Page:United States Statutes at Large Volume 102 Part 5.djvu/725

 PUBLIC LAW 100-709—NOV. 23, 1988

102 STAT. 4731

"(e) BAULOON PATBIENT.—If any advertisement described in subsection (a) contains a statement r^arding the minimum monthly payment under the plan, the advertisement shall also disclose, if appli(»ble, the fact that the plan includes a balloon payment. "(f) BALLOON PAYMENT DEFINED.—For purposes of this section and section 127A, the term 'balloon payment' means, with respect to any open end consumer credit plan under which extensions of credit are secured by the consumer's principal dwelling, any repayment option under which— "(1) the account holder is required to repay the entire amount of any outstanding balance as of a specified date or at the end of a specified period of time, as determined in accordance with the terms of the agreement pursuant to which such credit is extended and "(2) the aggr^ate amount of the minimum periodic payments requjbred would not fully amortize such outstanding balance by such date or at the end of such period.". (d) TECHNICAL AND CONFORMING AMENDBCENTS.—Section 122(b) of

the Trulii in Lending Act (15 U.S.C. 1632(b)) is amended by striking out "section 128(b)(l)" and inserting in lieu thereof "sections 127A(b)(3) and 128(b)(l)". SBC 3. HOME EQUITY PROTECTIONS.

Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by adding at the end thereof the following new section: "SEC. 137. HOME EQUITY PLANS.

"(a) INDEX REQUIREMENT.—In the case of extensions of credit under an open end consumer credit plan which are subject to a variable rate and are secured by a consumer's principal dwelling, the indfflc or other rate of interest to which changes in the annual percentage rate are related shall be based on an index or rate of interest which is publicly available and is not under the control of the creditor. "(b) GROUNDS FOR ACCELERATION OF OUTSTANDING BALANCE.—A

creditor may not unilaterally terminate any account under an open end consumer credit plan under which extensions of credit are secured by a consumer's principal dwelling and require the immediate repayment of any outstanding balance at sudi time, except in the case of— "(1) fraud or material misrepresentation on the part of the consumer in connection with the account; "(2) failure by the consumer to meet the repayment terms of the agreement for any outstanding balance; or "(3) any other action or failure to act by the consumer which adversely aCTects the creditor's security for the account or any r i ^ t of the creditor in such security. "(c) CHANGE IN TERMS.—

"(1) IN GENERAL.—No open end consumer credit plan under which extensions of credit are secured by a consumer's principal dwelling may contain a provision which permits a creditor to change unilaterally any term required to be disclosed under section 127 A(a) or any other term, except a change in insignificant terms such as the address of the creditor for billing purposes.

15 USC 1647.

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