Except as provided in subsection (b), (c), (d), or (e), a creditor, in connection with the consummation of a consumer credit transaction secured by a first lien on the principal dwelling of the consumer, other than a consumer credit transaction under an open end credit plan or a reverse mortgage, shall establish, before the consummation of such transaction, an escrow or impound account for the payment of taxes and hazard insurance, and, if applicable, flood insurance, mortgage insurance, ground rents, and any other required periodic payments or premiums with respect to the property or the loan terms, as provided in, and in accordance with, this section.
No impound, trust, or other type of account for the payment of property taxes, insurance premiums, or other purposes relating to the property may be required as a condition of a real property sale contract or a loan secured by a first deed of trust or mortgage on the principal dwelling of the consumer, other than a consumer credit transaction under an open end credit plan or a reverse mortgage, except when-
The Bureau may, by regulation, exempt from the requirements of subsection (a) a creditor that-
The Bureau shall, by regulation, exempt from the requirements of subsection (a) any loan made by an insured depository institution or an insured credit union secured by a first lien on the principal dwelling of a consumer if-
An escrow or impound account established pursuant to subsection (b) shall remain in existence for a minimum period of 5 years, beginning with the date of the consummation of the loan, unless and until-
Escrow accounts need not be established for loans secured by shares in a cooperative. Insurance premiums need not be included in escrow accounts for loans secured by dwellings or units, where the borrower must join an association as a condition of ownership, and that association has an obligation to the dwelling or unit owners to maintain a master policy insuring the dwellings or units.
For mortgages not covered by the requirements of subsection (b), no provision of this section shall be construed as precluding the establishment of an impound, trust, or other type of account for the payment of property taxes, insurance premiums, or other purposes relating to the property-
Except as may otherwise be provided for in this subchapter or in regulations prescribed by the Bureau, escrow or impound accounts established pursuant to subsection (b) shall be established in a federally insured depository institution or credit union.
Except as provided in this section or regulations prescribed under this section, an escrow or impound account subject to this section shall be administered in accordance with-
If prescribed by applicable State or Federal law, each creditor shall pay interest to the consumer on the amount held in any impound, trust, or escrow account that is subject to this section in the manner as prescribed by that applicable State or Federal law.
Any action or omission on the part of any person which constitutes a violation of the Real Estate Settlement Procedures Act of 1974 or any regulation prescribed under such Act for which the person has paid any fine, civil money penalty, or other damages shall not give rise to any additional fine, civil money penalty, or other damages under this section, unless the action or omission also constitutes a direct violation of this section.
In the case of any impound, trust, or escrow account that is required under subsection (b), the creditor shall disclose by written notice to the consumer at least 3 business days before the consummation of the consumer credit transaction giving rise to such account or in accordance with timeframes established in prescribed regulations the following information:
For purposes of this section, the following definitions shall apply:
The term "flood insurance" means flood insurance coverage provided under the national flood insurance program pursuant to the National Flood Insurance Act of 1968 [42 U.S.C. 4001 et seq.].
The term "hazard insurance" shall have the same meaning as provided for "hazard insurance", "casualty insurance", "homeowner's insurance", or other similar term under the law of the State where the real property securing the consumer credit transaction is located.
The term "insured credit union" has the meaning given the term in section 1752 of title 12.
The term "insured depository institution" has the meaning given the term in section 1813 of title 12.
If-
the creditor or servicer shall provide a timely and clearly written disclosure to the consumer that advises the consumer of the responsibilities of the consumer and implications for the consumer in the absence of any such account.
Any disclosure provided to a consumer under paragraph (1) shall include the following:
15 U.S.C. § 1639d
EDITORIAL NOTES
REFERENCES IN TEXTThis part, referred to in subsec. (c)(1)(D), was in the original "this subtitle", and was translated as reading "this chapter", meaning chapter 2 of title I of Pub. L. 90-321 to reflect the probable intent of Congress. Title I of Pub. L. 90-321 does not contain subtitles.The Real Estate Settlement Procedures Act of 1974, referred to in subsec. (g)(2)(A), (4), is Pub. L. 93-533, Dec. 22, 1974, 88 Stat. 1724, which is classified principally to chapter 27 (§2601 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 2601 of Title 12 and Tables.The Flood Disaster Protection Act of 1973, referred to in subsec. (g)(2)(B), is Pub. L. 93-234, Dec. 31, 1973, 87 Stat. 975. For complete classification of this Act to the Code, see Short Title of 1973 Amendment note set out under section 4001 of Title 42, The Public Health and Welfare, and Tables.The National Flood Insurance Act of 1968, referred to in subsec. (i)(1), is title XIII of Pub. L. 90-448, Aug. 1, 1968, 82 Stat. 572, which is classified principally to chapter 50 (§4001 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 4001 of Title 42 and Tables.
AMENDMENTS2018-Subsec. (c). Pub. L. 115-174, §108(1)(A), (B), (D), designated existing provisions as par. (1) and inserted heading, redesignated former pars. (1) to (4) as subpars. (A) to (D), respectively, of par. (1) and realigned margins, and added par. (2).Subsec. (c)(1). Pub. L. 115-174, §108(1)(B), (C), which directed substitution of "The Bureau" for "The Board" in introductory provisions, and "the Bureau" for "the Board" wherever appearing, duplicated the amendment made by Pub. L. 111-203, §1100A(2), which had already been executed. See 2010 Amendment note below.Subsec. (i)(3), (4). Pub. L. 115-174, §108(2), added pars. (3) and (4). 2015-Subsec. (c)(1). Pub. L. 114-94 struck out "predominantly" after "operates". 2010- Pub. L. 111-203, §1100A(2), which directed substitution of "Bureau" for "Board" wherever appearing in Pub. L. 90-321 was executed to this section, which was added to Pub. L. 90-321 by section 1461(a) of Pub. L. 111-203. Subsec. (j). Pub. L. 111-203, §1462, added subsec. (j).
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 1100A(2) of Pub. L. 111-203 effective on the designated transfer date, see section 1100H of Pub. L. 111-203 set out as a note under section 552a of Title 5, Government Organization and Employees.Amendment by section 1462 of Pub. L. 111-203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111-203 set out as a note under section 1601 of this title.
EFFECTIVE DATESection effective on the date on which final regulations implementing such section take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111-203 set out as an Effective Date of 2010 Amendment note under section 1601 of this title.
EXEMPTIONS AND MODIFICATIONS Pub. L. 111-203, title XIV, §1461(b), July 21, 2010, 124 Stat. 2181, provided that: "The Board may prescribe rules that revise, add to, or subtract from the criteria of section 129D(b) of the Truth in Lending Act [15 U.S.C. 1639d(b)] if the Board determines that such rules are in the interest of consumers and in the public interest."
- Administration
- the terms "Administration" and "Administrator" mean the Small Business Administration and the Administrator thereof, respectively; and