Page:United States Statutes at Large Volume 100 Part 2.djvu/302

 100 STAT. 1404 r ^

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PUBLIC LAW 99-498—OCT. 17, 1986

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report, answer, account, paper, or other data or documentary evidence.

"(g) CIVIL PENALTIES.— "(1) AUTHORITY TO IMPOSE PENALTIES.—Upon

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determination, after reasonable notice and opportunity for a hearing on the record, that a lender or a guaranty agency— "(A) has violated or failed to carry out any provision of this part or any regulation prescribed under this part, or "(B) has engaged in substantial misrepresentation of the nature of its financial charges, the Secretary may impose a civil penalty upon such lender or agency of not to exceed $25,000 for each violation, failure, or misrepresentation. "^^^ LIMITATIONS.—No civil penalty may be imposed under paragraph (1) of this subsection unless it is determined that the violation, failure, or substantial misrepresentation referred to in that paragraph resulted from— "(A)(i) a clear and consistent pattern or practice of violations, failures, or substantial misrepresentations in which ^.^. the lender or guaranty agency did not maintain procedures reasonably adapted to avoid the violation, failure, or substantial representation; "(ii) gross negligence; or "(iii) willful actions on the part of the lender or guaranty agency; and (Kii > "(g) ^jjg violation, failure, or substantial representation is material. "(3) CORRECTION OF FAILURE.—A lender or guaranty agency

has no liability under paragraph (1) of this subsection if, prior to the institution of an action under that paragraph, the lender or guaranty agency cures or corrects the violation or failure or notifies the person who received the substantial misrepresenta^ ' tion of the actual nature of the financial charges involved. "(4) CONSIDERATION AS SINGLE VIOLATION.—For the purpose of

.;>.? paragraph (1) of this subsection, violations, failures, or substantial misrepresentations arising from a specific practice of a lender or guaranty agency shall be deemed to be a single violation, failure, or substantial misrepresentation even if the violation, failure, or substantial misrepresentation affects more than one loan or more than one borrower, or both, and the Secretary may only impose a single civil penalty for each such violation, failure, or substantial misrepresentation. "(5) ASSIGNEES NOT LIABLE FOR VIOLATIONS BY OTHERS.—If a

loan affected by a violation, failure, or substantial misrepresentation is assigned to another holder, the lender or guaranty agency responsible for the violation, failure, or substantial misrepresentation shall remain liable for any civil money penalty provided for under paragraph (1) of this subsection, but the assignee shall not be liable for any such civil money penalty. "(6) COMPROMISE.—Until a matter is referred to the Attorney General, any civil penalty under paragraph (1) of this subsection may be compromised by the Secretary. In determining the amount of such penalty, or the amount agreed upon in comj; J promise, the Secretary shall consider the appropriateness of the penalty to the resources of the lender or guaranty agency subject to the determination; the gravity of the violation, failure, or substantial misrepresentation; the frequency and
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