12 U.S.C. § 3803

Alternative mortgage authority

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(a) General authority; compliance by banks, credit unions and all other housing creditors with applicable regulationsIn order to prevent discrimination against State-chartered depository institutions, and other nonfederally chartered housing creditors, with respect to making, purchasing, and enforcing alternative mortgage transactions, housing creditors may make, purchase, and enforce alternative mortgage transactions, except that this section shall apply—(1) with respect to banks, only to transactions made on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5582], in accordance with regulations governing alternative mortgage transactions as issued by the Comptroller of the Currency for national banks, to the extent that such regulations are authorized by rulemaking authority granted to the Comptroller of the Currency with regard to national banks under laws other than this section;(2) with respect to credit unions, only to transactions made on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010, in accordance with regulations governing alternative mortgage transactions as issued by the National Credit Union Administration Board for Federal credit unions, to the extent that such regulations are authorized by rulemaking authority granted to the National Credit Union Administration with regard to Federal credit unions under laws other than this section;(3) with respect to all other housing creditors, including without limitation, savings and loan associations, mutual savings banks, and savings banks, only to transactions made on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010, in accordance with regulations governing alternative mortgage transactions as issued by the Director of the Office of Thrift Supervision for federally chartered savings and loan associations, to the extent that such regulations are authorized by rulemaking authority granted to the Director of the Office of Thrift Supervision with regard to federally chartered savings and loan associations under laws other than this section; and(4) with respect to transactions made after the designated transfer date, only in accordance with regulations governing alternative mortgage transactions, as issued by the Bureau of Consumer Financial Protection for federally chartered housing creditors, in accordance with the rulemaking authority granted to the Bureau of Consumer Financial Protection with regard to federally chartered housing creditors under provisions of law other than this section.(b) Transactions deemed in compliance with applicable regulationsFor the purpose of determining the applicability of this section, an alternative mortgage transaction shall be deemed to be made in accordance with the applicable regulation notwithstanding the housing creditor’s failure to comply with the regulation, if—(1) the transaction is in substantial compliance with the regulation; and(2) within sixty days of discovering any error, the housing creditor corrects such error, including making appropriate adjustments, if any, to the account.(c) Preemption of State law

An alternative mortgage transaction may be made by a housing creditor in accordance with this section, notwithstanding any State constitution, law, or regulation that prohibits an alternative mortgage transaction. For purposes of this subsection, a State constitution, law, or regulation that prohibits an alternative mortgage transaction does not include any State constitution, law, or regulation that regulates mortgage transactions generally, including any restriction on prepayment penalties or late charges.

(d) Bureau actionsThe Bureau of Consumer Financial Protection shall—(1) review the regulations identified by the Comptroller of the Currency and the National Credit Union Administration,11 So in original. The comma probably should not appear. (as those rules exist on the designated transfer date), as applicable under paragraphs (1) through (3) of subsection (a);(2) determine whether such regulations are fair and not deceptive and otherwise meet the objectives of the Consumer Financial Protection Act of 2010; and(3) promulgate regulations under subsection (a)(4) after the designated transfer date.(e) Designated transfer date

As used in this section, the term “designated transfer date” means the date determined under section 1062 of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5582].

(Pub. L. 97–320, title VIII, § 804, Oct. 15, 1982, 96 Stat. 1546; Pub. L. 101–73, title VII, § 744(c), Aug. 9, 1989, 103 Stat. 438; Pub. L. 111–203, title X, § 1083(a)(2), July 21, 2010, 124 Stat. 2080.)Editorial NotesReferences in Text

The Consumer Financial Protection Act of 2010, referred to in subsec. (d)(2), is title X of Pub. L. 111–203, July 21, 2010, 124 Stat. 1955, which enacted subchapter V (§ 5481 et seq.) of chapter 53 of this title and enacted, amended, and repealed numerous other sections and notes in the Code. For complete classification of this Act to the Code, see Short Title note set out under section 5301 of this title and Tables.

Amendments

2010—Subsec. (a)(1), (2), (3). Pub. L. 111–203, § 1083(a)(2)(A)(i), inserted “on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010,” after “transactions made”.

Subsec. (a)(4). Pub. L. 111–203, § 1083(a)(2)(A)(ii)–(iv), added par. (4).

Subsec. (c). Pub. L. 111–203, § 1083(a)(2)(B), added subsec. (c) and struck out former subsec. (c). Prior to amendment, text read as follows: “An alternative mortgage transaction may be made by a housing creditor in accordance with this section, notwithstanding any State constitution, law, or regulation.”

Subsecs. (d), (e). Pub. L. 111–203, § 1083(a)(2)(C), added subsecs. (d) and (e).

1989—Subsec. (a)(3). Pub. L. 101–73 substituted “Director of the Office of Thrift Supervision” for “Federal Home Loan Bank Board” wherever appearing.

Statutory Notes and Related SubsidiariesEffective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective on the designated transfer date, see section 1083(b) of Pub. L. 111–203, set out as a note under section 3802 of this title.

Effective Date

Section effective Oct. 15, 1982, see section 807(a) of Pub. L. 97–320, set out as a note under section 3801 of this title.

Notes of Decisions

Cited in 28 cases, 1993–2010 · leading case: Nat'l Home Equity Mortg. Ass'n v. Face, 239 F.3d 633 (4th Cir. 2001).

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Nat'l Home Equity Mortg. Ass'n v. Face, 239 F.3d 633 (4th Cir. 2001). · cites it 8× “For the reasons that follow, we hold that, subject to the non-federally chartered lender’s compliance with federal law, it may charge a prepayment fee, despite any limitation imposed by the Virginia Code, because in that circumstance the federal law preempts state law by virtue…”

Black v. Fin. Freedom Senior Funding Corp., 2001 Cal. Daily Op. Serv. 8676 (Cal. Ct. App. 2001). · cites it 5× “only to transactions made in accordance with regulations governing alternative mortgage transactions as issued by the Director of the Office of Thrift Supervision for federally chartered savings and loan associations, to the extent that such regulations are authorized by…”

First Gibraltar Bank, Fsb, & Beneficial Texas, Inc. v. Dan Morales, Atty. Gen., as Attorney Gen. for the State of Texas, 19 F.3d 1032 (1st Cir. 1994). · cites it 3× “” 12 U.S.C. § 3803 (c). The states were given a three-year period, during which to “opt out” of the Parity Act’s operation, 12 U.”

Thomas P. Davis & Cathy M. Davis v. G.N. Mortg. Corp. & Countrywide Home Loans, Inc., 396 F.3d 869 (7th Cir. 2005). “12 U.S.C. § 3803 (c); see also McCarthy v.”

Thomas W. McCarthy v. Option One Mortg. Corp. & Bnc Mortg., Inc., 362 F.3d 1008 (7th Cir. 2004). · cites it 2× “12 U.S.C. § 3803 (a)(3). The compliance standard is satisfied if a transaction is in “substantial compliance” with the relevant regulations.”

Shinn v. Encore Mortg. Servs., Inc., 96 F. Supp. 2d 419 (D.N.J. 2000). · cites it 4× “” 12 U.S.C. § 3803 (c). However, in order to engage in alternative mortgage transactions and to reap the benefits of the Parity Act’s preemption, state housing creditors must comply with the OTS’s regulations governing federal savings and loan associations.”

Nat'l Home Equity Mortg. Ass'n v. Face, 64 F. Supp. 2d 584 (E.D. Va. 1999). · cites it 7× “12 U.S.C. § 3803 . An AMT describes a residential-based loan or credit sale in which the lender may raise the interest rate, renegotiate the finance charge, or implicitly adjust the mortgage rate by allowing debt to mature faster than anticipated in the original amortization…”

Robert & Jennifer Grunbeck v. The Dime Sav. Bank of New York, Fsb, 74 F.3d 331 (1st Cir. 1996). · cites it 2× “” 12 U.S.C. § 3803 (c). It is a requirement of section 3803 that for “housing creditors [other than banks and credit unions] .”

U.S. Bank Nat'l Ass'n v. Clark, 837 N.E.2d 74 (Ill. 2005). “§ 1735f — 7a (2000)), and, in some cases, by the federal Alternative Mortgage Transaction Parity Act of 1982 (Parity Act) ( 12 U.S.C. § 3803 (c) (2000)). The cases were later consolidated, and the homeowners filed an interlocutory appeal.”

Hafiz v. Greenpoint Mortage Funding, Inc., 652 F. Supp. 2d 1039 (N.D. Cal. 2009). “In Face , the Fourth Circuit found that a state statute that contradicted the AMTPA was preempted: The operative language of the Parity Act, contained in 12 U.S.C. § 3803 , provides that state-chartered deposit institutions and other non-federally chartered housing creditors may…”

Illinois Ass'n of Mortg. Brokers v. Off. of Banks & Real Est. & William A. Darr, 308 F.3d 762 (7th Cir. 2002). “” 12 U.S.C. § 3803 (c). The Home Ownership and Equity Protection Act of 1994, codified at 15 U.”

Grunbeck v. Dime Sav. Bank of New York, FSB, 848 F. Supp. 294 (D.N.H. 1994). · cites it 3× “See 12 U.S.C. § 3803 (a); 12 C.F.R. §§ 545.33 and 563.”

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