Page:United States Statutes at Large Volume 102 Part 5.djvu/726

 102 STAT. 4732

PUBLIC LAW 100-709—NOV. 23, 1988 "(2) CERTAIN CHANGES NOT PRECLUDED.—Notwithstanding the

provisions of subsection (1), a creditor may make any of the following changes: "(A) Change the index and margin applicable to extensions of credit under such plan if the index used by the creditor is no longer available and the substitute index and margin would result in a substantially similar interest rate. "(B) Prohibit additional extensions of credit or reduce the credit limit applicable to an account under the plan during any period in which the value of the consumers principal dwelling which secures any outstanding balance is significantly less than the original appraisal value of the dwelling. "(C) Prohibit additional extensions of credit or reduce the credit limit applicable to the account during any period in which the creditor has reason to believe that the consumer will be unable to comply with the repayment requirements of the account due to a material change in the consumer's financial circumstances. "(D) Prohibit additional extensions of credit or reduce the credit limit applicable to the account during any period in which the consumer is in default with respect to any material obligation of the consumer under the agreement. "(E) Prohibit additional extensions of credit or reduce the credit limit applicable to the account during any period in which— "(i) the creditor is precluded by government action from imposing the annual percentage rate provided for in the account agreement; or "(ii) any government action is in effect which adversely affects the priority of the creditor's security interest in the account to the extent that the value of the creditor's secured interest in the property is less than 120 percent of the amount of the credit limit applicable to the account. "(F) Any change that will benefit the consumer. "(3) MATERIAL OBLIGATIONS.—Upon the request of the consumer and at the time an agreement is entered into by a consumer to open an account under an open end consumer credit plan under which extensions of credit are secured by the consumer's principal dwelling, the consumer shall be given a list of the categories of contract obligations which are deemed by the creditor to be material obligations of the consumer under the agreement for purposes of paragraph (2)(D). "(4) CONSUMER BENEFIT.—

"(A) IN GENERAL.—For purposes of paragraph (2)(F), a change shall be deemed to benefit the consumer if the change is unequivocally beneficial to the borrower and the change is beneficial through the entire term of the agreement. "(B) BOARD CATEGORIZATION.—The Board may, by regula-

tion, determine categories of changes that benefit the consumer. "(d) TERMS CHANGED AFTER APPLICATION.—If any term or condition described in section 127A(a) which is disclosed to a consumer in connection with an application to open an account under an open end consumer credit plan described in such section (other than a

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