(Sec. 3) Requires additional disclosures to the consumer that the consumer is contracting to pay a much higher loan than most people pay. Sets forth additional proscriptions against prepayment penalties. Prohibits all balloon payments (currently restricted to mortgages with a term of less than five years).
Requires a creditor to make a case-by-case assessment of a consumer debtor's ability to pay that is based upon financial resources without taking into account equity in the dwelling which is the security for the credit.
Subjects an assignee or holder of a high-cost mortgage which was made, arranged, or assigned by persons financing consumer home improvements to all the affirmative claims and defenses which the consumer may have against specified parties regarding such mortgage or home improvements.
States that consummation of a high-cost mortgage that is not in compliance with this Act shall be treated as a failure to deliver requisite material disclosures.
(Sec. 4) Prohibits the terms of a high-cost mortgage from including advance collection of a premium on a single premium basis for specified credit insurance products.
Restricts the amount of points and fees which a creditor may finance in connection with a high-cost mortgage. Prohibits certain creditors from financing the prepayment fees or penalties due from the consumer.
Prohibits a high-cost mortgage creditor from: (1) accelerating the debt in its sole discretion; (2) taking actions that encourage debtor's default; (3) charging a fee for mortgage modification or payment deferral unless such actions bestow a material benefit upon the consumer; (4) extending mortgage credit unless specified warnings have been furnished, including the availability of home ownership credit counseling services; and (5) requiring mandatory arbitration or any other nonjudicial procedure as a method for resolving any controversy or claims arising from the transaction.
(Sec. 5) Declares that a consumer's waiver of the right of rescission shall not be effective if the creditor either advised or encouraged such waiver, or required it as a precondition for a transaction.
(Sec. 6) Increases: (1) civil money penalties for creditor violations; and (2) the statute of limitations from one to three years for violations of this Act.
(Sec. 7) Amends the Fair Credit Reporting Act to mandate that each high-cost mortgage creditor (including the successor creditor) report the debtor's complete payment history to certain consumer reporting agencies in accordance with regulations or guidelines established by participants in the secondary mortgage market.
(Sec. 8) Instructs the Board of Governors of the Federal Reserve System to publish implementing regulations.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2415 Introduced in Senate (IS)]
106th CONGRESS
2d Session
S. 2415
To amend the Home Ownership and Equity Protection Act of 1994 and other
sections of the Truth in Lending Act to protect consumers against
predatory practices in connection with high cost mortgage transactions,
to strengthen the civil remedies available to consumers under existing
law, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 12, 2000
Mr. Sarbanes (for himself, Mr. Dodd, Mr. Schumer, and Mr. Kerry)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Home Ownership and Equity Protection Act of 1994 and other
sections of the Truth in Lending Act to protect consumers against
predatory practices in connection with high cost mortgage transactions,
to strengthen the civil remedies available to consumers under existing
law, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Predatory Lending Consumer
Protection Act of 2000''.
SEC. 2. AMENDMENTS TO DEFINITIONS IN TRUTH IN LENDING ACT.
(a) High Cost Mortgages.--
(1) In general.--The portion of section 103(aa) of the
Truth in Lending Act (15 U.S.C. 1602(aa)) that precedes
paragraph (2) of such section is amended to read as follows:
``(aa) Mortgage Referred to in This Subsection.--
``(1) Definition.--
``(A) In general.--A mortgage referred to in this
subsection means a consumer credit transaction--
``(i) that is secured by the consumer's
principal dwelling, other than a reverse
mortgage transaction; and
``(ii) the terms of which are described in
at least 1 of the following subclauses:
``(I) The transaction is secured by
a first mortgage on the consumer's
principal dwelling and the annual
percentage rate on the credit, at the
consummation of the transaction, will
exceed by more than 6 percentage points
the yield on Treasury securities having
comparable periods of maturity on the
15th day of the month immediately
preceding the month in which the
application for the extension of credit
is received by the creditor;
``(II) The transaction is secured
by a junior or subordinate mortgage on
the consumer's principal dwelling and
the annual percentage rate on the
credit, at the consummation of the
transaction, will exceed by more than 8
percentage points the yield on Treasury
securities having comparable periods of
maturity on the 15th day of the month
immediately preceding the month in
which the application for the extension
of credit is received by the creditor.
``(III) The total points and fees
payable on the transaction will exceed
the greater of 5 percent of the total
loan amount or $1,000.
``(B) Introductory rates not taken into account.--
If the terms of any consumer credit transaction that is
secured by the consumer's principal dwelling offer, for
any initial or introductory period, an annual
percentage rate of interest which--
``(i) is less than the annual percentage
rate of interest which will apply after the end
of such initial or introductory period; or
``(ii) in the case of an annual percentage
rate which varies in accordance with an index,
which is less than the current annual
percentage rate under the index which will
apply after the end of such period,
the annual percentage rate of interest that shall be
taken into account for purposes of subclauses (I) and
(II) of subparagraph (A)(ii) shall be the rate
described in clause (i) or (ii) of this subparagraph
rather than any rate in effect during the initial or
introductory period.''.
(2) Technical and conforming amendment.--Section 103(aa)(2)
of the Truth in Lending Act (15 U.S.C. 1602(aa)(2)) is
amended--
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as
subparagraph (B).
(b) Points and Fees.--Section 103(aa)(4) of the Truth in Lending
Act (15 U.S.C. 1602(aa)(4)) is amended--
(1) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) all compensation paid directly or indirectly
by a consumer or a creditor to a mortgage broker;'';
(2) by redesignating subparagraph (D) as subparagraph (F);
and
(3) by striking subparagraph (C) and inserting the
following new subparagraphs:
``(C) each of the charges listed in section 106(e)
(except an escrow for future payment of taxes and
insurance);
``(D) the cost of all premiums financed by the
lender, directly or indirectly, for any credit life,
credit disability, credit unemployment or credit
property insurance, or any other life or health
insurance, or any payments financed by the lender,
directly or indirectly, for any debt cancellation or
suspension agreement or contract, except that, for
purposes of this subparagraph, insurance premiums or
debt cancellation or suspension fees calculated and
paid on a monthly basis shall not be considered
financed by the lender;
``(E) any prepayment penalty (as defined in section
129(c)(5)) or other fee paid by the consumer in
connection with an existing loan which is being
refinanced with the proceeds of the consumer credit
transaction; and''.
(c) High Cost Mortgage Lender.--
(1) In general.--Section 103(f) of the Truth in Lending Act
(15 U.S.C. 1602(f)) is amended by striking the last sentence
and inserting ``Any person who originates 2 or more mortgages
referred to in subsection (aa) in any 12-month period, any
person who originates 1 or more such mortgages through a
mortgage broker or acted as a mortgage broker between
originators and consumers on more than 5 mortgages referred to
in subsection (aa) within the preceding 12-month period, and
any creditor-affiliated party shall be considered to be a
creditor for purposes of this title.''.
(2) Creditor-affiliated party defined.--Section 103 of the
Truth in Lending Act (15 U.S.C. 1602) is amended by adding at
the end the following new subsection:
``(cc) Creditor-Affiliated Party.--The term ``creditor-affiliated
party'' means--
(1) any director, officer, employee, or controlling
stockholder of, or agent for, a creditor;
(2) in the case of a creditor which is an insured
depository institution, any other person who has filed or is
required to file a change-in-control notice with the
appropriate Federal banking agency under section 7(j) of the
Federal Deposit Insurance Act; and
(3) any shareholder, consultant, joint venture partner, and
any other person, including any independent contractor (such as
an attorney, appraiser, or accountant), who participates in the
conduct of the affairs of, or controls the lending practices
of, a creditor, as determined (by regulation or on a case-by-
case) by the appropriate Federal agency under subsection (a) or
(c) of section 108 with respect to the creditor.''.
SEC. 3. AMENDMENTS TO EXISTING REQUIREMENTS FOR HIGH COST CONSUMER
MORTGAGES.
(a) Additional Disclosures.--Section 129(a)(1) of the Truth in
Lending Act (15 U.S.C. 1639(a)(1)) is amended by adding at the end the
following new subparagraphs:
``(D) `The interest rate on this loan is much
higher than most people pay. This means the chance that
you will lose your home is much higher if you do not
make all payments under the loan.'.
``(E) `You may be able to get a loan with a much
lower interest rate. Before you sign any papers, you
have the right to go see a credit and debt counseling
service and to consult other lenders to find ways to
get a cheaper loan.'.
``(F) `If you are taking out this loan to repay
other loans, look to see how many months it will take
to pay for this loan and what the total amount is that
you will have to pay before this loan is repaid. Even
though the total amount you will have to pay each month
for this loan may be less than the total amount you are
paying each month for those other loans, you may have
to pay on this loan for many more months than those
other loans which will cost you more money in the
end.'''.
(b) Prepayment Penalty Provisions.--Section 129(c) of the Truth in
Lending Act (15 U.S.C. 1639(c)) is amended to read as follows:
``(c) Prepayment Penalty Provisions.--
``(1) No prepayment penalties after end of 24-month
period.--A mortgage referred to in section 103(aa) may not
contain terms under which a consumer must pay any prepayment
penalty for any payment made after the end of the 24-month
period beginning on the date the mortgage is consummated.
``(2) No prepayment penalties if more than 3 percent of
points and fees were financed.--Subject to subsection (l)(1), a
mortgage referred to in section 103(aa) may not contain terms
under which a consumer must pay any prepayment penalty for any
payment made at or before the end of the 24-month period
referred to in paragraph (1) if the creditor financed points or
fees in connection with the consumer credit transaction in an
amount equal to or greater than 3 percent of the total amount
of credit extended in the transaction.
``(3) Limited prepayment penalty for early repayment under
certain circumstances.--Subject to paragraph (2), the terms of
a mortgage referred to in section 103(aa) may contain terms
under which a consumer must pay a prepayment penalty for any
payment made at or before the end of the 24-month period
referred to in paragraph (1) to the extent the sum of total
amount of points or fees financed by the creditor, if any, in
connection with the consumer credit transaction and the total
amount payable as a prepayment penalty does not exceed the
amount which is equal to 3 percent of the total amount of
credit extended in the transaction.
``(4) Construction.--For purposes of this subsection, any
method of computing a refund of unearned scheduled interest is
a prepayment penalty if it is less favorable to the consumer
than the actuarial method (as that term is defined in section
933(d) of the Housing and Community Development Act of 1992).
``(5) Prepayment penalty defined.--The term `prepayment
penalty' means any monetary penalty imposed on a consumer for
paying all or part of the principal with respect to a consumer
credit transaction before the date on which the principal is
due.''.
(c) All Balloon Payments Prohibited.--Section 129(e) of the Truth
in Lending Act (15 U.S.C. 1639(e)) is amended by striking ``having a
term of less than 5 years''.
(d) Assessment of Ability To Repay.--Section 129(h) of the Truth in
Lending Act (15 U.S.C. 1639(h)) is amended--
(1) by striking ``Consumer.--A creditor'' and inserting
``Consumer.--
``(1) Prohibition on patterns and practices.--A creditor'';
and
(2) by adding at the end the following new paragraphs:
``(2) Case-by-case assessments of consumer ability to pay
required.--
``(A) In general.--In addition to the prohibition
in paragraph (1) on engaging in certain patterns and
practices, a creditor may not extend any credit in
connection with any mortgage referred to in section
103(aa) unless the creditor has determined, at the time
such credit is extended, that 1 or more of the resident
obligors, when considered individually and
collectively, will be able to make the scheduled
payments under the terms of the transaction based on a
consideration of their current and expected income,
current obligations, employment status, and other
financial resources, without taking into account any
equity of any such obligor in the dwelling which is the
security for the credit.
``(B) Regulations.--The Board shall prescribe, by
regulation the appropriate format for determining a
consumer's ability to pay and the criteria to be
considered in making any such determination.
``(C) Resident obligor.--For purposes of this
paragraph, the term `resident obligor' means an obligor
for whom the dwelling securing the extension of credit
is, or upon the consummation of the transaction will
be, the principal residence.
``(3) Verification.--The requirements of paragraphs (1) and
(2) shall not be deemed to have been met unless any information
relied upon by the creditor for purposes of any such paragraph
has been verified by the creditor independently of information
provided by any resident obligor.''.
(e) Requirements Relating to Home Improvement Contracts.--Section
129(i) of the Truth in Lending Act (15 U.S.C. 1639(i)) is amended--
(1) by striking ``Improvement Contracts.--A creditor'' and
inserting ``Improvement Contracts.--
``(1) In general.--A creditor''; and
(2) by adding at the end the following new paragraph:
``(2) Affirmative claims and defenses.--Notwithstanding any
other provision of law, any assignee or holder, in any
capacity, of a mortgage referred to in section 103(aa) which
was made, arranged, or assigned by a person financing home
improvements to the dwelling of a consumer shall be subject to
all affirmative claims and defenses which the consumer may have
against the seller, home improvement contractor, broker, or
creditor with respect to such mortgage or home improvements.''.
(f) Clarification of Rescission Rights.--Section 129(j) of the
Truth in Lending Act (15 U.S.C. 1639(j)) is amended to read as follows:
``(j) Consequence of Failure To Comply.--
``(1) In general.--If, in the case of a mortgage referred
to in section 103(aa)--
``(A) the mortgage contains a provision prohibited
by this section or does not contain a provision
required by this section; or
``(B) a creditor or other person fails to comply
with the provisions of this section, whether by an act
or omission, with regard to such mortgage at any time,
the consummation of the consumer credit transaction resulting
in such mortgage shall be treated as a failure to deliver the
material disclosures required under this title for the purpose
of section 125.
``(2) Rule of application.--In any application of section
125 to a mortgage described in section 103(aa) under
circumstances described in paragraph (1), paragraphs (2) and
(4) of section 125(e) shall not apply or be taken into
account.''.
SEC. 4. ADDITIONAL REQUIREMENTS FOR HIGH COST CONSUMER MORTGAGES.
(a) Single Premium Credit Insurance.--Section 129 of the Truth in
Lending Act (15 U.S.C. 1639) is amended--
(1) by redesignating subsections (k) and (l) as subsections
(s) and (t), respectively; and
(2) by inserting after subsection (j), the following new
subsection:
``(k) Single Premium Credit Insurance.--
``(1) In general.--The terms of a mortgage referred to in
section 103(aa) may not require, and no creditor or other
person may require or allow--
``(A) the advance collection of a premium, on a
single premium basis, for any credit life, credit
disability, credit unemployment, or credit property
insurance, and any analogous product; or
``(B) the advance collection of a fee for any debt
cancellation or suspension agreement or contract,
in connection with any such mortgage, whether such premium or
fee is paid directly by the consumer or is financed by the
consumer through such mortgage.
``(2) Rule of construction.--Paragraph (1) shall not be
construed as affecting the right of a creditor to collect
premium payments on insurance or debt cancellation or
suspension fees referred to in paragraph (1) that are
calculated and paid on a regular monthly basis, if the
insurance transaction is conducted separately from the mortgage
transaction, the insurance may be canceled by the consumer at
any time, and the insurance policy is automatically canceled
upon repayment or other termination of the mortgage referred to
in paragraph (1).''.
(b) Restriction on Financing Points and Fees.--Section 129 of the
Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after
subsection (k) (as added by subsection (a) of this section) the
following new subsection:
``(l) Restriction on Financing Points and Fees.--
``(1) Limit on amount of points and fees that may be
financed.--Subject to paragraphs (2) and (3) of subsection (c),
no creditor may, in connection with the formation or
consummation of a mortgage referred to in section 103(aa),
finance, directly or indirectly, any portion of the points,
fees, or other charges payable to the creditor or any third
party in an amount in excess of the greater of 3 percent of the
total loan amount or $600.
``(2) Prohibition on financing certain points, fees, or
charges.--No creditor may, in connection with the formation or
consummation of a mortgage referred to in section 103(aa),
finance, directly or indirectly, any of the following fees or
other charges payable to the creditor or any third party:
``(A) Any prepayment fee or penalty required to be
paid by the consumer in connection with a loan or other
extension of credit which is being refinanced by such
mortgage if the creditor, with respect to such
mortgage, or any affiliate of the creditor, is the
creditor with respect to the loan or other extension of
credit being refinanced.
``(B) Any points, fees, or other charges required
to be paid by the consumer in connection with such
mortgage if--
``(i) the mortgage is being entered into in
order to refinance an existing mortgage of the
consumer that is referred to in section
103(aa); and
``(ii) if the creditor, with respect to
such new mortgage, or any affiliate of the
creditor, is the creditor with respect to the
existing mortgage which is being refinanced.''.
(c) Creditor Call Provision.--Section 129 of the Truth in Lending
Act (15 U.S.C. 1639) is amended by inserting after subsection (l) (as
added by subsection (b) of this section) the following new subsection:
``(m) Creditor Call Provision.--
``(1) In general.--A mortgage referred to in section
103(aa) may not include terms under which the indebtedness may
be accelerated by the creditor, in the creditor's sole
discretion.
``(2) Exception.--Paragraph (1) shall not apply when
repayment of the loan has been accelerated as a result of a
bona fide default.''.
(d) Prohibition on Actions Encouraging Default.--Section 129 of the
Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after
subsection (m) (as added by subsection (c) of this section) the
following new subsection:
``(n) Prohibition on Actions Encouraging Default.--No creditor may
make any statement, take any action, or fail to take any action before
or in connection with the formation or consummation of any mortgage
referred to in section 103(aa) to refinance all or any portion of an
existing loan or other extension of credit, if the statement, action,
or failure to act has the effect of encouraging or recommending the
consumer to default on the existing loan or other extension of credit
at any time before, or in connection with, the closing or any scheduled
closing on such mortgage.''.
(e) Modification or Deferral Fees.--Section 129 of the Truth in
Lending Act (15 U.S.C. 1639) is amended by inserting after subsection
(n) (as added by subsection (d) of this section) the following new
subsection:
``(o) Modification or Deferral Fees.--
``(1) In general.--Except as provided in paragraph (2), a
creditor may not charge any consumer with respect to a mortgage
referred to in section 103(aa) any fee or other charge--
``(A) to modify, renew, extend, or amend such
mortgage, or any provision of the terms of the
mortgage; or
``(B) to defer any payment otherwise due under the
terms of the mortgage.
``(2) Exception for modifications for the benefit of the
consumer.--Paragraph (1) shall not apply with respect to any
fee imposed in connection with any action described in
subparagraph (A) or (B) if--
``(A) the action provides a material benefit to the
consumer; and
``(B) the amount of the fee or charge does not
exceed--
``(i) an amount equal to 0.5 percent of the
total loan amount; or
``(ii) in any case in which the total loan
amount of the mortgage does not exceed $60,000,
an amount in excess of $300.''.
(f) Consumer Counseling Requirements.--Section 129 of the Truth in
Lending Act (15 U.S.C. 1639) is amended by inserting after subsection
(o) (as added by subsection (e) of this section) the following new
subsection:
``(p) Consumer Counseling Requirement.--
``(1) In general.--A creditor may not extend any credit in
the form of a mortgage referred to in section 103(aa) to any
consumer, unless the creditor has provided to the consumer, at
such time before the consummation of the mortgage and in such
manner as the Board shall provide by regulation, all of the
following:
``(A) All warnings and disclosures regarding the
risks of the mortgage to the consumer.
``(B) A separate written statement recommending
that the consumer take advantage of available home
ownership or credit counseling services before agreeing
to the terms of any mortgage referred to in section
103(aa).
``(C) A written statement containing the names,
addresses, and telephone numbers of counseling agencies
or programs reasonably available to the consumer that
have been certified or approved by the Secretary of
Housing and Urban Development, a State housing finance
authority (as defined in section 1301 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989), or the agency referred
to in subsection (a) or (c) of section 108 with jurisdiction over the
creditor as qualified to provide counseling on--
``(i) the advisability of a high cost loan
transaction; and
``(ii) the appropriateness of a high cost
loan for the consumer.
``(D) Complete and updated lists required.--Any failure to
provide as complete or updated a list under paragraph (1)(C) as
is reasonably possible shall constitute a violation of this
section.''.
(g) Arbitration.--Section 129 of the Truth in Lending Act (15
U.S.C. 1639) is amended by inserting after subsection (p) (as added by
subsection (f) of this section) the following new subsection:
``(q) Arbitration.--
``(1) In general.--A mortgage referred to in section
103(aa) may not include terms which require arbitration or any
other nonjudicial procedure as the method for resolving any
controversy or settling any claims arising out of the
transaction.
``(2) Post-controversy agreements.--Subject to paragraph
(3), paragraph (1) shall not be construed as limiting the right
of the consumer and the creditor to agree to arbitration or any
other nonjudicial procedure as the method for resolving any
controversy at any time after a dispute or claim under the
transaction arises.
``(3) No waiver of statutory cause of action.--No provision
of any mortgage referred to in section 103(aa) or any agreement
between the consumer and the creditor shall be applied or
interpreted so as to bar a consumer from bringing an action in
an appropriate district court of the United States, or any
other court of competent jurisdiction, pursuant to section 130
or any other provision of law, for damages or other relief in
connection with any alleged violation of this section, any
other provision of this title, or any other Federal law.''.
(h) Prohibition on Evasions.--Section 129 of the Truth in Lending
Act (15 U.S.C. 1639) is amended by inserting after subsection (q) (as
added by subsection (g) of this section) the following new subsection:
``(r) Prohibitions on Evasions, Structuring of Transactions, and
Reciprocal Arrangements.--
``(1) In general.--A creditor may not take any action--
``(A) for the purpose or with the intent to
circumvent or evade any requirement of this title,
including entering into a reciprocal arrangement with
any other creditor or affiliate of another creditor or
dividing a transaction into separate parts, for the
purpose of evading or circumventing any such
requirement; or
``(B) with regard to any other loan or extension of
credit for the purpose or with the intent to evade the
requirements of this title, including structuring or
restructuring a consumer credit transaction as another
form of loan, such as a business loan.
``(2) Other actions.--In addition to the actions prohibited
under paragraph (1), a creditor may not take any action which
the Board determines, by regulation, constitutes a bad faith
effort to evade or circumvent any requirement of this section
with regard to a consumer credit transaction.
``(3) Regulations.--The Board shall prescribe such
regulations as the Board determines to be appropriate to
prevent circumvention or evasion of the requirements of this
section or to facilitate compliance with the requirements of
this section.''.
SEC. 5. AMENDMENTS RELATING TO RIGHT OF RESCISSION.
(a) Timing of Waiver by Consumer.--Section 125(a) of the Truth in
Lending Act (15 U.S.C. 1635(a)) is amended--
(1) by striking ``(a) Except as otherwise provided'' and
inserting ``(a) Right Established.--
``(1) In general.--Except as otherwise provided''; and
(2) by adding at the end the following new paragraph:
``(2) Timing of election of waiver by consumer.--No
election by a consumer to waive the right established under
paragraph (1) to rescind a transaction shall be effective if--
``(A) the waiver was required by the creditor as a
condition for the transaction;
``(B) the creditor advised or encouraged the
consumer to waive such right of the consumer; or
``(C) the creditor had any discussion with the
consumer about a waiver of such right during the period
beginning when the consumer provides written
acknowledgement of the receipt of the disclosures and
the delivery of forms and information required to be
provided to the consumer under paragraph (1) and ending
at such time as the Board determines, by regulation, to
be appropriate.''.
(b) Noncompliance With Requirements as Recoupment in Foreclosure
Proceeding.--Section 130(e) of the Truth in Lending Act (15 U.S.C.
1640(e)) is amended by inserting after the 2d sentence the following
new sentence: ``This subsection also does not bar a person from
asserting a rescission under section 125, in an action to collect the
debt as a defense to a judicial or nonjudicial foreclosure after the
expiration of the time periods for affirmative actions set forth in
this section and section 125.''.
SEC. 6. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.
(a) Increase in Amount of Civil Money Penalties for Certain
Violations.--Section 130(a) of the Truth in Lending Act (15 U.S.C.
1640) is amended--
(1) in paragraph (2)(A)(iii), by striking ``$2,000'' and
inserting ``$10,000''; and
(2) in paragraph (2)(B), by striking ``lesser of $500,000
or 1 percentum of the net worth of the creditor'' and inserting
``the greater of--
``(i) the amount determined by multiplying
the maximum amount of liability under
subparagraph (A) for such failure to comply in
an individual action by the number of members
in the certified class; or
``(ii) the amount equal to 2 percent of the
net worth of the creditor.''.
(b) Statute of Limitations Extended for Section 129 Violations.--
Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) (as
amended by section 5(b) of this Act) is amended--
(1) in the 1st sentence, by striking ``Any action'' and
inserting ``Except as provided in the subsequent sentence, any
action''; and
(2) by inserting after the 1st sentence the following new
sentence: ``Any action under this section with respect to any
violation of section 129 may be brought in any United States
district court, or in any other court of competent
jurisdiction, before the end of the 3-year period beginning on
the date of the occurrence of the violation.''.
SEC. 7. AMENDMENT TO FAIR CREDIT REPORTING ACT.
Section 623 of the Fair Credit Reporting Act (15 U.S.C. 1681s-2) is
amended by adding at the end the following new subsection:
``(e) Duty of Creditors With Respect to High Cost Mortgages.--
``(1) In general.--Each creditor who enters into a consumer
credit transaction which is a mortgage referred to in section
103(aa), and each successor to such creditor with respect to
such transaction, shall report the complete payment history,
favorable and unfavorable, of the obligor with respect to such
transaction to a consumer reporting agency that compiles and
maintains files on consumers on a nationwide basis at least
quarterly, or more frequently as required by regulation or in
guidelines established by participants in the secondary
mortgage market, while such transaction is in effect.
``(2) Definitions.--For purposes of paragraph (1), the
terms `credit' and `creditor' have the same meanings as in
section 103.''.
SEC. 8. REGULATIONS.
The Board of Governors of the Federal Reserve System shall publish
regulations implementing this Act, and the amendments made by this Act,
in final form before the end of the 6-month period beginning on the
date of the enactment of this Act.
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Introduced in Senate
Sponsor introductory remarks on measure. (CR S2632-2633, S2635-2636)
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (text of measure as introduced: CR S2633-2635)
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