reg_d_sample.xml

<?xml version="1.0" encoding="UTF-8"?>

<regulation xmlns="eregs" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"
	xsi:schemaLocation="eregs eregs.xsd">
	<fdsys>
		<cfrTitleNum>12</cfrTitleNum>
		<cfrTitleText>Banks and Banking</cfrTitleText>
		<volume>8</volume>
		<date>2012-01-01</date>
		<originalDate>2012-01-01</originalDate>
		<title>ALTERNATIVE MORTGAGE TRANSACTION PARITY (REGULATION D)</title>
	</fdsys>
	<preamble>
		<agency>Consumer Financial Protection Bureau</agency>
		<cfr>
			<title>12</title>
			<section>1004</section>
		</cfr>
		<depdoc>[Docket No. CFPB-2011-0004]</depdoc>
		<rin>RIN 3170-AA04</rin>
		<summary>
			<header>SUMMARY:</header>
			<content>
				The Bureau of Consumer Financial Protection (CFPB) is publishing for public comment 
				an interim final rule establishing Regulation D (Alternative Mortgage Transaction Parity) pursuant to the Alternative Mortgage Transaction Parity Act (AMTPA) and the Truth in Lending Act. The interim final rule is necessary to avoid a regulatory gap created by the amendments to AMTPA in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Without an interim final rule that takes immediate effect, state housing creditors would no longer be able to make variable rate mortgage loans and other alternative mortgage transactions pursuant to AMTPA in states that prohibit such transactions, thus denying consumers access to that form of credit. Until July 22, 2012, the interim final rule applies only to state housing creditors seeking to invoke federal preemption of state law under AMTPA. The interim final rule will be in place as a temporary measure pending the CFPB's completion of a notice-and-comment rulemaking to promulgate permanent rules, including rules governing alternative mortgage transactions made by federally chartered housing creditors. The CFPB seeks public comment in anticipation of that process.
			</content>
		</summary>
		<effectiveDate>2011-07-22</effectiveDate>
	</preamble>
	<part partNumber="1004">
		<content>
			<tableOfContents>
				<tocSecEntry>
					<sectionNum>1</sectionNum>
					<sectionSubject>Authority, purpose, and scope.</sectionSubject>
				</tocSecEntry>
				<tocSecEntry>
					<sectionNum>2</sectionNum>
	      			<sectionSubject>Definitions.</sectionSubject>
				</tocSecEntry>
				<tocSecEntry>
					<sectionNum>3</sectionNum>
					<sectionSubject>Preemption of State law.</sectionSubject>
				</tocSecEntry>
				<tocSecEntry>
					<sectionNum>4</sectionNum>
					<sectionSubject>Requirements for alternative mortgage transactions.</sectionSubject>
				</tocSecEntry>
				<tocAppEntry>
					<appendixLetter>A</appendixLetter>
					<appendixSubject>Appendix A to Part 1004—Official Commentary on Regulation D</appendixSubject>
				</tocAppEntry>
			</tableOfContents>
			<auth>
				<title>Authority:</title>
				<content>12 U.S.C. 3802, 3803; 15 U.S.C. 1604, 1639b; Pub. L. No. 111-203, 124 Stat. 1376.</content>
			</auth>
			<section sectionNum="1">
				<subject>Authority, purpose, and scope.</subject>
				<paragraph marker="a">
				 	<title>Authority.</title>
				 	<content>
				 		This regulation, known as Regulation D, is issued by the Bureau of Consumer Financial Protection to implement the Alternative Mortgage Transaction Parity Act, 12 U.S.C. 3801 et seq., as amended by title X, Section 1083 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, 124 Stat. 1376). Section 1004.4 is issued pursuant to the Alternative Mortgage Transaction Parity Act (as amended) and the Truth in Lending Act, 15 U.S.C. 1601 et seq.
				 	</content>
			 	</paragraph>
		   		<paragraph marker="b">
		   			<title>Purpose.</title>
		   			<content>
		   				Consistent with the Alternative Mortgage Transaction Parity Act, the Truth in Lending Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, the purpose of this regulation is to balance access to responsible credit and enhanced parity between State and federal housing creditors regarding the making, purchase, and enforcement of alternative mortgage transactions with consumer protection and the interests of the States in regulating mortgage transactions generally.
		   			</content>
		   		</paragraph>
				<paragraph marker="c">
					<title>Scope.</title>
					<content>
						This regulation applies to an alternative mortgage transaction if the creditor received an application for that transaction on or after July 22, 2011. This regulation does not apply to a transaction if the creditor received the application for that transaction before July 22, 2011.
					</content>
				</paragraph>
			</section>
				<section sectionNum="2">
	      		<subject>Definitions.</subject>
	      		<paragraph marker="none">
	      			<content>
	      				For purposes of this part:
	      			</content>
	      			<paragraph marker="a">
	    				<content>
	    					<def>Alternative mortgage transaction</def> means a loan, credit sale, or account:
	    				</content>
	    				<paragraph marker="1">
	    					<content>
	    						 That is secured by an interest in a residential structure that contains one to four units, whether or not that structure is attached to real property, including an individual condominium unit, cooperative unit, mobile home, or trailer, if it is used as a residence;
	    					</content>
	    				</paragraph>
	    				<paragraph marker="2">
	    					<content>
	    						That is made primarily for personal, family, or household purposes; and
	    					</content>
	    				</paragraph>
	    				<paragraph marker="3">
	    					<content>
	    						In which the interest rate or finance charge may be adjusted or renegotiated.
	    					</content>
	    				</paragraph>    				
	    			</paragraph>
	    			<paragraph marker="b">
	    				<content>
	    					<def>Creditor</def> shall have the same meaning as in <ref>12 CFR 226.2</ref>.
	    				</content>
	    			</paragraph>
	    			<paragraph marker="c" label="1004-2-c-1">
	    				<content>
	    					<def>Housing creditor</def> means:
	    				</content>
	    				<paragraph marker="1" label="1004-2-c-2">
	    					<content>
	    						A depository institution, as defined in section 501(a)(2) of the Depository Institutions Deregulation and Monetary Control Act of 1980;
	    					</content>
	    				</paragraph>
	    				<paragraph marker="2">
	    					<content>
	    						A lender approved by the Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act;
	    					</content>
	    				</paragraph>
	    				<paragraph marker="3">
	    					<content>
	    						Any person who regularly makes loans, credit sales, or advances on an account secured by an interest in a residential structure that contains one to four units, whether or not the structure is attached to real property, including an individual condominium unit, cooperative unit, mobile home, or trailer, if it is used as a residence; and
	    					</content>
	    				</paragraph>
	    				<paragraph marker="4">
	    					<content>
	    						Any transferee of a party listed in paragraph <ref target="1004-2-c-1">(c)(1)</ref>, <ref target="1004-2-c-2">(2)</ref>, or <ref target="1004-2-c-3">(3)</ref> of this section.
	    					</content>
	    				</paragraph>
	    			</paragraph>
	    			<paragraph marker="d">
	    				<content>
	    					<def>State</def> means any State of the United States of America, the District of Columbia, Puerto Rico, the Virgin Islands, the Northern Mariana Islands, American Samoa, Guam, and any other territory or possession of the United States.
	    				</content>
	    			</paragraph>
	    			<paragraph marker="e">
	    				<content>
	    					<def>State law</def> means a State constitution, statute, or regulation or any provision thereof.
	    				</content>
	    			</paragraph>
	      		</paragraph>
	   		</section>
	   		<section sectionNum="3">
	   			<subject>Preemption of State law.</subject>
	   			<paragraph marker="none">
	   				<content>
	   					Pursuant to 12 U.S.C. 3803, a State-chartered or -licensed housing creditor may make, purchase, and enforce alternative mortgage transactions in accordance with § 1004.4(a) through (c) of this part (as applicable), notwithstanding any provision of State law that restricts the ability of the housing creditor to adjust or renegotiate an interest rate or finance charge with respect to the transaction or to change the amount of interest or finance charges included in a regular periodic payment as a result of such an adjustment or renegotiation.
	   				</content>
	   			</paragraph>
	   		</section>
	   		<section sectionNum="4">
	   			<subject>Requirements for alternative mortgage transactions.</subject>
	   			<paragraph marker="a">
	   				<title>Mortgages with adjustable rates or finance charges and home equity lines of credit.</title>
	   				<content>
	   					A creditor that makes an alternative mortgage transaction with an adjustable rate or finance charge may only increase the interest rate or finance charge as follows:
	   				</content>
	   				<paragraph marker="1">
	   					<content>
	   					If the transaction is subject to <ref>12 CFR 226.5b</ref>, the creditor must comply with <ref>12 CFR 226.5b(f)(1).</ref>
	   				</content>
	   				</paragraph>
	   				<paragraph marker="2">
	   					<content>For all other transactions, the creditor must use either:</content>
	   					<paragraph marker="i">
	   						<content>
	   							An index to which changes in the interest rate are tied that is readily available to and verifiable by the borrower and beyond the control of the creditor; or
	   						</content>
	   					</paragraph>
	   					<paragraph marker="ii">
	   						<content>
	   							A formula or schedule identifying the amount that the interest rate or finance charge may increase and the times at which, or circumstances under which, a change may be made.
	   						</content>
	   					</paragraph>
	   				</paragraph>
	      		</paragraph>
	      		<paragraph marker="b">
	      			<title>Renegotiable rates for renewable balloon-payment mortgages.</title>
	      			<content>
	      				A creditor that makes an alternative mortgage transaction with payments based on an amortization period and a large final payment due after a shorter term may negotiate an increase or decrease in the interest rate when the transaction is renewed only if the creditor makes a written commitment to renew the transaction at specified intervals throughout the amortization period. However, the creditor is not required to renew the transaction if:
	      			</content>
	      			<paragraph marker="1">
	      				<content>
	      					Any action or inaction by the consumer materially and adversely affects the creditor's security for the transaction or any right of the creditor in such security;
	      				</content>
	      			</paragraph>
	      			<paragraph marker="2">
	      				<content>
	      					There is a material failure by the consumer to meet the repayment terms of the transaction;
	      				</content>
	      			</paragraph>
	      			<paragraph marker="3">
	      				<content>
	      					There is fraud or a willful or knowing material misrepresentation by the consumer in connection with the transaction; or
	      				</content>
	      			</paragraph>
	      			<paragraph marker="4">
	      				<content>
	      					Federal law dealing with credit extended by a depository institution to its executive officers specifically requires that as a condition of the extension the credit shall become due and payable on demand, provided that the creditor includes such a provision in the initial agreement.
	      				</content>
	      			</paragraph>
	      		</paragraph>
	      		<paragraph marker="c">
	      			<title>Requirements for high-cost and higher-priced mortgage loans.</title>
	      			<content></content>
	      			<paragraph marker="1">
	      				<content>
	      					If an alternative mortgage transaction is subject to <ref>12 CFR 226.32</ref>, the creditor must comply with <ref>12 CFR 226.32</ref> and <ref>12 CFR 226.34</ref>.
	      				</content>
	      			</paragraph>
	      			<paragraph marker="2">
	      				<content>
	      					If an alternative mortgage transaction is subject to <ref>12 CFR 226.35</ref>, the creditor must comply with <ref>12 CFR 226.35</ref>.
	      				</content>
	      			</paragraph>
	      		</paragraph>
	      		<paragraph marker="d">
	      			<title>Other applicable law.</title>
	      			<content>
	      				Notwithstanding paragraphs <ref target="1004-4-a">(a)</ref> through <ref target="1004-4-c">(c)</ref> of this section, a housing creditor that is not making an alternative mortgage transaction pursuant to § 1004.3 of this part may make that transaction consistent with applicable State or Federal law other than this section.
	      			</content>
	      		</paragraph>
	      		<paragraph marker="e">
	      			<title>Reductions in interest rate or finance charge.</title>
	      			<content>
	      				Nothing in this section prohibits a creditor from decreasing the interest rate or finance charge on an alternative mortgage transaction.
	      			</content>
	      		</paragraph>
	   		</section>
	   		<appendix appendixLetter="A" label="1004-A">
	   			<appendixTitle>Appendix A to Part 1004—Official Commentary on Regulation D</appendixTitle>
	   			<appendixSection appendixSecNum="1" label="1004-A-1">	
	   				<subject>§ 1004.1 Authority, Purpose, and Scope</subject>
	   				<appendixHeader>1(c) Scope</appendixHeader>
	   				<paragraph marker="1">
	   					<title>Application received before July 22, 2011.</title>
	   					<content>
	   						This Part does not apply to a transaction if the creditor received the application for that transaction before July 22, 2011, even if the transaction was consummated or completed on or after July 22, 2011. Whether 12 U.S.C. 3803(c) preempts State law with respect to such a transaction depends on whether: (1) The transaction was an alternative mortgage transaction as defined by the version of 12 U.S.C. 3802(1) in effect at the time of application; and (2) the State housing creditor complied with applicable federal regulations issued by the Office of the Comptroller of the Currency, the National Credit Union Administration, the Office of Thrift Supervision, or the Federal Home Loan Bank Board in effect at the time of application.
	   					</content>
	   				</paragraph>
	   				<paragraph marker="2">
	   					<title>Subsequent modifications and other actions.</title>
	   					<content>
	   						If applicable regulations under 12 U.S.C. 3803(c) (including this Part) preempted State law with respect to an alternative mortgage transaction at the time the application was received, the following actions with respect to that transaction are entitled to the same degree of preemption under such regulations:
	   					</content>
	   					<paragraph marker="i">
	   						<content>
	   							The subsequent consummation, completion, purchase, or enforcement of the transaction by a housing creditor.
	   						</content>
	   					</paragraph>
	   					<paragraph marker="ii">
	   						<content>
	   							 The subsequent modification, renewal, or extension of the transaction. However, if such a transaction is satisfied and replaced by another transaction, the second transaction must independently meet the requirements for preemption in effect at the time the application for the second transaction was received.
	   						</content>
	   					</paragraph>
	   				</paragraph>
	   			</appendixSection>
	   			<appendixSection appendixSecNum="2" label="1004-A-2">
	   				<subject>§ 1004.2 Definitions</subject>
	   				<appendixHeader>2(a) Alternative Mortgage Transaction</appendixHeader>
	   				 <paragraph marker="1">
	   				 	<title>Alternative mortgage transaction.</title>
	   				 	<content>
	   				 		For purposes of this Part, an alternative mortgage transaction that meets the definition in § 1004.2(a) includes any consumer credit transaction that is secured by a mortgage, deed of trust, or other equivalent consensual security interest in a dwelling or in residential real property that includes a dwelling. The dwelling need not be the primary dwelling of the consumer. Home equity lines of credit and subordinate lien mortgages are alternative mortgage transactions for purposes of this Part to the extent they meet the definition in § 1004.2(a).
	   				 	</content>
	   				</paragraph>
	      			<paragraph marker="2">
	      				<title>Examples of alternative mortgage transactions.</title>
	      				<content>
	      					Examples of alternative mortgage transactions include:
	      				</content>
	      				<paragraph marker="i">
	      					<content>
	      						Transactions in which the interest rate changes in accordance with fluctuations in an index.
	      					</content>
	      				</paragraph>
	      				<paragraph marker="ii">
	      					<content>
	      						Transactions in which the interest rate or finance charge may be increased or decreased after a specified period of time or under specified circumstances.
	      					</content>
	      				</paragraph>
	      				<paragraph marker="iii">
	      					<content>
	      						Balloon transactions in which payments are based on an amortization schedule and a large final payment is due after a shorter term, where the creditor makes a commitment to renew the transaction at specified intervals throughout the amortization period, but the interest rate may be renegotiated at renewal. For example, a fixed-rate mortgage loan with a 30-year amortization period but a balloon payment due five years after consummation is an alternative mortgage transaction under § 1004.2(a) if the creditor commits to renew the mortgage at five-year intervals for the entire 30-year amortization period.
	      					</content>
	      				</paragraph>
	      				<paragraph marker="iv">
	      					<content>
	      						Transactions in which the creditor and the consumer agree to share some or all of the appreciation in the value of the property (shared equity/shared appreciation).
	      					</content>
	      				</paragraph>
	      				<paragraph marker="none">
	      					<content>
	      						However, this Part preempts State law only to the extent provided in § 1004.3 and only to the extent that the requirements of § 1004.4(a) through (c) (as applicable) are met.
	      					</content>
	      				</paragraph>
	      			</paragraph>
	      			<paragraph marker="3">
	      				<title>Examples of transactions that are not alternative mortgage transactions.</title>
	      				<content>
	      					The following are examples of transactions that are not alternative mortgage transactions:
	      				</content>
	      				<paragraph marker="i">
	      					<content>
	      						Transactions with a fixed interest rate where one or more of the regular periodic payments may be applied solely to accrued interest and not to loan principal (an interest-only feature).
	      					</content>
	      				</paragraph>
	      				<paragraph marker="ii">
	      					<content>
	      						Balloon transactions with a fixed interest rate where payments are based on an amortization schedule and a large final payment is due after a shorter term, where the creditor does not make a commitment to renew the transaction at specified intervals throughout the amortization period.
	      					</content>
	      				</paragraph>
	      				<paragraph marker="iii">
	      					<content>
	      						Transactions with a fixed interest rate where one or more of the regular periodic payments may result in an increase in the principal balance (a negative amortization feature).
	      					</content>
	      				</paragraph>
	      			</paragraph>
	  			<appendixHeader>2(b) Creditor</appendixHeader>
	      		<paragraph marker="1">
	      			<title>Creditor</title>
	      			<content>
	      				As defined in 12 CFR 226.2, “creditor” includes federally and State-chartered banks, thrifts, and credit unions, as well as non-depository institutions, such as State-licensed lenders. The Official Staff Commentary to 12 CFR 226.2 contains additional guidance on the definition of the term “creditor.” See 12 CFR 226.2, Supp. I.
	      			</content>
	      		</paragraph>
	   			</appendixSection>
	   		</appendix>
	   	</content>
	</part>

</regulation>