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Consumer Credit Protection Act

CHAPTER 41 - CONSUMER CREDIT PROTECTION

SUBCHAPTER I - CONSUMER CREDIT COST DISCLOSURE

PART A - GENERAL PROVISIONS

Sec. 1601. Congressional findings and declaration of purpose

  • (a) Informed use of credit
    The Congress finds that economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit. The informed use of credit results from an awareness of the cost thereof by consumers. It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.
  • (b) Terms of personal property leases
    The Congress also finds that there has been a recent trend toward leasing automobiles and other durable goods for consumer use as an alternative to installment credit sales and that these leases have been offered without adequate cost disclosures. It is the purpose of this subchapter to assure a meaningful disclosure of the terms of leases of personal property for personal, family, or household purposes so as to enable the lessee to compare more readily the various lease terms available to him, limit balloon payments in consumer leasing, enable comparison of lease terms with credit terms where appropriate, and to assure meaningful and accurate disclosures of lease terms in advertisements.

Sec. 1602. Definitions and rules of construction

  • (a) The definitions and rules of construction set forth in this section are applicable for the purposes of this subchapter.
  • (b) The term ''Board'' refers to the Board of Governors of the Federal Reserve System.
  • (c) The term ''organization'' means a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.
  • (d) The term ''person'' means a natural person or an organization.
  • (e) The term ''credit'' means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.
  • (f) The term ''creditor'' refers only to a person who both (1) regularly extends, whether in connection with loans, sales of property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement. Notwithstanding the preceding sentence, in the case of an open-end credit plan involving a credit card, the card issuer and any person who honors the credit card and offers a discount which is a finance charge are creditors. For the purpose of the requirements imposed under part D of this subchapter and sections 1637(a)(5), 1637(a)(6), 1637(a)(7), 1637(b)(1), 1637(b)(2), 1637(b)(3), 1637(b)(8), and 1637(b)(10) of this title, the term ''creditor'' shall also include card issuers whether or not the amount due is payable by agreement in more than four installments or the payment of a finance charge is or may be required, and the Board shall, by regulation, apply these requirements to such card issuers, to the extent appropriate, even though the requirements are by their terms applicable only to creditors offering open-end credit plans. Any person who originates 2 or more mortgages referred to in subsection (aa) of this section in any 12-month period or any person who originates 1 or more such mortgages through a mortgage broker shall be considered to be a creditor for purposes of this subchapter.
  • (g) The term ''credit sale'' refers to any sale in which the seller is a creditor. The term includes any contract in the form of a bailment or lease if the bailee or lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the property and services involved and it is agreed that the bailee or lessee will become, or for no other or a nominal consideration has the option to become, the owner of the property upon full compliance with his obligations under the contract.
  • (h) The adjective ''consumer'', used with reference to a credit transaction, characterizes the transaction as one in which the party to whom credit is offered or extended is a natural person, and the money, property, or services which are the subject of the transaction are primarily for personal, family, or household purposes.
  • (i) The term ''open end credit plan'' means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time.
    • (j) The term ''adequate notice,'' as used in section 1643 of this title, means a printed notice to a cardholder which sets forth the pertinent facts clearly and conspicuously so that a person against whom it is to operate could reasonably be expected to have noticed it and understood its meaning. Such notice may be given to a cardholder by printing the notice on any credit card, or on each periodic statement of account, issued to the cardholder, or by any other means reasonably assuring the receipt thereof by the cardholder.
    • (k) The term ''credit card'' means any card, plate, coupon book or other credit device existing for the purpose of obtaining money, property, labor, or services on credit.
    • (l) The term ''accepted credit card'' means any credit card which the cardholder has requested and received or has signed or has used, or authorized another to use, for the purpose of obtaining money, property, labor, or services on credit.
    • (m) The term ''cardholder'' means any person to whom a credit card is issued or any person who has agreed with the card issuer to pay obligations arising from the issuance of a credit card to another person.
    • (n) The term ''card issuer'' means any person who issues a credit card, or the agent of such person with respect to such card.
    • (o) The term ''unauthorized use,'' as used in section 1643 of this title, means a use of a credit card by a person other than the cardholder who does not have actual, implied, or apparent authority for such use and from which the cardholder receives no benefit.
    • (p) The term ''discount'' as used in section 1666f of this title means a reduction made from the regular price. The term ''discount'' as used in section 1666f of this title shall not mean a surcharge.
    • (q) The term ''surcharge'' as used in this section and section 1666f of this title means any means of increasing the regular price to a cardholder which is not imposed upon customers paying by cash, check, or similar means.''
    • (r) The term ''State'' refers to any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States.
    • (s) The term ''agricultural purposes'' includes the production, harvest, exhibition, marketing, transportation, processing, or manufacture of agricultural products by a natural person who cultivates, plants, propagates, or nurtures those agricultural products, including but not limited to the acquisition of farmland, real property with a farm residence, and personal property and services used primarily in farming.
    • (t) The term ''agricultural products'' includes agricultural, horticultural, viticultural, and dairy products, livestock, wildlife, poultry, bees, forest products, fish and shellfish, and any products thereof, including processed and manufactured products, and any and all products raised or produced on farms and any processed or manufactured products thereof.
    • (u) The term ''material disclosures'' means the disclosure, as required by this subchapter, of the annual percentage rate, the method of determining the finance charge and the balance upon which a finance charge will be imposed, the amount of the finance charge, the amount to be financed, the total of payments, the number and amount of payments, the due dates or periods of payments scheduled to repay the indebtedness, and the disclosures required by section 1639(a) of this title.
    • (v) The term ''dwelling'' means a residential structure or mobile home which contains one to four family housing units, or individual units of condominiums or cooperatives.
      • (w) The term ''residential mortgage transaction'' means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer's dwelling to finance the acquisition or initial construction of such dwelling.
      • (x) As used in this section and section 1666f of this title, the term ''regular price'' means the tag or posted price charged for the property or service if a single price is tagged or posted, or the price charged for the property or service when payment is made by use of an open-end credit plan or a credit card if either (1) no price is tagged or posted, or (2) two prices are tagged or posted, one of which is charged when payment is made by use of an open-end credit plan or a credit card and the other when payment is made by use of cash, check, or similar means. For purposes of this definition, payment by check, draft, or other negotiable instrument which may result in the debiting of an open-end credit plan or a credit cardholder's open-end account shall not be considered payment made by use of the plan or the account.
        • (y) Any reference to any requirement imposed under this subchapter or any provision thereof includes reference to the regulations of the Board under this subchapter or the provision thereof in question.
        • (z) The disclosure of an amount or percentage which is greater than the amount or percentage required to be disclosed under this subchapter does not in itself constitute a violation of this subchapter.
        • (aa)
          • (1) A mortgage referred to in this subsection means a consumer credit transaction that is secured by the consumer's principal dwelling, other than a residential mortgage transaction, a reverse mortgage transaction, or a transaction under an open end credit plan, if -
            • (A) the annual percentage rate at consummation of the
              transaction will exceed by more than 10 percentage points the
              yield on Treasury securities having comparable periods of
              maturity on the fifteenth day of the month immediately preceding
              the month in which the application for the extension of credit is
              received by the creditor; or
            • (B) the total points and fees payable by the consumer at or
              before closing will exceed the greater of -
      • (i) 8 percent of the total loan amount; or
      • (ii) $400.
      • (2)
        • (A) After the 2-year period beginning on the effective date of the regulations promulgated under section 155 of the Riegle Community Development and Regulatory Improvement Act of 1994, and no more frequently than biennially after the first increase or decrease under this subparagraph, the Board may by regulation increase or decrease the number of percentage points specified in paragraph (1)(A), if the Board determines that the increase or decrease is -
    • (i) consistent with the consumer protections against abusive
      lending provided by the amendments made by subtitle B of title I
      of the Riegle Community Development and Regulatory Improvement
      Act of 1994; and
      (ii) warranted by the need for credit.
      • (B) An increase or decrease under subparagraph (A) may not result in the number of percentage points referred to in subparagraph (A) being -
    • (i) less that 8 percentage points; or
    • (ii) greater than 12 percentage points.
      • (C) In determining whether to increase or decrease the number of percentage points referred to in subparagraph (A), the Board shall consult with representatives of consumers, including low-income consumers, and lenders.
        • (3) The amount specified in paragraph (1)(B)(ii) shall be adjusted annually on January 1 by the annual percentage change in the Consumer Price Index, as reported on June 1 of the year preceding such adjustment.
        • (4) For purposes of paragraph (1)(B), points and fees shall include -
      • (A) all items included in the finance charge, except interest
        or the time-price differential;
      • (B) all compensation paid to mortgage brokers;
      • (C) each of the charges listed in section 1605(e) of this title
        (except an escrow for future payment of taxes), unless -
    • (i) the charge is reasonable;
    • (ii) the creditor receives no direct or indirect
      compensation; and
      (iii) the charge is paid to a third party unaffiliated with
      the creditor; and
      (D) such other charges as the Board determines to be
      appropriate.
      • (5) This subsection shall not be construed to limit the rate of interest or the finance charge that a person may charge a consumer for any extension of credit.
        • (bb) The term ''reverse mortgage transaction'' means a nonrecourse transaction in which a mortgage, deed of trust, or equivalent consensual security interest is created against the consumer's principal dwelling -
      • (1) securing one or more advances; and
        (2) with respect to which the payment of any principal,
        interest, and shared appreciation or equity is due and payable
        (other than in the case of default) only after -
        • (A) the transfer of the dwelling;
        • (B) the consumer ceases to occupy the dwelling as a principal
          dwelling; or
        • (C) the death of the consumer.

Sec. 1603. Exempted transactions

This subchapter does not apply to the following:

  • (1) Credit transactions involving extensions of credit
    primarily for business, commercial, or agricultural purposes, or
    to government or governmental agencies or instrumentalities, or
    to organizations.
  • (2) Transactions in securities or commodities accounts by a
    broker-dealer registered with the Securities and Exchange
    Commission.
  • (3) Credit transactions, other than those in which a security
    interest is or will be acquired in real property, or in personal
    property used or expected to be used as the principal dwelling of
    the consumer, in which the total amount financed exceeds $25,000.
  • (4) Transactions under public utility tariffs, if the Board
    determines that a State regulatory body regulates the charges for
    the public utility services involved, the charges for delayed
    payment, and any discount allowed for early payment.
  • (5) Transactions for which the Board, by rule, determines that
    coverage under this subchapter is not necessary to carry out the
    purposes of this subchapter.
  • (6) Repealed. Pub. L. 96-221, title VI, Sec. 603(c)(3), Mar.
    31, 1980, 94 Stat. 169.
  • (7) Loans made, insured, or guaranteed pursuant to a program
    authorized by title IV of the Higher Education Act of 1965 (20
    U.S.C. 1070 et seq., 42 U.S.C. 2751 et seq.).

Sec. 1604. Disclosure guidelines

  • (a) Promulgation, contents, etc., of regulations
    The Board shall prescribe regulations to carry out the purposes of this subchapter. Except in the case of a mortgage referred to in section 1602(aa) of this title, these regulations may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Board are necessary or proper to effectuate the purposes of this subchapter, to prevent circumvention or evasion thereof, or to facilitate compliance therewith.
  • (b) Model disclosure forms and clauses; publication, criteria,
    compliance, etc.
    The Board shall publish model disclosure forms and clauses for common transactions to facilitate compliance with the disclosure requirements of this subchapter and to aid the borrower or lessee in understanding the transaction by utilizing readily understandable language to simplify the technical nature of the disclosures. In devising such forms, the Board shall consider the use by creditors or lessors of data processing or similar automated equipment. Nothing in this subchapter may be construed to require a creditor or lessor to use any such model form or clause prescribed by the Board under this section. A creditor or lessor shall be deemed to be in compliance with the disclosure provisions of this subchapter with respect to other than numerical disclosures if the creditor or lessor (1) uses any appropriate model form or clause as published by the Board, or (2) uses any such model form or clause and changes it by (A) deleting any information which is not required by this subchapter, or (B) rearranging the format, if in making such deletion or rearranging the format, the creditor or lessor does not affect the substance, clarity, or meaningful sequence of the disclosure.
  • (c) Procedures applicable for adoption of model forms and clauses
    Model disclosure forms and clauses shall be adopted by the Board after notice duly given in the Federal Register and an opportunity for public comment in accordance with section 553 of title 5.
  • (d) Effective dates of regulations containing new disclosure
    requirements
    Any regulation of the Board, or any amendment or interpretation thereof, requiring any disclosure which differs from the disclosures previously required by this part, part D, or part E of this subchapter or by any regulation of the Board promulgated thereunder shall have an effective date of that October 1 which follows by at least six months the date of promulgation, except that the Board may at its discretion take interim action by regulation, amendment, or interpretation to lengthen the period of time permitted for creditors or lessors to adjust their forms to accommodate new requirements or shorten the length of time for creditors or lessors to make such adjustments when it makes a specific finding that such action is necessary to comply with the findings of a court or to prevent unfair or deceptive disclosure practices. Notwithstanding the previous sentence, any creditor or lessor may comply with any such newly promulgated disclosure requirements prior to the effective date of the requirements.
  • (f) [1] Exemption authority
    [1] So in original. No subsec. (e) has been enacted.
    • (1) In general
      The Board may exempt, by regulation, from all or part of this
      subchapter any class of transactions, other than transactions
      involving any mortgage described in section 1602(aa) of this
      title, for which, in the determination of the Board, coverage
      under all or part of this subchapter does not provide a
      meaningful benefit to consumers in the form of useful information
      or protection.
    • (2) Factors for consideration
      In determining which classes of transactions to exempt in whole
      or in part under paragraph (1), the Board shall consider the
      following factors and publish its rationale at the time a
      proposed exemption is published for comment:
      • (A) The amount of the loan and whether the disclosures, right
        of rescission, and other provisions provide a benefit to the
        consumers who are parties to such transactions, as determined
        by the Board.
      • (B) The extent to which the requirements of this subchapter
        complicate, hinder, or make more expensive the credit process
        for the class of transactions.
      • (C) The status of the borrower, including -
        • (i) any related financial arrangements of the borrower, as
          determined by the Board;
        • (ii) the financial sophistication of the borrower relative
          to the type of transaction; and
          (iii) the importance to the borrower of the credit, related
          supporting property, and coverage under this subchapter, as
          determined by the Board;
      • (D) whether the loan is secured by the principal residence of
        the consumer; and
        (E) whether the goal of consumer protection would be
        undermined by such an exemption.
  • (g) Waiver for certain borrowers
    • (1) In general
      The Board, by regulation, may exempt from the requirements of
      this subchapter certain credit transactions if -
      • (A) the transaction involves a consumer -
        • (i) with an annual earned income of more than $200,000; or
        • (ii) having net assets in excess of $1,000,000 at the time
          of the transaction; and
          (B) a waiver that is handwritten, signed, and dated by the
          consumer is first obtained from the consumer.
    • (2) Adjustments by the Board
      The Board, at its discretion, may adjust the annual earned
      income and net asset requirements of paragraph (1) for inflation.
  • § 1605. Determination of finance charge.
    • (a) ''Finance charge'' defined.
    • (b) Life, accident, or health insurance premiums included in finance charge.
    • (c) Property damage and liability insurance premiums included in finance charge.
    • (d) Items exempted from computation of finance charge in all credit transactions.
    • (e) Items exempted from computation of finance charge in extensions of credit secured by an interest in real property.
    • (f) Tolerances for accuracy.
  • § 1606. Determination of annual percentage rate.
    • (a) ''Annual percentage rate'' defined.
    • (b) Computation of rate of finance charges for balances within a specified range.
    • (c) Allowable tolerances for purposes of compliance with disclosure requirements.
    • (d) Use of rate tables or charts having allowable variance from determined rates.
    • (e) Authorization of tolerances in determining annual percentage rates.
  • § 1607. Administrative enforcement.
    • (a) Enforcing agencies.
    • (b) Violations of this subchapter deemed violations of pre-existing statutory requirements; additional agency powers.
    • (c) Federal Trade Commission as overall enforcing agency.
    • (d) Rules and regulations.
    • (e) Adjustment of finance charges; procedures applicable, coverage, criteria, etc.
  • § 1608. Views of other agencies.
  • § 1609. Repealed.
  • § 1610. Effect on other laws.
    • (a) Inconsistent provisions; procedures applicable for determination.
    • (b) State credit charge statutes.
    • (c) Disclosure as evidence.
    • (d) Contract or other obligations under State or Federal law.
    • (e) Certain credit and charge card application and solicitation disclosure provisions.
  • § 1611. Criminal liability for willful and knowing violation.
  • § 1612. Effect on government agencies.
    • (a) Consultation requirements respecting compliance of credit instruments issued to participating creditor.
    • (b) Inapplicability of Federal civil or criminal penalties to Federal, State, and local agencies.
    • (c) Inapplicability of Federal civil or criminal penalties to participating creditor where violating instrument issued by United States.
    • (d) Applicability of State penalties to violations by participating creditor.
  • § 1613. Annual reports to Congress by Board.
  • § 1614. Repealed.
  • § 1615. Prohibition on use of ''Rule of 78's'' in connection with mortgage refinancings and other consumer loans.
    • (a) Prompt refund of unearned interest required.
    • (b) Use of ''Rule of 78's'' prohibited.
    • (c) Statement of prepayment amount.
    • (d) Definitions.

PART B - CREDIT TRANSACTIONS

  • § 1631. Disclosure requirements.
    • (a) Duty of creditor or lessor respecting one or more than one obligor.
    • (b) Creditor or lessor required to make disclosure.
    • (c) Estimates as satisfying statutory requirements; basis of disclosure for per diem interest.
    • (d) Tolerances for numerical disclosures.
  • § 1632. Form of disclosure; additional information.
    • (a) Information clearly and conspicuously disclosed; ''annual percentage rate'' and ''finance charge''; order of disclosures and use of different terminology.
    • (b) Optional information by creditor or lessor.
    • (c) Tabular format required for certain disclosures under section 1637(c).
  • § 1633. Exemption for State-regulated transactions.
  • § 1634. Effect of subsequent occurrence.
  • § 1635. Right of rescission as to certain transactions.
    • (a) Disclosure of obligor's right to rescind.
    • (b) Return of money or property following rescission.
    • (c) Rebuttable presumption of delivery of required disclosures.
    • (d) Modification and waiver of rights.
    • (e) Exempted transactions; reapplication of provisions.
    • (f) Time limit for exercise of right.
    • (g) Additional relief.
    • (h) Limitation on rescission.
    • (i) Rescission rights in foreclosure.
  • § 1636. Repealed.
  • § 1637. Open end consumer credit plans.
    • (a) Required disclosures by creditor.
    • (b) Statement required with each billing cycle.
    • (c) Disclosure in credit and charge card applications and solicitations.
    • (d) Disclosure prior to renewal.
    • (e) Other rules for disclosures under subsections (c) and (d).
    • (f) Disclosure of range of certain fees which vary by State allowed.
    • (g) Insurance in connection with certain open end credit card plans.
  • § 1637a. Disclosure requirements for open end consumer credit plans secured by consumer's principal dwelling.
    • (a) Application disclosures.
    • (b) Time and form of disclosures.
    • (c) Third party applications.
    • (d) ''Principal dwelling'' defined.
    • (e) Pamphlet.
  • § 1638. Transactions other than under an open end credit plan.
    • (a) Required disclosures by creditor.
    • (b) Form and timing of disclosures; residential mortgage transaction requirements.
    • (c) Timing of disclosures on unsolicited mailed or telephone purchase orders or loan requests.
    • (d) Timing of disclosure in cases of an addition of a deferred payment price to an existing outstanding balance.
  • § 1639. Requirements for certain mortgages.
    • (a) Disclosures.
    • (b) Time of disclosures.
    • (c) No prepayment penalty.
    • (d) Limitations after default.
    • (e) No balloon payments.
    • (f) No negative amortization.
    • (g) No prepaid payments.
    • (h) Prohibition on extending credit without regard to payment ability of consumer.
    • (i) Requirements for payments under home improvement contracts.
    • (j) Consequence of failure to comply.
    • (k) ''Affiliate'' defined.
    • (l) Discretionary regulatory authority of Board.
  • § 1640. Civil liability.
    • (a) Individual or class action for damages; amount of award; factors determining amount of award.
    • (b) Correction of errors.
    • (c) Unintentional violations; bona fide errors.
    • (d) Liability in transaction or lease involving multiple obligors.
    • (e) Jurisdiction of courts; limitations on actions; State attorney general enforcement.
    • (f) Good faith compliance with rule, regulation, or interpretation of Board or with interpretation or approval of duly authorized official or employee of Federal Reserve System.
    • (g) Recovery for multiple failures to disclose.
    • (h) Offset from amount owed to creditor or assignee; rights of defaulting consumer.
    • (i) Class action moratorium.
  • § 1641. Liability of assignees.
    • (a) Prerequisites.
    • (b) Proof of compliance with statutory provisions.
    • (c) Right of rescission by consumer unaffected.
    • (d) Rights upon assignment of certain mortgages.
    • (e) Liability of assignee for consumer credit transactions secured by real property.
    • (f) Treatment of servicer.
  • § 1642. Issuance of credit cards.
  • § 1643. Liability of holder of credit card.
    • (a) Limits on liability.
    • (b) Burden of proof.
    • (c) Liability imposed by other laws or by agreement with issuer.
    • (d) Exclusiveness of liability.
  • § 1644. Fraudulent use of credit cards; penalties.
    • (a) Use, attempt or conspiracy to use card in transaction affecting interstate or foreign commerce.
    • (b) Transporting, attempting or conspiring to transport card in interstate commerce.
    • (c) Use of interstate commerce to sell or transport card.
    • (d) Receipt, concealment, etc., of goods obtained by use of card.
    • (e) Receipt, concealment, etc., of tickets for interstate or foreign transportation obtained by use of card.
    • (f) Furnishing of money, etc., through use of card.
  • § 1645. Business credit cards; limits on liability of employees.
  • § 1646. Dissemination of annual percentage rates; implementation, etc.
    • (a) Annual percentage rates.
    • (b) Credit card price and availability information.
    • (c) Implementation.
  • § 1647. Home equity plans.
    • (a) Index requirement.
    • (b) Grounds for acceleration of outstanding balance.
    • (c) Change in terms.
    • (d) Terms changed after application.
    • (e) Additional requirements relating to refunds and imposition of nonrefundable fees.
  • § 1648. Reverse mortgages.
    • (a) In general.
    • (b) Projected total cost.
  • § 1649. Certain limitations on liability.
    • (a) Limitations on liability.
    • (b) Exceptions.

PART C - CREDIT ADVERTISING

  • § 1661. Catalogs and multiple-page advertisements.
  • § 1662. Advertising of down payments and installments.
  • § 1663. Advertising of open end credit plans.
  • § 1664. Advertising of credit other than open end plans.
    • (a) Exclusion of open end credit plans.
    • (b) Advertisements of residential real estate.
    • (c) Rate of finance charge expressed as annual percentage rate.
    • (d) Requisite disclosures in advertisement.
  • § 1665. Nonliability of advertising media.
  • § 1665a. Use of annual percentage rate in oral disclosures; exceptions.
  • § 1665b. Advertising of open end consumer credit plans secured by consumer's principal dwelling.
    • (a) In general.
    • (b) Tax deductibility.
    • (c) Certain terms prohibited.
    • (d) Discounted initial rate.
    • (e) Balloon payment.
    • (f) ''Balloon payment'' defined.

PART D - CREDIT BILLING

  • § 1666. Correction of billing errors.
    • (a) Written notice by obligor to creditor; time for and contents of notice; procedure upon receipt of notice by creditor.
    • (b) Billing error.
    • (c) Action by creditor to collect amount or any part thereof regarded by obligor to be a billing error.
    • (d) Restricting or closing by creditor of account regarded by obligor to contain a billing error.
    • (e) Effect of noncompliance with requirements by creditor.
  • § 1666a. Regulation of credit reports.
    • (a) Reports by creditor on obligor's failure to pay amount regarded as billing error.
    • (b) Reports by creditor on delinquent amounts in dispute; notification of obligor of parties notified of delinquency.
    • (c) Reports by creditor of subsequent resolution of delinquent amounts.
  • § 1666b. Length of billing period in credit statement for imposition of finance charge; effect of failure of timely mailing or delivery of statement.
    • (a) Additional finance charge.
    • (b) Excusable cause.
  • § 1666c. Prompt crediting of payments; imposition of finance charge.
  • § 1666d. Treatment of credit balances.
  • § 1666e. Notification of credit card issuer by seller of return of goods, etc., by obligor; credit for account of obligor.
  • § 1666f. Inducements to cardholders by sellers of cash discounts for payments by cash, check or similar means; credit card surcharge prohibition; finance charge for sales transactions involving cash discounts.
    • (a) Cash discounts.
    • (b) Finance charge.
  • § 1666g. Tie-in services prohibited for issuance of credit card.
  • § 1666h. Offset of cardholder's indebtedness by issuer of credit card with funds deposited with issuer by cardholder; remedies of creditors under State law not affected.
    • (a) Offset against consumer's funds.
    • (b) Attachments and levies.
  • § 1666i. Assertion by cardholder against card issuer of claims and defenses arising out of credit card transaction; prerequisites; limitation on amount of claims or defenses.
    • (a) Claims and defenses assertible.
    • (b) Amount of claims and defenses assertible.
  • § 1666j. Applicability of State laws.
    • (a) Consistency of provisions
    • (b) Exemptions by Board from credit billing requirements.
    • (c) Finance charge or other charge for credit for sales transactions involving cash discounts.

PART E - CONSUMER LEASES

  • § 1667. Definitions.
  • § 1667a. Consumer lease disclosures.
  • § 1667b. Lessee's liability on expiration or termination of lease.
    • (a) Estimated residual value of property as basis; presumptions; action by lessor for excess liability; mutually agreeable final adjustment.
    • (b) Penalties and charges for delinquency, default, or early termination.
    • (c) Independent professional appraisal of residual value of property at termination of lease; finality.
  • § 1667c. Consumer lease advertising; liability of advertising media.
    • (a) In general.
    • (b) Advertising medium not liable.
    • (c) Radio advertisements.
  • § 1667d. Civil liability of lessors.
    • (a) Grounds for maintenance of action.
    • (b) Additional grounds for maintenance of action; ''creditor'' defined.
    • (c) Jurisdiction of courts; time limitation.
  • § 1667e. Applicability of State laws; exemptions by Board from leasing requirements.
  • § 1667f. Regulations.
    • (a) Regulations authorized.
    • (b) Model disclosure.

SUBCHAPTER II - RESTRICTIONS ON GARNISHMENT

  • § 1671. Congressional findings and declaration of purpose.
    • (a) Disadvantages of garnishment.
    • (b) Necessity for regulation.
  • § 1672. Definitions.
  • § 1673. Restriction on garnishment.
    • (a) Maximum allowable garnishment.
    • (b) Exceptions.
    • (c) Execution or enforcement of garnishment order or process prohibited.
  • § 1674. Restriction on discharge from employment by reason of garnishment.
    • (a) Termination of employment.
    • (b) Penalties.
  • § 1675. Exemption for State-regulated garnishments.
  • § 1676. Enforcement by Secretary of Labor.
  • § 1677. Effect on State laws.

SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS

  • § 1679. Findings and purposes.
    • (a) Findings.
    • (b) Purposes.
  • § 1679a. Definitions.
  • § 1679b. Prohibited practices.
    • (a) In general.
    • (b) Payment in advance.
  • § 1679c. Disclosures.
    • (a) Disclosure required.
    • (b) Separate statement requirement.
    • (c) Retention of compliance records.
  • § 1679d. Credit repair organizations contracts.
    • (a) Written contracts required.
    • (b) Terms and conditions of contract.
  • § 1679e. Right to cancel contract.
    • (a) In general.
    • (b) Cancellation form and other information.
    • (c) Consumer copy of contract required.
  • § 1679f. Noncompliance with this subchapter.
    • (a) Consumer waivers invalid.
    • (b) Attempt to obtain waiver.
    • (c) Contracts not in compliance.
  • § 1679g. Civil liability.
    • (a) Liability established.
    • (b) Factors to be considered in awarding punitive damages.
  • § 1679h. Administrative enforcement.
    • (a) In general.
    • (b) Violations of this subchapter treated as violations of Federal Trade Commission Act.
    • (c) State action for violations.
  • § 1679i. Statute of limitations.
  • § 1679j. Relation to State law.

SUBCHAPTER III - CREDIT REPORTING AGENCIES

Sec. 1681. Congressional findings and statement of purpose

  • (a) Accuracy and fairness of credit reporting
    The Congress makes the following findings:
    • (1) The banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public confidence which is essential to the continued functioning of the banking system.
    • (2) An elaborate mechanism has been developed for investigating and evaluating the credit worthiness, credit standing, credit capacity, character, and general reputation of consumers.
    • (3) Consumer reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers.
    • (4) There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy.
  • (b) Reasonable procedures
    It is the purpose of this subchapter to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this subchapter.

§ 1681a. Definitions; rules of construction.

Sec. 1681b. Permissible purposes of consumer reports

  • (a) In general
    Subject to subsection (c) of this section, any consumer reporting agency may furnish a consumer report under the following circumstances and no other:
    • (1) In response to the order of a court having jurisdiction to issue such an order, or a subpoena issued in connection with proceedings before a Federal grand jury.
    • (2) In accordance with the written instructions of the consumer to whom it relates.
    • (3) To a person which it has reason to believe -
      • (A) intends to use the information in connection with a credit
        transaction involving the consumer on whom the information is to
        be furnished and involving the extension of credit to, or review
        or collection of an account of, the consumer
        ; or
      • (B) intends to use the information for employment purposes; or
      • (C) intends to use the information in connection with the
        underwriting of insurance involving the consumer; or
      • (D) intends to use the information in connection with a
        determination of the consumer's eligibility for a license or
        other benefit granted by a governmental instrumentality required
        by law to consider an applicant's financial responsibility or
        status; or
      • (E) intends to use the information, as a potential investor or
        servicer, or current insurer, in connection with a valuation of,
        or an assessment of the credit or prepayment risks associated
        with, an existing credit obligation; or
      • (F) otherwise has a legitimate business need for the
        information -
        • (i) in connection with a business transaction that is
          initiated by the consumer
          ; or
        • (ii) to review an account to determine whether the consumer
          continues to meet the terms of the account.
    • (4) In response to a request by the head of a State or local child support enforcement agency (or a State or local government official authorized by the head of such an agency), if the person making the request certifies to the consumer reporting agency that -
      • (A) the consumer report is needed for the purpose of
        establishing an individual's capacity to make child support
        payments or determining the appropriate level of such payments;
      • (B) the paternity of the consumer for the child to which the
        obligation relates has been established or acknowledged by the
        consumer in accordance with State laws under which the obligation
        arises (if required by those laws);
      • (C) the person has provided at least 10 days' prior notice to
        the consumer whose report is requested, by certified or
        registered mail to the last known address of the consumer, that
        the report will be requested; and
        (D) the consumer report will be kept confidential, will be used
        solely for a purpose described in subparagraph (A), and will not
        be used in connection with any other civil, administrative, or
        criminal proceeding, or for any other purpose.
    • (5) To an agency administering a State plan under section 654 of title 42 for use to set an initial or modified child support award.
  • (b) Conditions for furnishing and using consumer reports for
    employment purposes
    • (1) Certification from user
      A consumer reporting agency may furnish a consumer report for
      employment purposes only if -
      • (A) the person who obtains such report from the agency
        certifies to the agency that -
        • (i) the person has complied with paragraph (2) with respect
          to the consumer report, and the person will comply with
          paragraph (3) with respect to the consumer report if
          paragraph (3) becomes applicable; and
          (ii) information from the consumer report will not be used
          in violation of any applicable Federal or State equal
          employment opportunity law or regulation; and
          (B) the consumer reporting agency provides with the report,
          or has previously provided, a summary of the consumer's rights
          under this subchapter, as prescribed by the Federal Trade
          Commission under section 1681g(c)(3) of this title.
    • (2) Disclosure to consumer
      • (A) In general
        Except as provided in subparagraph (B), a person may not
        procure a consumer report, or cause a consumer report to be
        procured, for employment purposes with respect to any consumer,
        unless -
        • (i) a clear and conspicuous disclosure has been made in
          writing to the consumer at any time before the report is
          procured or caused to be procured, in a document that
          consists solely of the disclosure, that a consumer report may
          be obtained for employment purposes; and
          (ii) the consumer has authorized in writing (which
          authorization may be made on the document referred to in
          clause (i)) the procurement of the report by that person.
      • (B) Application by mail, telephone, computer, or other similar
        means
        If a consumer described in subparagraph (C) applies for
        employment by mail, telephone, computer, or other similar
        means, at any time before a consumer report is procured or
        caused to be procured in connection with that application -
        • (i) the person who procures the consumer report on the
          consumer for employment purposes shall provide to the
          consumer, by oral, written, or electronic means, notice that
          a consumer report may be obtained for employment purposes,
          and a summary of the consumer's rights under section
          1681m(a)(3) of this title; and
          (ii) the consumer shall have consented, orally, in writing,
          or electronically to the procurement of the report by that
          person.
      • (C) Scope
        Subparagraph (B) shall apply to a person procuring a consumer
        report on a consumer in connection with the consumer's
        application for employment only if -
        • (i) the consumer is applying for a position over which the
          Secretary of Transportation has the power to establish
          qualifications and maximum hours of service pursuant to the
          provisions of section 31502 of title 49, or a position
          subject to safety regulation by a State transportation
          agency; and
          (ii) as of the time at which the person procures the report
          or causes the report to be procured the only interaction
          between the consumer and the person in connection with that
          employment application has been by mail, telephone, computer,
          or other similar means.
    • (3) Conditions on use for adverse actions
      • (A) In general
        Except as provided in subparagraph (B), in using a consumer
        report for employment purposes, before taking any adverse
        action based in whole or in part on the report, the person
        intending to take such adverse action shall provide to the
        consumer to whom the report relates -
        • (i) a copy of the report; and
          (ii) a description in writing of the rights of the consumer
          under this subchapter, as prescribed by the Federal Trade
          Commission under section 1681g(c)(3) of this title.
      • (B) Application by mail, telephone, computer, or other similar
        means
        • (i) If a consumer described in subparagraph (C) applies for
          employment by mail, telephone, computer, or other similar
          means, and if a person who has procured a consumer report on
          the consumer for employment purposes takes adverse action on
          the employment application based in whole or in part on the
          report, then the person must provide to the consumer to whom
          the report relates, in lieu of the notices required under
          subparagraph (A) of this section and under section 1681m(a) of
          this title, within 3 business days of taking such action, an
          oral, written or electronic notification -
      • (I) that adverse action has been taken based in whole or in
        part on a consumer report received from a consumer reporting
        agency;
      • (II) of the name, address and telephone number of the
        consumer reporting agency that furnished the consumer report
        (including a toll-free telephone number established by the
        agency if the agency compiles and maintains files on
        consumers on a nationwide basis);
      • (III) that the consumer reporting agency did not make the
        decision to take the adverse action and is unable to provide
        to the consumer the specific reasons why the adverse action
        was taken; and
        (IV) that the consumer may, upon providing proper
        identification, request a free copy of a report and may
        dispute with the consumer reporting agency the accuracy or
        completeness of any information in a report.
        • (ii) If, under clause (B)(i)(IV), the consumer requests a
          copy of a consumer report from the person who procured the
          report, then, within 3 business days of receiving the
          consumer's request, together with proper identification, the
          person must send or provide to the consumer a copy of a report
          and a copy of the consumer's rights as prescribed by the
          Federal Trade Commission under section 1681g(c)(3) of this
          title.
      • (C) Scope
        Subparagraph (B) shall apply to a person procuring a consumer
        report on a consumer in connection with the consumer's
        application for employment only if -
        • (i) the consumer is applying for a position over which the
          Secretary of Transportation has the power to establish
          qualifications and maximum hours of service pursuant to the
          provisions of section 31502 of title 49, or a position
          subject to safety regulation by a State transportation
          agency; and
          (ii) as of the time at which the person procures the report
          or causes the report to be procured the only interaction
          between the consumer and the person in connection with that
          employment application has been by mail, telephone, computer,
          or other similar means.
    • (4) Exception for national security investigations
      • (A) In general
        In the case of an agency or department of the United States
        Government which seeks to obtain and use a consumer report for
        employment purposes, paragraph (3) shall not apply to any
        adverse action by such agency or department which is based in
        part on such consumer report, if the head of such agency or
        department makes a written finding that -
        • (i) the consumer report is relevant to a national security
          investigation of such agency or department;
        • (ii) the investigation is within the jurisdiction of such
          agency or department;
        • (iii) there is reason to believe that compliance with
          paragraph (3) will -
      • (I) endanger the life or physical safety of any person;
      • (II) result in flight from prosecution;
      • (III) result in the destruction of, or tampering with,
        evidence relevant to the investigation;
      • (IV) result in the intimidation of a potential witness
        relevant to the investigation;
      • (V) result in the compromise of classified information;
        or
      • (VI) otherwise seriously jeopardize or unduly delay the
        investigation or another official proceeding.
      • (B) Notification of consumer upon conclusion of investigation
        Upon the conclusion of a national security investigation
        described in subparagraph (A), or upon the determination that
        the exception under subparagraph (A) is no longer required for
        the reasons set forth in such subparagraph, the official
        exercising the authority in such subparagraph shall provide to
        the consumer who is the subject of the consumer report with
        regard to which such finding was made -
        • (i) a copy of such consumer report with any classified
          information redacted as necessary;
        • (ii) notice of any adverse action which is based, in part,
          on the consumer report; and
          (iii) the identification with reasonable specificity of the
          nature of the investigation for which the consumer report was
          sought.
      • (C) Delegation by head of agency or department
        For purposes of subparagraphs (A) and (B), the head of any
        agency or department of the United States Government may
        delegate his or her authorities under this paragraph to an
        official of such agency or department who has personnel
        security responsibilities and is a member of the Senior
        Executive Service or equivalent civilian or military rank.
      • (D) Report to the Congress
        Not later than January 31 of each year, the head of each
        agency and department of the United States Government that
        exercised authority under this paragraph during the preceding
        year shall submit a report to the Congress on the number of
        times the department or agency exercised such authority during
        the year.
      • (E) Definitions
        For purposes of this paragraph, the following definitions
        shall apply:
        • (i) Classified information
          The term ''classified information'' means information that
          is protected from unauthorized disclosure under Executive
          Order No. 12958 or successor orders.
        • (ii) National security investigation
          The term ''national security investigation'' means any
          official inquiry by an agency or department of the United
          States Government to determine the eligibility of a consumer
          to receive access or continued access to classified
          information or to determine whether classified information
          has been lost or compromised.
  • (c) Furnishing reports in connection with credit or insurance
    transactions that are not initiated by consumer
    • (1) In general
      A consumer reporting agency may furnish a consumer report
      relating to any consumer pursuant to subparagraph (A) or (C) of
      subsection (a)(3) of this section in connection with any credit
      or insurance transaction that is not initiated by the consumer
      only if -
      • (A) the consumer authorizes the agency to provide such report
        to such person; or
      • (B)
        • (i) the transaction consists of a firm offer of credit or
          insurance;
        • (ii) the consumer reporting agency has complied with
          subsection (e) of this section; and
          (iii) there is not in effect an election by the consumer,
          made in accordance with subsection (e) of this section, to have
          the consumer's name and address excluded from lists of names
          provided by the agency pursuant to this paragraph.
    • (2) Limits on information received under paragraph (1)(B)
      A person may receive pursuant to paragraph (1)(B) only -
      • (A) the name and address of a consumer;
      • (B) an identifier that is not unique to the consumer and that
        is used by the person solely for the purpose of verifying the
        identity of the consumer; and
        (C) other information pertaining to a consumer that does not
        identify the relationship or experience of the consumer with
        respect to a particular creditor or other entity.
    • (3) Information regarding inquiries
      Except as provided in section 1681g(a)(5) of this title, a
      consumer reporting agency shall not furnish to any person a
      record of inquiries in connection with a credit or insurance
      transaction that is not initiated by a consumer.
  • (d) Reserved
  • (e) Election of consumer to be excluded from lists
    • (1) In general
      A consumer may elect to have the consumer's name and address
      excluded from any list provided by a consumer reporting agency
      under subsection (c)(1)(B) of this section in connection with a
      credit or insurance transaction that is not initiated by the
      consumer, by notifying the agency in accordance with paragraph
      (2) that the consumer does not consent to any use of a consumer
      report relating to the consumer in connection with any credit or
      insurance transaction that is not initiated by the consumer.
    • (2) Manner of notification
      A consumer shall notify a consumer reporting agency under
      paragraph (1) -
      • (A) through the notification system maintained by the agency
        under paragraph (5); or
      • (B) by submitting to the agency a signed notice of election
        form issued by the agency for purposes of this subparagraph.
    • (3) Response of agency after notification through system
      Upon receipt of notification of the election of a consumer
      under paragraph (1) through the notification system maintained by
      the agency under paragraph (5), a consumer reporting agency shall
      -
      • (A) inform the consumer that the election is effective only
        for the 2-year period following the election if the consumer
        does not submit to the agency a signed notice of election form
        issued by the agency for purposes of paragraph (2)(B); and
        (B) provide to the consumer a notice of election form, if
        requested by the consumer, not later than 5 business days after
        receipt of the notification of the election through the system
        established under paragraph (5), in the case of a request made
        at the time the consumer provides notification through the
        system.
    • (4) Effectiveness of election
      An election of a consumer under paragraph (1) -
      • (A) shall be effective with respect to a consumer reporting
        agency beginning 5 business days after the date on which the
        consumer notifies the agency in accordance with paragraph (2);
      • (B) shall be effective with respect to a consumer reporting
        agency -
        • (i) subject to subparagraph (C), during the 2-year period
          beginning 5 business days after the date on which the
          consumer notifies the agency of the election, in the case of
          an election for which a consumer notifies the agency only in
          accordance with paragraph (2)(A); or
        • (ii) until the consumer notifies the agency under
          subparagraph (C), in the case of an election for which a
          consumer notifies the agency in accordance with paragraph
          (2)(B);
      • (C) shall not be effective after the date on which the
        consumer notifies the agency, through the notification system
        established by the agency under paragraph (5), that the
        election is no longer effective; and
        (D) shall be effective with respect to each affiliate of the
        agency.
    • (5) Notification system
      • (A) In general
        Each consumer reporting agency that, under subsection
        (c)(1)(B) of this section, furnishes a consumer report in
        connection with a credit or insurance transaction that is not
        initiated by a consumer, shall -
        • (i) establish and maintain a notification system, including
          a toll-free telephone number, which permits any consumer
          whose consumer report is maintained by the agency to notify
          the agency, with appropriate identification, of the
          consumer's election to have the consumer's name and address
          excluded from any such list of names and addresses provided
          by the agency for such a transaction; and
          (ii) publish by not later than 365 days after September 30,
          1996, and not less than annually thereafter, in a publication
          of general circulation in the area served by the agency -
      • (I) a notification that information in consumer files
        maintained by the agency may be used in connection with
        such transactions; and
        (II) the address and toll-free telephone number for
        consumers to use to notify the agency of the consumer's
        election under clause (i).
      • (B) Establishment and maintenance as compliance
        Establishment and maintenance of a notification system
        (including a toll-free telephone number) and publication by a
        consumer reporting agency on the agency's own behalf and on
        behalf of any of its affiliates in accordance with this
        paragraph is deemed to be compliance with this paragraph by
        each of those affiliates.
    • (6) Notification system by agencies that operate nationwide
      Each consumer reporting agency that compiles and maintains
      files on consumers on a nationwide basis shall establish and
      maintain a notification system for purposes of paragraph (5)
      jointly with other such consumer reporting agencies.
  • (f) Certain use or obtaining of information prohibited
    A person shall not use or obtain a consumer report for any purpose unless -
    • (1) the consumer report is obtained for a purpose for which the
      consumer report is authorized to be furnished under this section;
      and

      (2) the purpose is certified in accordance with section 1681e
      of this title by a prospective user of the report through a
      general or specific certification.
  • (g) Furnishing reports containing medical information
    A consumer reporting agency shall not furnish for employment purposes, or in connection with a credit or insurance transaction, a consumer report that contains medical information about a consumer, unless the consumer consents to the furnishing of the report.
  • § 1681c. Requirements relating to information contained in consumer reports.
    • (a) Information excluded from consumer reports.
    • (b) Exempted cases.
    • (c) Running of reporting period.
    • (d) Information required to be disclosed.
    • (e) Indication of closure of account by consumer.
    • (f) Indication of dispute by consumer.
  • § 1681d. Disclosure of investigative consumer reports.
    • (a) Disclosure of fact of preparation.
    • (b) Disclosure on request of nature and scope of investigation.
    • (c) Limitation on liability upon showing of reasonable procedures for compliance with provisions.
    • (d) Prohibitions.
  • § 1681e. Compliance procedures.
    • (a) Identity and purposes of credit users.
    • (b) Accuracy of report.
    • (c) Disclosure of consumer reports by users allowed.
    • (d) Notice to users and furnishers of information.
    • (e) Procurement of consumer report for resale.
  • § 1681f. Disclosures to governmental agencies.
  • § 1681g. Disclosures to consumers.
    • (a) Information on file; sources; report recipients.
    • (b) Exempt information.
    • (c) Summary of rights required to be included with disclosure.
  • § 1681h. Conditions and form of disclosure to consumers.
    • (a) In general.
    • (b) Other forms of disclosure.
    • (c) Trained personnel.
    • (d) Persons accompanying consumer.
    • (e) Limitation of liability.
  • § 1681i. Procedure in case of disputed accuracy.
    • (a) Reinvestigations of disputed information.
    • (b) Statement of dispute.
    • (c) Notification of consumer dispute in subsequent consumer reports.
    • (d) Notification of deletion of disputed information.
  • § 1681j. Charges for certain disclosures.
    • (a) Reasonable charges allowed for certain disclosures.
    • (b) Free disclosure after adverse notice to consumer.
    • (c) Free disclosure under certain other circumstances.
    • (d) Other charges prohibited.
  • § 1681k. Public record information for employment purposes.
    • (a) In general.
    • (b) Exemption for national security investigations.
  • § 1681l. Restrictions on investigative consumer reports.
  • § 1681m. Requirements on users of consumer reports.
    • (a) Duties of users taking adverse actions on basis of information contained in consumer reports.
    • (b) Adverse action based on information obtained from third parties other than consumer reporting agencies.
    • (c) Reasonable procedures to assure compliance.
    • (d) Duties of users making written credit or insurance solicitations on basis of information contained in consumer files.
  • § 1681n. Civil liability for willful noncompliance.
    • (a) In general.
    • (b) Civil liability for knowing noncompliance.
    • (c) Attorney's fees.
  • § 1681o. Civil liability for negligent noncompliance.
    • (a) In general.
    • (b) Attorney's fees.
  • § 1681p. Jurisdiction of courts; limitation of actions.
  • § 1681q. Obtaining information under false pretenses.
  • § 1681r. Unauthorized disclosures by officers or employees.
  • § 1681s. Administrative enforcement.
    • (a) Enforcement by Federal Trade Commission.
    • (b) Enforcement by other agencies.
    • (c) State action for violations.
    • (d) Enforcement under other authority.
    • (e) Interpretive authority.
  • § 1681s-1. Information on overdue child support obligations.
  • § 1681s-2. Responsibilities of furnishers of information to consumer reporting agencies.
    • (a) Duty of furnishers of information to provide accurate information.
    • (b) Duties of furnishers of information upon notice of dispute.
    • (c) Limitation on liability.
    • (d) Limitation on enforcement.
  • § 1681t. Relation to State laws.
    • (a) In general.
    • (b) General exceptions.
    • (c) ''Firm offer of credit or insurance'' defined.
    • (d) Limitations.
  • § 1681u. Disclosures to FBI for counterintelligence purposes.
    • (a) Identity of financial institutions.
    • (b) Identifying information.
    • (c) Court order for disclosure of consumer reports.
    • (d) Confidentiality.
    • (e) Payment of fees.
    • (f) Limit on dissemination.
    • (g) Rules of construction.
    • (h) Reports to Congress.
    • (i) Damages.
    • (j) Disciplinary actions for violations.
    • (k) Good-faith exception.
    • (l) Limitation of remedies.
    • (m) Injunctive relief.

SUBCHAPTER IV - EQUAL CREDIT OPPORTUNITY

Sec. 1691. Scope of prohibition

  • (a) Activities constituting discrimination
    It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction -
    • (1) on the basis of race, color, religion, national origin, sex
      or marital status, or age (provided the applicant has the
      capacity to contract);
    • (2) because all or part of the applicant's income derives from
      any public assistance program; or
    • (3) because the applicant has in good faith exercised any right
      under this chapter.
  • (b) Activities not constituting discrimination
    It shall not constitute discrimination for purposes of this subchapter for a creditor -
    • (1) to make an inquiry of marital status if such inquiry is for
      the purpose of ascertaining the creditor's rights and remedies
      applicable to the particular extension of credit and not to
      discriminate in a determination of credit-worthiness;
    • (2) to make an inquiry of the applicant's age or of whether the
      applicant's income derives from any public assistance program if
      such inquiry is for the purpose of determining the amount and
      probable continuance of income levels, credit history, or other
      pertinent element of credit-worthiness [1] as provided
      in regulations of the Board;
    • (3) to use any empirically derived credit system which
      considers age if such system is demonstrably and statistically
      sound in accordance with regulations of the Board, except that in
      the operation of such system the age of an elderly applicant may
      not be assigned a negative factor or value; or
    • (4) to make an inquiry or to consider the age of an elderly
      applicant when the age of such applicant is to be used by the
      creditor in the extension of credit in favor of such applicant.
  • (c) Additional activities not constituting discrimination
    It is not a violation of this section for a creditor to refuse to extend credit offered pursuant to -
    • (1) any credit assistance program expressly authorized by law
      for an economically disadvantaged class of persons;
    • (2) any credit assistance program administered by a nonprofit
      organization for its members or an economically disadvantaged
      class of persons; or
    • (3) any special purpose credit program offered by a
      profit-making organization to meet special social needs which
      meets standards prescribed in regulations by the Board; if such refusal is required by or made pursuant to such program.
  • (d) Reason for adverse action; procedure applicable; ''adverse
    action'' defined
    • (1) Within thirty days (or such longer reasonable time as specified in regulations of the Board for any class of credit transaction) after receipt of a completed application for credit, a creditor shall notify the applicant of its action on the application.
    • (2) Each applicant against whom adverse action is taken shall be entitled to a statement of reasons for such action from the creditor. A creditor satisfies this obligation by -
      • (A) providing statements of reasons in writing as a matter of
        course to applicants against whom adverse action is taken; or
      • (B) giving written notification of adverse action which
        discloses (i) the applicant's right to a statement of reasons
        within thirty days after receipt by the creditor of a request
        made within sixty days after such notification, and (ii) the
        identity of the person or office from which such statement may be
        obtained. Such statement may be given orally if the written
        notification advises the applicant of his right to have the
        statement of reasons confirmed in writing on written request.
    • (3) A statement of reasons meets the requirements of this section only if it contains the specific reasons for the adverse action taken.
    • (4) Where a creditor has been requested by a third party to make a specific extension of credit directly or indirectly to an applicant, the notification and statement of reasons required by this subsection may be made directly by such creditor, or indirectly through the third party, provided in either case that the identity of the creditor is disclosed.
    • (5) The requirements of paragraph (2), (3), or (4) may be satisfied by verbal statements or notifications in the case of any creditor who did not act on more than one hundred and fifty applications during the calendar year preceding the calendar year in which the adverse action is taken, as determined under regulations of the Board.
    • (6) For purposes of this subsection, the term ''adverse action'' means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested. Such term does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit.
  • (e) Appraisals; copies of reports to applicants; costs
    Each creditor shall promptly furnish an applicant, upon written request by the applicant made within a reasonable period of time of the application, a copy of the appraisal report used in connection with the applicant's application for a loan that is or would have been secured by a lien on residential real property. The creditor may require the applicant to reimburse the creditor for the cost of the appraisal.
  • § 1691a. Definitions; rules of construction.
  • § 1691b. Promulgation of regulations by Board; establishment of Consumer Advisory Council by Board; duties, membership, etc., of Council.
    • (a) Regulations.
    • (b) Consumer Advisory Council.
  • § 1691c. Administrative enforcement.
    • (a) Enforcing agencies.
    • (b) Violations of subchapter deemed violations of pre-existing statutory requirements; additional agency powers.
    • (c) Overall enforcement authority of Federal Trade Commission.
    • (d) Rules and regulations by enforcing agencies.
  • § 1691c-1. Incentives for self-testing and self-correction.
    • (a) Privileged information.
    • (b) Results of self-testing.
    • (c) Adjudication.
  • § 1691d. Applicability of other laws.
    • (a) Requests for signature of husband and wife for creation of valid lien, etc.
    • (b) State property laws affecting creditworthiness.
    • (c) State laws prohibiting separate extension of consumer credit to husband and wife.
    • (d) Combining credit accounts of husband and wife with same creditor to determine permissible finance charges or loan ceilings under Federal or State laws.
    • (e) Election of remedies under subchapter or State law; nature of relief determining applicability.
    • (f) Compliance with inconsistent State laws; determination of inconsistency.
    • (g) Exemption by regulation of credit transactions covered by State law; failure to comply with State law.
  • § 1691e. Civil liability.
    • (a) Individual or class action for actual damages.
    • (b) Recovery of punitive damages in individual and class action for actual damages; exemptions; maximum amount of punitive damages in individual actions; limitation on total recovery in class actions; factors determining amount of award.
    • (c) Action for equitable and declaratory relief.
    • (d) Recovery of costs and attorney fees.
    • (e) Good faith compliance with rule, regulation, or interpretation of Board or interpretation or approval by an official or employee of Federal Reserve System duly authorized by Board.
    • (f) Jurisdiction of courts; time for maintenance of action; exceptions.
    • (g) Request by responsible enforcement agency to Attorney General for civil action.
    • (h) Authority for Attorney General to bring civil action; jurisdiction.
    • (i) Recovery under both subchapter and fair housing enforcement provisions prohibited for violation based on same transaction.
    • (j) Discovery of creditor's granting standards.
    • (k) Notice to HUD of violations.
  • § 1691f. Annual reports to Congress; contents.

SUBCHAPTER V - DEBT COLLECTION PRACTICES

  • § 1692. Congressional findings and declaration of purpose.
    • (a) Abusive practices.
    • (b) Inadequacy of laws.
    • (c) Available non-abusive collection methods.
    • (d) Interstate commerce.
    • (e) Purposes.
  • § 1692a. Definitions.
  • § 1692b. Acquisition of location information.
  • § 1692c. Communication in connection with debt collection.
    • (a) Communication with the consumer generally.
    • (b) Communication with third parties.
    • (c) Ceasing communication.
    • (d) ''Consumer'' defined.
  • § 1692d. Harassment or abuse.
  • § 1692e. False or misleading representations.
  • § 1692f. Unfair practices.
  • § 1692g. Validation of debts.
    • (a) Notice of debt; contents.
    • (b) Disputed debts.
    • (c) Admission of liability.
  • § 1692h. Multiple debts.
  • § 1692i. Legal actions by debt collectors.
    • (a) Venue.
    • (b) Authorization of actions.
  • § 1692j. Furnishing certain deceptive forms.
  • § 1692k. Civil liability.
    • (a) Amount of damages.
    • (b) Factors considered by court.
    • (c) Intent.
    • (d) Jurisdiction.
    • (e) Advisory opinions of Commission.
  • § 1692l. Administrative enforcement.
    • (a) Federal Trade Commission.
    • (b) Applicable provisions of law.
    • (c) Agency powers.
    • (d) Rules and regulations.
  • § 1692m. Reports to Congress by the Commission; views of other Federal agencies.
  • § 1692n. Relation to State laws.
  • § 1692o. Exemption for State regulation.

SUBCHAPTER VI - ELECTRONIC FUND TRANSFERS

  • § 1693. Congressional findings and declaration of purpose.
    • (a) Rights and liabilities undefined.
    • (b) Purposes.
  • § 1693a. Definitions.
  • § 1693b. Regulations.
    • (a) Prescription by Board.
    • (b) Issuance of model clauses.
    • (c) Criteria; modification of requirements.
    • (d) Applicability to service providers other than certain financial institutions.
  • § 1693c. Terms and conditions of transfers.
    • (a) Disclosures; time; form; contents.
    • (b) Notification of changes to consumer.
    • (c) Time for disclosures respecting accounts accessible prior to effective date of this subchapter.
  • § 1693d. Documentation of transfers.
    • (a) Availability of written documentation to consumer; contents.
    • (b) Notice of credit to consumer.
    • (c) Periodic statement; contents.
    • (d) Consumer passbook accounts.
    • (e) Accounts other than passbook accounts.
    • (f) Documentation as evidence.
  • § 1693e. Preauthorized transfers.
  • § 1693f. Error resolution.
    • (a) Notification to financial institution of error.
    • (b) Correction of error; interest.
    • (c) Provisional recredit of consumer's account.
    • (d) Absence of error; finding; explanation.
    • (e) Treble damages.
    • (f) Acts constituting error.
  • § 1693g. Consumer liability.
    • (a) Unauthorized electronic fund transfers; limit.
    • (b) Burden of proof.
    • (c) Determination of limitation on liability.
    • (d) Restriction on liability.
    • (e) Scope of liability.
  • § 1693h. Liability of financial institutions.
    • (a) Action or failure to act proximately causing damages.
    • (b) Acts of God and technical malfunctions.
    • (c) Intent.
  • § 1693i. Issuance of cards or other means of access.
    • (a) Prohibition; proper issuance.
    • (b) Exceptions.
    • (c) Validation.
  • § 1693j. Suspension of obligations.
  • § 1693k. Compulsory use of electronic fund transfers.
  • § 1693l. Waiver of rights.
  • § 1693m. Civil liability.
    • (a) Individual or class action for damages; amount of award.
    • (b) Factors determining amount of award.
    • (c) Unintentional violations; bona fide error.
    • (d) Good faith compliance with rule, regulation, or interpretation of Board or approval of duly authorized official or employee of Federal Reserve System.
    • (e) Notification to consumer prior to action; adjustment of consumer's account.
    • (f) Action in bad faith or for harassment; attorney's fees.
    • (g) Jurisdiction of courts; time for maintenance of action.
  • § 1693n. Criminal liability.
    • (a) Violations respecting giving of false or inaccurate information, failure to provide information, and failure to comply with provisions of this subchapter.
    • (b) Violations affecting interstate or foreign commerce.
    • (c) ''Debit instrument'' defined.
  • § 1693o. Administrative enforcement.
    • (a) Enforcing agencies.
    • (b) Violations of subchapter deemed violations of pre-existing statutory requirements; additional powers.
    • (c) Overall enforcement authority of Federal Trade Commission.
  • § 1693p. Reports to Congress.
  • § 1693q. Relation to State laws.
  • § 1693r. Exemption for State regulation.



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