§3804 — Title 12 Banks and Banking | U.S. Code

Summary

If a State law or a voter-approved change that becomes effective on or after October 15, 1982 and before a date three years after October 15, 1982 says the State does not want federal preemption, then the federal rule in section 3803 does not apply to alternative mortgage transactions the State regulates that start on or after that effective date. But the federal rule still applies to any transaction that was agreed to during the preemption period (the time from October 15, 1982 up to that later date) and to any renewal, extension, refinance, or other change of a transaction that was entered into during that preemption period. A transaction counts as having been entered into during the preemption period if it is funded or extended in whole or in part during that period, even if the promise to fund was made earlier. It also counts if it is a renewal, extension, refinance, or other change of a loan made before the period, when that renewal or change happens during the period with the borrower’s written consent.

Title 12, §3804

Banks and Banking — Source: USLM XML via OLRC

(a)The provisions of section 3803 of this title shall not apply to any alternative mortgage transaction in any State made on or after the effective date (if such effective date occurs on or after October 15, 1982, and prior to a date three years after October 15, 1982) of a State law or a certification that the voters of such State have voted in favor of any provision, constitutional or otherwise, which states explicitly and by its terms that such State does not want the preemption provided in section 3803 of this title to apply with respect to alternative mortgage transactions (or to any class or type of alternative mortgage transaction) subject to the laws of such State, except that section 3803 of this title shall continue to apply to—

(1)any alternative mortgage transaction undertaken on or after such date pursuant to an agreement to undertake such alternative mortgage transaction which was entered into on or after October 15, 1982, and prior to such later date (the “preemption period”); and

(2)any renewal, extension, refinancing, or other modification of an alternative mortgage transaction that was entered into during the preemption period.

(b)An alternative mortgage transaction shall be deemed to have been undertaken during the preemption period to which this section applies if it—

(1)is funded or extended in whole or in part during the preemption period, regardless of whether pursuant to a commitment or other agreement therefor made prior to that period; or

(2)is a renewal, extension, refinancing, or other modification of an alternative mortgage transaction entered into before the preemption period and such renewal, extension, or other modification is made during such period with the written consent of any person obligated to repay such credit.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1983—Subsec. (a). Pub. L. 98–181 inserted “(or to any class or type of alternative mortgage transaction)”.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective Oct. 15, 1982, see section 807(a) of Pub. L. 97–320, set out as a note under section 3801 of this title.

§3804 Applicability of preemption provisions