15 U.S.C. § 1607 : US Code - Section 1607: Administrative enforcement

Search 15 U.S.C. § 1607 : US Code - Section 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
(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
(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.