H.R.5037 - Residential Mortgage Credit Fairness Act of 1992102nd Congress (1991-1992)
|Sponsor:||Rep. Gallo, Dean A. [R-NJ-11] (Introduced 04/30/1992)|
|Committees:||House - Banking, Finance, and Urban Affairs|
|Latest Action:||House - 05/15/1992 Referred to the Subcommittee on Consumer Affairs and Coinage. (All Actions)|
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Text: H.R.5037 — 102nd Congress (1991-1992)All Information (Except Text)
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Introduced in House
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.