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Highlight Updates The Case for a July 22, 2010 Effective Date

If section 1400(c)(3) refers only to paragraphs (c)(1) and (c)(2) and thus applies only to provisions requiring rulemaking, then Dodd-Frank title XIV provisions not requiring rulemaking go into effect on the Dodd-Frank Act’s default effective date of July 22, 2010.179 The two major arguments against such an interpretation are a number of RESPA cases holding to the contrary with little or no analysis and the statement by Senator Dodd referred to at §, supra. On the other hand, the most logical reading of section 1400(c) requires use of a July 22, 2010 effective date.

Section 1400(c)(1) refers to regulations “required to be prescribed” and also sets time limits for regulations where such regulation is required. Section 1400(c)(2) states that a section takes effect on the date that the regulations implementing that section take effect. In this context, section 1400(c)(3) most sensibly should be read as only applying to the provisions discussed in section 1400(c)(1) and (c)(2)—statutory provisions where regulations are required. At least one court came to a similar conclusion, finding that the Dodd-Frank TILA amendment regarding prompt crediting of payments became effective when the statute “was added to the Code.”180 If the regulations are slow in being issued, then at a set point (January 21, 2013) even sections requiring regulations go into effect, despite the lack of an implementing regulation.

The alternative interpretation is to look at section 1400(c)(3) in isolation and to read it as follows: if there is a regulation required, then the provision goes into effect no later than January 21, 2013—and perhaps well before that date, even in 2011. But if a provision does not need regulations, that provision cannot be effective until January 21, 2013.

It makes perfect sense to delay a statutory provision until its implementing regulation is effective. It also makes sense to let a statutory provision go into effect without regulations if two and a half years have gone by and the regulation has still not been issued. It makes no sense to require that statutory provisions that require no regulation must be delayed a full two and a half years for no apparent reason, particularly where the provisions respond to urgent problems with mortgage lending.

To interpret section 1400(c)(3) as requiring a January 21, 2013 effective date where a regulation has not been issued produces absurd results. No regulations are required for the Dodd-Frank Act amendments dealing with the HAMP program,181 and delaying their effective date until January 21, 2013 makes no sense in light of the fact that at that time HAMP’s sunset date was December 31, 2012.182

Nor does it make sense to wait until January 21, 2013 to increase the statutory damages cap from $1,000 to $2,000 for open-end credit secured by a home and closed-end credit not secured by a home.183 At the time of the enactment of the Dodd-Frank Act, the cap had already been increased to $4,000 for closed-end credit secured by a home and $5,000 for credit cards. These latter two increases were already in effect at the time of the Dodd-Frank Act’s enactment. Why would Congress delay a similar increase for another two and a half years?

The special case of the effect of the Dodd-Frank arbitration provisions on existing contracts is discussed in §, infra.


  • 179 {179} Pub. L. No. 111-203, § 4 (July 21, 2010). Cf. State ex rel. Ocwen Loan Servicing, L.L.C. v. Webster, 752 S.E.2d 372, 379 (W. Va. 2013) (quoting trial circuit court decision finding that Dodd-Frank Act’s prohibition of arbitration clauses in mortgage loans took effect in 2010 because no regulations were required, but reversing on ground that the prohibition cannot be applied to a 2006 contract).

  • 180 {180} Zamora v. Wells Fargo Home Mortgage, 2012 WL 12895364 (D.N.M. Sept. 18, 2012) (holding that plaintiff’s claim under Dodd-Frank’s TILA amendment regarding prompt crediting of payments survived motion to dismiss because the provision did not require implementing regulations; holding that these provisions were added to the United States Code on July 24, 2010, not on July 22, when the bill became law).

  • 181 {181} The “Home Affordable Modification Program” (HAMP), established by the U.S. Dep’t of the Treasury pursuant to the Emergency Economic Stabilization Act of 2008, Pub. L. 110-343, 122 Stat. 3765 (Oct. 3, 2008). See generally National Consumer Law Center, Mortgage Servicing and Loan Modifications § 6.7 (2019), updated at (detailed discussion of HAMP).

  • 182 {182} MHA Handbook, Ch. 2, § 1.1 (program cut-off date requires that servicer receive a timely first trial period payment from the borrower on or before December 31, 2012).

  • 183 {183} But see Rubinstein v. Dep’t Stores, 955 F. Supp. 2d 260 (S.D.N.Y. 2013) (delayed effective date applies to the Dodd-Frank Act’s increases in statutory damages); Zevon v. Dep’t Stores Nat’l Bank, 2013 WL 5903024 (S.D.N.Y. Nov. 4, 2013) (delayed effective date applies to increases in statutory damages).