12 U.S.C. § 3806

Adjustable rate mortgage caps

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(a) In general

Any adjustable rate mortgage loan originated by a creditor shall include a limitation on the maximum interest rate that may apply during the term of the mortgage loan.

(b) Regulations

The Board of Governors of the Federal Reserve System shall prescribe regulations to carry out the purposes of this section.

Any violation of this section shall be treated as a violation of the Truth in Lending Act [15 U.S.C. 1601 et seq.] and shall be subject to administrative enforcement under section 108 [15 U.S.C. 1607] or civil damages under section 130 [15 U.S.C. 1640] of such Act, or both.

(d) DefinitionsFor the purpose of this section—(1) the term “creditor” means a person who regularly extends credit for personal, family, or household purposes; and(2) the term “adjustable rate mortgage loan” means any consumer loan secured by a lien on a one- to four-family dwelling unit, including a condominium unit, cooperative housing unit, or mobile home, where the loan is made pursuant to an agreement under which the creditor may, from time to time, adjust the rate of interest.(e) Effective date

This section shall take effect upon the expiration of 120 days after August 10, 1987.

(Pub. L. 100–86, title XII, § 1204, Aug. 10, 1987, 101 Stat. 662; Pub. L. 102–550, title IX, § 952, Oct. 28, 1992, 106 Stat. 3893.)Editorial NotesReferences in Text

The Truth in Lending Act, referred to in subsec. (c), is title I of Pub. L. 90–321, May 29, 1968, 82 Stat. 146, which is classified generally to subchapter I (§ 1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables.

Codification

Section was enacted as part of the Competitive Equality Banking Act of 1987, and not as part of the Alternative Mortgage Transaction Parity Act of 1982 which comprises this chapter.

Amendments

1992—Subsec. (d)(2). Pub. L. 102–550 substituted “any consumer loan” for “any loan”.

Notes of Decisions

Cited in 4 cases, 1991–2009 · leading case: Vallies v. Sky Bank, 591 F.3d 152 (3rd Cir. 2009).

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Vallies v. Sky Bank, 591 F.3d 152 (3rd Cir. 2009). · cites it 3× “The Competitive Equality Banking Act of 1987 (“CEBA”), 12 U.S.C. § 3806 , also does not conflict with the detrimental reliance requirement.”

Salois v. Dime Sav. Bank, 128 F.3d 20 (1st Cir. 1997). “” 12 U.S.C. § 3806 (c). We note that one other court of appeals has held that the RESPA is not subject to tolling doctrines.”

Consumers Union of the U.S., Inc. v. Fed. Reserve Bd., 938 F.2d 266 (D.C. Cir. 1991). “To guarantee the consumer against unlimited rises in the APR, the agreements must provide for a ceiling which the APR cannot exceed regardless of the rise in the index, see 12 U.S.C. § 3806 , and often also provide for a limitation on annual increases in the APR.”

Retained Realty, Inc. v. Est. of Spitzer, 643 F. Supp. 2d 228 (D. Conn. 2009). “”); 12 U.S.C. § 3806 (d)(1) (Adjustable Rate Mortgage Caps) (”[T]he term ’creditor’ means a person who regularly extends credit for personal, family, or household purposes.”

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