I 

115TH CONGRESS 

2D SESSION H. R. 5287 

To amend the Truth in Lending Act to clarify the exclusion for sellerfinancers from the definition of mortgage originator, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 14, 2018 

Mr. PEARCE (for himself and Mr. HECK) introduced the following bill; which 

was referred to the Committee on Financial Services 

A BILL 

To amend the Truth in Lending Act to clarify the exclusion 

for seller-financers from the definition of mortgage originator, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Preserving Access to 

5 Rural Installment Transactions for Years Act of 2018’’ 

6 or the ‘‘PARITY Act of 2018’’. 


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1 SEC. 2. AMENDMENTS RELATED TO THE EXCLUSION OF 

2 SELLER-FINANCERS IN THE DEFINITION OF 

3 MORTGAGE ORIGINATOR. 

4 Paragraph (2)(E) of the second subsection (cc) of 

5 section 103 of the Truth in Lending Act (relating to the 

6 definition of the term ‘‘mortgage originator’’) (15 U.S.C. 

7 1602(cc)(2)(E)) is amended— 

8 (1) in the matter preceding clause (i)— 

9 (A) by striking ‘‘3 properties’’ and insert10 ing ‘‘5 properties’’; 

11 (B) by striking ‘‘a person, estate, or trust’’ 

12 and inserting ‘‘a person or entity (including a 

13 corporation, partnership, proprietorship, asso14 ciation, cooperative, estate, or trust)’’; and 

15 (C) by striking ‘‘such person, estate, or 

16 trust’’ and inserting ‘‘such a person or entity’’; 

17 (2) in clause (i)— 

18 (A) by inserting ‘‘or’’ after the semicolon; 

19 (B) by striking ‘‘a person, estate, or trust 

20 that has constructed’’ and inserting ‘‘such a 

21 person or entity that— 

22 ‘‘(I) has constructed’’; and 

23 (C) by inserting at the end the following 

24 new subclause: 

25 ‘‘(II) has received any other com26 pensation related to such loan, includVerDate Sep 11 2014 03:47 Mar 24, 2018 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5287.IH H5287

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1 ing origination points or fees and ex2 cluding interest payments;’’; 

3 (3) by striking clauses (ii), (iii), and (iv); and 

4 (4) by inserting after clause (i) the following 

5 new clauses: 

6 ‘‘(ii) is not a high-cost mortgage; 

7 ‘‘(iii) does not include terms under 

8 which the outstanding principal balance 

9 will increase at any time over the course of 

10 the loan because the regular periodic pay11 ments do not cover the full amount of in12 terest due; 

13 ‘‘(iv) has— 

14 ‘‘(I) a fixed rate; or 

15 ‘‘(II) an adjustable rate that was 

16 not determined by a prior contractual 

17 obligation between the consumer and 

18 such a person or entity and— 

19 ‘‘(aa) is adjustable after 5 

20 or more years (as determined by 

21 the addition of a margin to a 

22 widely available index rate) sub23 ject to reasonable annual and 

24 lifetime limitations on interest 

25 rate increases or is determined 


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1 by a prior obligation that is in2 cluded in or assumed by the 

3 terms of the loan; or 

4 ‘‘(bb) with respect to any 

5 part of such loan contractually 

6 required to be used to make pay7 ments on an existing mortgage 

8 loan secured by such a property, 

9 is adjustable on or after the date 

10 of a rate adjustment on such ex11 isting mortgage loan; and’’. 

Æ 


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