US Laws, Codes, Statutes & Cases

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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 15USC1641]

 
                      TITLE 15--COMMERCE AND TRADE
 
                 CHAPTER 41--CONSUMER CREDIT PROTECTION
 
              SUBCHAPTER I--CONSUMER CREDIT COST DISCLOSURE
 
                       Part B--Credit Transactions
 
Sec. 1641. Liability of assignees


(a) Prerequisites

    Except as otherwise specifically provided in this subchapter, any 
civil action for a violation of this subchapter or proceeding under 
section 1607 of this title which may be brought against a creditor may 
be maintained against any assignee of such creditor only if the 
violation for which such action or proceeding is brought is apparent on 
the face of the disclosure statement, except where the assignment was 
involuntary. For the purpose of this section, a violation apparent on 
the face of the disclosure statement includes, but is not limited to (1) 
a disclosure which can be determined to be incomplete or inaccurate from 
the face of the disclosure statement or other documents assigned, or (2) 
a disclosure which does not use the terms required to be used by this 
subchapter.

(b) Proof of compliance with statutory provisions

    Except as provided in section 1635(c) of this title, in any action 
or proceeding by or against any subsequent assignee of the original 
creditor without knowledge to the contrary by the assignee when he 
acquires the obligation, written acknowledgement of receipt by a person 
to whom a statement is required to be given pursuant to this subchapter 
shall be conclusive proof of the delivery thereof and, except as 
provided in subsection (a) of this section, of compliance with this 
part. This section does not affect the rights of the obligor in any 
action against the original creditor.

(c) Right of rescission by consumer unaffected

    Any consumer who has the right to rescind a transaction under 
section 1635 of this title may rescind the transaction as against any 
assignee of the obligation.

(d) Rights upon assignment of certain mortgages

                           (1) In general

        Any person who purchases or is otherwise assigned a mortgage 
    referred to in section 1602(aa) of this title shall be subject to 
    all claims and defenses with respect to that mortgage that the 
    consumer could assert against the creditor of the mortgage, unless 
    the purchaser or assignee demonstrates, by a preponderance of the 
    evidence, that a reasonable person exercising ordinary due 
    diligence, could not determine, based on the documentation required 
    by this subchapter, the itemization of the amount financed, and 
    other disclosure of disbursements that the mortgage was a mortgage 
    referred to in section 1602(aa) of this title. The preceding 
    sentence does not affect rights of a consumer under subsection (a), 
    (b), or (c) of this section or any other provision of this 
    subchapter.

                      (2) Limitation on damages

        Notwithstanding any other provision of law, relief provided as a 
    result of any action made permissible by paragraph (1) may not 
    exceed--
            (A) with respect to actions based upon a violation of this 
        subchapter, the amount specified in section 1640 of this title; 
        and
            (B) with respect to all other causes of action, the sum of--
                (i) the amount of all remaining indebtedness; and
                (ii) the total amount paid by the consumer in connection 
            with the transaction.

                             (3) Offset

        The amount of damages that may be awarded under paragraph (2)(B) 
    shall be reduced by the amount of any damages awarded under 
    paragraph (2)(A).

                             (4) Notice

        Any person who sells or otherwise assigns a mortgage referred to 
    in section 1602(aa) of this title shall include a prominent notice 
    of the potential liability under this subsection as determined by 
    the Board.

(e) Liability of assignee for consumer credit transactions secured by 
        real property

                           (1) In general

        Except as otherwise specifically provided in this subchapter, 
    any civil action against a creditor for a violation of this 
    subchapter, and any proceeding under section 1607 of this title 
    against a creditor, with respect to a consumer credit transaction 
    secured by real property may be maintained against any assignee of 
    such creditor only if--
            (A) the violation for which such action or proceeding is 
        brought is apparent on the face of the disclosure statement 
        provided in connection with such transaction pursuant to this 
        subchapter; and
            (B) the assignment to the assignee was voluntary.

        (2) Violation apparent on the face of the disclosure 
                                  described

        For the purpose of this section, a violation is apparent on the 
    face of the disclosure statement if--
            (A) the disclosure can be determined to be incomplete or 
        inaccurate by a comparison among the disclosure statement, any 
        itemization of the amount financed, the note, or any other 
        disclosure of disbursement; or
            (B) the disclosure statement does not use the terms or 
        format required to be used by this subchapter.

(f) Treatment of servicer

                           (1) In general

        A servicer of a consumer obligation arising from a consumer 
    credit transaction shall not be treated as an assignee of such 
    obligation for purposes of this section unless the servicer is or 
    was the owner of the obligation.

    (2) Servicer not treated as owner on basis of assignment for 
                         administrative convenience

        A servicer of a consumer obligation arising from a consumer 
    credit transaction shall not be treated as the owner of the 
    obligation for purposes of this section on the basis of an 
    assignment of the obligation from the creditor or another assignee 
    to the servicer solely for the administrative convenience of the 
    servicer in servicing the obligation. Upon written request by the 
    obligor, the servicer shall provide the obligor, to the best 
    knowledge of the servicer, with the name, address, and telephone 
    number of the owner of the obligation or the master servicer of the 
    obligation.

                      (3) ``Servicer'' defined

        For purposes of this subsection, the term ``servicer'' has the 
    same meaning as in section 2605(i)(2) of title 12.

                          (4) Applicability

        This subsection shall apply to all consumer credit transactions 
    in existence or consummated on or after September 30, 1995.

(Pub. L. 90-321, title I, Sec. 131, May 29, 1968, 82 Stat. 157; Pub. L. 
96-221, title VI, Sec. 616(a), Mar. 31, 1980, 94 Stat. 182; Pub. L. 103-
325, title I, Sec. 153(c), Sept. 23, 1994, 108 Stat. 2195; Pub. L. 104-
29, Sec. 7, Sept. 30, 1995, 109 Stat. 274.)


                               Amendments

    1995--Subsec. (e). Pub. L. 104-29, Sec. 7(a), added subsec. (e).
    Subsec. (f). Pub. L. 104-29, Sec. 7(b), added subsec. (f).
    1994--Subsec. (d). Pub. L. 103-325 added subsec. (d).
    1980--Pub. L. 96-221 added subsecs. (a) and (c), designated existing 
provisions as subsec. (b), substituted ``excepted as provided in 
subsection (a) of this section'' for ``unless the violation is apparent 
on the face of the statement'', and struck out exception for actions 
under section 1640(d) of this title.


                    Effective Date of 1980 Amendment

    Amendment by Pub. L. 96-221 effective on expiration of two years and 
six months after Mar. 31, 1980, with all regulations, forms, and clauses 
required to be prescribed to be promulgated at least one year prior to 
such effective date, and allowing any creditor to comply with any 
amendments, in accordance with the regulations, forms, and clauses 
prescribed by the Board prior to such effective date, see section 625 of 
Pub. L. 96-221, set out as a note under section 1602 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 1640, 1667d of this title.