12 U.S.C. § 3803

Current through P.L. 118-47 (published on www.congress.gov on 03/23/2024)

Section 3803 - Alternative mortgage authority

(a) General authority; compliance by banks, credit unions and all other housing creditors with applicable regulations

In order to prevent discrimination against State-chartered depository institutions, and other nonfederally chartered housing creditors, with respect to making, purchasing, and enforcing alternative mortgage transactions, housing creditors may make, purchase, and enforce alternative mortgage transactions, except that this section shall apply-

(1) with respect to banks, only to transactions made on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010 [ 12 U.S.C. 5582 ], in accordance with regulations governing alternative mortgage transactions as issued by the Comptroller of the Currency for national banks, to the extent that such regulations are authorized by rulemaking authority granted to the Comptroller of the Currency with regard to national banks under laws other than this section;

(2) with respect to credit unions, only to transactions made on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010, in accordance with regulations governing alternative mortgage transactions as issued by the National Credit Union Administration Board for Federal credit unions, to the extent that such regulations are authorized by rulemaking authority granted to the National Credit Union Administration with regard to Federal credit unions under laws other than this section;

(3) with respect to all other housing creditors, including without limitation, savings and loan associations, mutual savings banks, and savings banks, only to transactions made on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010, in accordance with regulations governing alternative mortgage transactions as issued by the Director of the Office of Thrift Supervision for federally chartered savings and loan associations, to the extent that such regulations are authorized by rulemaking authority granted to the Director of the Office of Thrift Supervision with regard to federally chartered savings and loan associations under laws other than this section; and

(4) with respect to transactions made after the designated transfer date, only in accordance with regulations governing alternative mortgage transactions, as issued by the Bureau of Consumer Financial Protection for federally chartered housing creditors, in accordance with the rulemaking authority granted to the Bureau of Consumer Financial Protection with regard to federally chartered housing creditors under provisions of law other than this section.

(b) Transactions deemed in compliance with applicable regulations

For the purpose of determining the applicability of this section, an alternative mortgage transaction shall be deemed to be made in accordance with the applicable regulation notwithstanding the housing creditor's failure to comply with the regulation, if-

(1) the transaction is in substantial compliance with the regulation; and

(2) within sixty days of discovering any error, the housing creditor corrects such error, including making appropriate adjustments, if any, to the account.

(c) Preemption of State law

An alternative mortgage transaction may be made by a housing creditor in accordance with this section, notwithstanding any State constitution, law, or regulation that prohibits an alternative mortgage transaction. For purposes of this subsection, a State constitution, law, or regulation that prohibits an alternative mortgage transaction does not include any State constitution, law, or regulation that regulates mortgage transactions generally, including any restriction on prepayment penalties or late charges.

(d) Bureau actions

The Bureau of Consumer Financial Protection shall-

(1) review the regulations identified by the Comptroller of the Currency and the National Credit Union Administration,¹ (as those rules exist on the designated transfer date), as applicable under paragraphs (1) through (3) of subsection (a);

(2) determine whether such regulations are fair and not deceptive and otherwise meet the objectives of the Consumer Financial Protection Act of 2010; and

(3) promulgate regulations under subsection (a)(4) after the designated transfer date.

(e) Designated transfer date

As used in this section, the term "designated transfer date" means the date determined under section 1062 of the Consumer Financial Protection Act of 2010 [ 12 U.S.C. 5582 ].

¹ So in original. The comma probably should not appear.

12 U.S.C. § 3803

Pub. L. 97-320, title VIII, §804, Oct. 15, 1982, 96 Stat. 1546; Pub. L. 101-73, title VII, §744(c), Aug. 9, 1989, 103 Stat. 438; Pub. L. 111-203, title X, §1083(a)(2), July 21, 2010, 124 Stat. 2080.

EDITORIAL NOTES

REFERENCES IN TEXTThe Consumer Financial Protection Act of 2010, referred to in subsec. (d)(2), is title X of Pub. L. 111-203, 124 Stat. 1955, which enacted subchapter V (§5481 et seq.) of chapter 53 of this title and enacted, amended, and repealed numerous other sections and notes in the Code. For complete classification of this Act to the Code, see Short Title note set out under section 5301 of this title and Tables.

AMENDMENTS2010-Subsec. (a)(1), (2), (3). Pub. L. 111-203, §1083(a)(2)(A)(i), inserted "on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010," after "transactions made". Subsec. (a)(4). Pub. L. 111-203, §1083(a)(2)(A)(ii)-(iv), added par. (4).Subsec. (c). Pub. L. 111-203, §1083(a)(2)(B), added subsec. (c) and struck out former subsec. (c). Prior to amendment, text read as follows: "An alternative mortgage transaction may be made by a housing creditor in accordance with this section, notwithstanding any State constitution, law, or regulation."Subsecs. (d), (e). Pub. L. 111-203, §1083(a)(2)(C), added subsecs. (d) and (e). 1989-Subsec. (a)(3). Pub. L. 101-73 substituted "Director of the Office of Thrift Supervision" for "Federal Home Loan Bank Board" wherever appearing.

STATUTORY NOTES AND RELATED SUBSIDIARIES

EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111-203 effective on the designated transfer date, see section 1083(b) of Pub. L. 111-203 set out as a note under section 3802 of this title.

EFFECTIVE DATESection effective Oct. 15, 1982, see section 807(a) of Pub. L. 97-320 set out as a note under section 3801 of this title.

Bureau: The term "Bureau" means the Bureau of Consumer Financial Protection.
Director: The term "Director" means the Director of the Bureau.
State: The term "State" means any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands or any federally recognized Indian tribe, as defined by the Secretary of the Interior under section 5131(a) of title 25.
consumer: The term "consumer" means an individual or an agent, trustee, or representative acting on behalf of an individual.
credit: The term "credit" means the right granted by a person to a consumer to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for such purchase.
designated transfer date: The term "designated transfer date" means the date established under section 5582 of this title.
alternative mortgage transaction: the term "alternative mortgage transaction" means a loan or credit sale secured by an interest in residential real property, a dwelling, all stock allocated to a dwelling unit in a residential cooperative housing corporation, or a residential manufactured home (as that term is defined in section 5402(6) of title 42), in which the interest rate or finance charge may be adjusted or renegotiated, described and defined by applicable regulation; and