---
kind: "section"
citation: "12 C.F.R. § 37.3"
title: "12"
number: "37.3"
heading: "Prohibited practices."
url: "https://uscodex.org/cfr/12/37.3"
---

# §37.3. Prohibited practices.

- (a) **Anti-tying.** A national bank may not extend credit nor alter the terms or conditions of an extension of credit conditioned upon the customer entering into a debt cancellation contract or debt suspension agreement with the bank.
- (b) **Misrepresentations generally.** A national bank may not engage in any practice or use any advertisement that could mislead or otherwise cause a reasonable person to reach an erroneous belief with respect to information that must be disclosed under this part.
- (c) **Prohibited contract terms.** A national bank may not offer debt cancellation contracts or debt suspension agreements that contain terms:
  - (1) **Giving the bank the right unilaterally to modify the contract unless—**
    - (i) The modification is favorable to the customer and is made without additional charge to the customer; or
    - (ii) The customer is notified of any proposed change and is provided a reasonable opportunity to cancel the contract without penalty before the change goes into effect; or
  - (2) Requiring a lump sum, single payment for the contract payable at the outset of the contract, where the debt subject to the contract is a residential mortgage loan.

## Notes

### Authority

Authority: 12 U.S.C. 1 et seq., 24(Seventh), 93a, 1818.

### Source

Source: 67 FR 58976, Sept. 19, 2002, unless otherwise noted.