I 116TH CONGRESS 1ST SESSION H. R. 1036 To amend the Truth in Lending Act to clarify the exclusion for seller- financers from the definition of mortgage originator, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 7, 2019 Mr. RIGGLEMAN introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Truth in Lending Act to clarify the exclusion for seller-financers from the definition of mortgage origi- nator, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Preserving Access to 4 Rural Installment Transactions for Years Act of 2019’’ 5 or the ‘‘PARITY Act of 2019’’. 6 VerDate Sep 11 2014 00:48 Feb 20, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1036.IH H1036 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 1036 IH SEC. 2. AMENDMENTS RELATED TO THE EXCLUSION OF 1 SELLER-FINANCERS IN THE DEFINITION OF 2 MORTGAGE ORIGINATOR. 3 Section 103(dd)(2)(E) of the Truth in Lending Act 4 (15 U.S.C. 1602(dd)(2)(E)) is amended— 5 (1) in the matter preceding clause (i)— 6 (A) by striking ‘‘3 properties’’ and insert- 7 ing ‘‘5 properties’’; 8 (B) by striking ‘‘a person, estate, or trust’’ 9 and inserting ‘‘a person or entity (including a 10 corporation, partnership, proprietorship, asso- 11 ciation, cooperative, estate, or trust)’’; and 12 (C) by striking ‘‘such person, estate, or 13 trust’’ and inserting ‘‘such a person or entity’’; 14 (2) in clause (i)— 15 (A) by inserting ‘‘or’’ after the semicolon; 16 (B) by striking ‘‘a person, estate, or trust 17 that has constructed’’ and inserting ‘‘such a 18 person or entity that— 19 ‘‘(I) has constructed’’; and 20 (C) by inserting at the end the following 21 new subclause: 22 ‘‘(II) has received any other com- 23 pensation related to such loan, includ- 24 ing origination points or fees and ex- 25 cluding interest payments;’’; 26 VerDate Sep 11 2014 00:48 Feb 20, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1036.IH H1036 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 1036 IH (3) by striking clauses (ii), (iii), and (iv); and 1 (4) by inserting after clause (i) the following 2 new clauses: 3 ‘‘(ii) is not a high-cost mortgage; 4 ‘‘(iii) does not include terms under 5 which the outstanding principal balance 6 will increase at any time over the course of 7 the loan because the regular periodic pay- 8 ments do not cover the full amount of in- 9 terest due; 10 ‘‘(iv) has— 11 ‘‘(I) a fixed rate; or 12 ‘‘(II) an adjustable rate that was 13 not determined by a prior contractual 14 obligation between the consumer and 15 such a person or entity and— 16 ‘‘(aa) is adjustable after 5 17 or more years (as determined by 18 the addition of a margin to a 19 widely available index rate) sub- 20 ject to reasonable annual and 21 lifetime limitations on interest 22 rate increases or is determined 23 by a prior obligation that is in- 24 VerDate Sep 11 2014 00:48 Feb 20, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1036.IH H1036 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 1036 IH cluded in or assumed by the 1 terms of the loan; or 2 ‘‘(bb) with respect to any 3 part of such loan contractually 4 required to be used to make pay- 5 ments on an existing mortgage 6 loan secured by such a property, 7 is adjustable on or after the date 8 of a rate adjustment on such ex- 9 isting mortgage loan; and’’. 10 Æ VerDate Sep 11 2014 00:48 Feb 20, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H1036.IH H1036 pamtmann on DSKBFK8HB2PROD with BILLS