Section 1 Short title
This Act may be cited as the “Preserving Access to Rural Installment Transactions for Years Act of 2019” or the “PARITY Act of 2019”.
Preserving Access to Rural Installment Transactions for Years Act of 2019
A BILL
To amend the Truth in Lending Act to clarify the exclusion for seller-financers from the definition of mortgage originator, and for other purposes.
Sec. 2 Amendments related to the exclusion of seller-financers in the definition of mortgage originator
Section 103(dd)(2)(E) of the Truth in Lending Act (15 U.S.C. 1602(dd)(2)(E)) is amended—
in the matter preceding clause (i)—
by striking “3 properties” and inserting “5 properties”;
by striking “a person, estate, or trust” and inserting “a person or entity (including a corporation, partnership, proprietorship, association, cooperative, estate, or trust)”; and
by striking “such person, estate, or trust” and inserting “such a person or entity”;
in clause (i)—
by inserting “or” after the semicolon;
by striking “a person, estate, or trust that has constructed” and inserting
“(I) has constructed”
by inserting at the end the following new subclause:
“(II) has received any other compensation related to such loan, including origination points or fees and excluding interest payments;”
by striking clauses (ii), (iii), and (iv); and
by inserting after clause (i) the following new clauses:
“(ii) is not a high-cost mortgage;
“(iii) does not include terms under which the outstanding principal balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of interest due;
“(iv) has—
“(I) a fixed rate; or
“(II) an adjustable rate that was not determined by a prior contractual obligation between the consumer and such a person or entity and—
“(aa) is adjustable after 5 or more years (as determined by the addition of a margin to a widely available index rate) subject to reasonable annual and lifetime limitations on interest rate increases or is determined by a prior obligation that is included in or assumed by the terms of the loan; or
“(bb) with respect to any part of such loan contractually required to be used to make payments on an existing mortgage loan secured by such a property, is adjustable on or after the date of a rate adjustment on such existing mortgage loan; and”