[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1928 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1928

    To amend the Truth in Lending Act to protect consumers against 
predatory practices in connection with high cost mortgage transactions, 
to strengthen the civil remedies available to consumers under existing 
                      law, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 21, 2003

Mr. Sarbanes (for himself, Mr. Schumer, Ms. Stabenow, Mr. Corzine, Mr. 
 Durbin, Mr. Kerry, Ms. Mikulski, Mrs. Clinton, Mr. Levin, Mr. Leahy, 
   Mr. Akaka, Mr. Kennedy, Mr. Lautenberg, Mr. Dayton, and Mr. Dodd) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
    To amend the Truth in Lending Act to protect consumers against 
predatory practices in connection with high cost mortgage transactions, 
to strengthen the civil remedies available to consumers under existing 
                      law, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Predatory Lending Consumer 
Protection Act of 2003''.

SEC. 2. TRUTH IN LENDING ACT DEFINITIONS.

    (a) High Cost Mortgages.--
            (1) In general.--The portion of section 103(aa) of the 
        Truth in Lending Act (15 U.S.C. 1602(aa)) that precedes 
        paragraph (2) is amended to read as follows:
    ``(aa) Mortgage Referred to in This Subsection.--
            ``(1) Definition.--
                    ``(A) In general.--A mortgage referred to in this 
                subsection means a consumer credit transaction--
                            ``(i) that is secured by the principal 
                        dwelling of the consumer, other than a reverse 
                        mortgage transaction; and
                            ``(ii) the terms of which provide that--
                                    ``(I) the transaction is secured by 
                                a first mortgage on the principal 
                                dwelling of the consumer, and the 
                                annual percentage rate on the credit, 
                                at the consummation of the transaction, 
                                will exceed by more than 6 percentage 
                                points the yield on Treasury securities 
                                having comparable periods of maturity 
                                on the 15th day of the month 
                                immediately preceding the month in 
                                which the application for the extension 
                                of credit is received by the creditor;
                                    ``(II) the transaction is secured 
                                by a junior or subordinate mortgage on 
                                the principal dwelling of the consumer, 
                                and the annual percentage rate on the 
                                credit, at the consummation of the 
                                transaction, will exceed by more than 8 
                                percentage points the yield on Treasury 
                                securities having comparable periods of 
                                maturity on the 15th day of the month 
                                immediately preceding the month in 
                                which the application for the extension 
                                of credit is received by the creditor; 
                                or
                                    ``(III) the total points and fees 
                                payable on the transaction will exceed 
                                the greater of 5 percent of the total 
                                loan amount, or $1,000, excluding not 
                                more than 2 bona fide discount points.
                    ``(B) Introductory rates not taken into account.--
                For purposes of subparagraph (A)(ii), the annual 
                percentage rate of interest shall be determined--
                            ``(i) in the case of a fixed-rate loan in 
                        which the annual percentage rate will not vary 
                        during the term of the loan, as the rate in 
                        effect on the date of consummation of the 
                        transaction;
                            ``(ii) in the case of a loan in which the 
                        rate of interest varies according to an index, 
                        or is less than the rate of interest which will 
                        apply after the end of an initial or 
                        introductory period, by adding the index rate 
                        in effect on the date of consummation of the 
                        transaction to the maximum margin permitted at 
                        any time during the loan agreement; and
                            ``(iii) in the case of any other loan in 
                        which the rate may vary at any time during the 
                        term of the loan for any reason, by including 
                        in the finance charge component of the annual 
                        percentage rate--
                                    ``(I) the interest charged on the 
                                loan at the maximum rate that may be 
                                charged during the term of the loan; 
                                and
                                    ``(II) any other applicable charges 
                                that would otherwise be included in 
                                accordance with section 106.''.
            (2) Technical and conforming amendment.--Section 103(aa)(2) 
        of the Truth in Lending Act (15 U.S.C. 1602(aa)(2)) is 
        amended--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B).
    (b) Points and Fees.--Section 103(aa)(4) of the Truth in Lending 
Act (15 U.S.C. 1602(aa)(4)) is amended--
            (1) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) all compensation paid directly or indirectly 
                by a consumer or a creditor to a mortgage broker;'';
            (2) by redesignating subparagraph (D) as subparagraph (G); 
        and
            (3) by striking subparagraph (C) and inserting the 
        following:
                    ``(C) each of the charges listed in section 106(e) 
                (except an escrow for future payment of taxes and 
                insurance);
                    ``(D) the cost of all premiums financed by the 
                lender, directly or indirectly, for any credit  life, 
credit disability, credit unemployment or credit property insurance, or 
any other life or health insurance, or any payments financed by the 
lender, directly or indirectly, for any debt cancellation or suspension 
agreement or contract, except that, for purposes of this subparagraph, 
insurance premiums or debt cancellation or suspension fees calculated 
and paid on a monthly basis shall not be considered financed by the 
lender;
                    ``(E) the maximum prepayment penalties that may be 
                charged or collected under the terms of the loan 
                documents;
                    ``(F) all prepayment fees or penalties that are 
                charged to the borrower if the loan refinances a 
                previous loan made by the same creditor or an affiliate 
                of that creditor; and''.
    (c) High Cost Mortgage Lender.--Section 103(f) of the Truth in 
Lending Act (15 U.S.C. 1602(f)) is amended by striking the last 
sentence and inserting ``Any person who originates 2 or more mortgages 
referred to in subsection (aa) in any 12-month period, any person who 
originates 1 or more such mortgages through a mortgage broker or acted 
as a mortgage broker between originators and consumers on more than 5 
mortgages referred to in subsection (aa) within the preceding 12-month 
period, and any creditor-affiliated party shall be considered to be a 
creditor for purposes of this title.''.
    (d) Bona Fide Discount Points and Benchmark Rate Defined.--Section 
103 of the Truth in Lending Act (15 U.S.C. 1602) is amended by adding 
at the end the following:
    ``(cc) Other Interest Rate Related Terms.--
            ``(1) Benchmark rate.--The term `benchmark rate' means an 
        interest rate that the borrower may reduce by paying bona fide 
        discount points, not to exceed the weekly average yield of 
        United States Treasury securities having a maturity of 5 years, 
        on the 15th day of the month immediately preceding the month in 
        which the loan is made, plus 5 percentage points.
            ``(2) Bona fide discount points.--The term `bona fide 
        discount points' means loan discount points which are--
                    ``(A) knowingly paid by the borrower;
                    ``(B) paid for the express purpose of lowering the 
                benchmark rate;
                    ``(C) in fact reducing the interest rate or time-
                price differential applicable to the loan from an 
                interest rate which does not exceed the benchmark rate; 
                and
                    ``(D) recouped within the first 4 years of the 
                scheduled loan payments.
            ``(3) Recoupment.--For purposes of paragraph (2)(D), loan 
        discount points shall be considered to be recouped within the 
        first 4 years of the scheduled loan payments if the reduction 
        in the interest rate that is achieved by the payment of the 
        loan discount points reduces the interest charged on the 
        scheduled payments, such that the dollar amount of savings in 
        payments made by the borrower over the first 4 years is equal 
        to or exceeds the dollar amount of loan discount points paid by 
        the borrower.''.

SEC. 3. AMENDMENTS TO EXISTING REQUIREMENTS FOR HIGH COST CONSUMER 
              MORTGAGES.

    (a) Additional Disclosures.--Section 129(a)(1) of the Truth in 
Lending Act (15 U.S.C. 1639(a)(1)) is amended by adding at the end the 
following:
                    ``(C) `The interest rate on this loan is much 
                higher than most people pay. This means the chance that 
                you will lose your home is much higher if you do not 
                make all payments under the loan.'.
                    ``(D) `You may be able to get a loan with a much 
                lower interest rate. Before you sign any papers, you 
                have the right to go see a housing or consumer credit 
                counseling agency, as well as to consult other lenders 
                to find ways to get a cheaper loan.'.
                    ``(E) `If you are taking out this loan to repay 
                other loans, look to see how many months it will take 
                to pay for this loan and what the total amount is that 
                you will have to pay before this loan is repaid. Even 
                though the total amount you will have to pay each month 
                for this loan may be less than the total amount you are 
                paying each month for those other loans, you may have 
                to pay on this loan for many more months than those 
                other loans which will cost you more money in the 
                end.'''.
    (b) Prepayment Penalty Provisions.--Section 129(c) of the Truth in 
Lending Act (15 U.S.C. 1639(c)) is amended to read as follows:
    ``(c) Prepayment Penalty Provisions.--
            ``(1) No prepayment penalties after end of 24-month 
        period.--A mortgage referred to in section 103(aa) may not 
        contain terms under which a consumer must pay any prepayment 
        penalty for  any payment made after the end of the 24-month 
period beginning on the date the mortgage is consummated.
            ``(2) No prepayment penalties if more than 3 percent of 
        points and fees were financed.--Subject to subsection (l)(1), a 
        mortgage referred to in section 103(aa) may not contain terms 
        under which a consumer must pay any prepayment penalty for any 
        payment made at or before the end of the 24-month period 
        referred to in paragraph (1) if the creditor financed points or 
        fees in connection with the consumer credit transaction in an 
        amount equal to or greater than 3 percent of the total amount 
        of credit extended in the transaction.
            ``(3) Limited prepayment penalty for early repayment under 
        certain circumstances.--Subject to paragraph (2), the terms of 
        a mortgage referred to in section 103(aa) may contain terms 
        under which a consumer must pay a prepayment penalty for any 
        payment made at or before the end of the 24-month period 
        referred to in paragraph (1) to the extent that the sum of the 
        total amount of points or fees financed by the creditor, if 
        any, in connection with the consumer credit transaction and the 
        total amount payable as a prepayment penalty does not exceed 
        the amount which is equal to 3 percent of the total amount of 
        credit extended in the transaction.
            ``(4) Construction.--For purposes of this subsection, any 
        method of computing a refund of unearned scheduled interest is 
        a prepayment penalty if it is less favorable to the consumer 
        than the actuarial method (as that term is defined in section 
        933(d) of the Housing and Community Development Act of 1992).
            ``(5) Prepayment penalty defined.--The term `prepayment 
        penalty' means any monetary penalty imposed on a consumer for 
        paying all or part of the principal with respect to a consumer 
        credit transaction before the date on which the principal is 
        due.''.
    (c) All Balloon Payments Prohibited.--Section 129(e) of the Truth 
in Lending Act (15 U.S.C. 1639(e)) is amended by striking ``having a 
term of less than 5 years''.
    (d) Assessment of Ability To Repay.--Section 129(h) of the Truth in 
Lending Act (15 U.S.C. 1639(h)) is amended--
            (1) by striking ``Consumer.--A creditor'' and inserting 
        ``Consumer.--
            ``(1) Prohibition on patterns and practices.--A creditor''; 
        and
            (2) by adding at the end the following:
            ``(2) Case-by-case assessments of consumer ability to pay 
        required.--
                    ``(A) In general.--In addition to the prohibition 
                in paragraph (1) on engaging in certain patterns and 
                practices, a creditor may not extend any credit in 
                connection with any mortgage referred to in section 
                103(aa) unless the creditor has determined, at the time 
                such credit is extended, that 1 or more of the resident 
                obligors, when considered individually and 
                collectively, will be able to make the scheduled 
                payments under the terms of the transaction based on a 
                consideration of the current and expected income, 
                current obligations, employment status, and other 
                financial resources of any such obligor, without taking 
                into account any equity of any such obligor in the 
                dwelling which is the security for the credit.
                    ``(B) Regulations.--The Board shall prescribe, by 
                regulation, the appropriate format for determining the 
                ability of a consumer to make payments and the criteria 
                to be considered in making that determination.
                    ``(C) Resident obligor.--For purposes of this 
                paragraph, the term `resident obligor' means an obligor 
                for whom the dwelling securing the extension of credit 
                is, or upon the consummation of the transaction will 
                be, the principal residence.
            ``(3) Verification.--The requirements of paragraphs (1) and 
        (2) shall not be deemed to have been met unless any information 
        relied upon by the creditor for purposes of any such paragraph 
        has been verified by the creditor independently of information 
        provided by any resident obligor.''.
    (e) Requirements Relating to Home Improvement Contracts.--Section 
129(i) of the Truth in Lending Act (15 U.S.C. 1639(i)) is amended--
            (1) by striking ``Improvement Contracts.--A creditor'' and 
        inserting ``Improvement Contracts.--
            ``(1) In general.--A creditor''; and
            (2) by adding at the end the following:
            ``(2) Affirmative claims and defenses.--Notwithstanding any 
        other provision of law, any assignee or holder, in any 
        capacity, of a mortgage referred to in section 103(aa) which 
        was made, arranged, or assigned by a person financing home 
        improvements to the dwelling of a consumer shall be subject to 
        all affirmative claims and defenses which the consumer may have 
        against the seller, home improvement contractor, broker, or 
        creditor with respect to such mortgage or home improvements.''.
    (f) Clarification of Rescission Rights.--Section 129(j) of the 
Truth in Lending Act (15 U.S.C. 1639(j)) is amended to read as follows:
    ``(j) Consequence of Failure To Comply.--
            ``(1) In general.--The consummation of a consumer credit 
        transaction resulting in a mortgage referred to in section 
        103(aa) shall be treated as a failure to deliver the material 
        disclosures required under this title for the purpose of 
        section 125, if--
                    ``(A) the mortgage contains a provision prohibited 
                by this section or does not contain a provision 
                required by this section; or
                    ``(B) a creditor or other person fails to comply 
                with the provisions of this section, whether by an act 
                or omission, with regard to such mortgage at any time.
            ``(2) Rule of application.--In any application of section 
        125 to a mortgage described in section 103(aa) under 
        circumstances described in paragraph (1), paragraphs (2) and 
        (4) of section 125(e) shall not apply or be taken into 
        account.''.

SEC. 4. ADDITIONAL REQUIREMENTS FOR HIGH COST CONSUMER MORTGAGES.

    (a) Single Premium Credit Insurance.--Section 129 of the Truth in 
Lending Act (15 U.S.C. 1639) is amended--
            (1) by redesignating subsections (k) and (l) as subsections 
        (s) and (t), respectively; and
            (2) by inserting after subsection (j), the following:
    ``(k) Single Premium Credit Insurance.--
            ``(1) In general.--The terms of a mortgage referred to in 
        section 103(aa) may not require, and no creditor or other 
        person may require or allow in connection with any such 
        mortgage, whether paid directly by the consumer or financed by 
        the consumer through such mortgage--
                    ``(A) the advance collection of a premium, on a 
                single premium basis, for any credit life, credit 
                disability, credit unemployment, or credit property 
                insurance, and any analogous product; or
                    ``(B) the advance collection of a fee for any debt 
                cancellation or suspension agreement or contract.
            ``(2) Rule of construction.--Paragraph (1) shall not be 
        construed as affecting the right of a creditor to collect 
        premium payments on insurance or debt cancellation or 
        suspension fees referred to in paragraph (1) that are 
        calculated and paid on a regular monthly basis, if the 
        insurance transaction is conducted separately from the mortgage 
        transaction, the insurance may be canceled by the consumer at 
        any time, and the insurance policy is automatically canceled 
        upon repayment or other termination of the mortgage referred to 
        in paragraph (1).''.
    (b) Restriction on Financing Points and Fees.--Section 129 of the 
Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after 
subsection (k) (as added by subsection (a) of this section) the 
following:
    ``(l) Restriction on Financing Points and Fees.--
            ``(1) Limit on amount of points and fees that may be 
        financed.--Subject to paragraphs (2) and (3) of subsection (c), 
        no creditor may, in connection with the formation or 
        consummation of a mortgage referred to in section 103(aa), 
        finance, directly or indirectly, any portion of the points, 
        fees, or other charges payable to the creditor or any third 
        party in an amount in excess of the greater of 3 percent of the 
        total loan amount or $600.
            ``(2) Prohibition on financing certain points, fees, or 
        charges.--No creditor may, in connection with the formation or 
        consummation of a mortgage referred to in section 103(aa), 
        finance, directly or indirectly, any of the following fees or 
        other charges payable to the creditor or any third party:
                    ``(A) Any prepayment fee or penalty required to be 
                paid by the consumer in connection with a loan or other 
                extension of credit which is being refinanced by such 
                mortgage if the creditor, with respect to such 
                mortgage, or any affiliate of the creditor, is the 
                creditor with respect to the loan or other extension of 
                credit being refinanced.
                    ``(B) Any points, fees, or other charges required 
                to be paid by the consumer in connection with such 
                mortgage if--
                            ``(i) the mortgage is being entered into in 
                        order to refinance an existing mortgage of the 
                        consumer that is referred to in section 
                        103(aa); and
                            ``(ii) if the creditor, with respect to 
                        such new mortgage, or any affiliate of the 
                        creditor, is the creditor with respect to the 
                        existing mortgage which is being refinanced.''.
    (c) Creditor Call Provision.--Section 129 of the Truth in Lending 
Act (15 U.S.C. 1639) is amended by inserting after subsection (l) (as 
added by subsection (b) of this section) the following:
    ``(m) Creditor Call Provision.--
            ``(1) In general.--A mortgage referred to in section 
        103(aa) may not include terms under which the indebtedness may 
        be accelerated by the creditor, in the sole discretion of the 
        creditor.
            ``(2) Exception.--Paragraph (1) shall not apply when 
        repayment of the loan has been accelerated as a result of a 
        bona fide default.''.
    (d) Prohibition on Actions Encouraging Default.--Section 129 of the 
Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after 
subsection (m) (as added by subsection (c) of this section) the 
following:
    ``(n) Prohibition on Actions Encouraging Default.--No creditor may 
make any statement, take any action, or fail to take any action before 
or in connection with the formation or consummation of any mortgage 
referred to in section 103(aa) to refinance all or any portion of an 
existing loan or other extension of credit, if the statement, action, 
or failure to act has the effect of encouraging or recommending the 
consumer to default on the existing loan or other extension of credit 
at any time before, or in connection with, the closing or any scheduled 
closing on such mortgage.''.
    (e) Modification or Deferral Fees.--Section 129 of the Truth in 
Lending Act (15 U.S.C. 1639) is amended by inserting after subsection 
(n) (as added by subsection (d) of this section) the following:
    ``(o) Modification or Deferral Fees.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        creditor may not charge any consumer with respect to a mortgage 
        referred to in section 103(aa) any fee or other charge--
                    ``(A) to modify, renew, extend, or amend such 
                mortgage, or any provision of the terms of the 
                mortgage; or
                    ``(B) to defer any payment otherwise due under the 
                terms of the mortgage.
            ``(2) Exception for modifications for the benefit of the 
        consumer.--Paragraph (1) shall not apply with respect to any 
        fee imposed in connection with any action described in 
        subparagraph (A) or (B) if--
                    ``(A) the action provides a material benefit to the 
                consumer; and
                    ``(B) the amount of the fee or charge does not 
                exceed--
                            ``(i) an amount equal to 0.5 percent of the 
                        total loan amount; or
                            ``(ii) in any case in which the total loan 
                        amount of the mortgage does not exceed $60,000, 
                        an amount in excess of $300.''.
    (f) Consumer Counseling Requirements.--Section 129 of the Truth in 
Lending Act (15 U.S.C. 1639) is amended by inserting after subsection 
(o) (as added by subsection (e) of this section) the following:
    ``(p) Consumer Counseling Requirement.--
            ``(1) In general.--A creditor may not extend any credit in 
        the form of a mortgage referred to in section 103(aa) to any 
        consumer, unless the creditor has provided to the consumer, at 
        such time before the consummation of the mortgage and in such 
        manner as the Board shall provide by regulation--
                    ``(A) all warnings and disclosures regarding the 
                risks of the mortgage to the consumer;
                    ``(B) a separate written statement recommending 
                that the consumer take advantage of available home 
                ownership or credit counseling services before agreeing 
                to the terms of any mortgage referred to in section 
                103(aa); and
                    ``(C) a written statement containing the names, 
                addresses, and telephone numbers of counseling agencies 
                or programs reasonably available to the consumer that 
                have been certified or approved by the Secretary of 
                Housing and Urban Development, a State housing finance 
                authority (as defined in section 1301 of the Financial 
                Institutions Reform, Recovery, and Enforcement Act of 
                1989), or the agency referred to in subsection (a) or 
                (c) of section 108 with jurisdiction over the creditor 
                as qualified to provide counseling on--
                            ``(i) the advisability of a high cost loan 
                        transaction; and
                            ``(ii) the appropriateness of a high cost 
                        loan for the consumer.
            ``(2) Complete and updated lists required.--Any failure to 
        provide as complete or updated a list under paragraph (1)(C) as 
        is reasonably possible shall constitute a violation of this 
        section.''.
    (g) Arbitration.--Section 129 of the Truth in Lending Act (15 
U.S.C. 1639) is amended by inserting after subsection (p) (as added by 
subsection (f) of this section) the following:
    ``(q) Arbitration.--
            ``(1) In general.--A mortgage referred to in section 
        103(aa) may not include terms which require arbitration or any 
        other nonjudicial procedure as the method for resolving any 
        controversy or settling any claims arising out of the 
        transaction.
            ``(2) Post-controversy agreements.--Subject to paragraph 
        (3), paragraph (1) shall not be construed as limiting the right 
        of the consumer and the creditor to agree to arbitration or any 
        other nonjudicial procedure as the method for resolving any 
        controversy at any time after a dispute or claim under the 
        transaction arises.
            ``(3) No waiver of statutory cause of action.--No provision 
        of any mortgage referred to in section 103(aa) or any agreement 
        between the consumer and the creditor shall be applied or 
        interpreted so as to bar a consumer from bringing an action in 
        an appropriate district court of the United States, or any 
        other court of competent jurisdiction, pursuant to section 130 
        or any other provision of law, for damages or other relief in 
connection with any alleged violation of this section, any other 
provision of this title, or any other Federal law.''.
    (h) Prohibition on Evasions.--Section 129 of the Truth in Lending 
Act (15 U.S.C. 1639) is amended by inserting after subsection (q) (as 
added by subsection (g) of this section) the following:
    ``(r) Prohibitions on Evasions, Structuring of Transactions, and 
Reciprocal Arrangements.--
            ``(1) In general.--A creditor may not take any action--
                    ``(A) for the purpose or with the intent to 
                circumvent or evade any requirement of this title, 
                including entering into a reciprocal arrangement with 
                any other creditor or affiliate of another creditor or 
                dividing a transaction into separate parts, for the 
                purpose of evading or circumventing any such 
                requirement; or
                    ``(B) with regard to any other loan or extension of 
                credit for the purpose or with the intent to evade the 
                requirements of this title, including structuring or 
                restructuring a consumer credit transaction as another 
                form of loan, such as a business loan.
            ``(2) Other actions.--In addition to the actions prohibited 
        under paragraph (1), a creditor may not take any action which 
        the Board determines, by regulation, constitutes a bad faith 
        effort to evade or circumvent any requirement of this section 
        with regard to a consumer credit transaction.
            ``(3) Regulations.--The Board shall prescribe such 
        regulations as the Board determines to be appropriate to 
        prevent circumvention or evasion of the requirements of this 
        section or to facilitate compliance with the requirements of 
        this section.''.

SEC. 5. AMENDMENTS RELATING TO RIGHT OF RESCISSION.

    (a) Timing of Waiver by Consumer.--Section 125(a) of the Truth in 
Lending Act (15 U.S.C. 1635(a)) is amended--
            (1) by striking ``(a) Except as otherwise provided'' and 
        inserting ``(a) Right Established.--
            ``(1) In general.--Except as otherwise provided''; and
            (2) by adding at the end the following:
            ``(2) Timing of election of waiver by consumer.--No 
        election by a consumer to waive the right established under 
        paragraph (1) to rescind a transaction shall be effective if--
                    ``(A) the waiver was required by the creditor as a 
                condition for the transaction;
                    ``(B) the creditor advised or encouraged the 
                consumer to waive such right of the consumer; or
                    ``(C) the creditor had any discussion with the 
                consumer about a waiver of such right during the period 
                beginning when the consumer provides written 
                acknowledgement of the receipt of the disclosures and 
                the delivery of forms and information required to be 
                provided to the consumer under paragraph (1) and ending 
                at such time as the Board determines, by regulation, to 
                be appropriate.''.
    (b) Noncompliance With Requirements as Recoupment in Foreclosure 
Proceeding.--Section 130(e) of the Truth in Lending Act (15 U.S.C. 
1640(e)) is amended by inserting after the second sentence the 
following: ``This subsection also does not bar a person from asserting 
a rescission under section 125, in an action to collect the debt as a 
defense to a judicial or nonjudicial foreclosure after the expiration 
of the time periods for affirmative actions set forth in this section 
and section 125.''.

SEC. 6. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.

    (a) Increase in Amount of Civil Money Penalties for Certain 
Violations.--Section 130(a) of the Truth in Lending Act (15 U.S.C. 
1640(a)) is amended--
            (1) in paragraph (2)(A)(iii), by striking ``$2,000'' and 
        inserting ``$10,000''; and
            (2) in paragraph (2)(B), by striking ``lesser of $500,000 
        or 1 percentum of the net worth of the creditor'' and inserting 
        ``the greater of--
                            ``(i) the amount determined by multiplying 
                        the maximum amount of liability under 
                        subparagraph (A) for such failure to comply in 
                        an individual action by the number of members 
                        in the certified class; or
                            ``(ii) the amount equal to 2 percent of the 
                        net worth of the creditor.''.
    (b) Statute of Limitations Extended for Section 129 Violations.--
Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) (as 
amended by section 5(b) of this Act) is amended--
            (1) in the first sentence, by striking ``Any action'' and 
        inserting ``Except as provided in the subsequent sentence, any 
        action''; and
            (2) by inserting after the first sentence the following: 
        ``Any action under this section with respect to any violation 
        of section 129 may be brought in any United States district 
        court, or in any other court of competent jurisdiction, before 
        the end of the 3-year period beginning on the date of the 
        occurrence of the violation.''.

SEC. 7. AMENDMENT TO FAIR CREDIT REPORTING ACT.

    Section 623 of the Fair Credit Reporting Act (15 U.S.C. 1681s-2) is 
amended by adding at the end the following:
    ``(e) Duty of Creditors With Respect to High Cost Mortgages.--
            ``(1) In general.--Each creditor who enters into a consumer 
        credit transaction which is a mortgage referred to in section 
        103(aa), and each successor to such creditor with respect to 
        such transaction, shall report the complete payment history, 
        favorable and unfavorable, of the obligor with respect to such 
        transaction to a consumer reporting agency that compiles and 
        maintains files on consumers on a nationwide basis at least 
        quarterly, or more frequently as required by regulation or in 
        guidelines established by participants in the secondary 
        mortgage market, while such transaction is in effect.
            ``(2) Definitions.--For purposes of paragraph (1), the term 
        `credit' and `creditor' have the same meanings as in section 
        103 of the Truth in Lending Act (15 U.S.C. 1602).''.

SEC. 8. REGULATIONS.

    The Board of Governors of the Federal Reserve System shall publish 
regulations implementing this Act and the amendments made by this Act 
in final form before the end of the 6-month period beginning on the 
date of enactment of this Act.
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