Text: H.R.5037 — 102nd Congress (1991-1992)All Information (Except Text)

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HR 5037 IH
102d CONGRESS
2d Session
 H. R. 5037
To amend the Truth in Lending Act to prohibit creditors from extending credit
for any residential mortgage transaction under terms and conditions which are
less favorable to the consumer than the terms and conditions disclosed to the
consumer at the time of application for such credit, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
April 30, 1992
Mr. GALLO introduced the following bill; which was referred to the Committee
on Banking, Finance and Urban Affairs
A BILL
To amend the Truth in Lending Act to prohibit creditors from extending credit
for any residential mortgage transaction under terms and conditions which are
less favorable to the consumer than the terms and conditions disclosed to the
consumer at the time of application for such credit, 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 `Residential Mortgage Credit Fairness Act
  of 1992'.
SEC. 2. AMENDMENTS TO TRUTH IN LENDING ACT.
  (a) CREDIT REQUIRED TO BE EXTENDED UNDER TERMS AND CONDITIONS PREVIOUSLY
  DISCLOSED TO CONSUMER- Section 128 of the Truth in Lending Act (15
  U.S.C. 1638) is amended by adding at the end thereof the following new
  subsection:
  `(e) Residential Mortgage Transactions-
  `(1) IN GENERAL- No creditor may impose terms and conditions for the
  extension of credit for a residential mortgage transaction which are
  less favorable to the consumer than the terms and conditions which were
  disclosed to the consumer pursuant to the requirements of subsection (a)
  at the time required under paragraph (5).
  `(2) DISCLOSED TERMS MAY NOT BE LIMITED TO SPECIFIED PERIOD- Except as
  provided in paragraph (4), no creditor may provide that the availability
  of credit on the terms and conditions disclosed pursuant to subsection (a)
  in connection with a residential mortgage transaction, or the effectiveness
  of such terms and conditions--
  `(A) is limited to a specified period of time; or
  `(B) is conditioned on the consummation of such transaction before a
  specified date.
  `(3) EXCEPTION IF DISCLOSURE CLEARLY STATES THAT A TERM IS SUBJECT TO
  CHANGE- Paragraph (1) shall not apply with respect to any term or condition
  to which such paragraph would otherwise apply if--
  `(A) the disclosure referred to in such paragraph contains a clear and
  conspicuous statement that such term or condition is subject to change before
  any credit is actually extended for a residential mortgage transaction; and
  `(B) the creditor discloses the term or condition for the extension of
  credit to the consumer before any credit is extended.
  `(4) EXCEPTION IN CASE OF UNREASONABLE CONSUMER DELAY- Paragraphs (1) and
  (2) shall cease to apply to any residential mortgage transaction if any
  delay in consummating such transaction is unreasonable and is due to any
  action or failure to act by the consumer.
  `(5) ADDITIONAL DISCLOSURE REQUIREMENTS- The disclosures required under
  subsection (a) in connection with an extension of credit for a residential
  mortgage transaction shall--
  `(A) be mailed or delivered before the earlier of--
  `(i) the date on which the credit is extended; or
  `(ii) the end of the 3-day period beginning on the date the creditor
  receives the consumer's written application for such credit; and
  `(B) shall include, in accordance with such regulations as the Board may
  prescribe, a statement of the rights and duties of the creditor and the
  consumer under this subsection and any form the Board may provide for use
  by the consumer in the exercise of such consumer's right to withdraw an
  application in accordance with paragraph (6).
  `(6) CONSUMER'S RIGHT TO WITHDRAW APPLICATION- Any consumer who submits a
  written application for credit in connection with a residential mortgage
  transaction shall have the right to withdraw such application without
  incurring any obligation to the creditor (other than for such reasonable
  fees as the creditor may impose to cover the cost of the initial handling
  of such application and preparing and delivering the disclosure required
  with respect to such application) if the consumer provides the creditor
  with written notice, in accordance with such regulations as the Board may
  prescribe, of such withdrawal before the end of the 3-day period beginning
  on the date the consumer actually receives the disclosure made in accordance
  with paragraph (5).
  `(7) FINANCE CHARGE INCLUDES `POINTS' AND OTHER FEES- For purposes of the
  disclosures required under subsection (a) in connection with an extension
  of credit for a residential mortgage transaction, the term `finance charge'
  includes any fee imposed by the creditor for any such extension of credit
  and the information disclosed with respect to such term shall be itemized.
  `(8) INCREASE IN PENALTY FOR FAILURE TO MAKE REQUIRED DISCLOSURE- In the
  case of any creditor which fails to make the disclosures required under
  subsection (a) in connection with an extension of credit for a residential
  mortgage transaction, section 130(a)(2)(i) shall be applied by substituting
  `$1,000' for `$100' and `$10,000' for `$1,000' where such terms appear in
  such section.'.
  (b) DEFINITION OF RESIDENTIAL MORTGAGE TRANSACTION- Section 103(w) of the
  Truth in Lending Act (15 U.S.C. 1602(w)) is amended by adding at the end the
  following new sentence: `For purposes of section 128(e), such term means
  any consumer credit transaction (other than under an open credit plan)
  in which a consensual security interest is created or retained against
  the consumer's dwelling.'.
  (c) TECHNICAL AND CONFORMING AMENDMENTS- Section 128(b) of the Truth in
  Lending Act (15 U.S.C. 1638(b)) is amended--
  (1) by striking out `(b)(1) Except' and inserting in lieu thereof `(b)
  Except'; and
  (2) by striking out paragraph (2).
SEC. 3. APPLICABILITY.
  The amendments made by this Act shall apply only to terms and conditions
  required to be disclosed by creditors after the date of the enactment of
  this Act in connection with residential mortgage transactions.

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