15 U.S. Code 1602 - Definitions and Rules of Construction U.S. Code US Law LII - Legal Information Institute
15 U.S. Code 1602 - Definitions and Rules of Construction U.S. Code US Law LII - Legal Information Institute
edu/uscode/text/15/1602#
LII > U.S. Code > Title 15 > CHAPTER 41 > SUBCHAPTER I > Part A > § 1602
(a) The definitions and rules of construction set forth in this section are
applicable for the purposes of this subchapter.
(b) B�����.—
The term “Bureau” means the Bureau of Consumer Financial Protection.
(c) The term “Board” refers to the Board of Governors of the Federal
Reserve System.
(f) The term “credit” means the right granted by a creditor to a debtor to
defer payment of debt or to incur debt and defer its payment.
(g) The term “creditor” refers only to a person who both (1) regularly
extends, whether in connection with loans, sales of property or services, or
otherwise, consumer credit which is payable by agreement in more than
four installments or for which the payment of a finance charge is or may be
required, and (2) is the person to whom the debt arising from the
consumer credit transaction is initially payable on the face of the evidence
of indebtedness or, if there is no such evidence of indebtedness, by
agreement. Notwithstanding the preceding sentence, in the case of an
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open-end credit plan involving a credit card, the card issuer and any
person who honors the credit card and offers a discount which is a finance
charge are creditors. For the purpose of the requirements imposed under
part D of this subchapter and sections 1637(a)(5), 1637(a)(6), 1637(a)(7),
1637(b)(1), 1637(b)(2), 1637(b)(3), 1637(b)(8), and 1637(b)(10) of this
title, the term “creditor” shall also include card issuers whether or not the
amount due is payable by agreement in more than four installments or the
payment of a finance charge is or may be required, and the Bureau shall,
by regulation, apply these requirements to such card issuers, to the extent
appropriate, even though the requirements are by their terms applicable
only to creditors offering open-end credit plans. Any person who originates
2 or more mortgages referred to in subsection (aa) in any 12-month period
or any person who originates 1 or more such mortgages through a
mortgage broker shall be considered to be a creditor for purposes of this
subchapter. The term “creditor” includes a private educational lender (as
that term is defined in section 1650 of this title) for purposes of this
subchapter.
(h) The term “credit sale” refers to any sale in which the seller is a
creditor. The term includes any contract in the form of a bailment or lease
if the bailee or lessee contracts to pay as compensation for use a sum
substantially equivalent to or in excess of the aggregate value of the
property and services involved and it is agreed that the bailee or lessee will
become, or for no other or a nominal consideration has the option to
become, the owner of the property upon full compliance with his
obligations under the contract.
(j) The terms “open end credit plan” and “open end consumer credit plan”
mean a plan under which the creditor reasonably contemplates repeated
transactions, which prescribes the terms of such transactions, and which
provides for a finance charge which may be computed from time to time on
the outstanding unpaid balance. A credit plan or open end consumer credit
plan which is an open end credit plan or open end consumer credit plan
within the meaning of the preceding sentence is an open end credit plan or
open end consumer credit plan even if credit information is verified from
time to time.
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(k) The term “adequate notice,” as used in section 1643 of this title,
means a printed notice to a cardholder which sets forth the pertinent facts
clearly and conspicuously so that a person against whom it is to operate
could reasonably be expected to have noticed it and understood its
meaning. Such notice may be given to a cardholder by printing the notice
on any credit card, or on each periodic statement of account, issued to the
cardholder, or by any other means reasonably assuring the receipt thereof
by the cardholder.
(l) The term “credit card” means any card, plate, coupon book or other
credit device existing for the purpose of obtaining money, property, labor,
or services on credit.
(m) The term “accepted credit card” means any credit card which the
cardholder has requested and received or has signed or has used, or
authorized another to use, for the purpose of obtaining money, property,
labor, or services on credit.
(n) The term “cardholder” means any person to whom a credit card is
issued or any person who has agreed with the card issuer to pay
obligations arising from the issuance of a credit card to another person.
(o) The term “card issuer” means any person who issues a credit card, or
the agent of such person with respect to such card.
(p) The term “unauthorized use,” as used in section 1643 of this title,
means a use of a credit card by a person other than the cardholder who
does not have actual, implied, or apparent authority for such use and from
which the cardholder receives no benefit.
(q) The term “discount” as used in section 1666f of this title means a
reduction made from the regular price. The term “discount” as used in
section 1666f of this title shall not mean a surcharge.
(r) The term “surcharge” as used in this section and section 1666f of this
title means any means of increasing the regular price to a cardholder which
is not imposed upon customers paying by cash, check, or similar means.”
(s) The term “State” refers to any State, the Commonwealth of Puerto
Rico, the District of Columbia, and any territory or possession of the United
States.
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(y) As used in this section and section 1666f of this title, the term “regular
price” means the tag or posted price charged for the property or service if
a single price is tagged or posted, or the price charged for the property or
service when payment is made by use of an open-end credit plan or a
credit card if either (1) no price is tagged or posted, or (2) two prices are
tagged or posted, one of which is charged when payment is made by use
of an open-end credit plan or a credit card and the other when payment is
made by use of cash, check, or similar means. For purposes of this
definition, payment by check, draft, or other negotiable instrument which
may result in the debiting of an open-end credit plan or a credit
cardholder’s open-end account shall not be considered payment made by
use of the plan or the account.
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(1) D���������.—
(ii) the total points and fees payable in connection with the
transaction, other than bona fide third party charges not retained
by the mortgage originator, creditor, or an affiliate of the creditor
or mortgage originator, exceed—
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(iii) In the case of any other transaction in which the rate may
vary at any time during the term of the loan for any reason, the
interest charged on the transaction at the maximum rate that
may be charged during the term of the loan.
(2)
(A) After the 2-year period beginning on the effective date of the
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(4) For purposes of paragraph (1)(B), points and fees shall include—
(A) all items included in the finance charge, except interest or the
time-price differential;
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(C) each of the charges listed in section 1605(e) of this title (except
an escrow for future payment of taxes), unless—
(6) This subsection shall not be construed to limit the rate of interest
or the finance charge that a person may charge a consumer for any
extension of credit.
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(2) with respect to which the payment of any principal, interest, and
shared appreciation or equity is due and payable (other than in the case
of default) only after—
(1) C���������.—
Unless otherwise specified, the term “Commission” means the Federal
Trade Commission.
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(D) does not include a person or entity that only performs real
estate brokerage activities and is licensed or registered in
accordance with applicable State law, unless such person or entity is
compensated by a lender, a mortgage broker, or other mortgage
originator or by any agent of such lender, mortgage broker, or other
mortgage originator;
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(F) does not include the creditor (except the creditor in a table-
funded transaction) under paragraph (1), (2), or (4) of section
1639b(c) of this title; and
(6) S��������.—
The term “Secretary”, when used in connection with any transaction or
person involved with a residential mortgage loan, means the Secretary
of Housing and Urban Development.
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(7) S�������.—
The term “servicer” has the same meaning as in section 2605(i)(2) of
title 12.
(A) the average prime offer rate, as defined in section 1639c of this
title; or
(2) Unless 2 bona fide discount points have been excluded under
paragraph (1), up to and including 1 bona fide discount point payable
by the consumer in connection with the mortgage, but only if the
interest rate from which the mortgage’s interest rate will be discounted
does not exceed by more than 2 percentage points—
(A) the average prime offer rate, as defined in section 1639c of this
title; or
(3) For purposes of paragraph (1), the term “bona fide discount points”
means loan discount points which are knowingly paid by the consumer
for the purpose of reducing, and which in fact result in a bona fide
reduction of, the interest rate or time-price differential applicable to the
mortgage.
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(4) Paragraphs (1) and (2) shall not apply to discount points used to
purchase an interest rate reduction unless the amount of the interest
rate reduction purchased is reasonably consistent with established
industry norms and practices for secondary mortgage market
transactions.
(Pub. L. 90–321, title I, § 103, May 29, 1968, 82 Stat. 147; Pub. L. 91–508,
title V, § 501, Oct. 26, 1970, 84 Stat. 1126; Pub. L. 93–495, title III, § 303,
Oct. 28, 1974, 88 Stat. 1511; Pub. L. 94–222, § 3(a), Feb. 27, 1976, 90 Stat.
197; Pub. L. 96–221, title VI, §§ 602, 603(a), (b), 604, 612(a)(2), (b), Mar.
31, 1980, 94 Stat. 168, 169, 175, 176; Pub. L. 97–25, title I, § 102, July 27,
1981, 95 Stat. 144; Pub. L. 97–320, title VII, § 702(a), Oct. 15, 1982, 96 Stat.
1538; Pub. L. 103–325, title I, §§ 152(a)–(c), 154(a), Sept. 23, 1994, 108
Stat. 2190, 2191, 2196; Pub. L. 110–315, title X, § 1011(b), Aug. 14, 2008,
122 Stat. 3481; Pub. L. 111–24, title I, § 108, May 22, 2009, 123 Stat. 1743;
Pub. L. 111–203, title X, § 1100A(1), (2), title XIV, §§ 1401, 1431, July 21,
2010, 124 Stat. 2107, 2137, 2157; Pub. L. 115–174, title I, § 107, May 24,
2018, 132 Stat. 1304.)
59
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