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15 USC 1641 - Liability of assigneesLegal Research Home > US Code > Commerce and Trade > 15 USC 1641 - Liability of assignees

Sec. 1641. Liability of assignees

(a)PrerequisitesExcept as otherwise specifically provided in this subchapter, any civil action for aviolation of this subchapter or proceeding under section 1607 of this title which may bebrought against a creditor may be maintained against any assignee of such creditor onlyif the violation for which such action or proceeding is brought is apparent on the face ofthe disclosure statement, except where the assignment was involuntary. For the purposeof this section, a violation apparent on the face of the disclosure statement includes, butis not limited to(1) a disclosure which can be determined to be incomplete or inaccurate from the face ofthe disclosure statement or other documents assigned, or(2) a disclosure which does not use the terms required to be used by this subchapter.(b)Proof of compliance with statutory provisionsExcept as provided in section 1635 (c) of this title, in any action or proceeding by oragainst any subsequent assignee of the original creditor without knowledge to thecontrary by the assignee when he acquires the obligation, written acknowledgement ofreceipt by a person to whom a statement is required to be given pursuant to thissubchapter shall be conclusive proof of the delivery thereof and, except as provided insubsection (a) of this section, of compliance with this part. This section does not affectthe rights of the obligor in any action against the original creditor.(c)Right of rescission by consumer unaffectedAny consumer who has the right to rescind a transaction under section 1635 of this titlemay rescind the transaction as against any assignee of the obligation.(d)Rights upon assignment of certain mortgages(1)In generalAny person who purchases or is otherwise assigned a mortgage referred to in section1602 (aa) of this title shall be subject to all claims and defenses with respect to thatmortgage that the consumer could assert against the creditor of the mortgage, unless thepurchaser or assignee demonstrates, by a preponderance of the evidence, that areasonable person exercising ordinary due diligence, could not determine, based on thedocumentation required by this subchapter, the itemization of the amount financed, andother disclosure of disbursements that the mortgage was a mortgage referred to insection 1602 (aa) of this title. The preceding sentence does not affect rights of aconsumer under subsection (a), (b), or (c) of this section or any other provision of thissubchapter.(2)Limitation on damagesNotwithstanding any other provision of law, relief provided as a result of any actionmade permissible by paragraph (1) may not exceed—(A) with respect to actions based upon a violation of this subchapter, the amountspecified in section 1640 of this title; and(B) with respect to all other causes of action, the sum of—(i) the amount of all remaining indebtedness; and(ii) the total amount paid by the consumer in connection with the transaction.(3)OffsetThe amount of damages that may be awarded under paragraph (2)(B) shall be reducedby the amount of any damages awarded under paragraph (2)(A).(4)NoticeAny person who sells or otherwise assigns a mortgage referred to in section 1602 (aa) ofthis title shall include a prominent notice of the potential liability under this subsectionas determined by the Board.(e)Liability of assignee for consumer credit transactions secured by real property(1)In generalExcept as otherwise specifically provided in this subchapter, any civil action against acreditor for a violation of this subchapter, and any proceeding under section 1607 of thistitle against a creditor, with respect to a consumer credit transaction secured by realproperty may be maintained against any assignee of such creditor only if—(A) the violation for which such action or proceeding is brought is apparent on the face ofthe disclosure statement provided in connection with such transaction pursuant to this

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subchapter; and(B) the assignment to the assignee was voluntary.(2)Violation apparent on the face of the disclosure describedFor the purpose of this section, a violation is apparent on the face of the disclosurestatement if—(A) the disclosure can be determined to be incomplete or inaccurate by a comparisonamong the disclosure statement, any itemization of the amount financed, the note, or anyother disclosure of disbursement; or(B) the disclosure statement does not use the terms or format required to be used by thissubchapter.(f)Treatment of servicer(1)In generalA servicer of a consumer obligation arising from a consumer credit transaction shall notbe treated as an assignee of such obligation for purposes of this section unless theservicer is or was the owner of the obligation.(2)Servicer not treated as owner on basis of assignment for administrative convenienceA servicer of a consumer obligation arising from a consumer credit transaction shall notbe treated as the owner of the obligation for purposes of this section on the basis of anassignment of the obligation from the creditor or another assignee to the servicer solelyfor the administrative convenience of the servicer in servicing the obligation. Uponwritten request by the obligor, the servicer shall provide the obligor, to the bestknowledge of the servicer, with the name, address, and telephone number of the ownerof the obligation or the master servicer of the obligation.(3)"Servicer" definedFor purposes of this subsection, the term "servicer" has the same meaning as in section2605 (i)(2) of title 12.(4)ApplicabilityThis subsection shall apply to all consumer credit transactions in existence orconsummated on or after September 30, 1995.(g)Notice of new creditor(1)In generalIn addition to other disclosures required by this subchapter, not later than 30 days afterthe date on which a mortgage loan is sold or otherwise transferred or assigned to a thirdparty, the creditor that is the new owner or assignee of the debt shall notify the borrowerin writing of such transfer, including—(A) the identity, address, telephone number of the new creditor;(B) the date of transfer;(C) how to reach an agent or party having authority to act on behalf of the new creditor;(D) the location of the place where transfer of ownership of the debt is recorded; and(E) any other relevant information regarding the new creditor.(2)DefinitionAs used in this subsection, the term "mortgage loan" means any consumer credittransaction that is secured by the principal dwelling of a consumer.

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