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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3974 Introduced in House (IH)]

108th CONGRESS
  2d Session
                                H. R. 3974

     To amend the Truth in Lending Act to impose restrictions and 
limitations on high-cost mortgages, to revise the permissible fees and 
    charges on certain loans made, to prohibit unfair or deceptive 
practices by mortgage brokers and creditors, and to provide for public 
    education and counseling about predatory lenders, and for other 
                               purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 16, 2004

Mr. Miller of North Carolina (for himself and Mr. Watt) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL

 
     To amend the Truth in Lending Act to impose restrictions and 
limitations on high-cost mortgages, to revise the permissible fees and 
    charges on certain loans made, to prohibit unfair or deceptive 
practices by mortgage brokers and creditors, and to provide for public 
    education and counseling about predatory lenders, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Prohibit Predatory 
Lending Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions relating to high-cost mortgages.
Sec. 3. Amendments to existing requirements for certain mortgages.
Sec. 4. Additional requirements for certain mortgages.
Sec. 5. Amendment to provision governing correction of errors.
Sec. 6. Amendment relating to right of rescission.
Sec. 7. Amendments to civil liability provisions.
Sec. 8. Protections for all home loans.
Sec. 9. Regulations.

SEC. 2. DEFINITIONS RELATING TO HIGH-COST MORTGAGES.

    (a) High-Cost Mortgage Defined.--Section 103(aa) of the Truth in 
Lending Act (15 U.S.C. 1602(aa)) is amended by striking all that 
precedes paragraph (2) and inserting the following:
    ``(aa) High-Cost Mortgage.--
            ``(1) Definition.--
                    ``(A) In general.--The term `high-cost mortgage', 
                and a mortgage referred to in this subsection, means a 
                consumer credit transaction that is secured by the 
                consumer's principal dwelling, other than a reverse 
                mortgage transaction, if--
                            ``(i) in the case of a loan secured--
                                    ``(I) by a first mortgage on the 
                                consumer's principal dwelling, the 
                                annual percentage rate at consummation 
                                of the transaction will exceed by more 
                                than 8 percentage points the yield on 
                                Treasury securities having comparable 
                                periods of maturity on the 15th day of 
                                the month immediately preceding the 
                                month in which the application for the 
                                extension of credit is received by the 
                                creditor; or
                                    ``(II) by a subordinate or junior 
                                mortgage on the consumer's principal 
                                dwelling, 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 15th day of the month 
                                immediately preceding the month in 
                                which the application for the extension 
                                of credit is received by the creditor;
                            ``(ii) the total points and fees payable in 
                        connection with the loan exceed--
                                    ``(I) in the case of a loan for 
                                $20,000 or more, 5 percent of the total 
                                loan amount; or
                                    ``(II) in the case of a loan for 
                                less than $20,000, the lesser of 8 
                                percent of the total loan amount or 
                                $1,000; or
                            ``(iii) the loan documents permit the 
                        lender to charge or collect prepayment fees or 
                        penalties more than 30 months after the loan 
                        closing or such fees or penalties exceed, in 
                        the aggregate, more than 2 percent of the 
                        amount prepaid.
                    ``(B) Introductory rates taken into account.--For 
                purposes of subparagraph (A)(i), the annual percentage 
                rate of interest shall be determined based on the 
                following interest rate:
                            ``(i) In the case of a fixed-rate loan in 
                        which the annual percentage rate will not vary 
                        during the term of the loan, the interest rate 
                        in effect on the date of consummation of the 
                        transaction.
                            ``(ii) In the case of a loan in which the 
                        rate of interest varies solely in accordance 
                        with an index, the interest rate determined by 
                        adding the index rate in effect on the date of 
                        consummation of the transaction to the maximum 
                        margin permitted at any time during the loan 
                        agreement.
                            ``(iii) In the case of any other loan in 
                        which the rate may vary at any time during the 
                        term of the loan for any reason, the interest 
                        charged on the loan at the maximum rate that 
                        may be charged during the term of the loan.''.
    (b) Adjustment of Percentage Points.--Section 103(aa)(2) of the 
Truth in Lending Act (15 U.S.C. 1602(aa)(2)) is amended by striking 
subparagraph (B) and inserting the following new subparagraph:
                    ``(B) An increase or decrease under subparagraph 
                (A)--
                            ``(i) may not result in the number of 
                        percentage points referred to in paragraph 
                        (1)(A)(i)(I) being less than 6 percentage 
                        points or greater than 10 percentage points; 
                        and
                            ``(ii) may not result in the number of 
                        percentage points referred to in paragraph 
                        (1)(A)(i)(II) being less than 8 percentage 
                        points or greater than 12 percentage points.''.
    (c) Points and Fees Defined.--
            (1) In general.--Section 103(aa)(4) of the Truth in Lending 
        Act (15 U.S.C. 1602(aa)(4)) is amended--
                    (A) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) all compensation paid directly or indirectly 
                by a consumer or creditor to a mortgage broker from any 
                source, including a mortgage broker that originates a 
                loan in the name of the broker in a table-funded 
                transaction;'';
                    (B) in subparagraph (C)(ii), by striking ``and'' 
                after the semicolon at the end;
                    (C) by redesignating subparagraph (D) as 
                subparagraph (G); and
                    (D) by inserting after subparagraph (C) the 
                following new subparagraphs:
                    ``(D) premiums or other charges payable at or 
                before closing for any credit life, credit disability, 
                credit unemployment, or credit property insurance, or 
                any other accident, loss-of-income, life or health 
                insurance, or any payments directly or indirectly for 
                any debt cancellation or suspension agreement or 
                contract, except that insurance premiums or debt 
                cancellation or suspension fees calculated and paid in 
                full on a monthly basis shall not be considered 
                financed by the creditor;
                    ``(E) except as provided in subsection (cc), the 
                maximum prepayment fees and penalties which may be 
                charged or collected under the terms of the loan 
                documents;
                    ``(F) all prepayment fees or penalties that are 
                incurred by the borrower if the loan refinances a 
                previous loan made or currently held by the same 
                creditor or an affiliate of the creditor; and''.
            (2) Calculation of points and fees for open-end loans.--
        Section 103(aa) of the Truth in Lending Act (15 U.S.C. 
        1602(aa)) is amended--
                    (A) by redesignating paragraph (5) as paragraph 
                (6); and
                    (B) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) Calculation of points and fees for open-end loans.--
        In the case of open-end loans, points and fees shall be 
        calculated, for purposes of this section and section 129, by 
        adding the total points and fees known at or before closing, 
        including the maximum prepayment penalties which may be charged 
        or collected under the terms of the loan documents, plus the 
        minimum additional fees the consumer would be required to pay 
        to draw down an amount equal to the total credit line.''.
    (d) High Cost Mortgage Lender.--Section 103(f) of the Truth in 
Lending Act (15 U.S.C. 1602(f)) is amended by striking the last 
sentence and inserting the following new sentence: ``Any person who 
originates or brokers 2 or more mortgages referred to in subsection 
(aa) in any 12-month period, any person who originates 1 or more such 
mortgages through a mortgage broker in any 12 month period, or, in 
connection with a table funding transaction of such a mortgage, and any 
person to whom the obligation is initially assigned at or after 
settlement shall be considered to be a creditor for purposes of this 
title.''.
    (e) Bona Fide Discount Loan Discount Points and Prepayment 
Penalties.--Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is 
amended by adding at the end the following new subsection:
    ``(cc) Bona Fide Discount Points and Prepayment Penalties.--For the 
purposes of determining the amount of points and fees for purposes of 
subsection (aa), either the amounts described in paragraphs (1) or (4) 
of the following paragraphs, but not both, may be excluded:
            ``(1) Exclusion of bona fide discount points.--The discount 
        points described in 1 of the following subparagraphs shall be 
        excluded from determining the amounts of points and fees with 
        respect to a high-cost mortgage for purposes of subsection 
        (aa):
                    ``(A) Up to and including 2 bona fide discount 
                points payable by the borrower in connection with the 
                mortgage, but only if the interest rate from which the 
                mortgage's interest rate will be discounted does not 
                exceed by more than 1 percentage point the required net 
                yield for a 90-day standard mandatory delivery 
                commitment for a reasonably comparable loan from either 
                the Federal National Mortgage Association or the 
                Federal Home Loan Mortgage Corporation, whichever is 
                greater.
                    ``(B) Unless 2 bona fide discount points have been 
                excluded under subparagraph (A), up to and including 1 
                bona fide discount points payable by the borrower in 
                connection with the mortgage, but only if the interest 
                rate from which the mortgage's interest rate will be 
                discounted does not exceed by more than 2 percentage 
                points the required net yield for a 90-day standard 
                mandatory delivery commitment for a reasonably 
                comparable loan from either the Federal National 
                Mortgage Association or the Federal Home Loan Mortgage 
                Corporation, whichever is greater.
            ``(2) Definition.--For purposes of paragraph (1), the term 
        `bona fide discount points' means loan discount points which 
        are knowingly paid by the consumer for the purpose of reducing, 
        and which in fact result in a bona fide reduction of, the 
        interest rate or time-price differential applicable to the 
        mortgage.
            ``(3) Exception for interest rate reductions inconsistent 
        with industry norms.-- Paragraph (1) shall not apply to 
        discount points used to purchase an interest rate reduction 
        unless the amount of the interest rate reduction purchased is 
        reasonably consistent with established industry norms and 
        practices for secondary mortgage market transactions.
            ``(4) Allowance of conventional prepayment penalty.--
        Subsection (aa)(1)(4)(E) shall not apply so as to include a 
        prepayment penalty or fee that is authorized by law other than 
        this title and may be imposed pursuant to the terms of a high-
        cost mortgage (or other consumer credit transaction secured by 
        the consumer's principal dwelling) if--
                    ``(A) the annual percentage rate applicable with 
                respect to such mortgage or transaction (as determined 
                for purposes of subsection (aa)(1)(A)(i))--
                            ``(i) in the case of a first mortgage on 
                        the consumer's principal dwelling, does not 
                        exceed by more than 2 percentage points the 
                        yield on Treasury securities having comparable 
                        periods of maturity on the 15th day of the 
                        month immediately preceding the month in which 
                        the application for the extension of credit is 
                        received by the creditor; or
                            ``(ii) in the case of a subordinate or 
                        junior mortgage on the consumer's principal 
                        dwelling, does not exceed by more than 4 
                        percentage points the yield on such Treasury 
                        securities; and
                    ``(B) the total amount of any prepayment fees or 
                penalties permitted under the terms of the high-cost 
                mortgage or transaction does not exceed 2 percent of 
                the amount prepaid.''.

SEC. 3. AMENDMENTS TO EXISTING REQUIREMENTS FOR CERTAIN MORTGAGES.

    (a) Prepayment Penalty Provisions.--Section 129(c)(2) of the Truth 
in Lending Act (15 U.S.C. 1639(c)(2)) is amended--
            (1) by striking ``and'' after the semicolon at the end of 
        subparagraph (C);
            (2) by redesignating subparagraph (D) as subparagraph (E); 
        and
            (3) by inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) the amount of the principal obligation of the 
                mortgage exceeds the maximum principal obligation 
                limitation (for the applicable size residence) under 
                section 203(b)(2) of the National Housing Act for the 
                area in which the residence subject to the mortgage is 
                located; and''.
    (b) No Balloon Payments.--Section 129(e) of the Truth in Lending 
Act (15 U.S.C. 1639(e)) is amended to read as follows:
    ``(e) No Balloon Payments.--No high-cost mortgage may contain a 
scheduled payment that is more than twice as large as the average of 
earlier scheduled payments. This subsection shall not apply when the 
payment schedule is adjusted to the seasonal or irregular income of the 
consumer.''.
    (c) No Lending Without Due Regard to Ability to Repay.--Section 
129(h) of the Truth in Lending Act (15 U.S.C. 1639(h)) is amended--
            (1) by striking ``Payment Ability of Consumer.--A creditor 
        shall not'' and inserting ``Payment Ability of Consumer.--
            ``(1) Pattern or practice.--
                    ``(A) In general.--A creditor shall not'';
            (2) by inserting after subparagraph (A) (as so designated 
        by paragraph (1) of this subsection) the following new 
        subparagraph:
                    ``(B) Presumption of violation.--There shall be a 
                presumption that a creditor has violated this 
                subsection if the creditor engages in a pattern or 
                practice of making high-cost mortgages without 
                verifying or documenting the repayment ability of 
                consumers with respect to such loans.''; and
            (3) by adding at the end the following new paragraph:
            ``(2) Prohibition on extending credit without regard to 
        payment ability of consumer.--
                    ``(A) In general.--A creditor may not extend credit 
                to a consumer under a high-cost mortgage unless a 
                reasonable creditor would believe at the time the loan 
                is closed that the consumer or consumers that are 
                residing or will reside in the residence subject to the 
                mortgage will be able to make the scheduled payments 
                associated with the loan, based upon a consideration of 
                current and expected income, current obligations, 
                employment status, and other financial resources, other 
                than equity in the residence.
                    ``(B) Presumption of ability.--For purposes of this 
                subsection, there shall be a rebuttable presumption 
                that a consumer is able to make the scheduled payments 
                to repay the obligation if, at the time the loan is 
                consummated, the consumer's total monthly debts, 
                including amounts under the loan, do not exceed 50 
                percent of his or her monthly gross income as verified 
                by tax returns, payroll receipts, or other third-party 
                income verification.''.

SEC. 4. ADDITIONAL REQUIREMENTS FOR CERTAIN MORTGAGES.

    (a) Additional Requirements for Certain Mortgages.--Section 129 of 
the Truth in Lending Act (15 U.S.C. 1639) is amended--
            (1) by redesignating subsections (j), (k) and (l) as 
        subsections (n), (o) and (p) respectively; and
            (2) by inserting after subsection (i) the following new 
        subsections:
    ``(j) Recommended Default.--No creditor shall recommend or 
encourage default on an existing loan or other debt prior to and in 
connection with the closing or planned closing of a high-cost mortgage 
that refinances all or any portion of such existing loan or debt.
    ``(k) Late Fees.--
            ``(1) In general.--No lender may impose a late payment 
        charge or fee in connection with a high-cost mortgage--
                    ``(A) in an amount in excess of 4 percent of the 
                amount of the payment past due;
                    ``(B) unless the loan documents specifically 
                authorize the charge or fee;
                    ``(C) before the end of the 15-day period beginning 
                on the date the payment is due, or in the case of a 
                loan on which interest on each installment is paid in 
                advance, before the end of the 30-day period beginning 
                on the date the payment is due; or
                    ``(D) more than once with respect to a single late 
                payment.
            ``(2) Coordination with subsequent late fees.--If a payment 
        is otherwise a full payment for the applicable period and is 
        paid on its due date or within an applicable grace period, and 
        the only delinquency or insufficiency of payment is 
        attributable to any late fee or delinquency charge assessed on 
        any earlier payment, no late fee or delinquency charge may be 
        imposed on such payment.
            ``(3) Failure to make installment payment.--If, in the case 
        of a loan agreement the terms of which provide that any payment 
        shall first be applied to any past due principal balance, the 
        borrower fails to make an installment payment and the borrower 
        subsequently resumes making installment payments but has not 
        paid all past due installments, the lender may impose a 
        separate late payment charge or fee for any principal due 
        (without deduction due to late fees or related fees) until the 
        default is cured.
    ``(l) Acceleration of Debt.--No high-cost mortgage may contain a 
provision which permits the creditor, in its sole discretion, to 
accelerate the indebtedness. This provision shall not apply when 
repayment of the loan has been accelerated by default, pursuant to a 
due-on-sale provision, or pursuant to a material violation of some 
other provision of the loan documents unrelated to the payment 
schedule.
    ``(m) Restriction on Financing Points and Fees.--No creditor may 
directly or indirectly finance, in connection with any high-cost 
mortgage, any of the following:
            ``(1) Any prepayment fee or penalty payable by the borrower 
        in a refinancing transaction if the lender or an affiliate of 
        the lender is the noteholder of the note being refinanced.
            ``(2) Any points or fees.''.
    (b) Prohibitions on Evasions.--Section 129 of the Truth in Lending 
Act (15 U.S.C. 1639 is amended by inserting after subsection (p) (as so 
redesignated by subsection (a)(1) of this section) the following new 
subsection:
    ``(q) Prohibitions on Evasions, Structuring of Transactions, and 
Reciprocal Arrangements.--A creditor may not take any action in 
connection with a high-cost mortgage--
            ``(1) to structure a loan transaction as an open-end credit 
        plan or another form of loan for the purpose and with the 
        intent of evading the provisions of this title; or
            ``(2) to divide any loan transaction into separate parts 
        for the purpose and with the intent of evading provisions of 
        this title.''.
    (c) Modification or Deferral Fees.--Section 129 of the Truth in 
Lending Act (15 U.S.C. 1639) is amended by inserting after subsection 
(q) (as added by subsection (b) of this section) the following new 
subsection:
    ``(r) Modification and Deferral Fees Prohibited.--A creditor may 
not charge a consumer any fee to modify, renew, extend, or amend a 
high-cost mortgage, or to defer any payment due under the terms of such 
mortgage, unless the modification, renewal, extension or amendment 
results in a lower annual percentage rate on the mortgage for the 
consumer and then only if the amount of the fee is comparable to fees 
imposed for similar transactions in connection with consumer credit 
transactions that are secured by a consumer's principal dwelling and 
are not high-cost mortgages.''.
    (d) Arbitration and Forum Shopping.--Section 129 of the Truth in 
Lending Act (15 U.S.C. 1639) is amended by inserting after subsection 
(r) (as added by subsection (c) of this section) the following:
    ``(s) Arbitration.--
            ``(1) In general.--A high-cost mortgage may not include 
        terms which require arbitration or any other nonjudicial 
        procedure as the method for resolving any controversy or 
        settling any claims arising out of the transaction.
            ``(2) Post-controversy agreements.--Subject to paragraph 
        (3), paragraph (1) shall not be construed as limiting the right 
        of the consumer and the creditor to agree to arbitration or any 
        other nonjudicial procedure as the method for resolving any 
        controversy at any time after a dispute or claim under the 
        transaction arises.
            ``(3) No waiver of statutory cause of action.--No provision 
        of any high-cost mortgage or any agreement between the consumer 
        and the creditor shall be applied or interpreted so as to bar a 
        consumer from bringing an action in an appropriate district 
        court of the United States, or any other court of competent 
        jurisdiction, pursuant to section 130 or any other provision of 
        law, for damages or other relief in connection with any alleged 
        violation of this section, any other provision of this title, 
        or any other Federal law.''.
    (e) Payoff Statement.--Section 129 of the Truth in Lending Act (15 
U.S.C. 1639) is amended by inserting after subsection (s) (as added by 
subsection (d) of this section) the following new subsection:
    ``(t) Payoff Statement.--
            ``(1) Fees.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no creditor or servicer may charge a 
                fee for informing or transmitting to any person the 
                balance due to pay off the outstanding balance on a 
                high-cost mortgage.
                    ``(B) Transaction fee.--When payoff information 
                referred to in subparagraph (A) is provided by 
                facsimile transmission or by a courier service, a 
                creditor or servicer may charge a processing fee to 
                cover the cost of such transmission or service in an 
                amount not to exceed an amount that is comparable to 
                fees imposed for similar services provided in 
                connection with consumer credit transactions that are 
                secured by the consumer's principal dwelling and are 
                not high-cost mortgages.
                    ``(C) Fee disclosure.--Prior to charging a 
                transaction fee as provided in subparagraph (B), a 
                creditor or servicer shall disclose that payoff 
                balances are available for free pursuant to 
                subparagraph (A).
                    ``(D) Multiple requests.--If a creditor or servicer 
                has provided payoff information referred to in 
                subparagraph (A) without charge, other than the 
                transaction fee allowed by subparagraph (B), on 4 
                occasions during a calendar year, the creditor or 
                servicer may thereafter charge a reasonable fee for 
                providing such information during the remainder of the 
                calendar year.
            ``(2) Prompt delivery.--Payoff balances shall be provided 
        within a reasonable time but in any event no more than 5 
        business days after receiving a request by a consumer or a 
        person authorized by the consumer to obtain such 
        information.''.
    (f) Pre-Loan Counseling Required.--Section 129 of the Truth in 
Lending Act (15 U.S.C. 1639) is amended by inserting after subsection 
(t) (as added by subsection (e) of this section) the following new 
subsection:
    ``(u) Pre-Loan Counseling.--
            ``(1) In general.--A creditor may not extend credit to a 
        consumer under a high-cost mortgage without first receiving 
        certification from a counselor that is approved by the 
        Secretary of Housing and Urban Development, or at the 
        discretion of the Secretary, a state housing finance authority, 
        that the borrower has received counseling on the advisability 
        of the loan transaction. Such counselor shall not be employed 
        by the creditor or an affiliate of the creditor or be 
        affiliated with the creditor.
            ``(2) Disclosures required prior to counseling.--No 
        counselor may certify that a borrower has received counseling 
        on the advisability of the loan transaction unless the 
        counselor can verify that the consumer has received each 
        statement required (in connection with such loan) by section 
        129 of this title or by the Real Estate Settlement Procedures 
        Act of 1974 with respect to the transaction.
            ``(3) Regulations.--The Secretary of Housing and Urban 
        Development may prescribe such regulations as the Secretary 
        determines to be appropriate to carry out the requirements of 
        paragraph (1).''.

SEC. 5. AMENDMENT TO PROVISION GOVERNING CORRECTION OF ERRORS.

    (a) Amendment to Provision Governing Correction of Errors.--Section 
130(b) of the Truth in Lending Act (15 U.S.C. 1640(b)) is amended to 
read as follows:
    ``(b) Correction of Errors.--A creditor has no liability under this 
section or section 108 or 112 for any failure to comply with any 
requirement imposed under this chapter or chapter 5, if--
            ``(1) within 30 days of the loan closing and prior to the 
        institution of any action, the borrower is notified of or 
        discovers the violation, appropriate restitution is made, and 
        whatever adjustments are necessary are made to the loan to 
        either, at the choice of the borrower--
                    ``(A) make the loan satisfy the requirements of 
                this chapter; or
                    ``(B) change the terms of the loan in a manner 
                beneficial to the borrower so that the loan will no 
                longer be a high-cost mortgage; or
            ``(2) within 60 days of the lender's discovery or receipt 
        of notification of an unintentional violation or bona fide 
        error as described in subsection (c) and prior to the 
        institution of any action, the borrower is notified of the 
        compliance failure, appropriate restitution is made, and 
        whatever adjustments are necessary are made to the loan to 
        either, at the choice of the borrower--
                    ``(A) make the loan satisfy the requirements of 
                this chapter or
                    ``(B) change the terms of the loan in a manner 
                beneficial so that the loan will no longer be a high-
                cost mortgage.''.

SEC. 6. AMENDMENT RELATING TO RIGHT OF RESCISSION.

    Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is 
amended by inserting after the second sentence the following new 
sentence: ``This subsection also shall not bar a person from asserting 
a right to rescission under section 125, in an action to collect the 
debt or as a defense to a judicial or nonjudicial foreclosure after the 
expiration of the time periods for affirmative actions set forth in 
this section and section 125.''.

SEC. 7. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.

    (a) Increase in Amount of Civil Money Penalties for Certain 
Violations.--Section 130(a) of the Truth in Lending Act (15 U.S.C. 
1640(a)) is amended, in the matter preceding paragraph (1), by striking 
``an amount equal to the sum'' and inserting ``an amount equal to twice 
the sum''.
    (b) Statute of Limitations Extended for Section 129 Violations.--
Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) (as 
amended by section 6 of this Act) is amended--
            (1) in the first sentence, by striking ``Any action'' and 
        inserting ``Except as provided in the subsequent sentence, any 
        action''; and
            (2) by inserting after the first sentence the following new 
        sentence: ``Any action under this section with respect to any 
        violation of section 129 may be brought in any United States 
        district court, or in any other court of competent 
        jurisdiction, before the end of the 3-year period beginning on 
        the date of the occurrence of the violation.''.

SEC. 8. PROTECTIONS FOR ALL HOME LOANS.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 129 the following 
new section:
``Sec. 129A Protections for all home loans
    ``(a) Flipping.--
            ``(1) In general.--No creditor may knowingly or 
        intentionally engage in the unfair act or practice of flipping.
            ``(2) Flipping defined.--For purposes of this subsection, 
        the term `flipping' means the making of a loan or extension of 
        credit to a consumer which refinances an existing mortgage when 
        the new loan or extension of credit does not have reasonable, 
        tangible net benefit to the consumer considering all of the 
        circumstances, including the terms of both the new and the 
        refinanced loans or credit, the cost of the new loan or credit, 
        and the consumer's circumstances.
            ``(3) Tangible net benefit.--The Board may prescribe 
        regulations, in the discretion of the Board, defining the term 
        `tangible net benefit' for purposes of this subsection.
    ``(b) Single Premium Credit Insurance Prohibited.--No creditor may 
finance, directly or indirectly, in connection with any consumer credit 
transaction that is secured by the consumer's principal dwelling, any 
credit life, credit disability, credit unemployment or credit property 
insurance, or any other accident, loss-of-income, life or health 
insurance, or any payments directly or indirectly for any debt 
cancellation or suspension agreement or contract, except that insurance 
premiums or debt cancellation or suspension fees calculated and paid in 
full on a monthly basis shall not be considered financed by the 
creditor.''.
    (b) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act is amended by inserting after the item relating to 
section 129 the following new item:

``129A Protections for all home loans.''.

SEC. 9. REGULATIONS.

    (a) In General.--The Board of Governors of the Federal Reserve 
System shall publish regulations implementing this Act and the 
amendments made by this Act in final form before the end of the 6-month 
period beginning on the date of enactment of this Act.
    (b) Consumer Mortgage Education.--
            (1) Regulations.--The Board may prescribe regulations 
        requiring or encouraging creditors to provide consumer mortgage 
        education to prospective customers or direct such customers to 
        qualified consumer mortgage education or counseling programs in 
        the vicinity of the residence of the consumer.
            (2) Coordination with state law.--No requirement 
        established by the Board pursuant to paragraph (1) shall be 
        construed as affecting or superseding any requirement under the 
        law of any State with respect to consumer mortgage counseling 
        or education.
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