12 U.S.C. § 3806

Current through P.L. 118-64 (published on www.congress.gov on 05/24/2024), except for [P. L. 118-63]
Section 3806 - Adjustable rate mortgage caps
(a) In general

Any adjustable rate mortgage loan originated by a creditor shall include a limitation on the maximum interest rate that may apply during the term of the mortgage loan.

(b) Regulations

The Board of Governors of the Federal Reserve System shall prescribe regulations to carry out the purposes of this section.

(c) Enforcement

Any violation of this section shall be treated as a violation of the Truth in Lending Act [ 15 U.S.C. 1601 et seq.] and shall be subject to administrative enforcement under section 108 [ 15 U.S.C. 1607 ] or civil damages under section 130 [ 15 U.S.C. 1640 ] of such Act, or both.

(d) Definitions

For the purpose of this section-

(1) the term "creditor" means a person who regularly extends credit for personal, family, or household purposes; and
(2) the term "adjustable rate mortgage loan" means any consumer loan secured by a lien on a one- to four-family dwelling unit, including a condominium unit, cooperative housing unit, or mobile home, where the loan is made pursuant to an agreement under which the creditor may, from time to time, adjust the rate of interest.
(e) Effective date

This section shall take effect upon the expiration of 120 days after August 10, 1987.

12 U.S.C. § 3806

Pub. L. 100-86, title XII, §1204, Aug. 10, 1987, 101 Stat. 662; Pub. L. 102-550, title IX, §952, Oct. 28, 1992, 106 Stat. 3893.

EDITORIAL NOTES

REFERENCES IN TEXTThe Truth in Lending Act, referred to in subsec. (c), is title I of Pub. L. 90-321, May 29, 1968, 82 Stat. 146, which is classified generally to subchapter I (§1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables.

CODIFICATIONSection was enacted as part of the Competitive Equality Banking Act of 1987, and not as part of the Alternative Mortgage Transaction Parity Act of 1982 which comprises this chapter.

AMENDMENTS1992-Subsec. (d)(2). Pub. L. 102-550 substituted "any consumer loan" for "any loan".

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.
person
The term "person" means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.
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