RESPA - Real Estate Settlement Procedures Act
[Congressional
Record:
[Page H11746-H11796]
From
the Congressional Record Online via GPO Access [wais.access.gpo.gov]
TITLE
II--ECONOMIC GROWTH AND REGULATORY PAPERWORK REDUCTION
Sec. 2001. SHORT TITLE; TABLE OF
CONTENTS; DEFINITIONS
(a)
Short Title.--This title may be cited as the ``Economic Growth and Regulatory
Paperwork Reduction Act of 1996''.
(b)
Table of Contents.--The table of contents for this title is as follows:
TITLE
II--ECONOMIC GROWTH AND REGULATORY PAPERWORK REDUCTION
Sec. 2001. Short title; table
of contents; definitions
Subtitle
A--Streamlining the Home Mortgage Lending Process
Sec. 2101. Simplification and
unification of disclosures required under RESPA and TILA for mortgage
transactions.
Sec. 2102. General
exemption authority for loans.
Sec. 2103. Reductions
in Real
Estate Settlement Procedures Act of 1974 regulatory burdens.
Sec. 2104. Waiver
for certain borrowers.
Sec. 2105. Alternative
disclosures for adjustable rate mortgages.
Sec. 2106. Restitution
for violations of the Truth in Lending Act.
Sec. 2107. Limitation
on liability under the Truth in Lending Act.
Subtitle
B--Streamlining Government Regulation
Chapter
1--Eliminating Unnecessary Regulatory Requirements and Procedures
Sec. 2201. Elimination
of redundant approval requirement for Oakar
transactions.
Sec. 2202. Elimination of
duplicative requirements imposed upon bank holding companies.
Sec. 2203. Elimination
of the per branch capital requirement for national banks and State member
banks.
Sec. 2204. Elimination
of branch application requirements for automatic teller machines.
Sec. 2205. Elimination of
requirement for approval of investments in bank premises for well capitalized
and well managed banks.
Sec. 2206. Elimination
of approval requirement for divestitures.
Sec. 2207. Streamlined nonbanking acquisitions by well capitalized and well
managed banking organizations.
Sec. 2208. Elimination
of unnecessary filing for officer and director appointments.
Sec. 2209. Amendments
to the Depository Institution Management Interlocks Act.
Sec. 2210. Elimination
of recordkeeping and reporting requirements for officers.
Sec. 2211. Repayment
of Treasury loan.
Sec. 2212. Branch
closures.
Sec. 2213. Foreign
banks.
Sec. 2214. Disposition
of foreclosed assets.
Sec. 2215. Exemption
authority for antitying provision.
Sec. 2216. FDIC
approval of new State bank powers.
Chapter
2--Eliminating Unnecessary Regulatory Burdens
Sec. 2221. Small
bank examination cycle.
Sec. 2222. Required
review of regulations.
Sec. 2223. Repeal of
identification of nonbank financial institution
customers.
Sec. 2224. Repeal of certain
reporting requirements.
Sec. 2225. Increase in home
mortgage disclosure exemption threshold.
Sec. 2226. Elimination
of stock loan reporting requirement.
Sec. 2227. Credit
availability assessment.
Chapter
3--Regulatory Micromanagement
Sec. 2241. National
bank directors.
Sec. 2242. Paperwork
reduction review.
Sec. 2243. State
bank representation on Board of Directors of the FDIC.
Sec. 2244. Consultation
among examiners.
Subtitle
C--Regulatory Impact on Cost of Credit and Credit Availability
Sec. 2301. Audit
costs.
Sec. 2302. Incentives
for self-testing.
Sec. 2303. Qualified
thrift investment amendments.
Sec. 2304. Limited
purpose banks.
Sec. 2305. Amendment
to Fair Debt Collection Practices Act.
Sec. 2306. Increase in certain
credit union loan ceilings.
Sec. 2307. Bank
investments in Edge Act and agreement corporations.
Subtitle
D--Consumer Credit
Chapter
1--Credit Reporting Reform
Sec. 2401. Short
title.
Sec. 2402. Definitions.
Sec. 2403. Furnishing consumer
reports; use for employment purposes.
Sec. 2404. Use
of consumer reports for prescreening and direct marketing; prohibition on
unauthorized or uncertified use of information.
Sec. 2405. Consumer consent
required to furnish consumer report containing medical information.
Sec. 2406. Obsolete information
and information contained in consumer reports.
Sec. 2407. Compliance
procedures.
Sec. 2408. Consumer
disclosures.
Sec. 2409. Procedures
in case of the disputed accuracy of any information in a consumer's file.
Sec. 2410. Charges
for certain disclosures.
Sec. 2411. Duties
of users of consumer reports.
Sec. 2412. Civil
liability.
Sec. 2413. Responsibilities
of persons who furnish information to consumer reporting agencies.
Sec. 2414. Investigative
consumer reports.
Sec. 2415. Increased
criminal penalties for obtaining information under false pretenses.
Sec. 2416. Administrative
enforcement.
Sec. 2417. State
enforcement of Fair Credit Reporting Act.
Sec. 2418. Federal
Reserve Board authority.
Sec. 2419. Preemption
of State law.
Sec. 2420. Effective
date.
Sec. 2421. Relationship
to other law.
Sec. 2422. Federal
Reserve Board study.
Chapter
2--Credit Repair Organizations
Sec. 2451. Regulation of credit
repair organizations.
Sec. 2452. Credit
worthiness.
Subtitle
E--Asset Conservation, Lender Liability, and Deposit Insurance Protection
Sec. 2501. Short
title.
Sec. 2502. CERCLA
lender and fiduciary liability limitations amendments.
Sec. 2503. Conforming
amendment.
Sec. 2504. Lender
liability rule.
Sec. 2505. Effective
date.
Subtitle
F--Miscellaneous
Sec. 2601. Federal
Reserve Board study.
Sec. 2602. Treatment
of claims arising from breach of contracts executed by the receiver or
conservator.
Sec. 2603. Criminal
sanctions for fictitious financial instruments and counterfeiting.
Sec. 2604. Amendments
to the Truth in Savings Act.
Sec. 2605. Consumer
Leasing Act amendments.
Sec. 2606. Study
of corporate credit unions.
Sec. 2607. Report on the
reconciliation of differences between regulatory accounting principles and
generally accepted accounting principles.
Sec. 2608. State-by-State
and metropolitan area-by-metropolitan area study of bank fees.
[[Page H11750]]
Sec. 2609. Prospective
application of gold clauses in contracts.
Sec. 2610. Qualified
family partnerships.
Sec. 2611. Cooperative
efforts between depository institutions and farmers and ranchers in
drought-stricken areas.
Sec. 2612. Streamlining
process for determining new nonbanking activities.
Sec. 2613. Authorizing
bank service companies to organize as limited liability partnerships.
Sec. 2614. Retirement
certificates of deposits.
Sec. 2615. Prohibitions
on certain depository institution associations with Government-sponsored
enterprises.
Subtitle
G--Deposit Insurance Funds
Sec. 2701. Short
title.
Sec. 2702. Special
assessment to capitalize SAIF.
Sec. 2703. Financing
corporation funding.
Sec. 2704. Merger
of BIF and SAIF.
Sec. 2705. Creation
of SAIF special reserve.
Sec. 2706. Refund of amounts in
deposit insurance fund in excess of designated reserve amount.
Sec. 2707. Assessment rates for
SAIF members may not be less than assessment rates for BIF members.
Sec. 2708. Assessments
authorized only if needed to maintain the reserve ratio of a deposit insurance
fund.
Sec. 2709. Treasury
study of common depository institution charter.
Sec. 2710. Definitions.
Sec. 2711. Deductions
for special assessments.
(c)
Definitions.--Except as otherwise specified in this title, the following
definitions shall apply for purposes of this title:
(1)
Appraisal subcommittee.--The term ``Appraisal Subcommittee'' means the
Appraisal Subcommittee established under section 1011 of the Federal Financial
Institutions Examination Council Act of 1978 (as in existence on the day before
the date of enactment of this Act).
(2)
Appropriate Federal banking agency.--The term ``appropriate Federal banking
agency'' has the same meaning as in section 3 of the Federal Deposit Insurance
Act.
(3)
Board.--The term ``Board'' means the Board of Governors of the Federal Reserve
System.
(4)
Corporation.--The term ``Corporation'' means the Federal Deposit Insurance
Corporation.
(5)
Council.--The term ``Council'' means the Financial Institutions Examination
Council established under section 1004 of the Federal Financial Institutions
Examination Council Act of 1978.
(6)
Insured credit union.--The term ``insured credit union'' has the same meaning
as in section 101 of the Federal Credit Union Act.
(7)
Insured depository institution.--The term ``insured depository institution''
has the same meaning as in section 3 of the Federal Deposit Insurance Act.
Subtitle
A--Streamlining the Home Mortgage Lending Process
Sec. 2101. SIMPLIFICATION AND
UNIFICATION OF DISCLOSURES REQUIRED UNDER RESPA AND TILA FOR MORTGAGE
TRANSACTIONS.
(a)
In General.--With respect to credit transactions which are subject to the Real
Estate Settlement Procedures Act of 1974 and the Truth in Lending Act, the
Board of Governors of the Federal Reserve System (hereafter in this section
referred to as the ``Board'') and the Secretary of Housing and Urban
Development (hereafter in this section referred to as the ``Secretary'') shall
take such action as may be necessary before the end of the 6-month period
beginning on the date of enactment of this Act--
(1)
to simplify and improve the disclosures applicable to
such transactions under such Acts, including the timing of the disclosures; and
(2)
to provide a single format for such disclosures which
will satisfy the requirements of each such Act with respect to such
transactions.
(b)
Regulations.--To the extent that it is necessary to prescribe any regulation in
order to effect any changes required to be made under subsection (a), the
proposed regulation shall be published in the Federal Register before the end
of the 6-month period referred to in subsection (a).
(c)
Recommendations for Legislation.--If the Board and the Secretary find that
legislative action may be necessary or appropriate in order to simplify and
unify the disclosure requirements under the Real Estate Settlement Procedures
Act of 1974 and the Truth in Lending Act, the Board and the Secretary shall
submit a report containing recommendations to the Congress concerning such
action.
Sec. 2102. GENERAL
EXEMPTION AUTHORITY FOR LOANS.
(a)
Regulatory Flexibility.--Section 104 of the Truth in Lending Act (15 U.S.C.
1603) is amended--
(1)
by redesignating paragraphs
(5) and (6) as paragraphs (6) and (7), respectively; and
(2)
by inserting after paragraph (4) the following new
paragraph:
``(5) Transactions for which the Board, by rule, determines
that coverage under this title is not necessary to carry out the purposes of
this title.''.
(b)
Exemption Authority.--Section 105 of the Truth in Lending Act (15 U.S.C. 1604)
is amended by adding at the end the following new subsection:
``(f) Exemption Authority.--
``(1) In general.--The Board may exempt, by regulation, from
all or part of this title any class of transactions, other than transactions
involving any mortgage described in section 103(aa),
for which, in the determination of the Board, coverage under all or part of
this title 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 title 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 title, 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.''.
Sec. 2103. REDUCTIONS
IN REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 REGULATORY BURDENS.
(a)
Unnecessary Disclosure.--Section 6(a) of the Real Estate Settlement Procedures
Act of 1974 (12 U.S.C. 2605(a)) is amended to read as follows:
``(a) Disclosure to Applicant Relating to Assignment, Sale,
or Transfer of Loan Servicing.--Each person who makes a federally related
mortgage loan shall disclose to each person who applies for the loan, at the
time of application for the loan, whether the servicing of the loan may be
assigned, sold, or transferred to any other person at any time while the loan
is outstanding.''.
(b)
Consistency of Real Estate Settlement Procedures Act and Truth in Lending Act
Exemption of Business Loans.-- Section 7 of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2606) is amended--
(1)
by striking ``This Act'' and inserting the following:
``(a) In General.--This Act''; and
(2)
by adding at the end the following new subsection:
``(b) Interpretation.--In prescribing regulations under
section 19(a), the Secretary shall ensure that, with respect to subsection (a)
of this section, the exemption for credit transactions involving extensions of
credit primarily for business, commercial, or agricultural purposes, as
provided in section 7(1) of the Real Estate Settlement Procedures Act of 1974
shall be the same as the exemption for such credit transactions under section
104(1) of the Truth in Lending Act.''.
(c)
Redesignation of Controlled Business Arrangements as
Affiliated Business Arrangements.--The Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2601 et seq.) is amended--
(1)
in section 3(7), by striking ``controlled business
arrangement'' and inserting ``affiliated business arrangement''; and
(2)
in subsections (c)(4) and (d)(6) of section 8, by
striking ``controlled business arrangements'' and inserting ``affiliated
business arrangements''.
(d)
Disclosures by Telephone or Electronic Media.--Section 8(c)(4) of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C. 2607(c)(4)(A)) is amended
by striking subparagraph (A) and inserting the following ``(A) a disclosure is
made of the existence of such an arrangement to the person being referred and,
in connection with such referral, such person is provided a written estimate of
the charge or range of charges generally made by the provider to which the
person is referred (i) in the case of a face-to-face
referral or a referral made in writing or by electronic media, at or before the
time of the referral (and compliance with this requirement in such case may be
evidenced by a notation in a written, electronic, or similar system of records
maintained in the regular course of business); (ii) in the case of a referral
made by telephone, within 3 business days after the referral by telephone, (and
in such case an abbreviated verbal disclosure of the existence of the
arrangement and the fact that a written disclosure will be provided within 3
business days shall be made to the person being referred during the telephone
referral); or (iii) in the case of a referral by a lender (including a referral
by a lender to an affiliated lender), at the time the estimates required under
section 5(c) are provided (notwithstanding clause (i)
or (ii)); and any required written receipt of such disclosure (without regard
to the manner of the disclosure under clause (i),
(ii), or (iii)) may be obtained at the closing or settlement (except that a
person making a face-to-face referral who provides the written disclosure at or
before the time of the referral shall attempt to obtain any required written
receipt of such disclosure at such time and if the person being referred
chooses not to acknowledge the receipt of the disclosure at that time, that
fact shall be noted in the written, electronic, or similar system of records
maintained in the regular course of business by the person making the
referral),''.
(e)
Limitation on Claims Arising From Violations of Requirements for Servicing
Mortgages and Administering Escrow Accounts.--Section 16 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2614) is amended--
(1)
by striking ``section 8 or 9'' and inserting ``section
6, 8, or 9''; and
(2)
by striking ``within one year'' and inserting ``within 3 years in the case of a
violation of section 6 and 1 year in the case of a violation of section 8 or
9''.
[[Page H11751]]
(f)
Delay of Effectiveness of Recent Final Regulation Relating to Payments to
Employees.--Section 19 of the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2617) is amended by adding at the end the following new subsection:
``(d) Delay of Effectiveness of Recent Final Regulation
Relating to Payments to Employees.--
``(1)
In general.--The amendment to part 3500 of title 24 of the Code of Federal
Regulations contained in the final regulation prescribed by the Secretary and
published in the Federal Register on June 7, 1996, which will, as of the
effective date of such amendment--
``(A) eliminate the exemption for payments by an employer to
employees of such employer for referral activities which is currently codified
as section 3500.14(g)(1)(vii) of such title 24; and
``(B) replace such exemption with a more limited exemption in
new clauses (vii), (viii), and (ix) of section 3500.14 of such title 24, shall
not take effect before
``(2)
Continuation of prior rule.--The regulation codified as section
3500.14(g)(1)(vii) of title 24 of the Code of Federal Regulations, relating to
employer-employee payments, as in effect on May 1, 1996, shall remain in effect
until the date the amendment referred to in paragraph (1) takes effect in accordance
with such paragraph.
``(3)
Public notice of effective date.--The Secretary shall provide public notice of
the date on which the amendment referred to in paragraph (1) will take effect
in accordance with such paragraph not less than 90 days and not more than 180
days before such effective date.''.
(g)
Technical and Conforming Amendments.--
(1)
Section 4(a) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
2603(a)) is amended by striking ``Federal Home Loan Bank Board'' and inserting ``Director
of the Office of Thrift Supervision''.
(2)
Section 10(c)(1)(C) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2609(c)(1)(C)) is amended by striking ``Not
later than the expiration of the 90-day period beginning on the date of the
enactment of the Cranston-Gonzalez National Affordable Housing Act, the'' and
inserting ``The''.
(h)
Repeal of Obsolete Provisions.--The Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2601 et seq.) is amended by striking sections 13, 14 and 15.
Sec. 2104. WAIVER
FOR CERTAIN BORROWERS. Section 105 of the Truth in Lending Act (15
U.S.C. 1604) is amended by adding at the end the following new subsection:
``(g) Waiver for Certain Borrowers.--
``(1) In general.--The Board, by regulation, may exempt from
the requirements of this title 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.''.
Sec. 2105. ALTERNATIVE
DISCLOSURES FOR ADJUSTABLE RATE MORTGAGES.
Section
128(a) of the Truth in Lending Act (15 U.S.C. 1638(a)) is amended by adding at
the end the following new paragraph:
``(14)
In the case of any variable interest rate residential mortgage transaction, in
disclosures provided at application as prescribed by the Board for a variable
rate transaction secured by the consumer's principal dwelling, at the option of
the creditor, a statement that the periodic payments may increase or decrease
substantially, and the maximum interest rate and payment for a $10,000 loan
originated at a recent interest rate, as determined by the Board, assuming the
maximum periodic increases in rates and payments under the program, or a historical
example illustrating the effects of interest rate changes implemented according
to the loan program.''.
Sec. 2106. RESTITUTION
FOR VIOLATIONS OF THE TRUTH IN LENDING ACT.
Section
108(e)(3) of the Truth in Lending Act (15 U.S.C.
2602(3)) is amended--
(1)
by striking ``ordered (A) if'' and inserting the
following: ``ordered--
``(A) if'';
(2)
by striking ``may require a partial'' and inserting
``may-- `
`(i)
require a partial'';
(3)
by striking ``, except that with respect'' and all
that follows through ``Act, the agency shall require'' and inserting ``; or
``(ii) require'';
(4)
by striking ``reasonable, (B) the'' and inserting the following: ``reasonable,
if (in the case of an agency referred to in paragraph (1), (2), or (3) of
subsection (a)), the agency determines that a partial adjustment or making
partial payments over an extended period is necessary to avoid causing the
creditor to become undercapitalized pursuant to section 38 of the Federal
Deposit Insurance Act;
``(B) the''; and
(5)
by striking ``(C) except'' and inserting the
following:
``(C)
except''.
Sec. 2107. LIMITATION
ON LIABILITY UNDER THE TRUTH IN LENDING ACT.
(a)
In General.--Section 139(a) of the Truth in Lending Act
(15
U.S.C. 1649(a)) is amended by striking ``For any consumer credit transaction
subject to this title'' and inserting ``For any closed end consumer credit
transaction that is secured by real property or a dwelling, that is subject to
this title, and''.
(b) Effective Date.--The amendment made by subsection (a)
shall be effective as of
http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm
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