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Debt Laws | Federal
Laws | Consumer Protection
State Laws
Maine Credit Card Restrictions
1. Subject to subsection 2, a creditor shall disclose to the person who is obligated on a consumer credit transaction the information required under this article. A person who regularly extends credit that is payable in installments, or is subject to a finance charge, to consumers for personal, family or household purposes, when such extensions are secured by personal property, real property or both and such property is used or expected to be used as the consumer's principal dwelling, shall also disclose the information required under this article. In a transaction involving more than one obligor, a creditor, except in a transaction under section 8-204, need not disclose to more than one of such obligors if the obligor given disclosure is a primary obligor.
2. If a transaction involves one creditor as defined in section 1-301, subsection 17, that creditor shall make the disclosures. If a transaction involves more than one creditor, only one creditor shall be required to make the disclosures. The administrator shall by regulation specify which creditor shall make the disclosures.
3. The administrator may provide by regulation that any portion of the information required to be disclosed by this article may be given in the form of estimates when the provider of that information is not in a position to know exact information. When a portion of the interest on any consumer credit transaction is determined on a per diem basis and collected upon the consummation of the transaction, any disclosure with respect to that portion of interest is deemed accurate for purposes of this Title if the disclosure is based on information actually known to the creditor at the time the disclosure documents are being prepared for the consummation of the transaction.
4. The administrator shall determine whether tolerances for numerical disclosures other than the annual percentage rate are necessary to facilitate compliance with this Article, and if he determines that those tolerances are necessary to facilitate compliance, he shall by regulation permit disclosures within those tolerances. The administrator shall exercise his authority to permit tolerances for numerical disclosures other than the annual percentage rate so that tolerances are narrow enough to prevent tolerances from resulting in misleading disclosures or disclosures that circumvent the purposes of this Article.
1. Information required by this Article shall be disclosed clearly and conspicuously, in accordance with regulations of the administrator. The terms "annual percentage rate" and "finance charge" shall be disclosed more conspicuously than other terms, data or information provided in connection with a transaction, except information relating to the identity of the creditor. Except as provided in subsection 3, regulations of the administrator need not require that disclosures pursuant to this Article be made in the order set forth in this Article and, except as otherwise provided, may permit the use of terminology different from that employed in this Article if it conveys substantially the same meaning.
2. Any creditor may supply additional information or explanation with any disclosures required under this Article, except as provided in section 8-206, subsection 2.
3. Tabular format shall be required for certain disclosures under section 8-205, subsection 3.
A. The information described in section 8-205, subsection 3, paragraph A, subparagraph (i); section 8-205, subsection 3, paragraph C, subparagraph (ii), division (a), subdivision (1); section 8-205, subsection 3, paragraph D, subparagraph (i) and subparagraph (iii), division (a), subdivision (1) shall be:
(i) Disclosed in the form and manner which the administrator shall prescribe by regulations; and
(ii) Placed in a conspicuous and prominent location on or with any written application, solicitation or other document or paper with respect to which that disclosure is required.
B. Tabular format shall be as follows:
(i) In the regulations prescribed under paragraph A, subparagraph (i), the administrator shall require that the disclosure of the information shall, to the extent the administrator determines to be practicable and appropriate, be in the form of a table which:
(a) Contains clear and concise headings for each item of the information; and
(b) Provides a clear and concise form for stating each item of information required to be disclosed under each heading.
(ii) In prescribing the form under subparagraph (i), the administrator may:
(a) List the items required to be included in the table in a different order than the order in which those items are set forth in section 8-205, subsection 3, paragraph A, subparagraph (i) or paragraph D, subparagraph (i); and
(b) Subject to subparagraph (iii), employ terminology which is different from the terminology which is employed in section 8-205, subsection 3, if that terminology conveys substantially the same meaning.
(iii) Either the heading or the statement under the heading which relates to the time period referred to in section 8-205, subsection 3, paragraph A, subparagraph (i), division (c) shall contain the term "grace period."
If information disclosed in accordance with this Article is subsequently rendered inaccurate as the result of any act, occurrence or agreement subsequent to the delivery of the required disclosures, the inaccuracy resulting therefrom does not constitute a violation of this Article.
1. Except as otherwise provided in this section, in the case of any consumer credit transaction in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired on any property which is used as the principal dwelling of the person to whom credit is extended, the obligor may rescind the transaction until midnight of the 3rd business day following the consumation of the transaction or the delivery of the information and rescission forms required under this section together with the material disclosures required under this Article, whichever is later, by notifying the creditor, in accordance with regulations of the administrator, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the administrator, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the administrator, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section.
2. When an obligor exercises his right to rescind under subsection 1, he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within 20 days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, down payment or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor's obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it. The procedures of this section shall apply except when otherwise ordered by a court.
3. Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under this Article by a person to whom information, forms and a statement is required to be given pursuant to this section does no more than create a rebuttable presumption of delivery.
4. The administrator may, if he finds that such action is necessary in order to permit homeowners to meet bona fide personal financial emergencies, prescribe regulations authorizing the modification or waiver of any rights created under this section to the extent and under the circumstances set forth in those regulations.
5. This section does not apply to:
A. A residential mortgage transaction as defined in section 8-103, subsection 1, paragraph H;
B. A transaction which constitutes a refinancing or consolidation, with no new advances, of the principal balance then due and any accrued and unpaid finance charges of an existing extension of credit by the same creditor secured by an interest in the same property;
C. A transaction in which an agency of a state is the creditor; or
D. Advances under a preexisting open-end credit plan if a security interest has already been retained or acquired in conformance with this section and such advances are in accordance with a previously established credit limit for such plan adopted in conformance with this section.
6. An obligor's right of rescission expires 3 years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first, notwithstanding the fact that the information and forms required under this section or any other disclosures required under this Article have not been delivered to the obligor, except that if:
A. The administrator institutes a proceeding to enforce the provisions of this section within 3 years after the date of consummation of the transaction;
B. The administrator finds a violation of this section; and
C. The obligor's right to rescind is based in whole or in part on any matter involved in such proceeding, then the obligor's right of rescission expires 3 years after the date of consummation of the transaction or upon the earlier sale of the property, or upon the expiration of one year following the conclusion of the proceeding, or any judicial review or period for judicial review thereof, whichever is later.
7. In any action in which it is determined that a creditor has violated this section, in addition to rescission, the court may award relief under section 8-208 for violations of this Article not relating to the right to rescind.
8. An obligor has no rescission rights arising solely from the form of written notice used by the creditor to inform the obligor of the rights of the obligor under this section if the creditor provided the obligor the appropriate form of written notice published and adopted by the administrator or provided the obligor a comparable written notice of the rights of the obligor that was properly completed by the creditor and otherwise complied with all other requirements of this section regarding notice.
9. Rescission rights in foreclosure are determined in accordance with the following.
A. Notwithstanding section 8-208-A, and subject to the time period provided in subsection 6, in addition to any other right of rescission available under this section for a transaction, after the initiation of any judicial or nonjudicial foreclosure process on the primary dwelling of any obligor securing an extension of credit, the obligor has a right to rescind the transaction equivalent to other rescission rights provided by this section, if:
(i) A mortgage broker fee is not included in the finance charge in accordance with the laws and regulations in effect at the time the consumer credit transaction was consummated; or
(ii) The form of notice of rescission for the transaction is not the appropriate form of written notice published and adopted by the administrator or a comparable written notice, and otherwise complied with all the requirements of this section regarding notice.
B. Notwithstanding section 8-105, subsection 6, and subject to the time period provided in subsection 6, for the purposes of exercising any rescission rights after the initiation of any judicial or nonjudicial foreclosure process on the principal dwelling of the obligor securing an extension of credit, the disclosure of the finance charge and other disclosures affected by any finance charge are deemed accurate for purposes of this section if the amount disclosed as the finance charge does not vary from the actual finance charge by more than $35 or is greater than the amount required to be disclosed under this Title.
C. This subsection does not affect a consumer's right of rescission in recoupment under law.
D. This subsection applies to all consumer credit transactions in existence or consummated on or after September 30, 1995.
1. Before opening any account under an open-end consumer credit plan, the creditor shall disclose to the person to whom credit is to be extended each of the following items, to the extent applicable:
A. The conditions under which a finance charge may be imposed, including the time period within which any credit extended may be repaid without incurring a finance charge, except that the creditor may, at his election and without disclosure, impose no such finance charge if payment is received after the termination of that time period, and if no time period is provided, the creditor shall disclose that fact;
B. The method of determining the balance upon which the finance charge will be imposed;
C. The method of determining the amount of the finance charge, including any minimum or fixed amount imposed as a finance charge;
D. Where one or more periodic rates may be used to compute the finance charge, each rate, the range of balances to which it is applicable and the corresponding nominal annual percentage rate determined by multiplying the periodic rate by the number of periods in a year;
E. Identification of other charges which may be imposed as part of the plan, and their method of computation, in accordance with regulations of the administrator;
F. In cases where the credit is or will be secured, a statement that a security interest has been or will be taken in:
(i) The property purchased as part of the credit transaction; or
(ii) Property not purchased as part of the credit transaction identified by item or type; and
G. A statement in a form prescribed by regulations of the administrator of the protection provided by section 8-303, subsection 6, and section 8-401 to an obligor and the creditor's responsibilities under section 8-303, subsection 6 and section 8-402. With respect to one billing cycle per calendar year, at intervals of not less than 6 months or more than 18 months, the creditor shall transmit the statement to each obligor to whom the creditor is required to transmit a statement pursuant to subsection 2 for the billing cycle.
2. The creditor of any account under an open-end consumer credit plan shall transmit to the obligor, for each billing cycle at the end of which there is an outstanding balance in that account or with respect to which a finance charge is imposed, a statement setting forth each of the following items to the extent applicable:
A. The outstanding balance in the account at the beginning of the statement period;
B. The amount and date of each extension of credit during the period and a brief identification, on or accompanying the statement of each extension of credit in a form prescribed by the administrator, sufficient to enable the obligor either to identify the transaction or to relate it to copies of sales vouchers or similar instruments previously furnished, except that a creditor's failure to disclose such information in accordance with this paragraph shall not be deemed a failure to comply with this Article if:
(i) The creditor maintains procedures reasonably adapted to procure and provide such information; and
(ii) The creditor responds to and treats any inquiry for clarification or documentation as a billing error and an erroneously billed amount under Part 4;
C. In lieu of complying with the requirements of paragraph B, in the case of any transaction in which the creditor and seller are the same person, and such person's open-end credit plan has fewer than 15,000 accounts, the creditor may elect to provide only the amount and date of each extension of credit during the period and the seller's name and location where the transaction took place if:
(i) A brief identification of the transaction has been previously furnished; and
(ii) The creditor responds to and treats any inquiry for clarification or documentation as a billing error and an erroneously billed amount under Part 4.
D. The total amount credited to the account during the period;
E. The amount of any finance charge added to the account during the period, itemized to show the amounts, if any, due to the application of percentage rates and the amount, if any, imposed as a minimum or fixed charge;
F. Where one or more periodic rates may be used to compute the finance charge, each rate, the range of balances to which it is applicable and, unless the annual percentage rate determined under section 8-106, subsection 1, paragraph B, is required to be disclosed pursuant to paragraph G, the corresponding nominal annual percentage rate determined by multiplying the periodic rate by the number of periods in a year;
G. Where the total finance charge exceeds 50ΒΆ for a monthly or longer billing cycle, or the pro rata part of 50ΒΆ for a billing cycle shorter than monthly, the total finance charge expressed as an annual percentage rate determined under section 8-106, subsection 1, paragraph B, except that if the finance charge is the sum of 2 or more products of a rate times a portion of the balance, the creditor may, in lieu of disclosing a single rate for the total charge, disclose each such rate expressed as an annual percentage rate, and the part of the balance to which it is applicable;
H. The balance on which the finance charge was computed and a statement of how the balance was determined;
I. The outstanding balance in the account at the end of the period;
J. The date by which or the period within which payment shall be made to avoid additional finance charges, except that the creditor may, at his election and without disclosure, impose no such additional finance charge if payment is received after the date or the termination of that period; and
K. The address to be used by the creditor for the purpose of receiving billing inquiries from the obligor.
3. Disclosure in credit and charge card applications and solicitations shall be as follows.
A. Direct mail applications and solicitations shall be governed by this paragraph.
(i) Any application to open a credit card account for any person under an open-end consumer credit plan, or a solicitation to open such an account without requiring an application, that is mailed to consumers, shall disclose in tabular format the following information, pursuant to subsection 5 and section 8-202, subsection 3:
(a) Annual percentage rates:
(1) Each annual percentage rate applicable to extensions of credit under the credit plan;
(2) When an extension of credit is subject to a variable rate, the fact that the rate is variable, the annual percentage rate in effect at the time of the mailing and how the rate is determined; and
(3) When more than one rate applies, the range of balances to which each rate applies;
(b) Annual and other fees:
(1) Any annual fee, other periodic fee, or membership fee imposed for the issuance or availability of a credit card, including any account maintenance fee or other charge imposed based on activity or inactivity for the account during the billing cycle;
(2) Any minimum finance charge imposed for each period during which any extension of credit which is subject to a finance charge is outstanding; and
(3) Any transaction charge imposed in connection with use of the card to purchase goods or services;
(c) Grace period:
(1) Subject to section 2-202, subsection 5, the date by which, or the period within which, any credit extended under the credit plan for purchases of goods or services must be repaid to avoid incurring a finance charge; and
(2) If the length of the grace period varies, the card issuer may disclose the range of days, the minimum number of days or the average number of days in the grace period, if the disclosure is identified as such; and
(d) Balance calculation method:
(1) The name of the balance calculation method used in determining the balance on which the finance charge is computed if the method used has been defined by the administrator, or a detailed explanation of the balance calculation method used if the method has not been so defined; and
(2) In prescribing regulations to carry out this subsection, the administrator shall define and name not more than the 5 balance calculation methods determined by the administrator to be the most commonly used methods.
(ii) In addition to the information required to be disclosed under subparagraph (i), each application or solicitation to which that subparagraph applies shall disclose clearly and conspicuously the following information, subject to subsections 5 and 6:
(a) Any cash advance fee which is any fee imposed for an extension of credit in the form of cash;
(b) Any late fee which is any fee imposed for a late payment; and
(c) Any over-the-limit fee which is any fee imposed in connection with an extension of credit in excess of the amount of credit authorized to be extended with respect to that account.
B. Telephone solicitations shall be governed by this paragraph.
(i) In any telephone solicitation to open a credit card account for any person under an open-end consumer credit plan, the person making the solicitation shall orally disclose the information described in paragraph A, subparagraph (i).
(ii) Subparagraph (i) shall not apply to any telephone solicitation if:
(a) The credit card issuer:
(1) Does not impose any fee described in subsection 3, paragraph A, subparagraph (i), division (b), subdivision (1); or
(2) Does not impose any fee in connection with telephone solicitations unless the consumer signifies acceptance by using the card;
(b) The card issuer discloses clearly and conspicuously in writing the information described in paragraph A within 30 days after the consumer requests the card, but in no event later than the date of delivery of the card; and
(c) The card issuer discloses clearly and conspicuously that the consumer is not obligated to accept the card or account and the consumer will not be obligated to pay any of the fees or charges disclosed unless the consumer elects to accept the card or account by using the card.
C. Applications and solicitations by other means shall be governed by this paragraph.
(i) Any application to open a credit card account for any person under an open-end consumer credit plan, or any solicitation to open such an account without requiring an application, that is made available to the public or contained in catalogs, magazines, or other publications, shall meet the disclosure requirements of subparagraph (ii), (iii) or (iv).
(ii) An application or solicitation described in subparagraph (i) meets the requirement of this subparagraph if that application or solicitation contains:
(a) The information:
(1) Described in paragraph A, subparagraph (i) in the form required under section 8-202, subsection 3, subject to subsection 5 of this section; and
(2) Described in paragraph A, subparagraph (ii) in a clear and conspicuous form, subject to subsections 5 and 6;
(b) A statement, in a conspicuous and prominent location on the application or solicitation, that:
(1) The information is accurate as of the date the application or solicitation was printed;
(2) The information contained in the application or solicitation is subject to change after that date; and
(3) The applicant should contact the creditor for information on any change in the information contained in the application or solicitation since it was printed;
(c) A clear and conspicuous disclosure of the date the application or solicitation was printed; and
(d) A disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll-free telephone number or a mailing address at which the applicant may contact the creditor to obtain any change in the information provided in the application or solicitation since it was printed.
(iii) An application or solicitation described in subparagraph (i) meets the requirement of this subparagraph if that application or solicitation:
(a) Contains a statement, in a conspicuous and prominent location on the application or solicitation, that:
(1) There are costs associated with the use of credit cards; and
(2) The applicant may contact the creditor to request disclosure of specific information of those costs by calling a toll-free telephone number or by writing to an address, specified in the application;
(b) Contains a disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll-free telephone number and a mailing address at which the applicant may contact the creditor to obtain that information; and
(c) Does not contain any of the items described in paragraph A.
(iv) An application or solicitation meets the requirements of this subparagraph if it contains, or is accompanied by:
(a) The disclosures required by subsection 1, paragraphs A through F;
(b) The disclosures required by paragraph A, subparagraphs (i) and (ii), included clearly and conspicuously, except that the provisions of section 8-202, subsection 3, shall not apply; and
(c) A toll-free telephone number or a mailing address at which the applicant may contact the creditor to obtain any change in the information provided.
(v) Upon receipt of a request for any information referred to in subparagraph (ii), (iii) or (iv), the card issuer or the agent of that issuer shall promptly disclose all other information described in paragraph A.
D. Charge card applications and solicitation shall be governed by this paragraph.
(i) Any application or solicitation to open a charge card account shall disclose clearly and conspicuously the following information in the form required by section 8-202, subsection 3, subject to subsection 5:
(a) Any annual fee, other periodic fee or membership fee imposed for the issuance or availability of the charge card, including any account maintenance fee or other charge imposed based on activity or inactivity for the account during the billing cycle;
(b) Any transaction charge imposed in connection with use of the card to purchase goods or services; and
(c) A statement that charges incurred by use of the charge card are due and payable upon receipt of a periodic statement rendered for that charge card account.
(ii) In addition to the information required to be disclosed under subparagraph (i), each written application or solicitation to which that subparagraph applies shall disclose clearly and conspicuously the following information, subject to subsections 5 and 6, provided those fees or charges are not prohibited under section 2-501 or 2-502:
(a) Any cash advance fee which is any fee imposed for an extension of credit in the form of cash;
(b) Any late fee which is any fee imposed for a late payment; and
(c) Any over-the-limit fee which is any fee imposed in connection with an extension of credit in excess of the amount of credit authorized to be extended with respect to that account.
(iii) Any application to open a charge card account, or any solicitation to open such an account without requiring an application, that is made available to the public or contained in catalogs, magazines, or other publications, shall contain:
(a) The information:
(1) Described in subparagraph (i) in the form required under section 8-202, subsection 3, subject to subsection 5; and
(2) Described in subparagraph (ii) in a clear and conspicuous form, subject to subsections 5 and 6;
(b) A statement, in a conspicuous and prominent location on the application or solicitation, that:
(1) The information is accurate as of the date the application or solicitation was printed;
(2) The information contained in the application or solicitation is subject to change after that date; and
(3) The applicant should contact the creditor for information on any change in the information contained in the application or solicitation since it was printed;
(c) A clear and conspicuous disclosure of the date the application or solicitation was printed; and
(d) A disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll-free telephone number or a mailing address at which the applicant may contact the creditor to obtain any change in the information provided in the application or solicitation since it was printed.
(iv) If a charge card permits the card holder to receive an extension of credit under an open-end consumer credit plan, which is not maintained by the charge card issuer, the charge card issuer may provide the information described in subparagraphs (i) and (ii) in the form required by those subparagraphs in lieu of the information required under paragraph A, B or C with respect to any credit extended under that plan, if the charge card issuer discloses clearly and conspicuously to the consumer in the application or solicitation that:
(a) The charge card issuer will make an independent decision as to whether to issue the card;
(b) The charge card may arrive before the decision is made with respect to an extension of credit under an open-end consumer credit plan; and
(c) Approval by the charge card issuer does not constitute approval by the issuer of the extension of credit.
The information required to be disclosed under paragraph A shall be provided to the charge card holder by the creditor which maintains the open-end consumer credit plan before the first extension of credit under that plan.
(v) For the purposes of this subsection, the term "charge card" means a card, plate or other single credit device that may be used from time to time to obtain credit which is not subject to a finance charge.
E. The administrator may, by regulation, require the disclosure of information in addition to that required by this subsection or subsection 4, and modify any disclosure of information required by those subsections, in any application to open a credit card account for any person under an open-end consumer credit plan or any application to open a charge card account for any person, or a solicitation to open any such account without requiring an application, if the administrator determines that the action is necessary to carry out the purposes of, or prevent evasions of, this subsection.
4. Disclosure prior to renewal shall be as follows:
A. Except as provided in paragraph B, a card issuer that imposes any fee described in subsection 3, paragraph A, subparagraph (i), division (b), subdivision (1) or subsection 3, paragraph D, subparagraph (i), division (a), shall transmit to the consumer at least 30 days prior to the scheduled renewal date of the consumer's credit or charge card account a clear and conspicuous disclosure of:
(i) The date, the month, or the billing period at the close of which the account will expire if not renewed;
(ii) The information described in subsection 3, paragraph A, subparagraph (i), or subsection 3, paragraph D, subparagraph (i), that would apply if the account were renewed, subject to subsection 5; and
(iii) The method by which the consumer may terminate continued credit availability under the account.
B. Special rule for certain disclosures shall be governed by this paragraph.
(i) The disclosures required by this subsection may be provided:
(a) Prior to posting a fee described in subsection 3, paragraph A, subparagraph (i), division (b), subdivision (1) or subsection 3, paragraph D, subparagraph (i), division (a), to the account; or
(b) With the first periodic billing statement that reflects the posting of the fee to the account.
(ii) Disclosures may be provided under subparagraph (i) only if:
(a) The consumer is given a 30-day period to avoid payment of the fee or to have the fee recredited to the account in any case when the consumer does not wish to continue the availability of the credit; and
(b) The consumer is permitted to use the card during that period without incurring an obligation to pay the fee.
C. The administrator may, by regulation, provide for fewer disclosures than are required by paragraph A in the case of an account which is renewable for a period of less than 6 months.
5. Other rules for disclosures under subsections 3 and 4 shall be as follows.
A. If the amount of any fee required to be disclosed under subsection 3 or 4 is determined on the basis of a percentage of another amount, the percentage used in making that determination and the identification of the amount against which that percentage is applied shall be disclosed in lieu of the amount of that fee.
B. If a credit or charge card issuer does not impose any fee required to be disclosed under any provision of subsection 3 or 4, this provision shall not apply with respect to that issuer.
6. If the amount of any fee required to be disclosed by a credit or charge card issuer under subsection 3, paragraph A, subparagraph (ii); subsection 3, paragraph C, subparagraph (ii), division (a), subdivision (2); subsection 3, paragraph D, subparagraph (ii); or subsection 3, paragraph D, subparagraph (iii), division (a), subdivision (2), varies from state to state, the card issuer may disclose the range of those fees for purposes of subsection 3 in lieu of the amount for each applicable state, if that disclosure includes a statement that the amount of the fee varies from state to state.
7. Insurance in connection with certain open-end credit card plans shall be as follows:
A. Whenever a card issuer that offers any guarantee or insurance for repayment of all or part of the outstanding balance of an open-end credit card plan proposes to change the provider of that guarantee or insurance, the card issuer shall send each insured consumer written notice of the proposed change not less than 30 days prior to the change, including notice of any increase in the rate or substantial decrease in coverage or service which will result from that change. The notice may be included on or with the monthly statement provided to the consumer prior to the month in which the proposed change would take effect.
B. In any case in which a proposed change described in paragraph A occurs, the insured consumer shall be given the name and address of the new guarantor or insurer and a copy of the policy or group certificate containing the basic terms and conditions, including the premium rate to be charged.
C. The notices required under paragraphs A and B shall each include a statement that the consumer has the option to discontinue the insurance or guarantee.
D. The administrator shall define in regulations what constitutes a "substantial decrease in coverage or service" for purposes of paragraph A.
1. For each consumer credit transaction other than under an open-end credit plan, the creditor shall disclose each of the following items, to the extent applicable:
A. The identity of the creditor required to make disclosure;
B. The "amount financed," using that term, which shall be the amount of credit of which the consumer has actual use. This amount shall be computed as follows, but the computations need not be disclosed and shall not be disclosed with the disclosures conspicuously segregated in accordance with subsection 2:
(i) Take the principal amount of the loan or the case price less down payment and trade-in;
(ii) Add any charges which are not part of the finance charge or of the principal amount of the loan and which are financed by the consumer, including the cost of any items excluded from the finance charge pursuant to section 8-105; and
(iii) Subtract any charges which are part of the finance charge but which will be paid by the consumer before or at the time of the consummation of the transaction, or have been withheld from the proceeds of the credit;
C. In conjunction with the disclosure of the amount financed, a creditor shall provide a statement of the consumer's right to obtain, upon a written request, a written itemization of the amount financed. The statement shall include spaces for a "yes" and "no" indication to be initialed by the consumer to indicate whether the consumer wants a written itemization of the amount financed. Upon receiving an affirmative indication, the creditor shall provide, at the time other disclosures are required to be furnished, a written itemization of the amount financed. For the purposes of this paragraph, "itemization of the amount financed" means a disclosure of the following items, to the extent applicable:
(i) The amount that is or will be paid directly to the consumer;
(ii) The amount that is or will be credited to the consumer's account to discharge obligations owed to the creditor;
(iii) Each amount that is or will be paid to 3rd persons by the creditor on the consumer's behalf, together with an identification of or reference to the 3rd person; and
(iv) The total amount of any charges described in paragraph B, subparagraph (iii);
D. The "finance charge," not itemized, using that term;
E. The finance charge expressed as an "annual percentage rate," using that term. This is not required if the amount financed does not exceed $75 and the finance charge does not exceed $5, or if the amount financed exceeds $75 and the finance charge does not exceed $7.50;
F. The sum of the amount financed and the finance charge, which shall be termed the "total of payments;"
G. The number, amount and due dates or period of payments scheduled to repay the total of payments;
H. In a sale of property or services in which the seller is the creditor required to disclose pursuant to section 8-201, subsection 2, the "total sale price," using that term, which shall be the total of the cash price of the property or services, additional charges and the finance charge;
I. Descriptive explanations of the terms "amount financed," "finance charge," "annual percentage rate," "total of payments" and "total sale price" as specified by the administrator. The descriptive explanation of "total sale price" shall include reference to the amount of the down payment;
J. Where the credit is secured, a statement that a security interest has been taken in:
(i) The property which is purchased as part of the credit transaction; or
(ii) Property not purchased as part of the credit transaction identified by item or type;
K. Any dollar charge or percentage amount which may be imposed by a creditor solely on account of a late payment, other than a deferral or extension charge;
L. A statement indicating whether or not the consumer is entitled to a rebate of any finance charge upon refinancing or prepayment in full pursuant to acceleration or otherwise, if the obligation involves a precomputed finance charge. A statement indicating whether or not a penalty will be imposed in those same circumstances if the obligation involves a finance charge computed from time to time by application of a rate to the unpaid principal balance;
M. A statement that the consumer should refer to the appropriate contract document for any information such document provides about nonpayment, default, the right to accelerate the maturity of the debt and prepayment rebates and penalties;
N. In any residential mortgage transaction, a statement indicating whether a subsequent purchaser or assignee of the consumer may assume the debt obligation on its original terms and conditions; and
O. In the case of a variable interest rate residential mortgage transaction, in disclosures provided at application as prescribed by the administrator 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 administrator, assuming the maximum periodic increases in rates and payments under the program, or a historical example illustrating the effects of interest rates changes implemented according to the loan program.
2. Except as otherwise provided in this Article, the disclosures required under subsection 1 shall be made before the credit is extended. Except for the identity of the creditor, all disclosures required under subsection 1 and any disclosure provided for in section 8-105, subsection 2, 3 or 4 shall be conspicuously segregated from all other terms, data or information provided in connection with a transaction, including any computations or itemization.
3. In the case of a residential mortgage transaction, which is also subject to the Real Estate Settlement Procedures Act, United States Code, Title 12, Section 2601, et seq., good faith estimates of the disclosures required under subsection 1 shall be made in accordance with regulations of the administrator under section 8-201, subsection 3, before the credit is extended, or shall be delivered or placed in the mail not later than 3 business days after the creditor receives the consumer's written application, whichever is earlier. If the disclosure statement furnished within 3 days of the written application contains an annual percentage rate which is subsequently rendered inaccurate within the meaning of section 8-106, subsection 3, the creditor shall furnish another statement at the time of settlement or consummation.
4. If a creditor receives a purchase order by mail or telephone without personal solicitation, and the cash price and the total sale price and the terms of financing, including the annual percentage rate, are set forth in the creditor's catalog or other printed material distributed to the public, then the disclosures required under subsection 1 may be made at any time not later than the date the first payment is due.
5. If a creditor receives a request for a loan by mail or telephone without personal solicitation and the terms of financing, including the annual percentage rate for representative amounts of credit, are set forth in the creditor's printed material distributed to the public or in the contract of loan or other printed material delivered to the obligor then the disclosures required under subsection 1 may be made at any time not later than the date the first payment is due.
6. If a consumer credit sale is one of a series of consumer credit sales transactions made pursuant to an agreement providing for the addition of the total sale price of that sale to an existing outstanding balance, and the person to whom the credit is extended has approved in writing both the annual percentage rate or rates and the method of computing the finance charge or charges, and the creditor retains no security interest in any property as to which he has received payments aggregating the amount of the sales price including any finance charges attributable therto, then the disclosure required under subsection 1 for the particular sale may be made at any time not later than the date the first payment for that sale is due. For the purposes of this subsection, in the case of items purchased on different dates, the first purchased shall be deemed first paid for, and in the case of items purchased on the same date, the lowest priced shall be deemed first paid for.
1. In addition to other disclosures required under this article, for each high-rate, high-fee mortgage the creditor shall provide to the consumer the following disclosures in conspicuous type size.
A. "You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application."
B. "If you obtain this loan, the lender will have a mortgage on your home. You could lose your home and any money you have put into it if you do not meet your obligations under the loan."
2. In addition to the disclosures required under subsection 1, the creditor shall disclose:
A. For a credit transaction with a fixed rate of interest, the annual percentage rate and the amount of the regular monthly payment; or
B. For any other credit transaction, the annual percentage rate of the loan, the amount of the regular monthly payment, a statement that the interest rate and monthly payment may increase and the amount of the maximum monthly payment based on the maximum interest rate allowed pursuant to the federal Competitive Equality Banking Act of 1987, Public Law No. 100-86, Section 1204, 101 Stat. 552, 662 (1987).
3. The disclosures required by this section must be given to the consumer at least 3 business days prior to the consummation of the transaction.
4. After providing the disclosures required by this section, a creditor may not change the terms of the extension of credit if the changes make the disclosures inaccurate, unless new disclosures are provided that meet the requirements of this section.
A. A creditor may provide new disclosures by telephone under the following terms:
(1) The change is initiated by the consumer; and
(2) At the consummation of the transaction under which the credit is extended, the creditor provides to the consumer the new disclosures in writing and the creditor and the consumer certify in writing that those new disclosures were provided by telephone at least 3 days prior to the date of consummation of the transaction.
5. Upon determining that a modification of the disclosure process is necessary to permit consumers to meet bona fide personal financial emergencies, the administrator may adopt rules authorizing the modification or waiver of the rights of disclosure created under subsections 3 and 4 to the extent allowed under the regulations.
6. A high-rate, high-fee mortgage may not contain terms under which a consumer must pay a prepayment penalty for paying all or part of the principal before the date on which the principal is due.
A. For purposes of this subsection and subsection 7, 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 the federal Housing and Community Development Act of 1992, Public Law No. 102-550, Section 933(d), 106 Stat. 3672, 3892 (1992).
7. Notwithstanding subsection 6, a high-rate, high-fee mortgage may contain a prepayment penalty, including terms calculating a refund by a method that is not prohibited under the federal Housing and Community Development Act of 1992, Public Law No. 102-550, Section 933(b), 106 Stat. 3672, 3892 (1992), for the transaction in question if:
A. At the time the mortgage is consummated:
(1) The consumer is not liable for an amount of monthly indebtedness payments, including the amount of credit extended or to be extended under the transaction, that is greater than 50% of the monthly gross income of the consumer; and
(2) The income and expenses of the consumer are verified by a financial statement signed by the consumer, by a credit report and, in the case of employment income, by payment records or by verification from the employer of the consumer, which may be in the form of a copy of a pay stub or other payment record supplied by the consumer;
B. The penalty applies only to a prepayment made with amounts obtained by the consumer by means other than a refinancing by the creditor under the mortgage or an affiliate of that creditor;
C. The penalty does not apply after the end of the 5-year period beginning on the date the mortgage is consummated; and
D. The penalty is not prohibited under other applicable law.
8. A high-rate, high-fee mortgage may not provide for an interest rate applicable after default that is higher than the interest rate that applies before default or for default charges in excess of 5% of the amount in default. If the date of maturity of such a mortgage is accelerated due to default and the consumer is entitled to a rebate of interest, that rebate must be computed by a method that is not less favorable than the actuarial method, as that term is defined in the federal Housing and Community Development Act of 1992, Public Law No. 102-550, Section 933(d) 106 Stat. 3672, 3892 (1992).
9. A high-rate, high-fee mortgage that has a term of less than 5 years may not include terms under which the aggregate amount of the regular periodic payments will not fully amortize the outstanding principal balance.
10. A high-rate, high-fee mortgage may not include terms under which the outstanding principal balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of interest due.
11. A high-rate, high-fee mortgage may not include terms under which more than 2 periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the consumer.
11-A. A creditor who makes a high-rate, high-fee mortgage shall report both the favorable and unfavorable payment history of the consumer to a nationally recognized consumer credit reporting agency at least annually during the period the creditor holds or services the loan.
12. A creditor may not engage in a pattern or practice of extending credit to a consumer under a high-rate, high-fee mortgage based on the consumer's collateral without regard to the consumer's repayment ability, including the consumer's current and expected income, current obligations and employment.
12-A. A creditor may not:
A. Charge any points in connection with a high-rate, high-fee mortgage if the proceeds of the high-rate, high-fee mortgage are used to refinance an existing high-rate, high-fee mortgage owned by the creditor and the last financing was within 18 months of the current refinancing; except, however, this paragraph does not prohibit a creditor from charging points in connection with any additional proceeds received by the consumer or paid to 3rd parties on the consumer's behalf in connection with the refinancing. For purposes of this subsection, "additional proceeds" for a closed-end loan is the amount over and above the outstanding principal balance of the existing high-rate, high-fee mortgage; or
B. Charge a consumer any fees to modify, renew, extend or amend a high-rate, high-fee mortgage or defer any payment due under a high-rate, high-fee mortgage if, after the modification, renewal, extension or amendment, the loan is still a high-rate, high-fee mortgage or, if no longer a high-rate, high-fee mortgage, the annual percentage rate has not been reduced by a least 2 percentage points. For purposes of this paragraph, the term "fees" does not include interest that is otherwise payable and consistent with the provisions of the loan documents. The provisions of this paragraph do not prohibit a creditor from charging, imposing or causing to be paid, directly or indirectly, prepaid finance charges in connection with any additional proceeds, as defined in paragraph A, received by the consumer in connection with the modification, renewal, extension or amendment, provided the prepaid finance charges on the additional proceeds do not exceed 5% of the additional proceeds. This paragraph does not apply if the existing high-rate, high-fee mortgage is 60 or more days delinquent and the modification, renewal, extension, amendment or deferral is part of a work-out process.
13. A creditor may not make a payment to a contractor under a home improvement contract from amounts extended as credit under a high-rate, high-fee mortgage, except:
A. In the form of an instrument that is payable to the consumer or jointly to the consumer and the contractor; or
B. At the election of the consumer, by a 3rd-party escrow agent in accordance with terms established in a written agreement signed by the consumer, the creditor and the contractor before the date of payment.
13-A. A creditor may not advertise that refinancing preexisting debt with a high-rate, high-fee mortgage will reduce a consumer's aggregate monthly debt payment without also disclosing that the high-rate, high-fee mortgage may increase both the consumer's aggregate number of monthly debt payments and the aggregate amount paid by the consumer over the term of the high-rate, high-fee mortgage.
13-B. A creditor may not recommend or encourage default or further default by a consumer on an existing loan or other debt prior to the closing of a high-rate, high-fee mortgage that refinances all or any portion of the existing loan or debt.
13-C. Beginning January 1, 2004, a creditor that makes a high-rate, high-fee mortgage to a consumer and offers the consumer the option to purchase an individual or group credit life, accident, health, disability or unemployment insurance product on a prepaid single premium basis must also offer the consumer the option of purchasing that insurance product on a monthly premium basis.
If a consumer purchases from a lender an individual or group credit life, accident, health, disability or unemployment insurance product, that consumer has the right to cancel the insurance product at any time and receive a refund of any unearned premiums paid. Notice of the right to cancel must be sent by mail to the consumer by the creditor no later than 30 days after consummation. The notice must also disclose the type of insurance product purchased, the cost of the product and the procedure for canceling the product.
14. A mortgage that contains a provision prohibited by this section is deemed a failure to deliver the material disclosures required under this article for the purpose of section 8-204.
15. The administrator may, by rule or order, exempt specific mortgage products or categories of mortgages from any of the prohibitions specified in subsections 6 to 13 if the administrator finds that the exemption:
A. Is in the interest of the borrowing public; and
B. Applies only to products that maintain and strengthen home ownership and equity protection.
16. The administrator, by regulation or order, shall prohibit acts or practices in connection with:
A. Mortgage loans that the administrator finds unfair, deceptive or designed to evade the provisions of this section; and
B. Refinancing of mortgage loans that the administrator finds are associated with abusive lending practices or that are otherwise not in the interest of the borrowing public.
16-A. A creditor that makes a high-rate, high-fee mortgage to a consumer and any assignee of that creditor have the obligation, jointly and severally, to refund or credit the consumer for any default charges, prepayment penalties or prepaid finance charges collected in excess of the limits set forth in this article.
16-B. A high-rate, high-fee mortgage may not include a call provision that permits the creditor, in its sole discretion, to accelerate the indebtedness. This subsection does not apply when repayment of the loan is accelerated by a bona fide default, pursuant to a due-on-sale clause provision or pursuant to another provision of the loan agreement unrelated to the payment schedule, including, but not limited to, bankruptcy or receivership.
17. For purposes of this section, the term "affiliate" has the same meaning as in the federal Bank Holding Company Act of 1956, 12 United States Code, Section 1841, subsection (K).
18. A political subdivision of this State is prohibited from enacting, issuing and enforcing ordinances, resolutions, rules, regulations, orders, requests for proposals or requests for bids pertaining to the making of a high-rate, high-fee mortgage by a person who:
A. Is subject to the jurisdiction of the Office of Consumer Credit Regulation or the Bureau of Financial Institutions, including activities subject to this article;
B. Is subject to the jurisdiction or regulatory supervision of the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, the Federal Deposit Insurance Corporation, the Federal Trade Commission or the United States Department of Housing and Urban Development;
C. Is subject to the jurisdiction or regulatory supervision of a department or agency of another state; or
D. Originates, purchases, sells, assigns, securitizes or services property interests or obligations created by financial transactions or loans made, executed or originated by a person referred to in paragraph A, B or C or assist or facilitate such transactions.
This subsection applies to all ordinances, resolutions, rules, regulations, orders, requests for proposals and requests for bids pertaining to financial or lending activities, including any ordinances, resolutions, rules, regulations, orders, requests for proposals and requests for bids disqualifying persons from doing business with a political subdivision based upon the making of a high-rate, high-fee mortgage or imposing reporting requirements or any other obligations upon persons regarding the making of a high-rate, high-fee mortgage.
This subsection applies retroactively to all ordinances, resolutions, rules, regulations, orders, requests for proposals and requests for bids in existence on the effective date of this subsection.
1. In addition to the disclosures required under this article, for each reverse mortgage the creditor shall provide to the consumer, at least 3 days prior to the consummation of the transaction, a disclosure in conspicuous type of a good faith estimate of the projected total cost of the mortgage to the consumer expressed as a table of annual interest rates. Each annual interest rate must be based on a projected total future credit extension balance under a projected appreciation rate for the dwelling and a term for the mortgage. The disclosure must include:
A. Statements of the annual interest rates for at least 3 projected appreciation rates and at least 3 credit transaction periods, as determined by the administrator, including:
(1) A short-term reverse mortgage;
(2) A term equaling the actuarial life expectancy of the consumer; and
(3) Any longer term the administrator determines appropriate; and
B. A statement that the consumer is not obligated to complete the reverse mortgage transaction merely because the consumer has received the disclosure required under this section or has signed an application for the reverse mortgage.
2. In determining the projected total cost of the mortgage to be disclosed to the consumer under subsection 1, the creditor shall take into account:
A. Any shared appreciation or equity that the lender is, by contract, entitled to receive;
B. All costs and charges to the consumer, including the costs of any associated annuity that the consumer elects or is required to purchase as part of the reverse mortgage transaction;
C. All payments to and for the benefit of the consumer including, when an associated annuity is purchased and whether or not that purchase is required by the lender as a condition of making the reverse mortgage, the annuity payments received by the consumer and financed from the proceeds of the loan, instead of the proceeds used to finance the annuity; and
D. Any limitation on the liability of the consumer under reverse mortgage transactions such as nonrecourse limits and equity conservation agreements.
Each creditor shall give a consumer prior to the consummation of the lease a dated written statement on which the creditor and consumer are identified setting out accurately and in a clear and conspicuous manner, as prescribed by rules adopted by the administrator, the following information with respect to that lease, as applicable:
1. A brief description or identification of the leased property, including its capitalized cost;
2. The amount of any payment by the consumer required at the inception of the lease;
3. The amount paid or payable by the consumer for official fees, registration, certificate of title or license fees or taxes;
4. The amount of other charges payable by the consumer not included in the periodic payments, a description of the charges and that the consumer shall be liable for the differential, if any, between the anticipated fair market value of the leased property and its appraised actual value at the termination of the lease, if the consumer has such liability;
5. A statement of the amount or method of determining the amount of any liabilities the lease imposes upon the consumer at the end of the term and whether or not the consumer has the option to purchase the leased property and at what price and time;
6. A statement identifying all express warranties and guarantees made by the manufacturer or creditor with respect to the leased property, and identifying the party responsible for maintaining or servicing the leased property together with a description of the responsibility;
7. A brief description of insurance provided or paid for by the creditor or required of the consumer, including the types and amounts of the coverages and costs;
8. A description of any security interest held or to be retained by the creditor in connection with the lease and a clear identification of the property to which the security interest relates, subject to the restriction of section 3-301;
9. The number, amount and due dates or periods of payments under the lease and the total amount of such periodic payments;
10. Where the lease provides that the consumer shall be liable for the anticipated fair market value of the property on expiration of the lease, the fair market value of the property at the inception of the lease, the aggregate cost of the lease on expiration and the differential between them; and
11. A statement of the conditions under which the consumer or creditor may terminate the lease prior to the end of the term and the amount or method of determining any penalty or other charge for delinquency, default, late payments or early termination, subject to the restrictions of Article II.
The disclosures required under this section shall be made in accordance with rules adopted by the administrator and shall be signed by the consumer. The administrator may provide by regulation that any portion of the information required to be disclosed under this section may be given in the form of estimates where the creditor is not in a position to know exact information.
1. Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this Article, including any requirement under section 8-204, with respect to any person is liable to that person in an amount equal to the sum of:
A. Any actual damage sustained by such person as a result of the failure;
B. In an individual action:
(i) Twice the amount of any finance charge in connection with the transaction; or
(ii) In the case of a consumer lease, 25% of the total amount of monthly payments under the lease.
Liability under this paragraph may not be less than $100 nor greater than $1,000; except that in the case of a credit transaction not under an open-end credit plan that is secured by real property or a dwelling, liability under this paragraph may not be less than $200 nor greater than $2,000;
C. In the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of recision under section 8-204, the costs of the action, together with a reasonable attorney's fee as determined by the court; and
D. In the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery is applicable, and the total recovery for any class action or series of class actions arising out of the same failure to comply by the same creditor shall not be more than the lesser of $500,000 or 1% of the net worth of the creditor. In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected and the extent to which the creditor's failure of compliance was intentional.
2. A creditor or assignee has no liability under this section, section 8-108 or section 8-109 for any failure to comply with any requirement imposed under this Article, if within 60 days after discovering an error, whether pursuant to a final written examination report or notice issued under section 8-108, subsection 3, or through the creditor's or assignee's own procedures and prior to the institution of an action under this section or the receipt of written notice of the error from the obligor, the creditor or assignee notifies the person concerned of the error and makes whatever adjustments in the appropriate account are necessary to assure that the person will not be required to pay an amount in excess of the charge actually disclosed, or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower.
3. A creditor or assignee may not be held liable in any action brought under this section or section 8-204 for a violation of this Article if the creditor or assignee shows by a perponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programming and printing errors, except that an error of legal judgment with respect to a person's obligations under this Article is not a bona fide error.
4. When there are multiple obligors in a consumer credit transaction, there shall be not more than one recovery of damages under subsection 1, paragraph B, for a violation of this Article.
5. Any action under this section may be brought in any court of competent jurisdiction, within one year from the date of the occurrence of the violation. This subsection does not bar a person from asserting a violation of this Article in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action.
6. The multiple failure to disclose to any person any information required under this Article to be disclosed in connection with a single account under an open-end consumer credit plan, other single consumer credit sale, consumer loan, consumer lease or other extension of consumer credit shall entitle the person to a single recovery under this section, but continued failure to disclose after a recovery has been granted shall give rise to rights to additional recoveries. This subsection does not bar any remedy permitted by section 8-204.
7. A person may not take any action to offset any amount for which a creditor or assignee is potentially liable to such person under subsection 1, paragraph B, against any amount owed by that person, unless the amount of the creditor's or assignee's liability under this Article has been determined by judgment of a court of competent jurisdiction in an action of which that person was a party. This subsection does not bar a consumer then in default on the obligation from asserting a violation of this Article as an original action, or as a defense or counterclaim to an action to collect amounts owed by the consumer brought by a person liable under this Article.
8. With respect to disclosure under sections 8-205 and 8-206, a creditor is liable under subsection 1, paragraphs B or D, only for the failure to comply with certain disclosure requirements.
A. In connection with the disclosures of section 8-205, subsections 1 and 2 of a creditor's only liability under subsection 1, paragraphs B or D, is for failing to comply with the requirements of section 8-204, section 8-205, subsection 1 or subsection 2, paragraph D, E, F, G, H, I or J.
B. In connection with the disclosures of section 8-206, a creditor's only liability determined under subsection 1, paragraph B or D is for failing to comply with the requirements of section 8-204 or section 8-206, subsection 1, paragraph B, D, E, F, G or J.
C. With respect to any failure to make disclosures required by this Article, liability shall be imposed only upon the creditor required to make disclosures, except as provided in section 8-209.
D. [1981, c. 698, §23 (rp).]
9. In connection with the disclosures referred to in section 8-205, subsections 3 or 4, a card issuer shall have a liability under this section only to a card holder who uses a credit or charge card or pays a fee described in section 8-205, subsection 3, paragraph A, subparagraph (i), division (b), subdivision (1) or section 8-205, subsection 3, paragraph D, subparagraph (i), division (a).
1. For any closed-end consumer credit transaction subject to this Title that is secured by real property or a dwelling and that is consummated before September 30, 1995, a creditor or any assignee of a creditor does not have civil, administrative or criminal liability under this Title for, and a consumer does not have extended rescission rights under section 8-204, subsection 6 with respect to:
A. The creditor's treatment, for disclosure purposes, of:
(i) Taxes described in section 8-105, subsection 4, paragraph C;
(ii) Fees described in section 8-105, subsection 5, paragraphs B and E;
(iii) Fees and amounts described in section 8-105, subsection 1-A; or
(iv) Borrower-paid mortgage broker fees referred to in section 8-105, subsection 1, paragraph F;
B. The form of written notice used by the creditor to inform the obligor of the rights of the obligor under section 8-204 if the creditor provided the obligor with a properly dated form of written notice published and adopted by the administrator or a comparable written notice and otherwise complied with all the requirements of this section regarding notice; or
C. Any disclosure relating to the finance charge imposed with respect to the transaction if the amount or percentage actually disclosed:
(i) Is deemed accurate for purposes of this Title and if the amount disclosed as the finance charge does not vary from the actual finance charge by more than $200;
(ii) May, under section 8-105, subsection 6, paragraph B, be deemed accurate for purposes of section 8-204; or
(iii) Is greater than the amount or percentage required to be disclosed under this Title.
2. Subsection 1 does not apply to:
A. Any individual action or counterclaim brought under this Title that was filed before June 1, 1995;
B.Any class action brought under this Title for which a final order certifying a class was entered before January 1, 1995;
C.The named individual plaintiffs in any class action brought under this Title that was filed before June 1, 1995; or
D.Any consumer credit transaction for which a timely notice of rescission was sent to the creditor before June 1, 1995.
1. Except as otherwise specifically provided in this Article, any civil action for a violation of this Article or proceeding under section 8-108 which may be brought against a creditor may be maintained against any assignee of such creditor only if the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement, except where the assignment was involuntary. For the purpose of this section, a violation apparent on the face of the disclosure statement includes, but is not limited to:
A. A disclosure which can be determined to be incomplete or inaccurate from the face of the disclosure statement or other documents assigned; or
B. A disclosure which does not use the terms required to be used by this Article.
2. Except as provided in section 8-204, subsection 3, in any action or proceeding by or against any subsequent assignee of the original creditor without knowledge to the contrary by the assignee when he acquires the obligation, written acknowledgement of receipt by a person to whom a statement is required to be given pursuant to this Article is conclusive proof of the delivery thereof and, except as provided in subsection 1, of compliance with this Article. This section does not affect the rights of the obligor in any action against the original creditor.
3. Any consumer who has the right to rescind a transaction under section 8-204 may rescind the transaction as against any assignee of the obligation.
4. The rights upon assignment of certain mortgages are determined in accordance with the following.
A. Any person who purchases or is otherwise assigned a high-rate, high-fee mortgage, as defined in section 8-103, subsection 1, paragraph F-1, is subject to all claims and defenses with respect to that mortgage that the consumer may assert against the creditor of the mortgage, unless the purchaser or assignee demonstrates by a preponderance of the evidence that a reasonable person exercising ordinary due diligence could not determine, based on the documentation required by this Title, the itemization of the amount financed and other disclosure of disbursements, that the mortgage was a high-rate, high-fee mortgage. This paragraph does not affect rights of a consumer under subsection 1, 2 or 3 or any other provision of this Title.
B. Notwithstanding any other provision of law, relief provided as a result of any action made permissible by paragraph A may not exceed:
(i) With respect to actions based upon a violation of this Title, the amount specified in section 8-208; and
(ii) With respect to all other causes of action, the sum of:
(a) The amount of all remaining indebtedness; and
(b) The total amount paid by the consumer in connection with the transaction.
C. The amount of damages that may be awarded under paragraph B, subparagraph (ii) must be reduced by the amount of any damages awarded under paragraph B, subparagraph (i).
D. Any person who sells or otherwise assigns a high-rate, high-fee mortgage, as defined in section 8-103, subsection 1, paragraph F-1, shall include a prominent notice of the potential liability under this subsection as determined by the administrator.
5. The liability of assignees for consumer credit transactions secured by real property is determined in accordance with the following.
A. Except as otherwise provided in this Title, any civil action against a creditor for a violation of this Title and any proceeding under section 8-108 against a creditor, with respect to a consumer credit transaction secured by real property, may be maintained against any assignee of that creditor only if:
(i) The violation for which the action or proceeding is brought is apparent on the face of the disclosure statement provided in connection with the transaction pursuant to this Title; and
(ii) The assignment to the assignee was voluntary.
B. For the purposes of this subsection, a violation is apparent on the face of the disclosure statement if:
(i) The disclosure can be determined to be incomplete or inaccurate by a comparison among the disclosure statement, any itemization of the amount financed, the note or any other disclosure of disbursement; or
(ii) The disclosure statement does not use the terms or format required under this Title.
6. The treatment of a servicer of a consumer obligation from a consumer credit transaction is determined in accordance with the following.
A. A servicer of a consumer obligation arising from a consumer credit transaction may not be treated as an assignee of such an obligation for purposes of this section unless the servicer is or was the owner of the obligation.
B. A servicer of a consumer obligation arising from a consumer credit transaction may not be treated as the owner of the obligation for purposes of this section on the basis of an assignment of the obligation from the creditor or another assignee to the servicer solely for the administrative convenience of the servicer in servicing the obligation. Upon written request by the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address and telephone number of the owner of the obligation or the master servicer of the obligation.
C. For purposes of this subsection, the term "servicer" has the same meaning as in the federal Real Estate Settlement Procedures Act of 1974, Section 6(i)(2).
D. This subsection applies to all consumer credit transactions in existence or consummated on or after September 30, 1995.
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