12 U.S.C. § 3804: Applicability of preemption…

Summary

States can make the federal preemption rule in section 3803 stop applying to alternative mortgage transactions if the State passes a law or voters approve a measure that clearly says they do not want that federal rule. That law or voter certification must take effect on or after October 15, 1982 and before October 15, 1985. If so, the federal rule will not apply to those kinds of mortgages in that State from the law’s effective date. But the federal rule still applies to any mortgage tied to an agreement made during the period from October 15, 1982 to October 15, 1985 (the “preemption period”), and to any renewal, extension, refinance, or other change of a mortgage entered into during that period. A mortgage counts as entered into during the preemption period if it is funded or extended in whole or part during that period, even if the promise to fund was made earlier, or if it is a renewal, extension, refinance, or other change made during that 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