inexperienced in credit matters. (b) Purposes The purposes of this subchapter are - (1) to ensure that prospective buyers of the services of credit repair organizations are provided with the information necessary to make an informed decision regarding the purchase of such services; and (2) to protect the public from unfair or deceptive advertising and business practices by credit repair organizations. -SOURCE- (Pub. L. 90-321, title IV, Sec. 402, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-455.) -MISC1- PRIOR PROVISIONS A prior title IV of Pub. L. 90-321, May 29, 1968, 82 Stat. 164, as amended by Pub. L. 91-344, July 20, 1970, 84 Stat. 440; Pub. L. 92-321, June 30, 1972, 86 Stat. 382, which was set out as a note under section 1601 of this title, established a bipartisan National Commission on Consumer Finance to study the functioning and structure of the consumer finance industry as well as consumer credit transactions generally. The Commission was to submit a final report by Dec. 31, 1972, and was to cease to exist thereafter. EFFECTIVE DATE OF SUBCHAPTER Section 413 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. 3009-462, provided that: "This title [enacting this subchapter] shall apply after the end of the 6-month period beginning on the date of the enactment of the Credit Repair Organizations Act [Sept. 30, 1996], except with respect to contracts entered into by a credit repair organization before the end of such period." -FOOTNOTE- (!1) So in original. Probably should be "creditworthiness". -End- -CITE- 15 USC Sec. 1679a 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679a. Definitions -STATUTE- For purposes of this subchapter, the following definitions apply: (1) Consumer The term "consumer" means an individual. (2) Consumer credit transaction The term "consumer credit transaction" means any transaction in which credit is offered or extended to an individual for personal, family, or household purposes. (3) Credit repair organization The term "credit repair organization" - (A) means any person who uses any instrumentality of interstate commerce or the mails to sell, provide, or perform (or represent that such person can or will sell, provide, or perform) any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of - (i) improving any consumer's credit record, credit history, or credit rating; or (ii) providing advice or assistance to any consumer with regard to any activity or service described in clause (i); and (B) does not include - (i) any nonprofit organization which is exempt from taxation under section 501(c)(3) of title 26; (ii) any creditor (as defined in section 1602 of this title), with respect to any consumer, to the extent the creditor is assisting the consumer to restructure any debt owed by the consumer to the creditor; or (iii) any depository institution (as that term is defined in section 1813 of title 12) or any Federal or State credit union (as those terms are defined in section 1752 of title 12), or any affiliate or subsidiary of such a depository institution or credit union. (4) Credit The term "credit" has the meaning given to such term in section 1602(e) of this title. -SOURCE- (Pub. L. 90-321, title IV, Sec. 403, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-455.) -MISC1- PRIOR PROVISIONS For a prior section 403 of Pub. L. 90-321, see note set out under section 1679 of this title. -End- -CITE- 15 USC Sec. 1679b 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679b. Prohibited practices -STATUTE- (a) In general No person may - (1) make any statement, or counsel or advise any consumer to make any statement, which is untrue or misleading (or which, upon the exercise of reasonable care, should be known by the credit repair organization, officer, employee, agent, or other person to be untrue or misleading) with respect to any consumer's credit worthiness,(!1) credit standing, or credit capacity to - (A) any consumer reporting agency (as defined in section 1681a(f) of this title); or (B) any person - (i) who has extended credit to the consumer; or (ii) to whom the consumer has applied or is applying for an extension of credit; (2) make any statement, or counsel or advise any consumer to make any statement, the intended effect of which is to alter the consumer's identification to prevent the display of the consumer's credit record, history, or rating for the purpose of concealing adverse information that is accurate and not obsolete to - (A) any consumer reporting agency; (B) any person - (i) who has extended credit to the consumer; or (ii) to whom the consumer has applied or is applying for an extension of credit; (3) make or use any untrue or misleading representation of the services of the credit repair organization; or (4) engage, directly or indirectly, in any act, practice, or course of business that constitutes or results in the commission of, or an attempt to commit, a fraud or deception on any person in connection with the offer or sale of the services of the credit repair organization. (b) Payment in advance No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed. -SOURCE- (Pub. L. 90-321, title IV, Sec. 404, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-456.) -MISC1- PRIOR PROVISIONS For a prior section 404 of Pub. L. 90-321, see note set out under section 1679 of this title. -FOOTNOTE- (!1) So in original. Probably should be "creditworthiness,". -End- -CITE- 15 USC Sec. 1679c 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679c. Disclosures -STATUTE- (a) Disclosure required Any credit repair organization shall provide any consumer with the following written statement before any contract or agreement between the consumer and the credit repair organization is executed: "CONSUMER CREDIT FILE RIGHTS UNDER STATE AND FEDERAL LAW "You have a right to dispute inaccurate information in your credit report by contacting the credit bureau directly. However, neither you nor any 'credit repair' company or credit repair organization has the right to have accurate, current, and verifiable information removed from your credit report. The credit bureau must remove accurate, negative information from your report only if it is over 7 years old. Bankruptcy information can be reported for 10 years. "You have a right to obtain a copy of your credit report from a credit bureau. You may be charged a reasonable fee. There is no fee, however, if you have been turned down for credit, employment, insurance, or a rental dwelling because of information in your credit report within the preceding 60 days. The credit bureau must provide someone to help you interpret the information in your credit file. You are entitled to receive a free copy of your credit report if you are unemployed and intend to apply for employment in the next 60 days, if you are a recipient of public welfare assistance, or if you have reason to believe that there is inaccurate information in your credit report due to fraud. "You have a right to sue a credit repair organization that violates the Credit Repair Organization Act. This law prohibits deceptive practices by credit repair organizations. "You have the right to cancel your contract with any credit repair organization for any reason within 3 business days from the date you signed it. "Credit bureaus are required to follow reasonable procedures to ensure that the information they report is accurate. However, mistakes may occur. "You may, on your own, notify a credit bureau in writing that you dispute the accuracy of information in your credit file. The credit bureau must then reinvestigate and modify or remove inaccurate or incomplete information. The credit bureau may not charge any fee for this service. Any pertinent information and copies of all documents you have concerning an error should be given to the credit bureau. "If the credit bureau's reinvestigation does not resolve the dispute to your satisfaction, you may send a brief statement to the credit bureau, to be kept in your file, explaining why you think the record is inaccurate. The credit bureau must include a summary of your statement about disputed information with any report it issues about you. "The Federal Trade Commission regulates credit bureaus and credit repair organizations. For more information contact: "THE PUBLIC REFERENCE BRANCH "FEDERAL TRADE COMMISSION "WASHINGTON, D.C. 20580". (b) Separate statement requirement The written statement required under this section shall be provided as a document which is separate from any written contract or other agreement between the credit repair organization and the consumer or any other written material provided to the consumer. (c) Retention of compliance records (1) In general The credit repair organization shall maintain a copy of the statement signed by the consumer acknowledging receipt of the statement. (2) Maintenance for 2 years The copy of any consumer's statement shall be maintained in the organization's files for 2 years after the date on which the statement is signed by the consumer. -SOURCE- (Pub. L. 90-321, title IV, Sec. 405, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-457.) -REFTEXT- REFERENCES IN TEXT The Credit Repair Organization Act, referred to in subsec. (a), probably means the Credit Repair Organizations Act, Pub. L. 90-321, title IV, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-454, which is classified generally to this subchapter. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of this title and Tables. -MISC1- PRIOR PROVISIONS For a prior section 405 of Pub. L. 90-321, see note set out under section 1679 of this title. -End- -CITE- 15 USC Sec. 1679d 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679d. Credit repair organizations contracts -STATUTE- (a) Written contracts required No services may be provided by any credit repair organization for any consumer - (1) unless a written and dated contract (for the purchase of such services) which meets the requirements of subsection (b) of this section has been signed by the consumer; or (2) before the end of the 3-business-day period beginning on the date the contract is signed. (b) Terms and conditions of contract No contract referred to in subsection (a) of this section meets the requirements of this subsection unless such contract includes (in writing) - (1) the terms and conditions of payment, including the total amount of all payments to be made by the consumer to the credit repair organization or to any other person; (2) a full and detailed description of the services to be performed by the credit repair organization for the consumer, including - (A) all guarantees of performance; and (B) an estimate of - (i) the date by which the performance of the services (to be performed by the credit repair organization or any other person) will be complete; or (ii) the length of the period necessary to perform such services; (3) the credit repair organization's name and principal business address; and (4) a conspicuous statement in bold face type, in immediate proximity to the space reserved for the consumer's signature on the contract, which reads as follows: "You may cancel this contract without penalty or obligation at any time before midnight of the 3rd business day after the date on which you signed the contract. See the attached notice of cancellation form for an explanation of this right.". -SOURCE- (Pub. L. 90-321, title IV, Sec. 406, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-458.) -MISC1- PRIOR PROVISIONS For a prior section 406 of Pub. L. 90-321, see note set out under section 1679 of this title. -End- -CITE- 15 USC Sec. 1679e 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679e. Right to cancel contract -STATUTE- (a) In general Any consumer may cancel any contract with any credit repair organization without penalty or obligation by notifying the credit repair organization of the consumer's intention to do so at any time before midnight of the 3rd business day which begins after the date on which the contract or agreement between the consumer and the credit repair organization is executed or would, but for this subsection, become enforceable against the parties. (b) Cancellation form and other information Each contract shall be accompanied by a form, in duplicate, which has the heading "Notice of Cancellation" and contains in bold face type the following statement: "You may cancel this contract, without any penalty or obligation, at any time before midnight of the 3rd day which begins after the date the contract is signed by you. "To cancel this contract, mail or deliver a signed, dated copy of this cancellation notice, or any other written notice to [ name of credit repair organization ] at [ address of credit repair organization ] before midnight on [ date ] "I hereby cancel this transaction, [ date ] [ purchaser's signature ].". (c) Consumer copy of contract required Any consumer who enters into any contract with any credit repair organization shall be given, by the organization - (1) a copy of the completed contract and the disclosure statement required under section 1679c of this title; and (2) a copy of any other document the credit repair organization requires the consumer to sign, at the time the contract or the other document is signed. -SOURCE- (Pub. L. 90-321, title IV, Sec. 407, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-459.) -MISC1- PRIOR PROVISIONS For a prior section 407 of Pub. L. 90-321, see note set out under section 1679 of this title. -End- -CITE- 15 USC Sec. 1679f 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679f. Noncompliance with this subchapter -STATUTE- (a) Consumer waivers invalid Any waiver by any consumer of any protection provided by or any right of the consumer under this subchapter - (1) shall be treated as void; and (2) may not be enforced by any Federal or State court or any other person. (b) Attempt to obtain waiver Any attempt by any person to obtain a waiver from any consumer of any protection provided by or any right of the consumer under this subchapter shall be treated as a violation of this subchapter. (c) Contracts not in compliance Any contract for services which does not comply with the applicable provisions of this subchapter - (1) shall be treated as void; and (2) may not be enforced by any Federal or State court or any other person. -SOURCE- (Pub. L. 90-321, title IV, Sec. 408, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-459.) -End- -CITE- 15 USC Sec. 1679g 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679g. Civil liability -STATUTE- (a) Liability established Any person who fails to comply with any provision of this subchapter with respect to any other person shall be liable to such person in an amount equal to the sum of the amounts determined under each of the following paragraphs: (1) Actual damages The greater of - (A) the amount of any actual damage sustained by such person as a result of such failure; or (B) any amount paid by the person to the credit repair organization. (2) Punitive damages (A) Individual actions In the case of any action by an individual, such additional amount as the court may allow. (B) Class actions In the case of a class action, the sum of - (i) the aggregate of the amount which the court may allow for each named plaintiff; and (ii) the aggregate of the amount which the court may allow for each other class member, without regard to any minimum individual recovery. (3) Attorneys' fees In the case of any successful action to enforce any liability under paragraph (1) or (2), the costs of the action, together with reasonable attorneys' fees. (b) Factors to be considered in awarding punitive damages In determining the amount of any liability of any credit repair organization under subsection (a)(2) of this section, the court shall consider, among other relevant factors - (1) the frequency and persistence of noncompliance by the credit repair organization; (2) the nature of the noncompliance; (3) the extent to which such noncompliance was intentional; and (4) in the case of any class action, the number of consumers adversely affected. -SOURCE- (Pub. L. 90-321, title IV, Sec. 409, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-459.) -End- -CITE- 15 USC Sec. 1679h 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679h. Administrative enforcement -STATUTE- (a) In general Compliance with the requirements imposed under this subchapter with respect to credit repair organizations shall be enforced under the Federal Trade Commission Act [15 U.S.C. 41 et seq.] by the Federal Trade Commission. (b) Violations of this subchapter treated as violations of Federal Trade Commission Act (1) In general For the purpose of the exercise by the Federal Trade Commission of the Commission's functions and powers under the Federal Trade Commission Act [15 U.S.C. 41 et seq.], any violation of any requirement or prohibition imposed under this subchapter with respect to credit repair organizations shall constitute an unfair or deceptive act or practice in commerce in violation of section 5(a) of the Federal Trade Commission Act [15 U.S.C. 45(a)]. (2) Enforcement authority under other law All functions and powers of the Federal Trade Commission under the Federal Trade Commission Act shall be available to the Commission to enforce compliance with this subchapter by any person subject to enforcement by the Federal Trade Commission pursuant to this subsection, including the power to enforce the provisions of this subchapter in the same manner as if the violation had been a violation of any Federal Trade Commission trade regulation rule, without regard to whether the credit repair organization - (A) is engaged in commerce; or (B) meets any other jurisdictional tests in the Federal Trade Commission Act. (c) State action for violations (1) Authority of States In addition to such other remedies as are provided under State law, whenever the chief law enforcement officer of a State, or an official or agency designated by a State, has reason to believe that any person has violated or is violating this subchapter, the State - (A) may bring an action to enjoin such violation; (B) may bring an action on behalf of its residents to recover damages for which the person is liable to such residents under section 1679g of this title as a result of the violation; and (C) in the case of any successful action under subparagraph (A) or (B), shall be awarded the costs of the action and reasonable attorney fees as determined by the court. (2) Rights of Commission (A) Notice to Commission The State shall serve prior written notice of any civil action under paragraph (1) upon the Federal Trade Commission and provide the Commission with a copy of its complaint, except in any case where such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action. (B) Intervention The Commission shall have the right - (i) to intervene in any action referred to in subparagraph (A); (ii) upon so intervening, to be heard on all matters arising in the action; and (iii) to file petitions for appeal. (3) Investigatory powers For purposes of bringing any action under this subsection, nothing in this subsection shall prevent the chief law enforcement officer, or an official or agency designated by a State, from exercising the powers conferred on the chief law enforcement officer or such official by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence. (4) Limitation Whenever the Federal Trade Commission has instituted a civil action for violation of this subchapter, no State may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Commission for any violation of this subchapter that is alleged in that complaint. -SOURCE- (Pub. L. 90-321, title IV, Sec. 410, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-460.) -REFTEXT- REFERENCES IN TEXT The Federal Trade Commission Act, referred to in subsecs. (a) and (b), is act Sept. 26, 1914, ch. 311, 38 Stat. 717, as amended, which is classified generally to subchapter I (Sec. 41 et seq.) of chapter 2 of this title. For complete classification of this Act to the Code, see section 58 of this title and Tables. -End- -CITE- 15 USC Sec. 1679i 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679i. Statute of limitations -STATUTE- Any action to enforce any liability under this subchapter may be brought before the later of - (1) the end of the 5-year period beginning on the date of the occurrence of the violation involved; or (2) in any case in which any credit repair organization has materially and willfully misrepresented any information which - (A) the credit repair organization is required, by any provision of this subchapter, to disclose to any consumer; and (B) is material to the establishment of the credit repair organization's liability to the consumer under this subchapter, the end of the 5-year period beginning on the date of the discovery by the consumer of the misrepresentation. -SOURCE- (Pub. L. 90-321, title IV, Sec. 411, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-461.) -End- -CITE- 15 USC Sec. 1679j 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS -HEAD- Sec. 1679j. Relation to State law -STATUTE- This subchapter shall not annul, alter, affect, or exempt any person subject to the provisions of this subchapter from complying with any law of any State except to the extent that such law is inconsistent with any provision of this subchapter, and then only to the extent of the inconsistency. -SOURCE- (Pub. L. 90-321, title IV, Sec. 412, as added Pub. L. 104-208, div. A, title II, Sec. 2451, Sept. 30, 1996, 110 Stat. 3009-462.) -End- -CITE- 15 USC SUBCHAPTER III - CREDIT REPORTING AGENCIES 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER III - CREDIT REPORTING AGENCIES -HEAD- SUBCHAPTER III - CREDIT REPORTING AGENCIES -End- -CITE- 15 USC Sec. 1681 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER III - CREDIT REPORTING AGENCIES -HEAD- Sec. 1681. Congressional findings and statement of purpose -STATUTE- (a) Accuracy and fairness of credit reporting The Congress makes the following findings: (1) The banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public confidence which is essential to the continued functioning of the banking system. (2) An elaborate mechanism has been developed for investigating and evaluating the credit worthiness,(!1) credit standing, credit capacity, character, and general reputation of consumers. (3) Consumer reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers. (4) There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy. (b) Reasonable procedures It is the purpose of this subchapter to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this subchapter. -SOURCE- (Pub. L. 90-321, title VI, Sec. 602, as added Pub. L. 91-508, title VI, Sec. 601, Oct. 26, 1970, 84 Stat. 1128.) -MISC1- EFFECTIVE DATE OF 2003 AMENDMENT Pub. L. 108-159, Sec. 3, Dec. 4, 2003, 117 Stat. 1953, provided that: "Except as otherwise specifically provided in this Act [see Short Title of 2003 Amendment note set out under section 1601 of this title] and the amendments made by this Act - "(1) before the end of the 2-month period beginning on the date of enactment of this Act [Dec. 4, 2003], the Board and the Commission shall jointly prescribe regulations in final form establishing effective dates for each provision of this Act; and "(2) the regulations prescribed under paragraph (1) shall establish effective dates that are as early as possible, while allowing a reasonable time for the implementation of the provisions of this Act, but in no case shall any such effective date be later than 10 months after the date of issuance of such regulations in final form." [For final rules adopted by Board of Governors of the Federal Reserve System and Federal Trade Commission establishing effective dates for provisions of Pub. L. 108-159, see 68 F.R. 74467 (joint interim final rules) and 69 F.R. 6526 (joint final rules).] EFFECTIVE DATE Section 504(d) of Pub. L. 90-321, as added by Pub. L. 91-508, title VI, Sec. 602, Oct. 26, 1970, 84 Stat. 1136, provided that: "Title VI [enacting this subchapter] takes effect upon the expiration of one hundred and eighty days following the date of its enactment [Oct. 26, 1970]." SHORT TITLE This subchapter known as the "Fair Credit Reporting Act", see Short Title note set out under section 1601 of this title. STUDY OF EFFECTS OF CREDIT SCORES AND CREDIT-BASED INSURANCE SCORES ON AVAILABILITY AND AFFORDABILITY OF FINANCIAL PRODUCTS Pub. L. 108-159, title II, Sec. 215, Dec. 4, 2003, 117 Stat. 1984, provided that: "(a) Study Required. - The Commission and the Board, in consultation with the Office of Fair Housing and Equal Opportunity of the Department of Housing and Urban Development, shall conduct a study of - "(1) the effects of the use of credit scores and credit-based insurance scores on the availability and affordability of financial products and services, including credit cards, mortgages, auto loans, and property and casualty insurance; "(2) the statistical relationship, utilizing a multivariate analysis that controls for prohibited factors under the Equal Credit Opportunity Act [15 U.S.C. 1691 et seq.] and other known risk factors, between credit scores and credit-based insurance scores and the quantifiable risks and actual losses experienced by businesses; "(3) the extent to which, if any, the use of credit scoring models, credit scores, and credit-based insurance scores impact on the availability and affordability of credit and insurance to the extent information is currently available or is available through proxies, by geography, income, ethnicity, race, color, religion, national origin, age, sex, marital status, and creed, including the extent to which the consideration or lack of consideration of certain factors by credit scoring systems could result in negative or differential treatment of protected classes under the Equal Credit Opportunity Act, and the extent to which, if any, the use of underwriting systems relying on these models could achieve comparable results through the use of factors with less negative impact; and "(4) the extent to which credit scoring systems are used by businesses, the factors considered by such systems, and the effects of variables which are not considered by such systems. "(b) Public Participation. - The Commission shall seek public input about the prescribed methodology and research design of the study described in subsection (a), including from relevant Federal regulators, State insurance regulators, community, civil rights, consumer, and housing groups. "(c) Report Required. - "(1) In general. - Before the end of the 24-month period beginning on the date of enactment of this Act [Dec. 4, 2003], the Commission shall submit a detailed report on the study conducted pursuant to subsection (a) to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate. "(2) Contents of report. - The report submitted under paragraph (1) shall include the findings and conclusions of the Commission, recommendations to address specific areas of concerns addressed in the study, and recommendations for legislative or administrative action that the Commission may determine to be necessary to ensure that credit and credit-based insurance scores are used appropriately and fairly to avoid negative effects." FTC STUDY OF ISSUES RELATING TO THE FAIR CREDIT REPORTING ACT Pub. L. 108-159, title III, Sec. 318, Dec. 4, 2003, 117 Stat. 1998, provided that: "(a) Study Required. - "(1) In general. - The Commission shall conduct a study on ways to improve the operation of the Fair Credit Reporting Act [15 U.S.C. 1681 et seq.]. "(2) Areas for study. - In conducting the study under paragraph (1), the Commission shall review - "(A) the efficacy of increasing the number of points of identifying information that a credit reporting agency is required to match to ensure that a consumer is the correct individual to whom a consumer report relates before releasing a consumer report to a user, including - "(i) the extent to which requiring additional points of such identifying information to match would - "(I) enhance the accuracy of credit reports; and "(II) combat the provision of incorrect consumer reports to users; "(ii) the extent to which requiring an exact match of the first and last name, social security number, and address and ZIP Code of the consumer would enhance the likelihood of increasing credit report accuracy; and "(iii) the effects of allowing consumer reporting agencies to use partial matches of social security numbers and name recognition software on the accuracy of credit reports; "(B) requiring notification to consumers when negative information has been added to their credit reports, including - "(i) the potential impact of such notification on the ability of consumers to identify errors on their credit reports; and "(ii) the potential impact of such notification on the ability of consumers to remove fraudulent information from their credit reports; "(C) the effects of requiring that a consumer who has experienced an adverse action based on a credit report receives a copy of the same credit report that the creditor relied on in taking the adverse action, including - "(i) the extent to which providing such reports to consumers would increase the ability of consumers to identify errors in their credit reports; and "(ii) the extent to which providing such reports to consumers would increase the ability of consumers to remove fraudulent information from their credit reports; "(D) any common financial transactions that are not generally reported to the consumer reporting agencies, but would provide useful information in determining the credit worthiness of consumers; and "(E) any actions that might be taken within a voluntary reporting system to encourage the reporting of the types of transactions described in subparagraph (D). "(3) Costs and benefits. - With respect to each area of study described in paragraph (2), the Commission shall consider the extent to which such requirements would benefit consumers, balanced against the cost of implementing such provisions. "(b) Report Required. - Not later than 1 year after the date of enactment of this Act [Dec. 4, 2003], the chairman of the Commission shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives containing a detailed summary of the findings and conclusions of the study under this section, together with such recommendations for legislative or administrative actions as may be appropriate." FTC STUDY OF THE ACCURACY OF CONSUMER REPORTS Pub. L. 108-159, title III, Sec. 319, Dec. 4, 2003, 117 Stat. 1999, provided that: "(a) Study Required. - Until the final report is submitted under subsection (b)(2), the Commission shall conduct an ongoing study of the accuracy and completeness of information contained in consumer reports prepared or maintained by consumer reporting agencies and methods for improving the accuracy and completeness of such information. "(b) Biennial Reports Required. - "(1) Interim reports. - The Commission shall submit an interim report to the Congress on the study conducted under subsection (a) at the end of the 1-year period beginning on the date of enactment of this Act [Dec. 4, 2003] and biennially thereafter for 8 years. "(2) Final report. - The Commission shall submit a final report to the Congress on the study conducted under subsection (a) at the end of the 2-year period beginning on the date on which the final interim report is submitted to the Congress under paragraph (1). "(3) Contents. - Each report submitted under this subsection shall contain a detailed summary of the findings and conclusions of the Commission with respect to the study required under subsection (a) and such recommendations for legislative and administrative action as the Commission may determine to be appropriate." -CROSS- DEFINITIONS Pub. L. 108-159, Sec. 2, Dec. 4, 2003, 117 Stat. 1953, provided that: "As used in this Act [see Short Title of 2003 Amendment note set out under section 1601 of this title] - "(1) the term 'Board' means the Board of Governors of the Federal Reserve System; "(2) the term 'Commission', other than as used in title V [20 U.S.C. 9701 et seq.], means the Federal Trade Commission; "(3) the terms 'consumer', 'consumer report', 'consumer reporting agency', 'creditor', 'Federal banking agencies', and 'financial institution' have the same meanings as in section 603 of the Fair Credit Reporting Act [15 U.S.C. 1681a], as amended by this Act; and "(4) the term 'affiliates' means persons that are related by common ownership or affiliated by corporate control." -FOOTNOTE- (!1) So in original. Probably should be "creditworthiness,". -End- -CITE- 15 USC Sec. 1681a 01/05/2009 -EXPCITE- TITLE 15 - COMMERCE AND TRADE CHAPTER 41 - CONSUMER CREDIT PROTECTION SUBCHAPTER III - CREDIT REPORTING AGENCIES -HEAD- Sec. 1681a. Definitions; rules of construction -STATUTE- (a) Definitions and rules of construction set forth in this section are applicable for the purposes of this subchapter. (b) The term "person" means any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity. (c) The term "consumer" means an individual. (d) Consumer Report. - (1) In general. - The term "consumer report" means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness,(!1) credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for - (A) credit or insurance to be used primarily for personal, family, or household purposes; (B) employment purposes; or (C) any other purpose authorized under section 1681b of this title. (2) Exclusions. - Except as provided in paragraph (3), the term "consumer report" does not include - (A) subject to section 1681s-3 of this title, any - (i) report containing information solely as to transactions or experiences between the consumer and the person making the report; (ii) communication of that information among persons related by common ownership or affiliated by corporate control; or (iii) communication of other information among persons related by common ownership or affiliated by corporate control, if it is clearly and conspicuously disclosed to the consumer that the information may be communicated among such persons and the consumer is given the opportunity, before the time that the information is initially communicated, to direct that such information not be communicated among such persons; (B) any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device; (C) any report in which a person who has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer conveys his or her decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made, and such person makes the disclosures to the consumer required under section 1681m of this title; or (D) a communication described in subsection (o) or (x) of this section. (3) Restriction on sharing of medical information. - Except for information or any communication of information disclosed as provided in section 1681b(g)(3) of this title, the exclusions in paragraph (2) shall not apply with respect to information disclosed to any person related by common ownership or affiliated by corporate control, if the information is - (A) medical information; (B) an individualized list or description based on the payment transactions of the consumer for medical products or services; or (C) an aggregate list of identified consumers based on payment transactions for medical products or services. (e) The term "investigative consumer report" means a consumer report or portion thereof in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information. However, such information shall not include specific factual information on a consumer's credit record obtained directly from a creditor of the consumer or from a consumer reporting agency when such information was obtained directly from a creditor of the consumer or from the consumer. (f) The term "consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports. (g) The term "file", when used in connection with information on any consumer, means all of the information on that consumer recorded and retained by a consumer reporting agency regardless of how the information is stored. (h) The term "employment purposes" when used in connection with a consumer report means a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee. (i) Medical Information. - The term "medical information" - (1) means information or data, whether oral or recorded, in any form or medium, created by or derived from a health care provider or the consumer, that relates to - (A) the past, present, or future physical, mental, or behavioral health or condition of an individual; (B) the provision of health care to an individual; or (C) the payment for the provision of health care to an individual.(!2) (2) does not include the age or gender of a consumer, demographic information about the consumer, including a consumer's residence address or e-mail address, or any other information about a consumer that does not relate to the physical, mental, or behavioral health or condition of a consumer, including the existence or value of any insurance policy. (j) Definitions Relating to Child Support Obligations. - (1) Overdue support. - The term "overdue support" has the meaning given to such term in section 666(e) of title 42. (2) State or local child support enforcement agency. - The term "State or local child support enforcement agency" means a State or local agency which administers a State or local program for establishing and enforcing child support obligations. (k) Adverse Action. - (1) Actions included. - The term "adverse action" - (A) has the same meaning as in section 1691(d)(6) of this title; and (B) means - (i) a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance; (ii) a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee; (iii) a denial or cancellation of, an increase in any charge for, or any other adverse or unfavorable change in the terms of, any license or benefit described in section 1681b(a)(3)(D) of this title; and (iv) an action taken or determination that is - (I) made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a review of an account under section 1681b(a)(3)(F)(ii) of this title; and (II) adverse to the interests of the consumer. (2) Applicable findings, decisions, commentary, and orders. - For purposes of any determination of whether an action is an adverse action under paragraph (1)(A), all appropriate final findings, decisions, commentary, and orders issued under section 1691(d)(6) of this title by the Board of Governors of the Federal Reserve System or any court shall apply. (l) Firm Offer of Credit or Insurance. - The term "firm offer of credit or insurance" means any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer, except that the offer may be further conditioned on one or more of the following: (1) The consumer being determined, based on information in the consumer's application for the credit or insurance, to meet specific criteria bearing on credit worthiness (!3) or insurability, as applicable, that are established - (A) before selection of the consumer for the offer; and (B) for the purpose of determining whether to extend credit or insurance pursuant to the offer. (2) Verification - (A) that the consumer continues to meet the specific criteria used to select the consumer for the offer, by using information in a consumer report on the consumer, information in the consumer's application for the credit or insurance, or other information bearing on the credit worthiness (!3) or insurability of the consumer; or (B) of the information in the consumer's application for the credit or insurance, to determine that the consumer meets the specific criteria bearing on credit worthiness (!3) or insurability. (3) The consumer furnishing any collateral that is a requirement for the extension of the credit or insurance that was - (A) established before selection of the consumer for the offer of credit or insurance; and (B) disclosed to the consumer in the offer of credit or insurance. (m) Credit or Insurance Transaction That Is Not Initiated by the Consumer. - The term "credit or insurance transaction that is not initiated by the consumer" does not include the use of a consumer report by a person with which the consumer has an account or insurance policy, for purposes of - (1) reviewing the account or insurance policy; or (2) collecting the account. (n) State. - The term "State" means any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States. (o) Excluded Communications. - A communication is described in this subsection if it is a communication - (1) that, but for subsection (d)(2)(D) of this section, would be an investigative consumer report; (2) that is made to a prospective employer for the purpose of - (A) procuring an employee for the employer; or (B) procuring an opportunity for a natural person to work for the employer; (3) that is made by a person who regularly performs such procurement; (4) that is not used by any person for any purpose other than a purpose described in subparagraph (A) or (B) of paragraph (2); and (5) with respect to which - (A) the consumer who is the subject of the communication - (i) consents orally or in writing to the nature and scope of the communication, before the collection of any information for the purpose of making the communication; (ii) consents orally or in writing to the making of the communication to a prospective employer, before the making of the communication; and (iii) in the case of consent under clause (i) or (ii) given orally, is provided written confirmation of that consent by the person making the communication, not later than 3 business days after the receipt of the consent by that person; (B) the person who makes the communication does not, for the purpose of making the communication, make any inquiry that if made by a prospective employer of the consumer who is the subject of the communication would violate any applicable Federal or State equal employment opportunity law or regulation; and (C) the person who makes the communication - (i) discloses in writing to the consumer who is the subject of the communication, not later than 5 business days after receiving any request from the consumer for such disclosure, the nature and substance of all information in the consumer's file at the time of the request, except that the sources of any information that is acquired solely for use in making the communication and is actually used for no other purpose, need not be disclosed other than under appropriate discovery procedures in any court of competent jurisdiction in which an action is brought; and (ii) notifies the consumer who is the subject of the communication, in writing, of the consumer's right to request the information described in clause (i). (p) Consumer Reporting Agency That Compiles and Maintains Files on Consumers on a Nationwide Basis. - The term "consumer reporting agency that compiles and maintains files on consumers on a nationwide basis" means a consumer reporting agency that regularly engages in the practice of assembling or evaluating, and maintaining, for the purpose of furnishing consumer reports to third parties bearing on a consumer's credit worthiness,(!4) credit standing, or credit capacity, each of the following regarding consumers residing nationwide: (1) Public record information. (2) Credit account information from persons who furnish that information regularly and in the ordinary course of business. (q) Definitions Relating to Fraud Alerts. - (1) Active duty military consumer. - The term "active duty military consumer" means a consumer in military service who - (A) is on active duty (as defined in section 101(d)(1) of title 10) or is a reservist performing duty under a call or order to active duty under a provision of law referred to in section 101(a)(13) of title 10; and (B) is assigned to service away from the usual duty station of the consumer. (2) Fraud alert; active duty alert. - The terms "fraud alert" and "active duty alert" mean a statement in the file of a consumer that - (A) notifies all prospective users of a consumer report relating to the consumer that the consumer may be a victim of fraud, including identity theft, or is an active duty military consumer, as applicable; and (B) is presented in a manner that facilitates a clear and conspicuous view of the statement described in subparagraph (A) by any person requesting such consumer report. (3) Identity theft. - The term "identity theft" means a fraud committed using the identifying information of another person, subject to such further definition as the Commission may prescribe, by regulation. (4) Identity theft report. - The term "identity theft report" has the meaning given that term by rule of the Commission, and means, at a minimum, a report - (A) that alleges an identity theft; (B) that is a copy of an official, valid report filed by a consumer with an appropriate Federal, State, or local law enforcement agency, including the United States Postal Inspection Service, or such other government agency deemed appropriate by the Commission; and (C) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false. (5) New credit plan. - The term "new credit plan" means a new account under an open end credit plan (as defined in section 1602(i) of this title) or a new credit transaction not under an open end credit plan. (r) Credit and Debit Related Terms - (1) Card issuer. - The term "card issuer" means - (A) a credit card issuer, in the case of a credit card; and (B) a debit card issuer, in the case of a debit card. (2) Credit card. - The term "credit card" has the same meaning as in section 1602 of this title. (3)