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H.R. 5287: PARITY Act of 2018

The text of the bill below is as of Mar 14, 2018 (Introduced).


I

115th CONGRESS

2d Session

H. R. 5287

IN THE HOUSE OF REPRESENTATIVES

March 14, 2018

(for himself and Mr. Heck) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To amend the Truth in Lending Act to clarify the exclusion for seller-financers from the definition of mortgage originator, and for other purposes.

1.

Short title

This Act may be cited as the Preserving Access to Rural Installment Transactions for Years Act of 2018 or the PARITY Act of 2018.

2.

Amendments related to the exclusion of seller-financers in the definition of mortgage originator

Paragraph (2)(E) of the second subsection (cc) of section 103 of the Truth in Lending Act (relating to the definition of the term mortgage originator) (15 U.S.C. 1602(cc)(2)(E)) is amended—

(1)

in the matter preceding clause (i)—

(A)

by striking 3 properties and inserting 5 properties;

(B)

by striking a person, estate, or trust and inserting a person or entity (including a corporation, partnership, proprietorship, association, cooperative, estate, or trust); and

(C)

by striking such person, estate, or trust and inserting such a person or entity;

(2)

in clause (i)—

(A)

by inserting or after the semicolon;

(B)

by striking a person, estate, or trust that has constructed and inserting

such a person or entity that—

(I)

has constructed

; and

(C)

by inserting at the end the following new subclause:

(II)

has received any other compensation related to such loan, including origination points or fees and excluding interest payments;

;

(3)

by striking clauses (ii), (iii), and (iv); and

(4)

by inserting after clause (i) the following new clauses:

(ii)

is not a high-cost mortgage;

(iii)

does 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;

(iv)

has—

(I)

a fixed rate; or

(II)

an adjustable rate that was not determined by a prior contractual obligation between the consumer and such a person or entity and—

(aa)

is adjustable after 5 or more years (as determined by the addition of a margin to a widely available index rate) subject to reasonable annual and lifetime limitations on interest rate increases or is determined by a prior obligation that is included in or assumed by the terms of the loan; or

(bb)

with respect to any part of such loan contractually required to be used to make payments on an existing mortgage loan secured by such a property, is adjustable on or after the date of a rate adjustment on such existing mortgage loan; and

.