---
kind: "section"
citation: "12 C.F.R. § 34.23"
title: "12"
number: "34.23"
heading: "Prepayment fees."
url: "https://uscodex.org/cfr/12/34.23"
---

# §34.23. Prepayment fees.


A national bank offering or purchasing ARM loans may impose fees for prepayments notwithstanding any State law limitations to the contrary. For purposes of this section, prepayments do not include:

- (a) Payments that exceed the required payment amount to avoid or reduce negative amortization; or
- (b) Principal payments, in excess of those necessary to retire the outstanding debt over the remaining loan term at the then-current interest rate, that are made in accordance with rules governing the determination of monthly payments contained in the loan documents.

## Notes

### Source

Source: 61 FR 11301, Mar. 20, 1996, unless otherwise noted.

### Authority

Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1462a, 1463, 1464, 1465, 1701j-3, 1828(o), 3331 et seq., 5101 et seq., 5412(b)(2)(B) and 15 U.S.C. 1639h.