Page:United States Statutes at Large Volume 124.djvu/2177

 124 STAT. 2151 PUBLIC LAW 111–203—JULY 21, 2010 ‘‘(1) insurance premiums or debt cancellation or suspension fees calculated and paid in full on a monthly basis shall not be considered financed by the creditor; and ‘‘(2) this subsection shall not apply to credit unemployment insurance for which the unemployment insurance premiums are reasonable, the creditor receives no direct or indirect com- pensation in connection with the unemployment insurance pre- miums, and the unemployment insurance premiums are paid pursuant to another insurance contract and not paid to an affiliate of the creditor. ‘‘(e) ARBITRATION.— ‘‘(1) IN GENERAL.—No residential mortgage loan and no extension of credit under an open end consumer credit plan secured by the principal dwelling of the consumer may include terms which require arbitration or any other nonjudicial proce- dure as the method for resolving any controversy or settling any claims arising out of the transaction. ‘‘(2) POST-CONTROVERSY AGREEMENTS.—Subject to para- graph (3), paragraph (1) shall not be construed as limiting the right of the consumer and the creditor or any assignee to agree to arbitration or any other nonjudicial procedure as the method for resolving any controversy at any time after a dispute or claim under the transaction arises. ‘‘(3) NO WAIVER OF STATUTORY CAUSE OF ACTION.—No provi- sion of any residential mortgage loan or of any extension of credit under an open end consumer credit plan secured by the principal dwelling of the consumer, and no other agreement between the consumer and the creditor relating to the residen- tial mortgage loan or extension of credit referred to in para- graph (1), shall be applied or interpreted so as to bar a con- sumer from bringing an action in an appropriate district court of the United States, or any other court of competent jurisdic- tion, pursuant to section 130 or any other provision of law, for damages or other relief in connection with any alleged violation of this section, any other provision of this title, or any other Federal law. ‘‘(f) MORTGAGES WITH NEGATIVE AMORTIZATION.—No creditor may extend credit to a borrower in connection with a consumer credit transaction under an open or closed end consumer credit plan secured by a dwelling or residential real property that includes a dwelling, other than a reverse mortgage, that provides or permits a payment plan that may, at any time over the term of the extension of credit, result in negative amortization unless, before such trans- action is consummated— ‘‘(1) the creditor provides the consumer with a statement that— ‘‘(A) the pending transaction will or may, as the case may be, result in negative amortization; ‘‘(B) describes negative amortization in such manner as the Board shall prescribe; ‘‘(C) negative amortization increases the outstanding principal balance of the account; and ‘‘(D) negative amortization reduces the consumer’s equity in the dwelling or real property; and ‘‘(2) in the case of a first-time borrower with respect to a residential mortgage loan that is not a qualified mortgage, the first-time borrower provides the creditor with sufficient