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Student Loan Law: 18.5.2.4.5 National Bank Act preemption of students’ state law claims

Private student loans are not regulated by the HEA so there is no HEA preemption of state law claims against private student loan lenders. But federal preemption issues are raised when the private lender is a national bank or federal savings association. This National Bank Act (NBA) preemption, though, does not apply to state-chartered banks and savings associations or to non-depository lenders. For example, the Sallie Mae Bank is an industrial bank with a Utah state charter, and NBA preemption does not apply to it.

Credit Discrimination: 8.2 Advantages of a Discrimination Law Challenge

Discrimination law challenges to unfair credit terms have many advantages over other consumer law causes of action. State unfair and deceptive acts and practices (UDAP) statutes provide effective remedies for unfair credit terms, but a number of UDAP statutes do not apply to creditors or credit, and a number of UDAP statutes only prohibit deceptive, not unfair, practices.9 When credit terms are fully disclosed, it may be difficult to demonstrate that they were deceptive.

Federal Deception Law: 12.4.3.1 State Requirements

A number of jurisdictions have adopted one or more statutes or regulations that specifically require translations of contracts for certain transactions or under certain circumstances.63 However, there is significant variation from state to state.

Consumer Banking and Payments Law: 7.2.17.4 Application of State Law to Credit on Prepaid Cards

Some payday lenders have attempted to use prepaid cards issued by banks to evade state usury and payday loan laws.

Because prepaid cards with credit features are typically issued by a bank, there might be preemption issues with regard to the application of state laws.802 But state laws may still apply to any non-bank parties involved in the transaction, as agents of national banks and federal savings associations are not entitled to preemption.803

Mortgage Lending: Listing of Provisions

Title 12. Banks and Banking

Chapter 13. National Housing

Subchapter II. Mortgage Insurance

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12 U.S.C. § 1709-1a. State constitutional and legal limits upon interest chargeable on loans, mortgages, or other interim financing arrangements; applicability; covered arrangements

Mortgage Lending: 12 U.S.C. § 1709-1a. State constitutional and legal limits upon interest chargeable on loans, mortgages, or other interim financing arrangements; applicability; covered arrangements

(a) The provisions of the constitution of any State expressly limiting the amount of interest which may be charged, taken, received, or reserved by certain classes of lenders and the provisions of any law of that State expressly limiting the amount of interest which may be charged, taken, received, or reserved shall not apply to—

Mortgage Lending: Listing of Provisions

Title 24. Housing and Urban Development

Subtitle B. Regulations Relating to Housing and Urban Development

Chapter II. Office of Assistant Secretary for Housing—Federal Housing Commissioner, Department of Housing and Urban Development

Subchapter B. Mortgage and Loan Insurance Programs under National Housing Act and Other Authorities

Part 203. Single Family Mortgage Insurance

Mortgage Lending: § 203.20 Agreed interest rate.

(a) The mortgage shall bear interest at the rate agreed upon by the mortgagee and the mortgagor.

(b) Interest shall be payable in monthly installments on the principal amount of the mortgage outstanding on the due date of each installment.

Mortgage Lending: § 203.21 Amortization provisions.

The mortgage must contain complete amortization provisions satisfactory to the Commissioner, requiring monthly payments by the mortgagor not in excess of his reasonable ability to pay as determined by the Commissioner. The sum of the principal and interest payments in each month shall be substantially the same.

Mortgage Lending: § 203.22 Payment of insurance premiums or charges; prepayment privilege.

(a) Payment of periodic insurance premiums or charges. Except with respect to mortgages for which a one-time mortgage insurance premium is paid pursuant to § 203.280, the mortgage may provide for monthly payments by the mortgagor to the mortgagee of an amount equal to one-twelfth of the annual mortgage insurance premium payable by the mortgagee to the Commissioner.

Mortgage Lending: § 203.25 Late charge.

The mortgage may provide for the collection by the mortgagee of a late charge, not to exceed four per cent of the amount of each payment more than 15 days in arrears, to cover servicing and other costs attributable to the receipt of payments from mortgagors after the date upon which payment is due.

[41 Fed. Reg. 49,734 (Nov. 10, 1976).]

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Mortgage Lending: § 203.27 Charges, fees or discounts.

(a) The mortgagee may collect from the mortgagor the following charges, fees or discounts:

(1) [Reserved.]

(2) A charge to compensate the mortgagee for expenses incurred in originating and closing the loan, provided that the Commissioner may establish limitations on the amount of any such charge.

(3) Reasonable and customary amounts, but not more than the amount actually paid by the mortgagee, for any of the following items:

Mortgage Lending: Listing of Provisions

Title 24. Housing and Urban Development

Subtitle B. Regulations Relating to Housing and Urban Development

Chapter II. Office of Assistant Secretary for Housing—Federal Housing Commissioner, Department of Housing and Urban Development

Subchapter B. Mortgage and Loan Insurance Programs under National Housing Act and Other Authorities

Mortgage Lending: § 201.13 Interest and discount points.

The interest rate for any loan shall be negotiated and agreed to by the borrower and the lender, and such interest rate shall be fixed for the full term of the loan and recited in the note. Interest on the loan shall accrue from the date of the loan, and shall be calculated on a simple interest basis. The lender and the borrower may negotiate the amount of discount points, if any, to be paid by the borrower as part of the borrower’s initial payment.

Mortgage Lending: § 201.14 Payments on the loan.

The note normally shall provide for equal installment payments due weekly, biweekly, semi-monthly or monthly. The note may provide for either or both of the first and final payments to vary in amount but not to exceed 1½ times the regular installment. Where the borrower has an irregular flow of income, the note may be payable at quarterly or semi-annual intervals corresponding with the borrower’s flow of income. The first scheduled payment after the borrower’s initial payment shall be due no later than two months from the date of the loan.

Mortgage Lending: § 201.15 Late charges to borrowers.

(a) Imposition of late charge. The note may provide for imposition of a late charge unless precluded by State law. The late charge may be imposed only for installments of principal and interest which are in arrears for the greater of 15 calendar days or the number of days required by applicable State law before such a charge may be imposed. Late charges must be billed to the borrower or reflected in the payment coupon, and evidence of any late charges that have been paid must be in the loan file if an insurance claim is made.

Mortgage Lending: § 201.17 Prepayment provision.

The note shall contain a provision permitting full or partial prepayment of the loan without penalty, except that the borrower may be assessed reasonable and customary charges for recording a release of the lender’s security interest in the property, if permitted by State law.

[56 Fed. Reg. 52,430 (Oct. 18, 1991); 61 Fed. Reg. 19,797 (May 2, 1996).]

Mortgage Lending: Listing of Provisions

Title 38. Veterans’ Benefits

Part III. Readjustment and Related Benefits

Chapter 37. Housing and Small Business Loans

Subchapter I. General

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38 U.S.C. § 3709 Refinancing of housing loans

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Subchapter III. Administrative Provisions

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Mortgage Lending: 38 U.S.C. § 3709 Refinancing of housing loans

(a) Fee recoupment.—Except as provided in subsection (d) and notwithstanding section 3703 of this title or any other provision of law, a loan to a veteran for a purpose specified in section 3710 of this title that is being refinanced may not be guaranteed or insured under this chapter unless—

Mortgage Lending: 38 U.S.C. § 3728 Exemption from State anti-usury provisions

If, under any law of the United States, loans and mortgages insured under title I or title II of the National Housing Act are exempt from the application of the provisions of any State constitution or law (1) limiting the rate or amount of interest, discount points, or other charges which may be charged, taken, received, or reserved by lenders, (2) restricting the manner of calculating such interest (including prohibition of the charging of interest on interest), or (3) requiring a minimum amortization of principal, then loans guaranteed or insured under this chapter a

Mortgage Lending: Listing of Provisions

Title 38. Pensions, Bonuses, and Veterans’ Relief

Chapter I. Department of Veterans Affairs

Part 36. Loan Guaranty

Subpart B. Guaranty or Insurance of Loans to Veterans with Electronic Reporting

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Sec.

36.4310 Amortization.

36.4311 Prepayment.

36.4312 Interest rates.

36.4313 Charges and fees.

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Mortgage Lending: § 36.4310 Amortization.

(a) All loans, the maturity date of which is beyond 5 years from date of loan or date of assumption by the veteran, shall be amortized. Except as provided in paragraph (e) of this section, the schedule of payments thereon shall be in accordance with any generally recognized plan of amortization requiring approximately equal periodic payments and shall require a principal reduction not less often than annually during the life of the loan.

Mortgage Lending: § 36.4311 Prepayment.

The debtor shall have the right to prepay at any time, without premium or fee, the entire indebtedness or any part thereof not less than the amount of one installment, or $100, whichever is less. Any prepayment in full of the indebtedness shall be credited on the date received, and no interest may be charged thereafter. Any partial prepayment made on other than an installment due date need not be credited until the next following installment due date or 30 days after such prepayment, whichever is earlier.

Mortgage Lending: § 36.4312 Interest rates.

(a) In guaranteeing or insuring loans under 38 U.S.C. chapter 37, the Secretary may elect to require that such loans either bear interest at a rate that is agreed upon by the veteran and the lender, or bear interest at a rate not in excess of a rate established by the Secretary. The Secretary may, from time to time, change that election by publishing a notice in the Federal Register. However, the interest rate of a loan for the purpose of an interest rate reduction under 38 U.S.C.