An Act to amend the Real Estate Settlement Procedures Act of 1974.
PL 94-205 (S.2327), enacted 01/02/1976

PUBLIC LAW 94-205—JAN. 2, 1976 
89 STAT. 1157 
Public Law 94-205 
94th Congress 
An Act 
To amend the Real Estate Settlement Procedures Act of 1974. 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled, That this Act may 
be cited as the "Real Estate Settlement Procedures Act Amendments 
of 1975". 
SEC- 2. Section 3(1) of the Real Estate Settlement Procedures Act 
of 1974 is amended— 
(1) by inserting "(other than temporary financing such as a 
construction loan)" immediately after "includes any loan"; 
(2) by inserting "a first lien on" immediately after "is secured 
by" in subparagraph (A); 
(3) by striking out "is eligible for purchase by" in subpara-
graph (B) (iii) and inserting in lieu thereof "is intended to be sold 
by the originating lender to"; 
(4) by striking out "or" the first time it appears in subpara-
graph (B) (iii); 
(5) by striking out "from any" and "could" in subparagraph 
(B) (iii) and inserting in lieu thereof "a" and "is to", respec-
tively; and 
(6) by inserting the following immediately before the semi-
colon at the end ot subparagraph (B) (iv) : ", except that for the 
purpose of this Act, the term 'creditor' does not include any 
agency or instrumentality of any State". 
SEC. 3. Section 4 of the Real Estate Settlement Procedures Act of 
1974 is amended— 
(1) by inserting "(a)" immediately before "The Secretary" in 
the first sentence; 
(2) by striking out the words "minimum" and "unavoidable" 
in the parenthetical phrase in the first sentence; 
(3) by striking out the last sentence thereof and inserting in 
lieu thereof the following new sentences: "The Secretary may, by 
regulation, permit the deletion from the form prescribed under 
this section of items which are not, under local laws or customs, 
applicable in any locality, except that such regulation shall require 
that the numerical code prescribed by the Secretary be retained 
in forms to be used in all localities. Nothing in this section may be. 
construed to require that that part of the standard form which 
relates to the borrower's transaction be furnished to the seller, or 
to require that that part of the standard form which relates to the 
seller be furnished to the borrower."; and 
(4) by adding at the end thereof the following new subsection: 
"(b) The form prescribed under this section shall be completed and 
made available for inspection by the borrower at or before settlement 
by the person conducting the settlement, except that (1) the Secretary 
may exempt from the requirements of this section settlements occur-
ring in localities where the final settlement statement is not customarily 
provided at or before the date of settlement, or settlements where such 
requirements are impractical and (2) the borrower may, in accordance 
Jan. 2, 1976 
[S. 2327] 
Real Estate 
Settlement 
Procedures Act 
Amendments of 
1975. 
12 u s e 2601 
note. 
12 u s e 2602. 
12 u s e 2603. 
89 STAT. 1158 
PUBLIC LAW 94-205—JAN. 2, 1976 
with regulations of the Secretary, waive his right to have the form 
made available at such time. Upon the request of the borrower to 
inspect the form prescribed under this section during the business day 
immediately preceding the day of settlement, the person who will 
conduct the settlement shall permit the borrower to inspect those items 
which are known to such person during such preceding day.". 
SEC. 4. Section 5 of the Eeal Estate Settlement Procedures Act of 
12 use 2604. 
1974 is amended— 
(1) by redesignating subsections (c) and (d) as subsections (d) 
and (e), respectively; 
(2) by inserting after subsection (b) the following new sub-
section : 
"(c) Each lender shall include with the booklet a good faith esti-
mate of the amount or range of charges for specific settlement services 
the borrower is likely to incur in connection with the settlement as 
prescribed by the Secretary."; 
(3) by striking out "an application" in the first sentence of 
subsection (d), as redesignated by paragraph (1) of this section, 
and inserting in lieu thereof "or for whom it prepares a written 
application"; and 
(4) by inserting "or preparation" immediately aft^r "receipt" 
in the second sentence of subsection (d), as redesignated by para-
graph (1) of this section. 
Repeal- 
SEC. 5. Section 6 of the Real Estate Settlement Procedures Act of 
12 use 2605. 
1974 is repealed. 
Repeal. 
SEC. 6. Section 7 of the Real Estate Settlement Procedures Act of 
12 use 2606. 
1974 is repealed. 
SEC. 7. Section 8 of the Real Estate Settlement Procedures Act of 
12 use 2607. 
1974 is amended in subsection (c) by striking out "or" immediately 
before " (2)", and by inserting before the period at the end thereof the 
following: ", or (3) payments pursuant to cooperative brokerage and 
referral arrangements or agreements between real estate agents and 
brokers, or (4) such other payments or classes of payments or other 
transfers as are specified in regulations prescribed by the Secretary, 
after consultation with the Attorney General, the Administrator of 
Veterans' Affairs, the Federal Home Loan Bank Board, the Federal 
Deposit Insurance Corporation, the Board of Governors of the Federal 
Reserve System, and the Secretary of Agriculture". 
SEC. 8. Section 10 of the Real Estate Settlement Procedures Act of 
12 use 2609. 
1974 is amended to read as follows: 
a 
ESCROW ACCOUNTS 
"SEC. 10. A lender, in connection with a federally related mortgage 
loan, may not require the borrower or prospective borrower— 
" (1) to deposit in any escrow account which may be established 
in connection with such loan for the purpose of assuring payment 
of taxes, insurance premiums, or other charges with respect to the 
property, in connection with the settlement, an aggregate sum (for 
such purpose) in excess of a sum that will be sufficient to pay such 
taxes, insurance premiums and other charges attributable to the 
period beginning on the last date on which each such charge would 
PUBLIC LAW 94-205—JAN. 2, 1976 
89 STAT. 1159 
have been paid under the normal lending practice of the lender 
and local custom, provided that the selection of each such date 
constitutes prudent lending practice, and ending on the due date 
of its first full installment payment under the mortgage, plus 
one-sixth of the estimated total amount of such taxes, insurance 
premiums and other charges to be paid on dates, as provided 
above, during the ensuing twelve-month period; or 
" (2) to deposit in any such escrow account in any month begin-
ning with the first full installment payment under the mortgage 
a sum (for the purpose of assuring payment of taxes, insurance 
premiums and other charges with respect to the property) in 
excess of the sum of (A) one-twelfth of the total amount of the 
estimated taxes, insurance premiums and other charges which are 
reasonably anticipated to be paid on dates during the ensuing 
twelve months which dates are in accordance with the normal 
lending practice of the lender and local custom, provided that the 
selection of each such date constitutes prudent lending practice, 
plus (B) such amount as is necessary to maintain an additional 
balance in such escrow account not to exceed one-sixth of the esti-
mated total amount of such taxes, insurance premiums and other 
charges to be paid on dates, as provided above, during the ensuing 
twelve-month period: Provided^ however^ That in the event the 
lender determines there will be or is a deficiency he shall not be 
prohibited from requiring additional monthly deposits in such 
escrow account to avoid or eliminate such deficiency.". 
SEC. 9. Section 18 of the Real Estate Settlement Procedures Act of' 
1974 is amended by striking out subsection (b) and by striking out 12 USC 2616, 
" (a)" in subsection (a). 
SEC. 10. The Real Estate Settlement Procedures Act of 1974 is 12 USC 2601 
amended by redesignating section 19 as section 20 and by inserting the note-
following new section immediately after section 18: 
"AUTHORITY or THE SECRETARY 
"SEC. 19. (a) The Secretary is authorized to prescribe such rules Rules and 
and regulations, to make such interpretations, and to grant such rea- regulations, 
sonable exemptions for classes of transactions, as may be necessary to ^^ ^^^ 2617. 
achieve the purposes of this Act. 
"(b) No provision of this Act or the laws of any State imposing any 
liability shall apply to any act done or omitted in good faith in con-
formity with any rule, regulation, or interpretation thereof by the 
Secretary or the Attorney General, notwithstanding that after such 
act or omission has occurred, such rule, regulation, or interpretation 
is amended, rescinded, or determined by judicial or other authority to 
be invalid for any reason.". 
SEC. 11. Section 121(c) of the Truth in Lending Act is repealed. 
Repeal. 
15 USC 1631. 
89 STAT. 1160 
PUBLIC LAW 94-205—JAN. 2, 1976 
Effective date. 
SEO. 12. The provisions of this Act and the amendments made hereby 
12 use 2602 
shall become effective upon enactment. The Secretary may suspend 
°°*®' 
for up to one hundred and eighty days from the date of enactment 
of this Act any provision of section 4 and section 5 of the Eeal Estate 
12 use 2603, 
Settlement Procedures Act of 1974, as amended by this Act. 
2604. 
' 
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^ 
Approved January 2, 1976. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 94-667 (Comm. on Banking, Currency, and Housing) and 
94-769 (Comm. of Conference). 
SENATE REPORT No. 94-410 (Comm. on Banking, Housing, and Urban Affairs). 
CONGRESSIONAL RECORD, Vol. 121 (1975): 
Oct. 9, considered and passed Senate. 
Nov. 17, considered and passed House, amended. 
Dec. 8, Senate concurred in House amendments with amendments. 
Dec. 19, House and Senate agreed to conference report.