The following transactions are
not subject to this part or, if the exemption is limited to specified
provisions of this part, are not subject to those provisions:
(a) Business, commercial, agricultural,
or organizational credit.
(1) An extension of credit primarily for
a business, commercial or agricultural purpose.
(2) An extension of credit to other than
a natural person, including credit to government agencies or instrumentalities.
(b) Credit over
applicable threshold amount.
(1) Exemption.
(i) Requirements. An extension of credit in which the amount of credit extended exceeds
the applicable threshold amount or in which there is an express written
commitment to extend credit in excess of the applicable threshold
amount, unless the extension of credit is:
(A) Secured by
any real property, or by personal property used or expected to be
used as the principal dwelling of the consumer; or
(B) A private education loan as defined in
section 1026.46(b)(5).
(ii) Annual
adjustments. The threshold amount in paragraph (b)(1)(i) of this
section is adjusted annually to reflect increases in the Consumer
Price Index for Urban Wage Earners and Clerical Workers, as applicable. See the official commentary to this paragraph (b) for the threshold
amount applicable to a specific extension of credit or express written
commitment to extend credit.
(2) Transition
rule for open-end accounts exempt prior to July 21, 2011. An
open-end account that is exempt on July 20, 2011 based on an express
written commitment to extend credit in excess of $25,000 remains exempt
until December 31, 2011 unless:
(i) The creditor takes
a security interest in any real property, or in personal property
used or expected to be used as the principal dwelling of the consumer;
or
(ii) The creditor
reduces the express written commitment to extend credit to $25,000
or less.
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(c) Public utility credit. An extension of
credit that involves public utility services provided through pipe,
wire, other connected facilities, or radio or similar transmission
(including extensions of such facilities), if the charges for service,
delayed payment, or any discounts for prompt payment are filed with
or regulated by any government unit. The financing of durable goods
or home improvements by a public utility is not exempt.
(d) Securities or commodities
accounts. Transactions in securities or commodities accounts
in which credit is extended by a broker-dealer registered with the
Securities and Exchange Commission or the Commodity Futures Trading
Commission.
(e) Home
fuel budget plans. An installment agreement for the purchase
of home fuels in which no finance charge is imposed.
(f) Student loan programs. Loans made,
insured, or guaranteed pursuant to a program authorized by Title IV
of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).
(g) Employer-sponsored
retirement plans. An extension of credit to a participant in
an employer-sponsored retirement plan qualified under section 401(a)
of the Internal Revenue Code, a tax-sheltered annuity under section
403(b) of the Internal Revenue Code, or an eligible governmental deferred
compensation plan under section 457(b) of the Internal Revenue Code
(26 U.S.C. 401(a); 26 U.S.C. 403(b); 26 U.S.C. 457(b)), provided that
the extension of credit is comprised of fully vested funds from such
participant’s account and is made in compliance with the Internal
Revenue Code (26 U.S.C. 1 et seq.).
(h) Partial exemption for certain mortgage loans. The special disclosure requirements in section 1026.19(g) and, unless
the creditor chooses to provide the disclosures described in section
1026.19(e) and (f), in section 1026.19(e) and (f) do not apply to
a transaction that satisfies all of the following criteria:
(1) The transaction is secured by a subordinate
lien;
(2) The transaction
is for the purpose of:
(i) Down payment, closing costs, or
other similar home buyer assistance, such as principal or interest
subsidies;
(ii) Property
rehabilitation assistance;
(iii) Energy efficiency assistance;
or
(iv) Foreclosure
avoidance or prevention;
(3) The credit contract does not require
the payment of interest;
(4) The credit contract provides that repayment of the amount of
credit extended is:
(i) Forgiven either incrementally or
in whole, at a date certain, and subject only to specified ownership
and occupancy conditions, such as a requirement that the consumer
maintain the property as the consumer’s principal dwelling for five
years;
(ii) Deferred
for a minimum of 20 years after consummation of the transaction;
(iii) Deferred until
sale of the property securing the transaction; or
(iv) Deferred until the property securing
the transaction is no longer the principal dwelling of the consumer;
(5) (i) The costs payable by the
consumer in connection with the transaction at consummation are limited
to:
(A) Recording fees;
(B) Transfer taxes;
(C) A bona fide and reasonable application
fee; and
(D) A bona
fide and reasonable fee for housing counseling services; and
(ii)
The total of costs payable by the consumer under paragraph (h)(5)(i)(C)
and (D) of this section is less than 1 percent of the amount of credit
extended; and
(6) The following disclosures are provided:
(i) Disclosures
described in section 1026.18 that comply with this part; or
(ii) Alternatively,
disclosures described in section 1026.19(e) and (f) that comply with
this part.
