Title 12, Banks and BankingRelease 119-110
§3803 Alternative Mortgage Authority
Title 12 › CHAPTER 39 — ALTERNATIVE MORTGAGE TRANSACTIONS › § 3803
Summary
Lets banks, credit unions, and other housing lenders make, buy, and enforce "alternative mortgage" loans under the federal rules that applied to them on or before the designated transfer date. For transactions made before that date, each lender follows the rules its federal regulator had issued (for example, national banks followed Comptroller rules, federal credit unions followed NCUA rules, and federally chartered thrifts followed the former OTS rules). For transactions made after the designated transfer date, lenders must follow rules set by the Bureau of Consumer Financial Protection. If a lender mostly followed the rules and fixes any mistake within 60 days of finding it, the loan counts as meeting the rules. Federal permission to make these mortgages overrides any state ban on them, but it does not override normal state mortgage limits (for example, limits on prepayment penalties or late fees). The Bureau must review the older regulator rules as they existed on the designated transfer date, check they are fair and not deceptive and meet the Consumer Financial Protection Act goals, and then issue the post-transfer-date rules. Designated transfer date — the date set under section 1062 of the Consumer Financial Protection Act of 2010.
Full Legal Text
Title 12, §3803
Banks and Banking, Source: USLM XML via OLRC
(a)General authority; compliance by banks, credit unions and all other housing creditors with applicable regulations
In order to prevent discrimination against State-chartered depository institutions, and other nonfederally chartered housing creditors, with respect to making, purchasing, and enforcing alternative mortgage transactions, housing creditors may make, purchase, and enforce alternative mortgage transactions, except that this section shall apply—
(1)with respect to banks, only to transactions made on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5582], in accordance with regulations governing alternative mortgage transactions as issued by the Comptroller of the Currency for national banks, to the extent that such regulations are authorized by rulemaking authority granted to the Comptroller of the Currency with regard to national banks under laws other than this section;
(2)with respect to credit unions, only to transactions made on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010, in accordance with regulations governing alternative mortgage transactions as issued by the National Credit Union Administration Board for Federal credit unions, to the extent that such regulations are authorized by rulemaking authority granted to the National Credit Union Administration with regard to Federal credit unions under laws other than this section;
(3)with respect to all other housing creditors, including without limitation, savings and loan associations, mutual savings banks, and savings banks, only to transactions made on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010, in accordance with regulations governing alternative mortgage transactions as issued by the Director of the Office of Thrift Supervision for federally chartered savings and loan associations, to the extent that such regulations are authorized by rulemaking authority granted to the Director of the Office of Thrift Supervision with regard to federally chartered savings and loan associations under laws other than this section; and
(4)with respect to transactions made after the designated transfer date, only in accordance with regulations governing alternative mortgage transactions, as issued by the Bureau of Consumer Financial Protection for federally chartered housing creditors, in accordance with the rulemaking authority granted to the Bureau of Consumer Financial Protection with regard to federally chartered housing creditors under provisions of law other than this section.
(b)Transactions deemed in compliance with applicable regulations
For the purpose of determining the applicability of this section, an alternative mortgage transaction shall be deemed to be made in accordance with the applicable regulation notwithstanding the housing creditor’s failure to comply with the regulation, if—
(1)the transaction is in substantial compliance with the regulation; and
(2)within sixty days of discovering any error, the housing creditor corrects such error, including making appropriate adjustments, if any, to the account.
(c)Preemption of State law
An alternative mortgage transaction may be made by a housing creditor in accordance with this section, notwithstanding any State constitution, law, or regulation that prohibits an alternative mortgage transaction. For purposes of this subsection, a State constitution, law, or regulation that prohibits an alternative mortgage transaction does not include any State constitution, law, or regulation that regulates mortgage transactions generally, including any restriction on prepayment penalties or late charges.
(d)Bureau actions
The Bureau of Consumer Financial Protection shall—
(1)review the regulations identified by the Comptroller of the Currency and the National Credit Union Administration, (as those rules exist on the designated transfer date), as applicable under paragraphs (1) through (3) of subsection (a);
(2)determine whether such regulations are fair and not deceptive and otherwise meet the objectives of the Consumer Financial Protection Act of 2010; and
(3)promulgate regulations under subsection (a)(4) after the designated transfer date.
(e)Designated transfer date
As used in this section, the term “designated transfer date” means the date determined under section 1062 of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5582].
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
The Consumer Financial Protection Act of 2010, referred to in subsec. (d)(2), is title X of Pub. L. 111–203, July 21, 2010, 124 Stat. 1955, which enacted subchapter V (§ 5481 et seq.) of chapter 53 of this title and enacted, amended, and repealed numerous other sections and notes in the Code. For complete classification of this Act to the Code, see
Short Title
note set out under section 5301 of this title and Tables.
Amendments
2010—Subsec. (a)(1), (2), (3). Pub. L. 111–203, § 1083(a)(2)(A)(i), inserted “on or before the designated transfer date, as determined under section 1062 of the Consumer Financial Protection Act of 2010,” after “transactions made”. Subsec. (a)(4). Pub. L. 111–203, § 1083(a)(2)(A)(ii)–(iv), added par. (4). Subsec. (c). Pub. L. 111–203, § 1083(a)(2)(B), added subsec. (c) and struck out former subsec. (c). Prior to amendment, text read as follows: “An alternative mortgage transaction may be made by a housing creditor in accordance with this section, notwithstanding any State constitution, law, or regulation.” Subsecs. (d), (e). Pub. L. 111–203, § 1083(a)(2)(C), added subsecs. (d) and (e). 1989—Subsec. (a)(3). Pub. L. 101–73 substituted “Director of the Office of Thrift Supervision” for “Federal Home Loan Bank Board” wherever appearing.
Statutory Notes and Related Subsidiaries
Effective Date
of 2010 AmendmentAmendment by Pub. L. 111–203 effective on the designated transfer date, see section 1083(b) of Pub. L. 111–203, set out as a note under section 3802 of this title.
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.
Reference
Citations & Metadata
Citation
12 U.S.C. § 3803
Title 12, Banks and Banking
Last Updated
Sep 23, 2026
Release point: 119-110