I
106TH CONGRESS
2D SESSION
H.R. 4250
To amend the Home Ownership and Equity Protection Act of 1994 and
other sections of the Truth in Lending Act to protect consumers against
predatory practices in connection with high cost mortgage transactions,
to strengthen the civil remedies available to consumers under existing
law, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 12, 2000
Mr. LAFALCE (for himself, Mr. VENTO, Mr. FRANK of Massachusetts, Mr.
KANJORSKI, Mrs. MALONEY of New York, Mr. GUTIERREZ, Mr. BENT-
SEN, Ms. CARSON, Mr. MEEKS of New York, Ms. SCHAKOWSKY, and Mrs.
JONES of Ohio) introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To amend the Home Ownership and Equity Protection Act
of 1994 and other sections of the Truth in Lending
Act to protect consumers against predatory practices in
connection with high cost mortgage transactions, to
strengthen the civil remedies available to consumers
under existing law, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Predatory Lending
Consumer Protection Act of 2000’’.
SEC. 2. AMENDMENTS TO DEFINITIONS IN TRUTH IN LEND-
ING ACT.
(a) HIGH COST MORTGAGES.—
(1) IN
GENERAL.—The portion of section
103(aa) of the Truth in Lending Act (15 U.S.C.
1602(aa)) that precedes paragraph (2) of such sec-
tion is amended to read as follows:
‘‘(aa) MORTGAGE REFERRED
TO
IN THIS SUB-
SECTION.—
‘‘(1) DEFINITION.—
‘‘(A) IN GENERAL.—A mortgage referred
to in this subsection means a consumer credit
transaction—
‘‘(i) that is secured by the consumer’s
principal dwelling, other than a reverse
mortgage transaction; and
‘‘(ii) the terms of which are described
in at least 1 of the following subclauses:
‘‘(I) The transaction is secured
by a first mortgage on the consumer’s
principal dwelling and the annual per-
centage rate on the credit, at the con-
summation of the transaction, will ex-
‘‘(B) INTRODUCTORY RATES NOT TAKEN
INTO ACCOUNT.—If the terms of any consumer
credit transaction that is secured by the con-
sumer’s principal dwelling offer, for any initial
or introductory period, an annual percentage
rate of interest which—
‘‘(i) is less than the annual percentage
rate of interest which will apply after the
end of such initial or introductory period;
or
‘‘(ii) in the case of an annual percent-
age rate which varies in accordance with
an index, which is less than the current
annual percentage rate under the index
which will apply after the end of such pe-
riod,
the annual percentage rate of interest that shall
be taken into account for purposes of sub-
clauses (I) and (II) of subparagraph (A)(ii)
shall be the rate described in clause (i) or (ii)
of this subparagraph rather than any rate in ef-
fect during the initial or introductory period.’’.
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENT.—Section 103(aa)(2) of the Truth in Lending
Act (15 U.S.C. 1602(aa)(2)) is amended—
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as
subparagraph (B).
(b) POINTS AND FEES.—Section 103(aa)(4) of the
Truth in Lending Act (15 U.S.C. 1602(aa)(4)) is
amended—
(1) by striking subparagraph (B) and inserting
the following new subparagraph:
‘‘(B) all compensation paid directly or indi-
rectly by a consumer or a creditor to a mort-
gage broker;’’;
(2) by redesignating subparagraph (D) as sub-
paragraph (F); and
(3) by striking subparagraph (C) and inserting
the following new subparagraphs:
‘‘(C) each of the charges listed in section
106(e) (except an escrow for future payment of
taxes and insurance);
‘‘(D) the cost of all premiums financed by
the lender, directly or indirectly, for any credit
life, credit disability, credit unemployment or
credit property insurance, or any other life or
health insurance, or any payments financed by
the lender, directly or indirectly, for any debt
cancellation or suspension agreement or con-
tract, except that, for purposes of this subpara-
graph, insurance premiums or debt cancellation
or suspension fees calculated and paid on a
monthly basis shall not be considered financed
by the lender;
‘‘(E) any prepayment penalty (as defined
in section 129(c)(5)) or other fee paid by the
consumer in connection with an existing loan
which is being refinanced with the proceeds of
the consumer credit transaction; and’’.
(c) HIGH COST MORTGAGE LENDER.—
(1) IN GENERAL.—Section 103(f) of the Truth
in Lending Act (15 U.S.C. 1602(f)) is amended by
striking the last sentence and inserting ‘‘Any person
who originates 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 or acted as a mortgage broker be-
tween originators and consumers on more than 5
mortgages referred to in subsection (aa) within the
preceding 12-month period, and any creditor-affili-
ated party shall be considered to be a creditor for
purposes of this title.’’.
(2) CREDITOR-AFFILIATED PARTY DEFINED.—
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) CREDITOR-AFFILIATED
PARTY.—The term
‘creditor-affiliated party’ means—
‘‘(1) any director, officer, employee, or control-
ling stockholder of, or agent for, a creditor;
‘‘(2) in the case of a creditor which is an in-
sured depository institution, any other person who
has filed or is required to file a change-in-control no-
tice with the appropriate Federal banking agency
under section 7(j) of the Federal Deposit Insurance
Act; and
‘‘(3) any shareholder, consultant, joint venture
partner, and any other person, including any inde-
pendent contractor (such as an attorney, appraiser,
or accountant), who participates in the conduct of
the affairs of, or controls the lending practices of, a
creditor, as determined (by regulation or on a case-
by-case) by the appropriate Federal agency under
subsection (a) or (c) of section 108 with respect to
the creditor.’’.
SEC. 3. AMENDMENTS TO EXISTING REQUIREMENTS FOR
HIGH COST CONSUMER MORTGAGES.
(a) ADDITIONAL DISCLOSURES.—Section 129(a)(1)
of the Truth in Lending Act (15 U.S.C. 1639(a)(1)) is
amended by adding at the end the following new subpara-
graphs:
‘‘(D) The interest rate on this loan is
much higher than most people pay. This means
the chance that you will lose your home is much
higher if you do not make all payments under
the loan.
‘‘(E) You may be able to get a loan with
a much lower interest rate. Before you sign any
papers, you have the right to go see a credit
and debt counseling service and to consult other
lenders to find ways to get a cheaper loan.
‘‘(F) If you are taking out this loan to
repay other loans, look to see how many months
it will take to pay for this loan and what the
total amount is that you will have to pay before
this loan is repaid. Even though the total
amount you will have to pay each month for
this loan may be less than the total amount you
are paying each month for those other loans,
you may have to pay on this loan for many
more months than those other loans which will
cost you more money in the end.’’.
(b) PREPAYMENT PENALTY PROVISIONS.—Section
129(c) of the Truth in Lending Act (15 U.S.C. 1639(c))
is amended to read as follows:
‘‘(c) PREPAYMENT PENALTY PROVISIONS.—
‘‘(1) NO PREPAYMENT PENALTIES AFTER END
OF 24-MONTH PERIOD.—A mortgage referred to in
section 103(aa) may not contain terms under which
a consumer must pay any prepayment penalty for
any payment made after the end of the 24-month
period beginning on the date the mortgage is con-
summated.
‘‘(2) NO
PREPAYMENT
PENALTIES
IF
MORE
THAN 3 PERCENT OF POINTS AND FEES WERE FI-
NANCED.—Subject to subsection (l)(1), a mortgage
referred to in section 103(aa) may not contain terms
under which a consumer must pay any prepayment
penalty for any payment made at or before the end
of the 24-month period referred to in paragraph (1)
if the creditor financed points or fees in connection
with the consumer credit transaction in an amount
equal to or greater than 3 percent of the total
amount of credit extended in the transaction.
‘‘(3) LIMITED
PREPAYMENT
PENALTY
FOR
EARLY
REPAYMENT
UNDER
CERTAIN
CIR-
CUMSTANCES.—Subject to paragraph (2), the terms
of a mortgage referred to in section 103(aa) may
contain terms under which a consumer must pay a
prepayment penalty for any payment made at or be-
fore the end of the 24-month period referred to in
paragraph (1) to the extent the sum of total amount
of points or fees financed by the creditor, if any,
in connection with the consumer credit transaction
and the total amount payable as a prepayment pen-
alty does not exceed the amount which is equal to
3 percent of the total amount of credit extended in
the transaction.
‘‘(4) CONSTRUCTION.—For purposes of this
subsection, any method of computing a refund of un-
earned scheduled interest is a prepayment penalty if
it is less favorable to the consumer than the actu-
arial method (as that term is defined in section
933(d) of the Housing and Community Development
Act of 1992).
‘‘(5) PREPAYMENT
PENALTY
DEFINED.—The
term ‘prepayment penalty’ means any monetary pen-
alty imposed on a consumer for paying all or part
of the principal with respect to a consumer credit
transaction before the date on which the principal is
due.’’.
(c) ALL BALLOON PAYMENTS PROHIBITED.—Section
129(e) of the Truth in Lending Act (15 U.S.C. 1639(e))
is amended by striking ‘‘having a term of less than 5
years’’.
(d) ASSESSMENT OF ABILITY TO REPAY.—Section
129(h) of the Truth in Lending Act (15 U.S.C. 1639(h))
is amended—
(1) by striking ‘‘CONSUMER.—A creditor’’ and
inserting ‘‘CONSUMER.—
‘‘(1) PROHIBITION
ON
PATTERNS
AND
PRAC-
TICES.—A creditor’’; and
(2) by adding at the end the following new
paragraphs:
‘‘(2) CASE-BY-CASE
ASSESSMENTS
OF
CON-
SUMER ABILITY TO PAY REQUIRED.—
‘‘(A) IN GENERAL.—In addition to the pro-
hibition in paragraph (1) on engaging in certain
patterns and practices, a creditor may not ex-
tend any credit in connection with any mort-
gage referred to in section 103(aa) unless the
creditor has determined, at the time such credit
is extended, that 1 or more of the resident obli-
gors, when considered individually and collec-
tively, will be able to make the scheduled pay-
ments under the terms of the transaction based
on a consideration of their current and expected
income, current obligations, employment status,
and other financial resources, without taking
into account any equity of any such obligor in
the dwelling which is the security for the credit.
‘‘(B) REGULATIONS.—The Board shall
prescribe, by regulation the appropriate format
for determining a consumer’s ability to pay and
the criteria to be considered in making any
such determination.
‘‘(C) RESIDENT OBLIGOR.—For purposes
of this paragraph, the term ‘resident obligor’
means an obligor for whom the dwelling secur-
ing the extension of credit is, or upon the con-
summation of the transaction will be, the prin-
cipal residence.
‘‘(3) 
VERIFICATION.—The 
requirements 
of
paragraphs (1) and (2) shall not be deemed to have
been met unless any information relied upon by the
creditor for purposes of any such paragraph has
been verified by the creditor independently of infor-
mation provided by any resident obligor.’’.
(e) REQUIREMENTS RELATING TO HOME IMPROVE-
MENT CONTRACTS.—Section 129(i) of the Truth in Lend-
ing Act (15 U.S.C. 1639(i)) is amended—
(1) by striking ‘‘IMPROVEMENT CONTRACTS.—
A creditor’’ and inserting ‘‘IMPROVEMENT CON-
TRACTS.—
‘‘(1) IN GENERAL.—A creditor’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) AFFIRMATIVE CLAIMS AND DEFENSES.—
Notwithstanding any other provision of law, any as-
signee or holder, in any capacity, of a mortgage re-
ferred to in section 103(aa) which was made, ar-
ranged, or assigned by a person financing home im-
provements to the dwelling of a consumer shall be
subject to all affirmative claims and defenses which
the consumer may have against the seller, home im-
provement contractor, broker, or creditor with re-
spect to such mortgage or home improvements.’’.
(f) CLARIFICATION OF RESCISSION RIGHTS.—Sec-
tion 129(j) of the Truth in Lending Act (15 U.S.C.
1639(j)) is amended to read as follows:
‘‘(j) CONSEQUENCE OF FAILURE TO COMPLY.—
‘‘(1) IN GENERAL.—If, in the case of a mort-
gage referred to in section 103(aa)—
‘‘(A) the mortgage contains a provision
prohibited by this section or does not contain a
provision required by this section; or
‘‘(B) a creditor or other person fails to
comply with the provisions of this section,
whether by an act or omission, with regard to
such mortgage at any time,
the consummation of the consumer credit trans-
action resulting in such mortgage shall be treated as
a failure to deliver the material disclosures required
under this title for the purpose of section 125.
‘‘(2) RULE OF APPLICATION.—In any applica-
tion of section 125 to a mortgage described in sec-
tion 103(aa) under circumstances described in para-
graph (1), paragraphs (2) and (4) of section 125(e)
shall not apply or be taken into account.’’.
SEC. 4. ADDITIONAL REQUIREMENTS FOR HIGH COST CON-
SUMER MORTGAGES.
(a) SINGLE PREMIUM CREDIT INSURANCE.—Section
129 of the Truth in Lending Act (15 U.S.C. 1639) is
amended—
(1) by redesignating subsections (k) and (l) as
subsections (s) and (t), respectively; and
(2) by inserting after subsection (j), the fol-
lowing new subsection:
‘‘(k) SINGLE PREMIUM CREDIT INSURANCE.—
‘‘(1) IN GENERAL.—The terms of a mortgage
referred to in section 103(aa) may not require, and
no creditor or other person may require or allow—
‘‘(A) the advance collection of a premium,
on a single premium basis, for any credit life,
credit disability, credit unemployment, or credit
property insurance, and any analogous product;
or
‘‘(B) the advance collection of a fee for any
debt cancellation or suspension agreement or
contract,
in connection with any such mortgage, whether such
premium or fee is paid directly by the consumer or
is financed by the consumer through such mortgage.
‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1)
shall not be construed as affecting the right of a
creditor to collect premium payments on insurance
or debt cancellation or suspension fees referred to in
paragraph (1) that are calculated and paid on a reg-
ular monthly basis, if the insurance transaction is
conducted separately from the mortgage transaction,
the insurance may be canceled by the consumer at
any time, and the insurance policy is automatically
canceled upon repayment or other termination of the
mortgage referred to in paragraph (1).’’.
(b) RESTRICTION
ON
FINANCING
POINTS
AND
FEES.—Section 129 of the Truth in Lending Act (15
U.S.C. 1639) is amended by inserting after subsection (k)
(as added by subsection (a) of this section) the following
new subsection:
‘‘(l) RESTRICTION
ON
FINANCING
POINTS
AND
FEES.—
‘‘(1) LIMIT ON AMOUNT OF POINTS AND FEES
THAT MAY BE FINANCED.—Subject to paragraphs
(2) and (3) of subsection (c), no creditor may, in
connection with the formation or consummation of a
mortgage referred to in section 103(aa), finance, di-
rectly or indirectly, any portion of the points, fees,
or other charges payable to the creditor or any third
party in an amount in excess of the greater of 3 per-
cent of the total loan amount or $600.
‘‘(2) PROHIBITION
ON
FINANCING
CERTAIN
POINTS, FEES, OR CHARGES.—No creditor may, in
connection with the formation or consummation of a
mortgage referred to in section 103(aa), finance, di-
rectly or indirectly, any of the following fees or other
charges payable to the creditor or any third party:
‘‘(A) Any prepayment fee or penalty re-
quired to be paid by the consumer in connection
with a loan or other extension of credit which
is being refinanced by such mortgage if the
creditor, with respect to such mortgage, or any
affiliate of the creditor, is the creditor with re-
spect to the loan or other extension of credit
being refinanced.
‘‘(B) Any points, fees, or other charges re-
quired to be paid by the consumer in connection
with such mortgage if—
‘‘(i) the mortgage is being entered
into in order to refinance an existing mort-
gage of the consumer that is referred to in
section 103(aa); and
‘‘(ii) if the creditor, with respect to
such new mortgage, or any affiliate of the
creditor, is the creditor with respect to the
existing mortgage which is being refi-
nanced.’’.
(c) CREDITOR CALL PROVISION.—Section 129 of the
Truth in Lending Act (15 U.S.C. 1639) is amended by
inserting after subsection (l) (as added by subsection (b)
of this section) the following new subsection:
‘‘(m) CREDITOR CALL PROVISION.—
‘‘(1) IN GENERAL.—A mortgage referred to in
section 103(aa) may not include terms under which
the indebtedness may be accelerated by the creditor,
in the creditor’s sole discretion.
‘‘(2) EXCEPTION.—Paragraph (1) shall not
apply when repayment of the loan has been acceler-
ated as a result of a bona fide default.’’.
(d) PROHIBITION ON ACTIONS ENCOURAGING DE-
FAULT.—Section 129 of the Truth in Lending Act (15
U.S.C. 1639) is amended by inserting after subsection (m)
(as added by subsection (c) of this section) the following
new subsection:
‘‘(n) PROHIBITION ON ACTIONS ENCOURAGING DE-
FAULT.—No creditor may make any statement, take any
action, or fail to take any action before or in connection
with the formation or consummation of any mortgage re-
ferred to in section 103(aa) to refinance all or any portion
of an existing loan or other extension of credit, if the state-
ment, action, or failure to act has the effect of encour-
aging or recommending the consumer to default on the
existing loan or other extension of credit at any time be-
fore, or in connection with, the closing or any scheduled
closing on such mortgage.’’.
(e) MODIFICATION
OR DEFERRAL FEES.—Section
129 of the Truth in Lending Act (15 U.S.C. 1639) is
amended by inserting after subsection (n) (as added by
subsection (d) of this section) the following new sub-
section:
‘‘(o) MODIFICATION OR DEFERRAL FEES.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a creditor may not charge any consumer
with respect to a mortgage referred to in section
103(aa) any fee or other charge—
‘‘(A) to modify, renew, extend, or amend
such mortgage, or any provision of the terms of
the mortgage; or
‘‘(B) to defer any payment otherwise due
under the terms of the mortgage.
‘‘(2) EXCEPTION FOR MODIFICATIONS FOR THE
BENEFIT OF THE CONSUMER.—Paragraph (1) shall
not apply with respect to any fee imposed in connec-
tion with any action described in subparagraph (A)
or (B) if—
‘‘(A) the action provides a material benefit
to the consumer; and
‘‘(B) the amount of the fee or charge does
not exceed—
‘‘(i) an amount equal to 0.5 percent of
the total loan amount; or
‘‘(ii) in any case in which the total
loan amount of the mortgage does not ex-
ceed $60,000, an amount in excess of
$300.’’.
(f) CONSUMER COUNSELING REQUIREMENTS.—Sec-
tion 129 of the Truth in Lending Act (15 U.S.C. 1639)
is amended by inserting after subsection (o) (as added by
subsection (e) of this section) the following new sub-
section:
‘‘(p) CONSUMER COUNSELING REQUIREMENT.—
‘‘(1) IN GENERAL.—A creditor may not extend
any credit in the form of a mortgage referred to in
section 103(aa) to any consumer, unless the creditor
has provided to the consumer, at such time before
the consummation of the mortgage and in such man-
ner as the Board shall provide by regulation, all of
the following:
‘‘(A) All warnings and disclosures regard-
ing the risks of the mortgage to the consumer.
‘‘(B) A separate written statement recom-
mending that the consumer take advantage of
available home ownership or credit counseling
services before agreeing to the terms of any
mortgage referred to in section 103(aa).
‘‘(C) A written statement containing the
names, addresses, and telephone numbers of
counseling agencies or programs reasonably
available to the consumer that have been cer-
tified or approved by the Secretary of Housing
and Urban Development, a State housing fi-
nance authority (as defined in section 1301 of
the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989), or the agency
referred to in subsection (a) or (c) of section
108 with jurisdiction over the creditor as quali-
fied to provide counseling on—
‘‘(i) the advisability of a high cost
loan transaction; and
‘‘(ii) the appropriateness of a high
cost loan for the consumer.
‘‘(B) COMPLETE
AND UPDATED LISTS RE-
QUIRED.—Any failure to provide as complete or up-
dated a list under paragraph (1)(C) as is reasonably
possible shall constitute a violation of this section.’’.
(g) ARBITRATION.—Section 129 of the Truth in
Lending Act (15 U.S.C. 1639) is amended by inserting
after subsection (p) (as added by subsection (f) of this
section) the following new subsection:
‘‘(q) ARBITRATION.—
‘‘(1) IN GENERAL.—A mortgage referred to in
section 103(aa) 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.—Sub-
ject 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 non-
judicial 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 AC-
TION.—No provision of any mortgage referred to in
section 103(aa) or any agreement between the con-
sumer and the creditor shall be applied or inter-
preted so as to bar a consumer from bringing an ac-
tion 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 provi-
sion of this title, or any other Federal law.’’.
(h) PROHIBITION ON EVASIONS.—Section 129 of the
Truth in Lending Act (15 U.S.C. 1639) is amended by
inserting after subsection (q) (as added by subsection (g)
of this section) the following new subsection:
‘‘(r) PROHIBITIONS ON EVASIONS, STRUCTURING OF
TRANSACTIONS, AND RECIPROCAL ARRANGEMENTS.—
‘‘(1) IN GENERAL.—A creditor may not take
any action—
‘‘(A) for the purpose or with the intent to
circumvent or evade any requirement of this
title, including entering into a reciprocal ar-
rangement with any other creditor or affiliate of
another creditor or dividing a transaction into
separate parts, for the purpose of evading or
circumventing any such requirement; or
‘‘(B) with regard to any other loan or ex-
tension of credit for the purpose or with the in-
tent to evade the requirements of this title, in-
cluding structuring or restructuring a consumer
credit transaction as another form of loan, such
as a business loan.
‘‘(2) OTHER ACTIONS.—In addition to the ac-
tions prohibited under paragraph (1), a creditor may
not take any action which the Board determines, by
regulation, constitutes a bad faith effort to evade or
circumvent any requirement of this section with re-
gard to a consumer credit transaction.
‘‘(3) REGULATIONS.—The Board shall prescribe
such regulations as the Board determines to be ap-
propriate to prevent circumvention or evasion of the
requirements of this section or to facilitate compli-
ance with the requirements of this section.’’.
SEC. 5. AMENDMENTS RELATING TO RIGHT OF RESCIS-
SION.
(a) TIMING
OF WAIVER
BY CONSUMER.—Section
125(a) of the Truth in Lending Act (15 U.S.C. 1635(a))
is amended—
(1) by striking ‘‘(a) Except as otherwise pro-
vided’’ and inserting ‘‘(a) RIGHT ESTABLISHED.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) TIMING OF ELECTION OF WAIVER BY CON-
SUMER.—No election by a consumer to waive the
right established under paragraph (1) to rescind a
transaction shall be effective if—
‘‘(A) the waiver was required by the cred-
itor as a condition for the transaction;
‘‘(B) the creditor advised or encouraged
the consumer to waive such right of the con-
sumer; or
‘‘(C) the creditor had any discussion with
the consumer about a waiver of such right dur-
ing the period beginning when the consumer
provides written acknowledgement of the receipt
of the disclosures and the delivery of forms and
information required to be provided to the con-
sumer under paragraph (1) and ending at such
time as the Board determines, by regulation, to
be appropriate.’’.
(b) NONCOMPLIANCE
WITH
REQUIREMENTS
AS
RECOUPMENT IN FORECLOSURE PROCEEDING.—Section
130(e) of the Truth in Lending Act (15 U.S.C. 1640(e))
is amended by inserting after the 2d sentence the following
new sentence: ‘‘This subsection also does not bar a person
from asserting a rescission under section 125, in an action
to collect the debt as a defense to a judicial or nonjudicial
foreclosure after the expiration of the time periods for af-
firmative actions set forth in this section and section
125.’’.
SEC. 6. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.
(a) INCREASE IN AMOUNT OF CIVIL MONEY PEN-
ALTIES FOR CERTAIN VIOLATIONS.—Section 130(a) of
the Truth in Lending Act (15 U.S.C. 1640) is amended—
(1) in (2)(A)(iii), by striking ‘‘$2,000’’ and in-
serting ‘‘$10,000’’; and
(2) in paragraph (2)(B), by striking ‘‘ lesser of
$500,000 or 1 percentum of the net worth of the
creditor’’ and inserting ‘‘the greater of—
‘‘(i) the amount determined by multi-
plying the maximum amount of liability
under subparagraph (A) for such failure to
comply in an individual action by the num-
ber of members in the certified class; or
‘‘(ii) the amount equal to 2 percent of
the net worth of the creditor.’’.
(b) STATUTE OF LIMITATIONS EXTENDED FOR SEC-
TION 129 VIOLATIONS.—Section 130(e) of the Truth in
Lending Act (15 U.S.C. 1640(e)) (as amended by section
5(b) of this Act) is amended—
(1) in the 1st sentence, by striking ‘‘Any ac-
tion’’ and inserting ‘‘Except as provided in the sub-
sequent sentence, any action’’; and
(2) by inserting after the 1st sentence the fol-
lowing 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. 7. AMENDMENT TO FAIR CREDIT REPORTING ACT.
Section 623 of the Fair Credit Reporting Act (15
U.S.C. 1681s–2) is amended by adding at the end the fol-
lowing new subsection:
‘‘(e) DUTY OF CREDITORS WITH RESPECT TO HIGH
COST MORTGAGES.—
‘‘(1) IN GENERAL.—Each creditor who enters
into a consumer credit transaction which is a mort-
gage referred to in section 103(aa), and each suc-
cessor to such creditor with respect to such trans-
action, shall report the complete payment history,
favorable and unfavorable, of the obligor with re-
spect to such transaction to a consumer reporting
agency that compiles and maintains files on con-
sumers on a nationwide basis at least quarterly, or
more frequently as required by regulation or in
guidelines established by participants in the sec-
ondary mortgage market, while such transaction is
in effect.
‘‘(2) DEFINITIONS.—For purposes of paragraph
(1), the terms ‘credit’ and ‘creditor’ have the same
meanings as in section 103.’’.
SEC. 8. REGULATIONS.
The Board of Governors of the Federal Reserve Sys-
tem 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
the enactment of this Act.
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