---
kind: "section"
citation: "15 U.S.C. § 1647"
title: "15"
title_heading: "Commerce and Trade"
number: "1647"
heading: "Home equity plans"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/1647"
units:
  - "Chapter 41 — Consumer Credit Protection"
  - "Subchapter I — Consumer Credit Cost Disclosure"
  - "Part B — Credit Transactions"
---

# §1647. Home equity plans

- (a) **Index requirement—** In the case of extensions of [credit](/usc/15/1602.md?p=f) under an [open end consumer credit plan](/usc/15/1602.md?p=j) which are subject to a variable rate and are secured by a [consumer](/usc/15/1681a.md?p=c)’s principal [dwelling](/usc/15/1602.md?p=w), the index or other rate of interest to which changes in the annual percentage rate are related shall be based on an index or rate of interest which is publicly available and is not under the control of the [creditor](/usc/15/1602.md?p=g).
- (b) **Grounds for acceleration of outstanding balance—** A [creditor](/usc/15/1602.md?p=g) may not unilaterally terminate any [account](/usc/15/1681a.md?p=r-4) under an [open end consumer credit plan](/usc/15/1602.md?p=j) under which extensions of [credit](/usc/15/1602.md?p=f) are secured by a [consumer](/usc/15/1681a.md?p=c)’s principal [dwelling](/usc/15/1602.md?p=w) and require the immediate repayment of any outstanding balance at such time, except in the case of—
  - (1) fraud or material misrepresentation on the part of the [consumer](/usc/15/1681a.md?p=c) in connection with the [account](/usc/15/1681a.md?p=r-4);
  - (2) failure by the [consumer](/usc/15/1681a.md?p=c) to meet the repayment terms of the [agreement](/usc/15/7a.md?p=2) for any outstanding balance; or
  - (3) any other action or failure to act by the [consumer](/usc/15/1681a.md?p=c) which adversely affects the [creditor](/usc/15/1602.md?p=g)’s [security](/usc/15/1667.md?p=5) for the [account](/usc/15/1681a.md?p=r-4) or any right of the [creditor](/usc/15/1602.md?p=g) in such [security](/usc/15/1667.md?p=5).

  This subsection does not apply to [reverse mortgage transactions](/usc/15/1602.md?p=cc).

- (c) **Change in terms—**
  - (1) **In general—** No [open end consumer credit plan](/usc/15/1602.md?p=j) under which extensions of [credit](/usc/15/1602.md?p=f) are secured by a [consumer](/usc/15/1681a.md?p=c)’s principal [dwelling](/usc/15/1602.md?p=w) may contain a provision which permits a [creditor](/usc/15/1602.md?p=g) to change unilaterally any term required to be disclosed under [section 1637a(a) of this title](/usc/15/1637a.md?p=a) or any other term, except a change in insignificant terms such as the address of the [creditor](/usc/15/1602.md?p=g) for billing purposes.
  - (2) **Certain changes not precluded—** Notwithstanding the provisions of subsection[^1] (1), a [creditor](/usc/15/1602.md?p=g) may make any of the following changes:
    - (A) Change the index and margin applicable to extensions of [credit](/usc/15/1602.md?p=f) under such plan if the index used by the [creditor](/usc/15/1602.md?p=g) is no longer available and the substitute index and margin would result in a substantially similar interest rate.
    - (B) Prohibit additional extensions of [credit](/usc/15/1602.md?p=f) or reduce the [credit](/usc/15/1602.md?p=f) limit applicable to an [account](/usc/15/1681a.md?p=r-4) under the plan during any period in which the value of the [consumer](/usc/15/1681a.md?p=c)’s principal [dwelling](/usc/15/1602.md?p=w) which secures any outstanding balance is significantly less than the original appraisal value of the [dwelling](/usc/15/1602.md?p=w).
    - (C) Prohibit additional extensions of [credit](/usc/15/1602.md?p=f) or reduce the [credit](/usc/15/1602.md?p=f) limit applicable to the [account](/usc/15/1681a.md?p=r-4) during any period in which the [creditor](/usc/15/1602.md?p=g) has reason to believe that the [consumer](/usc/15/1681a.md?p=c) will be unable to comply with the repayment requirements of the [account](/usc/15/1681a.md?p=r-4) due to a material change in the [consumer](/usc/15/1681a.md?p=c)’s financial circumstances.
    - (D) Prohibit additional extensions of [credit](/usc/15/1602.md?p=f) or reduce the [credit](/usc/15/1602.md?p=f) limit applicable to the [account](/usc/15/1681a.md?p=r-4) during any period in which the [consumer](/usc/15/1681a.md?p=c) is in default with respect to any material obligation of the [consumer](/usc/15/1681a.md?p=c) under the [agreement](/usc/15/7a.md?p=2).
    - (E) Prohibit additional extensions of [credit](/usc/15/1602.md?p=f) or reduce the [credit](/usc/15/1602.md?p=f) limit applicable to the [account](/usc/15/1681a.md?p=r-4) during any period in which—
      - (i) the [creditor](/usc/15/1602.md?p=g) is precluded by government action from imposing the annual percentage rate provided for in the [account](/usc/15/1681a.md?p=r-4) [agreement](/usc/15/7a.md?p=2); or
      - (ii) any government action is in effect which adversely affects the priority of the [creditor](/usc/15/1602.md?p=g)’s [security interest](/usc/15/1667.md?p=5) in the [account](/usc/15/1681a.md?p=r-4) to the extent that the value of the [creditor](/usc/15/1602.md?p=g)’s secured interest in the property is less than 120 percent of the amount of the [credit](/usc/15/1602.md?p=f) limit applicable to the [account](/usc/15/1681a.md?p=r-4).
    - (F) Any change that will benefit the [consumer](/usc/15/1681a.md?p=c).
  - (3) **Material obligations—** Upon the request of the [consumer](/usc/15/1681a.md?p=c) and at the time an [agreement](/usc/15/7a.md?p=2) is entered into by a [consumer](/usc/15/1681a.md?p=c) to open an [account](/usc/15/1681a.md?p=r-4) under an [open end consumer credit plan](/usc/15/1602.md?p=j) under which extensions of [credit](/usc/15/1602.md?p=f) are secured by the [consumer](/usc/15/1681a.md?p=c)’s principal [dwelling](/usc/15/1602.md?p=w), the [consumer](/usc/15/1681a.md?p=c) shall be given a list of the categories of contract obligations which are deemed by the [creditor](/usc/15/1602.md?p=g) to be material obligations of the [consumer](/usc/15/1681a.md?p=c) under the [agreement](/usc/15/7a.md?p=2) for purposes of [paragraph (2)(D)](#c-2-D).
  - (4) **Consumer benefit—**
    - (A) **In general—** For purposes of [paragraph (2)(F)](#c-2-F), a change shall be deemed to benefit the [consumer](/usc/15/1681a.md?p=c) if the change is unequivocally beneficial to the borrower and the change is beneficial through the entire term of the [agreement](/usc/15/7a.md?p=2).
    - (B) **Bureau categorization—** The [Bureau](/usc/15/1602.md?p=b) may, by regulation, determine categories of changes that benefit the [consumer](/usc/15/1681a.md?p=c).
- (d) **Terms changed after application—** If any term or condition described in [section 1637a(a) of this title](/usc/15/1637a.md?p=a) which is disclosed to a [consumer](/usc/15/1681a.md?p=c) in connection with an application to open an [account](/usc/15/1681a.md?p=r-4) under an [open end consumer credit plan](/usc/15/1602.md?p=j) described in such section (other than a variable feature of the plan) changes before the [account](/usc/15/1681a.md?p=r-4) is opened, and if, as a result of such change, the [consumer](/usc/15/1681a.md?p=c) elects not to enter into the plan [agreement](/usc/15/7a.md?p=2), the [creditor](/usc/15/1602.md?p=g) shall refund all fees paid by the [consumer](/usc/15/1681a.md?p=c) in connection with such application.
- (e) **Additional requirements relating to refunds and imposition of nonrefundable fees—**
  - (1) **In general—** No nonrefundable fee may be imposed by a [creditor](/usc/15/1602.md?p=g) or any other [person](/usc/15/1602.md?p=e) in connection with any application by a [consumer](/usc/15/1681a.md?p=c) to establish an [account](/usc/15/1681a.md?p=r-4) under any [open end consumer credit plan](/usc/15/1602.md?p=j) which provides for extensions of [credit](/usc/15/1602.md?p=f) which are secured by a [consumer](/usc/15/1681a.md?p=c)’s principal [dwelling](/usc/15/1602.md?p=w) before the end of the 3-day period beginning on the date such [consumer](/usc/15/1681a.md?p=c) receives the disclosure required under [section 1637a(a) of this title](/usc/15/1637a.md?p=a) and the pamphlet required under [section 1637a(e) of this title](/usc/15/1637a.md?p=e) with respect to such application.
  - (2) **Constructive receipt—** For purposes of determining when a nonrefundable fee may be imposed in accordance with this subsection if the disclosures and pamphlet referred to in [paragraph (1)](#e-1) are mailed to the [consumer](/usc/15/1681a.md?p=c), the date of the receipt of the disclosures by such [consumer](/usc/15/1681a.md?p=c) shall be deemed to be 3 business days after the date of mailing by the [creditor](/usc/15/1602.md?p=g).

## Footnotes

[^1]: So in original. Probably should be “paragraph”.

## Source credit

(Pub. L. 90–321, title I, § 137, as added Pub. L. 100–709, § 3, Nov. 23, 1988, 102 Stat. 4731; amended Pub. L. 103–325, title I, § 154(c), Sept. 23, 1994, 108 Stat. 2197; Pub. L. 111–203, title X, § 1100A(2), July 21, 2010, 124 Stat. 2107.)

## Notes

### Editorial Notes

### Amendments

2010—Subsec. (c)(4)(B). Pub. L. 111–203 substituted “Bureau” for “Board” in heading and text.

1994—Subsec. (b). Pub. L. 103–325 inserted at end “This subsection does not apply to reverse mortgage transactions.”

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees.

### Effective Date

For effective date of section, see Regulations; Effective Date note below.

### Regulations; Effective Date

For provisions relating to promulgation of regulations to implement amendment by Pub. L. 100–709 [enacting this section], and effective date of such amendment in connection with those regulations, see section 7 of Pub. L. 100–709, set out as a note under section 1637a of this title.