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12 USC CHAPTER 39 - ALTERNATIVE MORTGAGE TRANSACTIONS 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 39 - ALTERNATIVE MORTGAGE TRANSACTIONS

.

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CHAPTER 39 - ALTERNATIVE MORTGAGE TRANSACTIONS

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Sec.

3801. Findings and purpose.

3802. Definitions.

3803. Alternative mortgage authority.

(a) General authority; compliance by banks, credit

unions and all other housing creditors with

applicable regulations.

(b) Transactions deemed in compliance with applicable

regulations.

(c) Preemption of State constitutions, laws or

regulations.

3804. Applicability of preemption provisions.

3805. Applicability of consumer protection provisions.

3806. Adjustable rate mortgage caps.

(a) In general.

(b) Regulations.

(c) Enforcement.

(d) Definitions.

(e) Effective date.

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12 USC Sec. 3801 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 39 - ALTERNATIVE MORTGAGE TRANSACTIONS

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Sec. 3801. Findings and purpose

-STATUTE-

(a) The Congress hereby finds that -

(1) increasingly volatile and dynamic changes in interest rates

have seriously impared (FOOTNOTE 1) the ability of housing

creditors to provide consumers with fixed-term, fixed-rate credit

secured by interests in real property, cooperative housing,

manufactured homes, and other dwellings;

(FOOTNOTE 1) So in original. Probably should be ''impaired''.

(2) alternative mortgage transactions are essential to the

provision of an adequate supply of credit secured by residential

property necessary to meet the demand expected during the 1980's;

and

(3) the Comptroller of the Currency, the National Credit Union

Administration, and the Director of the Office of Thrift

Supervision have recognized the importance of alternative

mortgage transactions and have adopted regulations authorizing

federally chartered depository institutions to engage in

alternative mortgage financing.

(b) It is the purpose of this chapter to eliminate the

discriminatory impact that those regulations have upon nonfederally

chartered housing creditors and provide them with parity with

federally chartered institutions by authorizing all housing

creditors to make, purchase, and enforce alternative mortgage

transactions so long as the transactions are in conformity with the

regulations issued by the Federal agencies.

-SOURCE-

(Pub. L. 97-320, title VIII, Sec. 802, Oct. 15, 1982, 96 Stat.

1545; Pub. L. 101-73, title VII, Sec. 744(c), Aug. 9, 1989, 103

Stat. 438.)

-MISC1-

AMENDMENTS

1989 - Subsec. (a)(3). Pub. L. 101-73 substituted ''Director of

the Office of Thrift Supervision'' for ''Federal Home Loan Bank

Board''.

SHORT TITLE

Section 801 of title VIII of Pub. L. 97-320 provided that: ''This

title (enacting this chapter) may be cited as the 'Alternative

Mortgage Transaction Parity Act of 1982'.''

EFFECTIVE DATE

Section 807(a) of Pub. L. 97-320 provided that: ''This title

(enacting this chapter) shall be effective upon enactment (Oct. 15,

1982).''

IDENTIFICATION, DESCRIPTION AND PUBLICATION OF REGULATIONS

INAPPLICABLE TO, OR CONFORMATION OF REGULATIONS FOR USE OF

NONFEDERALLY CHARTERED HOUSING CREDITORS

Section 807(b) of Pub. L. 97-320 provided that: ''Within sixty

days of the enactment of this title (Oct. 15, 1982), the

Comptroller of the Currency, the National Credit Union

Administration, and the Federal Home Loan Bank Board shall

identify, describe, and publish those portions or provisions of

their respective regulations that are inappropriate for (and thus

inapplicable to), or that need to be conformed for the use of, the

nonfederally chartered housing creditors to which their respective

regulations apply, including without limitation, making necessary

changes in terminology to conform the regulatory and disclosure

provisions to those more typically associated with various types of

transactions including credit sales.''

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12 USC Sec. 3802 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 39 - ALTERNATIVE MORTGAGE TRANSACTIONS

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Sec. 3802. Definitions

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As used in this chapter -

(1) 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 -

(A) in which the interest rate or finance charge may be

adjusted or renegotiated;

(B) involving a fixed-rate, but which implicitly permits rate

adjustments by having the debt mature at the end of an interval

shorter than the term of the amortization schedule; or

(C) involving any similar type of rate, method of determining

return, term, repayment, or other variation not common to

traditional fixed-rate, fixed-term transactions, including

without limitation, transactions that involve the sharing of

equity or appreciation;

described and defined by applicable regulation; and

(2) the term ''housing creditor'' means -

(A) a depository institution, as defined in section 501(a)(2)

of the Depository Institutions Deregulation and Monetary

Control Act of 1980;

(B) a lender approved by the Secretary of Housing and Urban

Development for participation in any mortgage insurance program

under the National Housing Act (12 U.S.C. 1701 et seq.);

(C) any person who regularly makes loans, credit sales, or

advances secured by interests in properties referred to in

paragraph (1); or

(D) any transferee of any of them.

A person is not a ''housing creditor'' with respect to a specific

alternative mortgage transaction if, except for this chapter, in

order to enter into that transaction, the person would be

required to comply with licensing requirements imposed under

State law, unless such person is licensed under applicable State

law and such person remains, or becomes, subject to the

applicable regulatory requirements and enforcement mechanisms

provided by State law.

-SOURCE-

(Pub. L. 97-320, title VIII, Sec. 803, Oct. 15, 1982, 96 Stat.

1545.)

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REFERENCES IN TEXT

Section 501(a)(2) of the Depository Institutions Deregulation and

Monetary Control Act of 1980, referred to in par. (2)(A), is

section 501(a)(2) of Pub. L. 96-221, title V, Mar. 31, 1980, 94

Stat. 161, as amended, which is set out as a note under section

1735f-7 of this title.

The National Housing Act, referred to in par. (2)(B), is act June

27, 1934, ch. 847, 48 Stat. 1246, as amended, which is classified

principally to chapter 13 (Sec. 1701 et seq.) of this title. For

complete classification of this Act to the Code, see section 1701

of this title and Tables.

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EFFECTIVE DATE

Section effective Oct. 15, 1982, see section 807(a) of Pub. L.

97-320, set out as a note under section 3801 of this title.

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SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1715z-20 of this title.

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12 USC Sec. 3803 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 39 - ALTERNATIVE MORTGAGE TRANSACTIONS

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Sec. 3803. Alternative mortgage authority

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(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 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 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; and

(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 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.

(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 constitutions, laws or regulations

An alternative mortgage transaction may be made by a housing

creditor in accordance with this section, notwithstanding any State

constitution, law, or regulation.

-SOURCE-

(Pub. L. 97-320, title VIII, Sec. 804, Oct. 15, 1982, 96 Stat.

1546; Pub. L. 101-73, title VII, Sec. 744(c), Aug. 9, 1989, 103

Stat. 438.)

-MISC1-

AMENDMENTS

1989 - Subsec. (a)(3). Pub. L. 101-73 substituted ''Director of

the Office of Thrift Supervision'' for ''Federal Home Loan Bank

Board'' wherever appearing.

EFFECTIVE DATE

Section effective Oct. 15, 1982, see section 807(a) of Pub. L.

97-320, set out as a note under section 3801 of this title.

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SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1715z-20, 3804 of this

title.

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12 USC Sec. 3804 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 39 - ALTERNATIVE MORTGAGE TRANSACTIONS

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Sec. 3804. Applicability of preemption provisions

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(a) The provisions of section 3803 of this title shall not apply

to any alternative mortgage transaction in any State made on or

after the effective date (if such effective date occurs on or after

October 15, 1982, and prior to a date three years after October 15,

1982) of a State law or a certification that the voters of such

State have voted in favor of any provision, constitutional or

otherwise, which states explicitly and by its terms that such State

does not want the preemption provided in section 3803 of this title

to apply with respect to alternative mortgage transactions (or to

any class or type of alternative mortgage transaction) subject to

the laws of such State, except that section 3803 of this title

shall continue to apply to -

(1) any alternative mortgage transaction undertaken on or after

such date pursuant to an agreement to undertake such alternative

mortgage transaction which was entered into on or after October

15, 1982, and prior to such later date (the ''preemption

period''); and

(2) any renewal, extension, refinancing, or other modification

of an alternative mortgage transaction that was entered into

during the preemption period.

(b) An alternative mortgage transaction shall be deemed to have

been undertaken during the preemption period to which this section

applies if it -

(1) is funded or extended in whole or in part during the

preemption period, regardless of whether pursuant to a commitment

or other agreement therefor made prior to that period; or

(2) is a renewal, extension, refinancing, or other modification

of an alternative mortgage transaction entered into before the

preemption period and such renewal, extension, or other

modification is made during such period with the written consent

of any person obligated to repay such credit.

-SOURCE-

(Pub. L. 97-320, title VIII, Sec. 805, Oct. 15, 1982, 96 Stat.

1547; Pub. L. 98-181, title IV, Sec. 472, Nov. 30, 1983, 97 Stat.

1237.)

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AMENDMENTS

1983 - Subsec. (a). Pub. L. 98-181 inserted ''(or to any class or

type of alternative mortgage transaction)''.

EFFECTIVE DATE

Section effective Oct. 15, 1982, see section 807(a) of Pub. L.

97-320, set out as a note under section 3801 of this title.

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12 USC Sec. 3805 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 39 - ALTERNATIVE MORTGAGE TRANSACTIONS

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Sec. 3805. Applicability of consumer protection provisions

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Section 501(c)(1) of the Depository Institutions Deregulation and

Monetary Control Act of 1980 shall not apply to transactions which

are subject to this chapter.

-SOURCE-

(Pub. L. 97-320, title VIII, Sec. 806, Oct. 15, 1982, 96 Stat.

1548.)

-REFTEXT-

REFERENCES IN TEXT

Section 501(c)(1) of the Depository Institutions Deregulation and

Monetary Control Act of 1980, referred to in text, is section

501(c)(1) of Pub. L. 96-221, title V, Mar. 31, 1980, 94 Stat. 161,

as amended, which is set out as a note under section 1735f-7 of

this title.

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EFFECTIVE DATE

Section effective Oct. 15, 1982, see section 807(a) of Pub. L.

97-320, set out as a note under section 3801 of this title.

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12 USC Sec. 3806 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 39 - ALTERNATIVE MORTGAGE TRANSACTIONS

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Sec. 3806. Adjustable rate mortgage caps

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(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.

-SOURCE-

(Pub. L. 100-86, title XII, Sec. 1204, Aug. 10, 1987, 101 Stat.

662; Pub. L. 102-550, title IX, Sec. 952, Oct. 28, 1992, 106 Stat.

3893.)

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REFERENCES IN TEXT

The Truth in Lending Act, referred to in subsec. (c), is title I

of Pub. L. 90-321, May 29, 1968, 82 Stat. 146, as amended, which is

classified generally to subchapter I (Sec. 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.

-COD-

CODIFICATION

Section 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.

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AMENDMENTS

1992 - Subsec. (d)(2). Pub. L. 102-550 substituted ''any consumer

loan'' for ''any loan''.

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SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 15 section 1639.

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