Truth in Lending Act Amendments of 1995
PL 104-29 (H.R.2399), enacted 09/30/1995

PUBLIC LAW 104-29—SEPT. 30, 1995 
109 STAT. 271 
Public Law 104-29 
104th Congress 
An Act 
To amend the Truth in Lending Act to clarify the intent of such Act and to 
Sept. 30, 1995 
reduce burdensome regulatory requirements on creditors. 
[H.R. 2399] 
Be it enacted by the Senate and House of Representatives 
of 
the United States of America in Congress assembled. 
Truth in Lending 
Act Amendments 
SECTION 1. SHORT TITLE. 
of 1995. 
1 ^ TTQO 1 fini 
This Act may be cited as the "Truth in Lending Act Amend- _ofg 
ments of 1995". 
SEC. 2. CERTAIN CHARGES. 
(a) THIRD PARTY FEES.—Section 106(a) of the Truth in Lending 
Act (15 U.S.C. 1605(a)) is amended by adding after the 2d sentence 
the following new sentence: 'The finance charge shall not include 
fees and amounts imposed by third party closing agents (including 
settlement agents, attorneys, and escrow and title companies) if 
the creditor does not require the imposition of the charges or 
the services provided and does not retain the charges.". 
(b) BORROWER-PAID MORTGAGE BROKER FEES.— 
(1) INCLUSION IN FINANCE CHARGE.—Section 106(a) of the 
Truth in Lending Act (15 U.S.C. 1605(a)) is amended by adding 
at the end the following new paragraph: 
"(6) Borrower-paid mortgage broker fees, including fees 
paid directly to the broker or the lender (for delivery to the 
broker) whether such fees are paid in cash or financed.". 
(2) EFFECTIVE DATE.—^The amendment made by paragraph 
15 USC 1605 
(1) shall take effect on the earlier of— 
note. 
(A) 60 days after the date on which the Board of 
Governors of the Federal Reserve System issues final regu-
lations under paragraph (3); or 
(B) the date that is 12 months after the date of the 
enactment of this Act. 
(3) REGULATIONS IMPLEMENTING BORROWER-PAID MORTGAGE 
15 use 1605 
BROKER FEES.—^The Board of Governors of the Federal Reserve note-
System shall promulgate regulations implementing the amend-
ment made by paragraph (1) by no later than 6 months after 
the date of the enactment of this Act. 
(c) TAXES ON SECURITY INSTRUMENTS OR EVIDENCES OF INDEBT-
EDNESS.—Section 106(d) of the Truth in Lending Act (15 U.S.C. 
1605(d)) is amended by adding at the end the following new para-
graph: 
"(3) Any tax levied on security instruments or on documents 
evidencing indebtedness if the payment of such taxes is a 
precondition for recording the instrument securing the evidence 
of indebtedness.". 
109 STAT. 272 
PUBLIC LAW 104-29—SEPT. 30, 1995 
(d) PREPARATION OF LOAN DOCUMENTS.—Section 106(e)(2) of 
the Truth in Lending Act (15 U.S.C. 1605(e)(2)) is amended to 
read as follows: 
"(2) Fees for preparation of loan-related documents.". 
(e) FEES RELATING TO PEST INFESTATIONS, INSPECTIONS, AND 
HAZARDS.—Section 106(e)(5) of the Truth in Lending Act (15 U.S.C. 
1605(e)(5)) is amended by inserting ", including fees related to 
any pest infestation or flood hazard inspections conducted prior 
to closing" before the period. 
15 use 1605 
(f) ENSURING FINANCE CHARGES REFLECT COST OF CREDIT.— 
note. 
(1) REPORT.— 
(A) IN GENERAL.—Not later than 6 months after the 
date of the enactment of this Act, the Board of Governors 
of the Federal Reserve System shall submit to the Congress 
a report containing recommendations on any regulatory 
or statutory changes necessary— 
(i) to ensure that finance charges imposed in 
connection with consumer credit transactions more 
accurately reflect the cost of providing credit; and 
(ii) to address 
abusive 
refinancing 
practices 
engaged in for the purpose of avoiding rescission. 
(B) REPORT REQUIREMENTS.—In preparing the report 
under this paragraph, the Board shall— 
(i) consider the extent to which it is feasible to 
include in finance charges all charges payable directly 
or indirectly by the consumer to whom credit is 
extended, and imposed directly or indirectly by the 
creditor as an incident to the extension of credit (espe-
cially those charges excluded from finance charges 
under section 106 of the Truth in Lending Act as 
of the date of the enactment of this Act), excepting 
only those charges which are payable in a comparable 
cash transaction; and 
(ii) consult with and consider the views of affected 
industries and consumer groups. 
Federal Register, 
(2) REGULATIONS.—^The Board of Governors of the Federal 
publication. 
Reserve System shall prescribe any appropriate regulation in 
order to effect any change included in the report under para-
graph (1), and shall publish the regulation in the Federal 
Register before the end of the 1-year period beginning on the 
date of enactment of this Act. 
SEC. 3. TOLERANCES; BASIS OF DISCLOSURES. 
(a) TOLERANCES FOR ACCURACY.—Section 106 of the Truth in 
Lending Act (15 U.S.C. 1605) is amended by adding at the end 
the following new subsection: 
"(f) TOLERANCES FOR ACCURACY.—In connection with credit 
transactions not under an open end credit plan that are secured 
by real property or a dwelling, the disclosure of the finance charge 
and other disclosures affected by any finance charge— 
"(1) shall be treated as being accurate for purposes of 
this title if the amount disclosed as the finance charge— 
"(A) does not vary from the actual finance charge by 
more than $100; or 
"(B) is greater than the amount required to be disclosed 
under this title; and 
PUBLIC LAW 104-29—SEPT. 30, 1995 
109 STAT. 273 
"(2) shall be treated as being accurate for purposes of 
section 125 if— 
"(A) except as provided in subparagraph (B), the 
amount disclosed as the finance charge does not vary from 
the actual finance charge by more than an amount equal 
to one-half of one percent of the total amount of credit 
extended; or 
"(B) in the case of a transaction, other than a mortgage 
referred to in section 103(aa), which— 
"(i) is a refinancing of the principal balance then 
due and any accrued and unpaid finance charges of 
a residential mortgage transaction as defined in section 
103(w), or is any subsequent refinancing of such a 
transaction; and 
"(ii) does not provide any new consolidation or 
new advance; 
if the amount disclosed as the finance charge does not 
vary from the actual finance charge by more than an 
amount equal to one percent of the total amount of credit 
extended.". 
(b) BASIS OF DISCLOSURE FOR PER DIEM INTEREST.—Section 
121(c) of the Truth in Lending Act (15 U.S.C. 1631(c)) is amended 
by adding at the end the following new sentence: "In the case 
of any consumer credit transaction a portion of the interest on 
which is determined on a per diem basis and is to be collected 
upon the consummation of such transaction, any disclosure with 
respect to such portion of interest shall be deemed to be accurate 
for purposes of this title if the disclosure is based on information 
actually known to the creditor at the time that the disclosure 
documents are being prepared for the consummation of the trans-
action.". 
SEC. 4. LIMITATION ON LIABILITY. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by adding at the end the following 
new section: 
"SEC. 139. CERTAIN LIMITATIONS ON LIABILITY. 
15 USC 1649. 
"(a) LIMITATIONS ON LIABILITY.—For any consumer credit trans-
action subject to this title that is consummated before the date 
of the enactment of the Truth in Lending Act Amendments of 
1995, a creditor or any assignee of a creditor shall have no civil, 
administrative, or criminal liability under this title for, and a 
consumer shall have no extended rescission rights under section 
125(f) with respect to— 
"(1) the creditor's treatment, for disclosure purposes, of— 
"(A) taxes described in section 106(d)(3); 
"(B) fees described in section 106(e)(2) and (5); 
"(C) fees and amounts referred to in the 3rd sentence 
of section 106(a); or 
"(D) borrower-paid mortgage broker fees referred to 
in section 106(a)(6); 
"(2) the form of written notice used by the creditor to 
inform the obligor of the rights of the obligor under section 
125 if the creditor provided the obligor with a properly dated 
form of written notice published and adopted by the Board 
or a comparable written notice, and otherwise complied with 
all the requirements of this section regarding notice; or 
99-194 O - 95 - 10 : QL 3 Part 1 
109 STAT. 274 
PUBLIC LAW 104-29—SEPT. 30, 1995 
"(3) any disclosure relating to the finance charge imposed 
with respect to the transaction if the amount or percentage 
actually disclosed— 
"(A) may be treated as accurate for purposes of this 
title if the amount disclosed as the finance charge does 
not vary from the actual finance charge by more than 
$200; 
"(B) may, under section 106(f)(2), be treated as accurate 
for purposes of section 125; or 
"(C) is greater than the amount or percentage required 
to be disclosed under this title. 
"(b) EXCEPTIONS.—Subsection (a) shall not apply to— 
"(1) any individual action or counterclaim brought under 
this title which was filed before June 1, 1995; 
"(2) any class action brought under this title for which 
a final order certifying a class was entered before January 
1, 1995; 
"(3) the named individual plaintiffs in any class action 
brought under this title which was filed before June 1, 1995; 
or 
"(4) any consumer credit transaction with respect to which 
a timely notice of rescission was sent to the creditor before 
June 1, 1995.". 
(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 138 the following new item: 
"139. Certain limitations on liability.". 
SEC. 5. LIMITATION ON RESCISSION LIABILITY. 
Section 125 of the Truth in Lending Act (15 U.S.C. 1635) 
is further amended by adding at the end the following new sub-
section: 
"(h) LIMITATION ON RESCISSION.—^An obligor shall have no 
rescission rights arising solely from the form of written notice 
used by the creditor to inform the obligor of the rights of the 
obligor under this section, if the creditor provided the obligor the 
appropriate form of written notice published and adopted by the 
Board, or a comparable written notice of the rights of the obligor, 
that was properly completed by the creditor, and otherwise complied 
with all other requirements of this section regarding notice.". 
SEC. 6. CALCULATION OF DAMAGES. 
Section 130(a)(2)(A) of the Truth in Lending Act (15 U.S.C. 
1640(a)(2)(A)) is amended— 
(1) by striking "or (ii)" and inserting "(ii)"; and 
(2) by inserting before the semicolon at the end the follow-
ing: ", or (iii) in the case of an individual action relating 
to a credit transaction not under an open end credit plan 
that is secured by real property or a dwelling, not less than 
$200 or greater than $2,000". 
SEC. 7. ASSIGNEE LIABILITY. 
(a) VIOLATIONS APPARENT ON THE FACE OF TRANSACTION DOCU-
MENTS.—Section 131 of the Truth in Lending Act (15 U.S.C. 1641) 
is amended by adding at the end the following new subsection: 
"(e) 
LIABILITY OF ASSIGNEE FOR CONSUMER CREDIT TRANS-
ACTIONS SECURED BY REAL PROPERTY.— 
PUBLIC LAW 104-29—SEPT. 30, 1995 
109 STAT. 275 
"(1) IN GENERAL.—Except as otherwise specifically provided 
in this title, any civil action against a creditor for a violation 
of this title, and any proceeding under section 108 against 
a creditor, with respect to a consumer credit transaction secured 
by real property may be maintained against any assignee of 
such creditor only if— 
"(A) the violation for which such action or proceeding 
is brought is apparent on the face of the disclosure state-
ment provided in connection with such transaction pursu-
ant to this title; and 
"(B) the assignment to the assignee was voluntary. 
"(2) VIOLATION APPARENT ON THE FACE OF THE DISCLOSURE 
DESCRIBED.—For the purpose of this section, a violation is 
apparent on the face of the disclosure statement if— 
"(A) the disclosure can be determined to be incomplete 
or inaccurate by a comparison among the disclosure state-
ment, any itemization of the amount financed, the note, 
or any other disclosure of disbursement; or 
"(B) the disclosure statement does not use the terms 
or format required to be used by this title.", 
(b) SERVICER NOT TREATED AS ASSIGNEE.—Section 131 of the 
Truth in Lending Act (15 U.S.C. 1641) is further amended by 
adding after subsection (e) (as added by subsection (a) of this 
section) the following new subsection: 
"(f) TREATMENT OF SERVICER.— 
"(1) IN GENERAL.—^A servicer of a consumer obligation aris-
ing from a consumer credit transaction shall not be treated 
as an assignee of such obligation for purposes of this section 
unless the servicer is or was the owner of the obligation. 
"(2) SERVICER NOT TREATED AS OWNER ON BASIS OF ASSIGN-
MENT FOR ADMINISTRATIVE CONVENIENCE.—^A servicer of a 
consumer obligation arising from a consumer credit transaction 
shall not be treated as the owner of the obligation for purposes 
of this section on the basis of an assignment of the obligation 
from the creditor or another assignee to the servicer solely 
for the administrative convenience of the servicer in servicing 
the obligation. Upon written request by the obligor, the servicer 
shall provide the obligor, to the best knowledge of the servicer, 
with the name, address, and telephone number of the owner 
of the obligation or the master servicer of the obligation. 
"(3) SERVICER DEFINED.—For purposes of this subsection, 
the term 'servicer' has the same meaning as in section 6(i)(2) 
of the Real Estate Settlement Procedures Act of 1974. 
"(4) APPLICABILITY.—^This subsection shall apply to all 
consumer credit transactions in existence or consummated on 
or after the date of the enactment of the Truth in Lending 
Act Amendments of 1995.". 
SEC. 8. RESCISSION RIGHTS IN FORECLOSURE. 
Section 125 of the Truth in Lending Act (15 U.S.C. 1635) 
is amended by inserting after subsection (h) (as added by section 
5 of this Act) the following new subsection: 
"(i) RESCISSION RIGHTS IN FORECLOSURE.— 
"(1) IN GENERAL.—^Notwithstanding section 139, and subject 
to the time period provided in subsection (f), in addition to 
any other right of rescission available under this section for 
a transaction, after the initiation of any judicial or nonjudicial 
109 STAT. 276 
PUBLIC LAW 104-29—SEPT. 30, 1995 
foreclosure process on the primary dwelling of an obligor secur-
ing an extension of credit, the obligor shall have a right to 
rescind the transaction equivalent to other rescission rights 
provided by this section, if— 
"(A) a mortgage broker fee is not included in the 
finance charge in accordance with the laws and regulations 
in effect at the time the consumer credit transaction was 
consummated; or 
"(B) the form of notice of rescission for the transaction 
is not the appropriate form of written notice published 
and adopted by the Board or a comparable written notice, 
and otherwise complied with all the requirements of this 
section regarding notice. 
"(2) TOLERANCE FOR DISCLOSURES.—Notwithstanding sec-
tion 106(f), and subject to the time period provided in subsection 
(f), for the purposes of exercising any rescission rights after 
the initiation of any judicial or nonjudicial foreclosure process 
on the principal dwelling of the obligor securing an extension 
of credit, the disclosure of the finance charge and other disclo-
sures affected by any finance charge shall be treated as being 
accurate for purposes of this section if the amount disclosed 
as the finance charge does not vary from the actual finance 
charge by more than $35 or is greater than the amount required 
to be disclosed under this title. 
"(3) RIGHT OF RECOUPMENT UNDER STATE LAW.—^Nothing 
in this subsection affects a consumer's right of rescission in 
recoupment under State law. 
"(4) APPLICABILITY.—^This subsection shall apply to all 
consumer credit transactions in existence or consummated on 
or after the date of the enactment of the Truth in Lending 
Act Amendments of 1995.". 
Approved September 30, 1995. 
LEGISLATIVE HISTORY—H.R. 2399: 
CONGRESSIONAL RECORD, Vol. 141 (1995): 
Sept. 27, considered and passed House. 
Sept. 28, considered and passed Senate.