
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC1607]

 
                      TITLE 15--COMMERCE AND TRADE
 
                 CHAPTER 41--CONSUMER CREDIT PROTECTION
 
              SUBCHAPTER I--CONSUMER CREDIT COST DISCLOSURE
 
                       Part A--General Provisions
 
Sec. 1607. Administrative enforcement


(a) Enforcing agencies

    Compliance with the requirements imposed under this subchapter shall 
be enforced under
        (1) section 8 of the Federal Deposit Insurance Act [12 U.S.C. 
    1818], in the case of--
            (A) national banks, and Federal branches and Federal 
        agencies of foreign banks, by the Office of the Comptroller of 
        the Currency;
            (B) member banks of the Federal Reserve System (other than 
        national banks), branches and agencies of foreign banks (other 
        than Federal branches, Federal agencies, and insured State 
        branches of foreign banks), commercial lending companies owned 
        or controlled by foreign banks, and organizations operating 
        under section 25 or 25(a) \1\ of the Federal Reserve Act [12 
        U.S.C. 601 et seq., 611 et seq.], by the Board; and
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    \1\ See References in Text note below.
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            (C) banks insured by the Federal Deposit Insurance 
        Corporation (other than members of the Federal Reserve System) 
        and insured State branches of foreign banks, by the Board of 
        Directors of the Federal Deposit Insurance Corporation;

        (2) section 8 of the Federal Deposit Insurance Act [12 U.S.C. 
    1818], by the Director of the Office of Thrift Supervision, in the 
    case of a savings association the deposits of which are insured by 
    the Federal Deposit Insurance Corporation.
        (3) the Federal Credit Union Act [12 U.S.C. 1751 et seq.], by 
    the National Credit Union Administration Board with respect to any 
    Federal credit union.
        (4) part A of subtitle VII of title 49, by the Secretary of 
    Transportation with respect to any air carrier or foreign air 
    carrier subject to that part.
        (5) the Packers and Stockyards Act, 1921 [7 U.S.C. 181 et seq.] 
    (except as provided in section 406 of that Act [7 U.S.C. 226, 227]), 
    by the Secretary of Agriculture with respect to any activities 
    subject to that Act.
        (6) the Farm Credit Act of 1971 [12 U.S.C. 2001 et seq.] by the 
    Farm Credit Administration with respect to any Federal land bank, 
    Federal land bank association, Federal intermediate credit bank, or 
    production credit association.

The terms used in paragraph (1) that are not defined in this subchapter 
or otherwise defined in section 3(s) of the Federal Deposit Insurance 
Act (12 U.S.C. 1813(s)) shall have the meaning given to them in section 
1(b) of the International Banking Act of 1978 (12 U.S.C. 3101).

(b) Violations of this subchapter deemed violations of pre-existing 
        statutory requirements; additional agency powers

    For the purpose of the exercise by any agency referred to in 
subsection (a) of this section of its powers under any Act referred to 
in that subsection, a violation of any requirement imposed under this 
subchapter shall be deemed to be a violation of a requirement imposed 
under that Act. In addition to its powers under any provision of law 
specifically referred to in subsection (a) of this section, each of the 
agencies referred to in that subsection may exercise, for the purpose of 
enforcing compliance with any requirement imposed under this subchapter, 
any other authority conferred on it by law.

(c) Federal Trade Commission as overall enforcing agency

    Except to the extent that enforcement of the requirements imposed 
under this subchapter is specifically committed to some other Government 
agency under subsection (a) of this section, the Federal Trade 
Commission shall enforce such requirements. For the purpose of the 
exercise by the Federal Trade Commission of its functions and powers 
under the Federal Trade Commission Act [15 U.S.C. 41 et seq.], a 
violation of any requirement imposed under this subchapter shall be 
deemed a violation of a requirement imposed under that Act. All of the 
functions and powers of the Federal Trade Commission under the Federal 
Trade Commission Act are available to the Commission to enforce 
compliance by any person with the requirements imposed under this 
subchapter, irrespective of whether that person is engaged in commerce 
or meets any other jurisdictional tests in the Federal Trade Commission 
Act.

(d) Rules and regulations

    The authority of the Board to issue regulations under this 
subchapter does not impair the authority of any other agency designated 
in this section to make rules respecting its own procedures in enforcing 
compliance with requirements imposed under this subchapter.

(e) Adjustment of finance charges; procedures applicable, coverage, 
        criteria, etc.

    (1) In carrying out its enforcement activities under this section, 
each agency referred to in subsection (a) or (c) of this section, in 
cases where an annual percentage rate or finance charge was inaccurately 
disclosed, shall notify the creditor of such disclosure error and is 
authorized in accordance with the provisions of this subsection to 
require the creditor to make an adjustment to the account of the person 
to whom credit was extended, to assure that such person will not be 
required to pay a finance charge in excess of the finance charge 
actually disclosed or the dollar equivalent of the annual percentage 
rate actually disclosed, whichever is lower. For the purposes of this 
subsection, except where such disclosure error resulted from a willful 
violation which was intended to mislead the person to whom credit was 
extended, in determining whether a disclosure error has occurred and in 
calculating any adjustment, (A) each agency shall apply (i) with respect 
to the annual percentage rate, a tolerance of one-quarter of 1 percent 
more or less than the actual rate, determined without regard to section 
1606(c) of this title, and (ii) with respect to the finance charge, a 
corresponding numerical tolerance as generated by the tolerance provided 
under this subsection for the annual percentage rate; except that (B) 
with respect to transactions consummated after two years following March 
31, 1980, each agency shall apply (i) for transactions that have a 
scheduled amortization of ten years or less, with respect to the annual 
percentage rate, a tolerance not to exceed one-quarter of 1 percent more 
or less than the actual rate, determined without regard to section 
1606(c) of this title, but in no event a tolerance of less than the 
tolerances allowed under section 1606(c) of this title, (ii) for 
transactions that have a scheduled amortization of more than ten years, 
with respect to the annual percentage rate, only such tolerances as are 
allowed under section 1606(c) of this title, and (iii) for all 
transactions, with respect to the finance charge, a corresponding 
numerical tolerance as generated by the tolerances provided under this 
subsection for the annual percentage rate.
    (2) Each agency shall require such an adjustment when it determines 
that such disclosure error resulted from (A) a clear and consistent 
pattern or practice of violations, (B) gross negligence, or (C) a 
willful violation which was intended to mislead the person to whom the 
credit was extended. Notwithstanding the preceding sentence, except 
where such disclosure error resulted from a willful violation which was 
intended to mislead the person to whom credit was extended, an agency 
need not require such an adjustment if it determines that such 
disclosure error--
        (A) resulted from an error involving the disclosure of a fee or 
    charge that would otherwise be excludable in computing the finance 
    charge, including but not limited to violations involving the 
    disclosures described in sections 1605(b), (c) and (d) of this 
    title, in which event the agency may require such remedial action as 
    it determines to be equitable, except that for transactions 
    consummated after two years after March 31, 1980, such an adjustment 
    shall be ordered for violations of section 1605(b) of this title;
        (B) involved a disclosed amount which was 10 per centum or less 
    of the amount that should have been disclosed and (i) in cases where 
    the error involved a disclosed finance charge, the annual percentage 
    rate was disclosed correctly, and (ii) in cases where the error 
    involved a disclosed annual percentage rate, the finance charge was 
    disclosed correctly; in which event the agency may require such 
    adjustment as it determines to be equitable;
        (C) involved a total failure to disclose either the annual 
    percentage rate or the finance charge, in which event the agency may 
    require such adjustment as it determines to be equitable; or
        (D) resulted from any other unique circumstance involving 
    clearly technical and nonsubstantive disclosure violations that do 
    not adversely affect information provided to the consumer and that 
    have not misled or otherwise deceived the consumer.

In the case of other such disclosure errors, each agency may require 
such an adjustment.
    (3) Notwithstanding paragraph (2), no adjustment shall be ordered--
        (A) if it would have a significantly adverse impact upon the 
    safety or soundness of the creditor, but in any such case, the 
    agency may--
            (i) require a partial adjustment in an amount which does not 
        have such an impact; or
            (ii) require the full adjustment, but permit the creditor to 
        make the required adjustment in partial payments over an 
        extended period of time which the agency considers to be 
        reasonable, if (in the case of an agency referred to in 
        paragraph (1), (2), or (3) of subsection (a) of this section), 
        the agency determines that a partial adjustment or making 
        partial payments over an extended period is necessary to avoid 
        causing the creditor to become undercapitalized pursuant to 
        section 38 of the Federal Deposit Insurance Act [12 U.S.C. 
        1831o];

        (B) the \2\ amount of the adjustment would be less than $1, 
    except that if more than one year has elapsed since the date of the 
    violation, the agency may require that such amount be paid into the 
    Treasury of the United States, or
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    \2\ So in original. Probably should be preceded by ``if''.
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        (C) except where such disclosure error resulted from a willful 
    violation which was intended to mislead the person to whom credit 
    was extended, in the case of an open-end credit plan, more than two 
    years after the violation, or in the case of any other extension of 
    credit, as follows:
        (i) with respect to creditors that are subject to examination by 
    the agencies referred to in paragraphs (1) through (3) of subsection 
    (a) of this section, except in connection with violations arising 
    from practices identified in the current examination and only in 
    connection with transactions that are consummated after the date of 
    the immediately preceding examination, except that where practices 
    giving rise to violations identified in earlier examinations have 
    not been corrected, adjustments for those violations shall be 
    required in connection with transactions consummated after the date 
    of examination in which such practices were first identified;
        (ii) with respect to creditors that are not subject to 
    examination by such agencies, except in connection with transactions 
    that are consummated after May 10, 1978; and
        (iii) in no event after the later of (I) the expiration of the 
    life of the credit extension, or (II) two years after the agreement 
    to extend credit was consummated.

    (4)(A) Notwithstanding any other provision of this section, an 
adjustment under this subsection may be required by an agency referred 
to in subsection (a) or (c) of this section only by an order issued in 
accordance with cease and desist procedures provided by the provision of 
law referred to in such subsections.
    (B) In case of an agency which is not authorized to conduct cease 
and desist proceedings, such an order may be issued after an agency 
hearing on the record conducted at least thirty but not more than sixty 
days after notice of the alleged violation is served on the creditor. 
Such a hearing shall be deemed to be a hearing which is subject to the 
provisions of section 8(h) of the Federal Deposit Insurance Act [12 
U.S.C. 1818(h)] and shall be subject to judicial review as provided 
therein.
    (5) Except as otherwise specifically provided in this subsection and 
notwithstanding any provision of law referred to in subsection (a) or 
(c) of this section, no agency referred to in subsection (a) or (c) of 
this section may require a creditor to make dollar adjustments for 
errors in any requirements under this subchapter, except with regard to 
the requirements of section 1666d of this title.
    (6) A creditor shall not be subject to an order to make an 
adjustment, if within sixty days after discovering a disclosure error, 
whether pursuant to a final written examination report or through the 
creditor's own procedures, the creditor notifies the person concerned of 
the error and adjusts the account so as to assure that such person will 
not be required to pay a finance charge in excess of the finance charge 
actually disclosed or the dollar equivalent of the annual percentage 
rate actually disclosed, whichever is lower.
    (7) Notwithstanding the second sentence of subsection (e)(1), 
subsection (e)(3)(C)(i), and subsection (e)(3)(C)(ii) of this section, 
each agency referred to in subsection (a) or (c) of this section shall 
require an adjustment for an annual percentage rate disclosure error 
that exceeds a tolerance of one quarter of one percent less than the 
actual rate, determined without regard to section 1606(c) of this title, 
with respect to any transaction consummated between January 1, 1977, and 
March 31, 1980.

(Pub. L. 90-321, title I, Sec. 108, May 29, 1968, 82 Stat. 150; Pub. L. 
91-206, Sec. 3, Mar. 10, 1970, 84 Stat. 49; Pub. L. 93-495, title IV, 
Sec. 403, Oct. 28, 1974, 88 Stat. 1517; Pub. L. 95-630, title V, 
Sec. 501, Nov. 10, 1978, 92 Stat. 3680; Pub. L. 96-221, title VI, 
Sec. 608(a), (c), Mar. 21, 1980, 94 Stat. 171, 173; Pub. L. 98-443, 
Sec. 9(n), Oct. 4, 1984, 98 Stat. 1708; Pub. L. 101-73, title VII, 
Sec. 744(k), Aug. 9, 1989, 103 Stat. 439; Pub. L. 102-242, title II, 
Sec. 212(b), Dec. 19, 1991, 105 Stat. 2299; Pub. L. 102-550, title XVI, 
Sec. 1604(a)(5), Oct. 28, 1992, 106 Stat. 4082; Pub. L. 104-208, div. A, 
title II, Sec. 2106, Sept. 30, 1996, 110 Stat. 3009-402.)

                       References in Text

    Section 25(a) of the Federal Reserve Act, referred to in subsec. 
(a)(1)(B), which is classified to subchapter II (Sec. 611 et seq.) of 
chapter 6 of Title 12, Banks and Banking, was renumbered section 25A of 
that act by Pub. L. 102-242, title I, Sec. 142(e)(2), Dec. 19, 1991, 105 
Stat. 2281. Section 25 of the Federal Reserve Act is classified to 
subchapter I (Sec. 601 et seq.) of chapter 6 of Title 12.
    The Federal Credit Union Act, referred to in subsec. (a)(3), is act 
June 26, 1934, ch. 750, 48 Stat. 1216, as amended, which is classified 
generally to chapter 14 (Sec. 1751 et seq.) of Title 12. For complete 
classification of this Act to the Code, see section 1751 of Title 12 and 
Tables.
    The Packers and Stockyards Act, 1921, referred to in subsec. (a)(5), 
is act Aug. 15, 1921, ch. 64, 42 Stat. 159, as amended, which is 
classified to chapter 9 (Sec. 181 et seq.) of Title 7, Agriculture. For 
complete classification of this Act to the Code, see section 181 of 
Title 7 and Tables.
    The Farm Credit Act of 1971, referred to in subsec. (a)(6), is Pub. 
L. 92-181, Dec. 10, 1971, 85 Stat. 583, as amended, which is classified 
generally to chapter 23 (Sec. 2001 et seq.) of Title 12, Banks and 
Banking. For complete classification of this Act to the Code, see Short 
Title note set out under section 2001 of Title 12 and Tables.
    The Federal Trade Commission Act, referred to in subsec. (c), is act 
Sept. 26, 1914, ch. 311, 38 Stat. 717, as amended, which is classified 
generally to subchapter I (Sec. 41 et seq.) of chapter 2 of this title. 
For complete classification of this Act to the Code, see section 58 of 
this title and Tables.

                          Codification

    In subsec. (a)(4), ``part A of subtitle VII of title 49'' 
substituted for ``the Federal Aviation Act of 1958 [49 App. U.S.C. 1301 
et seq.]'' and ``that part'' substituted for ``that Act'' on authority 
of Pub. L. 103-272, Sec. 6(b), July 5, 1994, 108 Stat. 1378, the first 
section of which enacted subtitles II, III, and V to X of Title 49, 
Transportation.


                               Amendments

    1996--Subsec. (e)(3). Pub. L. 104-208 struck out ``ordered (A) if'' 
and inserted ``ordered--
        ``(A) if'';
struck out ``may require a partial'' and inserted ``may--
        ``(i) require a partial'';
struck out ``, except that with respect to any transaction consumated 
after March 31, 1980, the agency shall require'' and inserted ``; or
        ``(ii) require'';
directed the substitution of ``reasonable, if (in the case of an agency 
referred to in paragraph (1), (2), or (3) of subsection (a) of this 
section), the agency determines that a partial adjustment or making 
partial payments over an extended period is necessary to avoid causing 
the creditor to become undercapitalized pursuant to section 38 of the 
Federal Deposit Insurance Act;
        ``(B) the'';
for ``reasonable, (B) the'', which was executed by making the 
substitution for ``reasonable, (B) if the''; and struck out ``(C) 
except'' and inserted
        ``(C) except''.
    1992--Subsec. (a)(1)(C). Pub. L. 102-550 substituted semicolon for 
period at end.
    1991--Subsec. (a). Pub. L. 102-242, Sec. 212(b)(2), inserted at end 
``The terms used in paragraph (1) that are not defined in this 
subchapter or otherwise defined in section 3(s) of the Federal Deposit 
Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them 
in section 1(b) of the International Banking Act of 1978 (12 U.S.C. 
3101).''
    Pub. L. 102-242, Sec. 212(b)(1), added par. (1) and struck out 
former par. (1) which read as follows: ``section 8 of the Federal 
Deposit Insurance Act, in the case of
        ``(A) national banks, by the Comptroller of the Currency.
        ``(B) member banks of the Federal Reserve System (other than 
    national banks), by the Board.
        ``(C) banks insured by the Federal Deposit Insurance Corporation 
    (other than members of the Federal Reserve System), by the Board of 
    Directors of the Federal Deposit Insurance Corporation.''
    1989--Subsec. (a)(2). Pub. L. 101-73 amended par. (2) generally. 
Prior to amendment, par. (2) read as follows: ``section 5(d) of the Home 
Owner's Loan Act of 1933, section 407 of the National Housing Act, and 
sections 6(i) and 17 of the Federal Home Loan Bank Act, by the Federal 
Home Loan Bank Board (acting directly or through the Federal Savings and 
Loan Insurance Corporation), in the case of any institution subject to 
any of those provisions.''
    1984--Subsec. (a)(4). Pub. L. 98-443 substituted ``Secretary of 
Transportation'' for ``Civil Aeronautics Board''.
    1980--Subsec. (e). Pub. L. 96-221, Sec. 608(a), added subsec. (e).
    Pub. L. 96-221, Sec. 608(c), struck out in pars. (1)(A)(i) and (7) 
``, except in the case of an irregular mortgage lending transaction'' 
after ``section 1606(c) of this title''. See Effective Date of 1980 
Amendment note below.
    1974--Subsec. (a)(4) to (6). Pub. L. 93-495 redesignated pars. (5) 
and (6) as (4) and (5), respectively. Former par. (4), which related to 
enforcement by the Interstate Commerce Commission, was struck out.


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-550 effective as if included in the Federal 
Deposit Insurance Corporation Improvement Act of 1991, Pub. L. 102-242, 
as of Dec. 19, 1991, see section 1609(a) of Pub. L. 102-550, set out as 
a note under section 191 of Title 12, Banks and Banking.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-443 effective Jan. 1, 1985, see section 9(v) 
of Pub. L. 98-443, set out as a note under section 5314 of Title 5, 
Government Organization and Employees.


                    Effective Date of 1980 Amendment

    Section 608(b) of Pub. L. 96-221 provided that: ``This section 
[amending this section] shall take effect on the date of enactment of 
the Truth in Lending Simplification and Reform Act [Mar. 31, 1980].''
    Section 608(c) of Pub. L. 96-221 provided that the amendment made by 
that section is effective one year after Mar. 31, 1980.


                    Effective Date of 1974 Amendment

    Amendment by Pub. L. 93-495 effective Oct. 28, 1974, see section 416 
of Pub. L. 93-495, set out as an Effective Date note under section 1665a 
of this title.

                          Transfer of Functions

    ``National Credit Union Administration Board'' substituted for 
``Director of the Bureau of Federal Credit Unions'' in subsec. (a)(3) 
pursuant to section 3 of Pub. L. 91-206 and section 501 of Pub. L. 95-
630 [12 U.S.C. 1752a] which transferred functions of Bureau of Federal 
Credit Unions, and Director thereof, to National Credit Union 
Administration and vested authority for management of Administration in 
National Credit Union Administration Board.

                  Section Referred to in Other Sections

    This section is referred to in sections 1640, 1641 of this title; 
title 12 section 3806.
