§6603 Application of chapter

Summary

Covers any Y2K lawsuit filed after January 1, 1999 if the Y2K failure or possible failure happened before January 1, 2003. That includes appeals, remands, stays, and other court, agency, or dispute-resolution steps tied to those cases. It does not create new legal claims, and it does not make people more or less liable than federal or state law already does, except where this chapter clearly says otherwise. Claims for personal injury or wrongful death are not covered. Written contract terms — even limits, exclusions, or warranty disclaimers — must be enforced unless doing so would clearly break a state statute that was in effect on January 1, 1999 that specifically speaks to that term. If a contract says nothing about a particular issue, the law in effect when the contract was signed will decide how to read it. State court rules that treated contracts as unfair (unconscionability or adhesion) as of January 1, 1999 still apply. Federal rules in this chapter override conflicting state law, but they do not change a State’s right to claim sovereign immunity. This chapter does not replace the Year 2000 Information and Readiness Disclosure Act. If a claim is based on the federal securities laws, most of this chapter does not apply (except for one narrow part noted in the law). Part of the chapter applies when a government entity brings a Y2K case. In those situations, a defendant can be a State or a local government as defined in the law. A “Y2K upset” is a short, exceptional failure to meet federally enforceable measurement, monitoring, or reporting duties directly tied to a Y2K problem and beyond the defendant’s control, but it excludes many situations like threats to health, safety, the banking system, negligence, lack of maintenance or preparedness, or failures of underlying requirements. To use the Y2K upset defense, a defendant must show with signed logs or other evidence that it tried in good faith to prevent problems, that the upset came from a Y2K failure, that noncompliance was unavoidable to protect critical services or life and property, that it tried to fix the problem right away, and that it told the proper federal regulator within 72 hours of learning about the upset. If proven by a preponderance of the evidence, this defense blocks penalties for the noncompliance. The upset may last no more than 15 days unless a regulator grants more time. Fraudulent use of the defense can be punished under 18 U.S.C. 1001, and the defense cannot be used for upsets after June 30, 2000. Governments can still seek orders to fix violations. People who do business affecting residential mortgages may not foreclose on a consumer mortgage because a real Y2K failure made timely or accurate payment processing impossible. The consumer must tell the mortgage servicer in writing within 7 business days after learning of the problem and give any documents about it. Foreclosure may only start again, if the mortgage still isn’t paid and no written extension was given, after the later of four weeks after January 1, 2000 or four weeks after the consumer’s notice — but notices given on or after March 15, 2000 are not effective. These rules do not apply to defaults that happened before December 15, 1999 or to defaults that were clearly coming before that date. The rules only delay enforcement; they do not erase the debt. Definitions in the law explain “consumer,” “residential mortgage,” and “servicer.”