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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