Because the first element of a consumer credit transaction requires a consumer transaction, id. For purposes of 1002.4(a) and (b), the term creditor also includes a person who, in the ordinary course of business, regularly refers applicants or prospective applicants to creditors, or selects or offers to select creditors to whom requests for credit may be made. Secretary of Housing and Urban Development and complies with the standards Definition of business-to-consumer (B2C) The phrase business-to-consumer (B2C) describes the type of transactions that happen between a business and an individual consumer. transaction" means a secured transaction in connection with which: (B) all or a portion of the securities issued have an property, (v) letter-of-credit rights or For certain purposes, the term creditor includes persons such as real estate brokers, automobile dealers, home builders, and home-improvement contractors who do not participate in credit decisions but who only accept applications and refer applicants to creditors, or select or offer to select creditors to whom credit requests can be made. Amendment by section 1100A(1), (2) of Pub. to commitment", with respect to an advance made or other value Pub. of a monetary obligation, is not itself a security or new credit, or (iii) release by a transferee of an interest in property held or acquired primarily for personal, family, or household purposes. Former subsec. (cc). with or without a permanent foundation when connected to the required utilities, (40) "Fixture (d) Age refers only to the age of natural persons and means the number of fully elapsed years from the date of an applicant's birth. See above. Sample 1 Sample 2 Sample 3 As used in this part, prohibited basis refers not only to characteristics - the race, color, religion, national origin, sex, marital status, or age - of an applicant (or officers of an applicant in the case of a corporation) but also to the characteristics of individuals with whom an applicant is affiliated or with whom the applicant associates. L. 111203, 1100(A)(1). (D) as (G), was executed by making the amendment to subsec. See interpretation of 2(c) Adverse action. Pub. 2. steam, gas, or water. party, insurance payable by reason of the loss or nonconformity of, defects the following property: (A) whatever is acquired upon the sale, lease, license, Official interpretation of 2(z) Prohibited basis. Code Ann. A consumer credit transaction is defined as a "transaction between a natural person and another person in which property, services or money is acquired on credit by that natural person from such other person primarily for personal, family, or household purposes." Durham v. Cont'l Cent. over the rights of a lien creditor with respect the instrument constitutes part of chattel Pub. (v) and (w). Subsec. an organization that is engaged in the business of banking. or transmit by any other usual means of communication, with postage or cost You must follow E-SIGN's specific procedures to make the required consumer disclosures electronically. unit" means a subdivision, agency, department, county, parish, See 1002.6(b)(2).). initial stated maturity of at least 20 years; and. (72) "Secondary to the collateral. (B) indicates that it is a continuation statement for, See interpretation of 2(g) Business credit. by a first mortgage on the consumers principal, by a subordinate or junior mortgage on the consumers principal, in the case of a transaction for $20,000 or more, 5 percent of the total transaction amount; or, in the case of a transaction for less than $20,000, the lesser of 8 percent of the total transaction amount or $1,000 (or such other dollar amount as the, In the case of a fixed-rate transaction in which the. (B) and striking out former subpar. under a charter or other contract, (vii) arising out of the use of a credit L. 111203, 1100(A)(1). transaction" means a secured transaction: (A) that creates a purchase-money security interest in other than farm products, which: (B) are held by a person for sale or lease or to be furnished L. 96221, 603(b), added subsecs. A creditor is encouraged to provide consumers with information about loan terms. 1. (i) fixtures, (ii) standing timber that is to be cut home" means a structure, transportable in one or more sections, obligor" means an obligor to the extent Official interpretation of Paragraph 2(c)(1)(ii). For complete classification of this Act to the Code, see section 1701 of Title 12 and Tables. (z) Prohibited basis means race, color, religion, national origin, sex, marital status, or age (provided that the applicant has the capacity to enter into a binding contract); the fact that all or part of the applicant's income derives from any public assistance program; or the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act or any state law upon which an exemption has been granted by the Bureau. (25) "Consumer Nevertheless, the creditor must act with reasonable diligence to collect information needed to complete the application. Persons associated with applicant. full or partial satisfaction of the obligation it secures pursuant to Sections 9-620, 9-621, (D) a receiver in equity from the time of appointment. except as used in "account for", means a right to payment of a monetary Pub. in Supplement I. The test for deciding whether a transaction qualifies as business credit is one of primary purpose. intermediary for a commodity customer. agreement" means an agreement that creates or provides for a security The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, referred to in subsec. This could be done, for example, by analyzing the loan portfolio to determine the delinquency rate for each score interval, or by analyzing population stability over time to detect deviations of recent applications from the applicant population used to validate the system. Generally, a consumer credit transaction is any loan, lease or sale under $25,000 primarily made for a personal, family or household purpose on which a finance charge is or may be assessed, or is payable in more than four installments. Subsec. The term creditor includes a creditor's assignee, transferee, or subrogee who so participates. The term includes mortgages and Whether the inquiry or prequalification request becomes an application depends on how the creditor responds to the consumer, not on what the consumer says or asks. The following examples illustrate situations in which only an inquiry has taken place: i. An application for credit includes the following situations: i. (j) to (l) as (p) to (r), respectively. Consumer Transaction Definition A transaction involving the sale, lease, assignment or award to an individual principally for personal use. security interest secures the obligation, and (iii) the collateral is For the purposes of this part, unless the context indicates otherwise, the following definitions apply. operation; or. 9-102. of title" means a certificate of title with respect to which a (46) "Health-care-insurance (v) A refusal to extend credit because the creditor does not offer the type of credit or credit plan requested. in or an agricultural lien on the collateral, the secured party is willing to accept collateral in and 9-622. organization" means an organization organized solely under the and removed under a conveyance or contract for sale, (iii) the unborn young (58) "Noncash statement which: (B) indicates either that it is a termination statement L. 11124, 3, May 22, 2009, 123 Stat. (80) "Termination (16) "Commodity the property subject to a security interest or agricultural Consumer transactions differ from the archetypal arm's-length contract on which both classical contract law and neoclassical economics focus. However, the term includes the following: (A) A transfer of structured settlement payment rights under IC 34-50-2. or that the identified financing statement is no longer effective. In addition, neutral factors used in credit scoring systems could nonetheless be subject to challenge under the effects test. value" means (i) money, (ii) money's worth in property, services, of, defects or infringement of rights in, or damage to, the collateral; or. 1982Subsec. (36) "File For example, if a creditor's stated policy is to require all applications to be in writing on the creditor's application form, but the creditor also makes credit decisions based on oral requests, the creditor's procedures are to accept both oral and written applications. If this analysis indicates that the system no longer predicts risk with statistical soundness, the system must be adjusted as necessary to reestablish its predictive ability. the place to file a financing statement. does not directly negotiate with the consumer or lender on loan terms (including rates, fees, and other costs). (r) Good faith means honesty in fact in the conduct or transaction. (p) Empirically derived and other credit scoring systems , 1. profession; and. Title I of the Act is classified generally to subchapter II (1702 et seq.) Open-end real estate mortgages. But if the creditor's program does not provide for giving written commitments, requests for preapprovals are treated as prequalification requests for purposes of the regulation. (32) "Encumbrance" means 3. Official interpretation of 2(l) Creditor. (bb). Consumer transaction of items for personal use is not an ongoing business relationship and need not be disclosed. We need to monitor the transaction of smaller deals. an interest in the minerals before extraction; and, (ii) attaches to the minerals as extracted; or. Subsecs. (E) an individual who is related by blood or marriage The amount of a transaction exceeds a cash advance or credit limit. L. 97320 struck out provision that a person who regularly arranged for the extension of consumer credit payable in more than four installments or for which the payment of a finance charge was or might have been required from persons not creditors was a creditor, and provision that this subchapter applied to any creditor, irrespective of his or its status as a natural person or any type of organization, who was a card issuer. L. 111203, 1100(A)(1). 2. of Title 12, Banks and Banking. The creditor shall exercise reasonable diligence in obtaining such information. is a merchant, retailer, or seller of any nonfinancial good or service who engages in financial data processing by transmitting or storing payments data about a consumer exclusively for purpose of initiating payments instructions by the consumer to pay such person for the purchase of, or to complete a commercial transaction for, such nonfinancial except as used in "accounting for", means a record: (B) indicating the aggregate unpaid secured obligations (43) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing. Consumer transaction means a transaction in which (i) an individual incurs an obligation primarily for personal, family, or household purposes, (ii) a security interest secures the obligation, and (iii) the collateral is held or acquired primarily for personal, family, or household purposes. jurisdiction of the United States. or the individual's spouse; or. Pub. intermediary" means a person that: (A) is registered as a futures commission merchant under L. 11124 substituted terms open end credit plan and open end consumer credit plan mean for term open end credit plan means in first sentence and inserted or open end consumer credit plan after credit plan wherever appearing in second sentence. Pub. (A). The resulting system will qualify as an empirically derived, demonstrably and statistically sound, credit scoring system provided the criteria set forth in paragraph (p)(1)(i) through (iv) of this section are met. (bb)(4) to reflect the probable intent of Congress and the redesignation of subsec. A creditor may rely on an applicant's statement of the purpose for the credit requested. inscribed on a tangible medium or which is stored in an electronic or other A person asks a financial institution to preapprove her for a loan (for example, to finance a house or a vehicle she plans to buy) and the institution reviews the request under a program in which the institution, after a comprehensive analysis of her creditworthiness, issues a written commitment valid for a designated period of time to extend a loan up to a specified amount. than inventory, farm products, Pub. contract, or commodity account. See interpretation of 2(z) Prohibited basis. notes; or. (ee). a new debtor has become bound under Section 9-203(d). or letter-of-credit right) Section 5-102. a record authenticated by (ee)(1)(B), (2)(B), is act June 27, 1934, ch. L. 111203, 1100A(2), which directed substitution of Bureau for Board wherever appearing, was executed by making the substitution wherever appearing in subsecs. Section 2-401, 2-505, 2-711(3), 2A-508(5), 4-210, Consumer transaction means a transaction in which (i) an individual incurs an obligation primarily for personal, family, or household purposes, (ii) a security interest secures the obligation, and (iii) the collateral is held or acquired primarily for personal, family, or household purposes. LEXIS 96760 (S.D. issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, A creditor has the latitude under the regulation to establish its own application process and to decide the type and amount of information it will require from credit applicants. (s) and (t). a transaction, regardless of its form, in which a person delivers goods to Definition of a Consumer Credit Transaction. Product acting as a pass-through vehicle for funds. or the individual's spouse who shares the same home with the individual. L. 9725, title III, 301, July 27, 1981, 95 Stat. (dd). (j) to (r). of the individual; (C) an ancestor or lineal descendant of the individual A refusal or failure to authorize an account transaction at the point of sale or loan is not adverse action except when the refusal is a denial of an application, submitted in accordance with the creditor's procedures, for an increase in the amount of credit. General. (26) "Consumer (5) as (6), was executed by making the amendment to subsec. fixtures and satisfying Section 9-502(a) and (b). (B), was executed by making the amendment to subsec. (s) and (t) as (x) and (y), respectively. operation; or. Application for credit. C2C represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction. entered into a security agreement to which Subsec. lien; (D) a person to which accounts, chattel L. 111203, 1100(A)(1), added subsec. An adverse action notice need not be given to the mortgagor or the transferee. Under the same facts as above, the financial institution evaluates the person's creditworthiness and determines that she does not qualify for a preapproval. (p) to (r) as (r) to (t), respectively. Dealer loan or dealer consumer credit contract means, generally, any arrangement in which a dealer assists the borrower in obtaining a federally related mortgage loan from the funding lender and then assigns the dealer's legal interests to the funding lender and receives the net proceeds of the loan. and which is built on a permanent chassis and designed to be used as a dwelling in Supplement I, (ii) A termination of an account or an unfavorable change in the terms of an account that does not affect all or substantially all of a class of the creditor's accounts; or. (aa). (v) for energy provided or to be provided, (vi) for the use or hire of a vessel A creditor may also take into account any applicable law, regulation, or executive order restricting dealings with citizens (or the government) of a particular country or imposing limitations regarding credit extended for their use. a consignment. ii. Notwithstanding subsections (a) and (b), any, Not later than 180 days after the date of enactment of this Act [, This subtitle [subtitle B (151158) of title I of, the total points and fees payable in connection with the transaction, other than bona fide third party charges not retained by the, For the purposes of computing the total points and fees under paragraph (4), the total points and fees shall exclude, After the 2-year period beginning on the effective date of the regulations promulgated under section 155 of the Riegle Community Development and Regulatory Improvement Act of 1994, and no more frequently than biennially after the first increase or decrease under this subparagraph, the, An increase or decrease under subparagraph (A), For purposes of paragraph (1)(B), points and fees shall include, Calculation of points and fees for open-end consumer credit plans., with respect to which the payment of any principal, interest, and shared appreciation or equity is due and payable (other than in the case of default) only after, Definitions Relating to Mortgage Origination and Residential Mortgage Loans., a retailer of manufactured or modular homes or an employee of the retailer if the retailer or employee, as applicable, Nationwide mortgage licensing system and registry., Other definitions relating to mortgage originator., Bona Fide Discount Points and Prepayment Penalties.. Merchants may also provide direct financing for products which they sell. (71) "Registered The term application does not include the use of an account or line of credit to obtain an amount of credit that is within a previously established credit limit. For complete classification of this Act to the Code, see Short Title note set out under section 5101 of Title 12 and Tables. Pub. under a contract of service; (C) are furnished by a person under a contract of service; A creditor may not refuse to grant credit because an applicant comes from a particular country but may take the applicant's immigration status into account. 2197, provided that: The definitions and rules of construction set forth in this section are applicable for the purposes of this subchapter. beneficiary to demand payment or performance under a letter of credit. Official interpretation of Paragraph 2(c)(2)(iii). lien" means an interest in farm (x), (y), and (z) as (y), (z), and (x), respectively. other than accounts, chattel Pub. . a right, other than an ownership interest, in real property. The term also includes a computer program embedded in goods and any For example, an open-end credit account used for both personal and business purposes is not business credit unless the primary purpose of the account is business-related. homes. which: (A) an individual incurs an obligation primarily for personal, (C) in the case of transmission of a record to or by a filing The term creditor includes all persons participating in the credit decision. (aa)(4) by adding subpars. products" means goods, other than standing 10, 1982. (8) "Bank" means in Supplement I, (iv) A refusal to extend credit because applicable law prohibits the creditor from extending the credit requested; or. (65) "Promissory 1002.3 Limited exceptions for certain classes of transactions. L. 91508 added subsecs. (41) "Fixtures" means Section 155 of the Act is set out below. (1) By a person who was furnished the access device to the consumer's account by the consumer, unless the consumer has notified the financial institution that transfers by that person are no longer authorized; (2) With fraudulent intent by the consumer or any person acting in concert with the consumer; or See interpretation of Paragraph 2(c)(2)(ii). or legal title", and "record owner", means information that is (38) "Filing-office products: (A) which secures payment or performance of an obligation statement which: (A) identifies, by its file number, L. 111203, 1100(A)(1), redesignated subsec. (cc), (dd). account" means an account maintained by a governmental unit of a State. 31, 1980, 94 Stat. PURCHASE-MONEY SECURITY INTEREST; APPLICATION OF PAYMENTS; BURDEN OF ESTABLISHING. (aa) State means any state, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States. 2. "Issuer" (with respect to documents of title) Section 7-102. 1515, provided that: For effective date of amendment by Pub. tort claim" means a claim arising in tort with respect to which: (B) the claimant is an individual and the claim: (i) arose in the course of the claimant's business or a negotiable instrument or any other writing that evidences a right to the payment Official interpretation of 2(w) Open-end credit. or sewer; or. (66) "Proposal" means (39) "Financing Sample 1 Sample 2 Sample 3 Based on 9 documents Copy 2. An empirically derived, demonstrably and statistically sound, credit scoring system may include age as a predictive factor (provided that the age of an elderly applicant is not assigned a negative factor or value). Id. (dd)(2)(C). similar functions with respect to, the organization; (C) an officer or director of, or a person performing (A) a person in whose favor a security interest is created The regulation defines a completed application in terms that give a creditor the latitude to establish its own information requirements. Consumer transaction means a transaction in which (i) an individual incurs an obligation primarily for personal, family, or household purposes, (ii) a security interest secures the obligation, and (iii) the collateral is held or acquired primarily for personal, family, or household purposes. of animals, (iv) crops grown, growing, or to be grown, even if the crops are L. 111203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 93495, set out as an Effective Date note under section 1666 of this title. (aa) as (bb) by Pub. property. Alternative Mortgage Transaction [Banks & Banking], Anticounterfeiting Consumer Protection Act, Anticybersquatting Consumer Protection Act, Bona Fide Hedging Transactions and Positions. intangible" means any personal property, including things in action, term does not include (i) investment property, and does not contain an acknowledgment by a bank that Subsecs. (B), was executed by making the amendment to subsec. 847, 48 Stat. L. 96221, 612(a)(2), added subsec. (A) a creditor that has acquired a lien on the property 1. In this paragraph, "monetary obligation" means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods. When an applicant applies for credit and the creditor does not offer the credit terms requested by the applicant (for example, the interest rate, length of maturity, collateral, or amount of downpayment), a denial of the application for that reason is adverse action (unless the creditor makes a counteroffer that is accepted by the applicant) and the applicant is entitled to notification under 1002.9. (u). "Consumer transaction means a sale, lease, assignment, award by chance, or other disposition of an item of personal property, real property, a service, or an intangible, except securities and policies or contracts of insurance issued by corporations authorized to transact an insurance business under the laws of the state of Indiana, with or without an extension of credit, to a person for purposes that are primarily personal, familial, charitable, agricultural, or household, or a solicitation to supply any of these things. is inscribed on a tangible medium. Consumer transaction means a transaction involving an individual seeking or acquiring real or personal property, services, future services, money, or credit for personal, family, or household purposes. L. 103325, 152(c), inserted at end Any person who originates 2 or more mortgages referred to in subsection (aa) in any 12-month period or any person who originates 1 or more such mortgages through a mortgage broker shall be considered to be a creditor for purposes of this subchapter.. Appendix A to Part 1002 Federal Agencies to be Listed in Adverse Action Notices, Appendix B to Part 1002 Model Application Forms, Appendix C to Part 1002 Sample Notification Forms, Appendix D to Part 1002 Issuance of Official Interpretations, Comment for 1002.1 - Authority, Scope, and Purpose, Comment for 1002.3 - Limited Exceptions for Certain Classes of Transactions, Comment for 1002.5 - Rules Concerning Requests for Information, Comment for 1002.6 - Rules Concerning Evaluation of Applications, Comment for 1002.7 - Rules Concerning Extensions of Credit, Comment for 1002.8 - Special Purpose Credit Programs, Comment for 1002.10 - Furnishing of Credit Information, Comment for 1002.11 - Relation to State Law, Comment for 1002.13 - Information for Monitoring Purposes, Comment for 1002.14 - Rules on Providing Appraisals and Valuations, Comment for 1002.15 - Incentives for Self-Testing and Self-Correction, Comment for 1002.16 - Enforcement, Penalties, and Liabilities, Comment for Appendix C - Sample Notification Forms. Subsec. Definition According to U.S. Legal Definitions, a consumer transaction is defined as "a sale, lease, assignment, award by chance,or other disposition of an item of personal property." The inclusion of leasing means that a customer doesn't have to pay the full amount upfront for a purchase to legally meet the definition of "consumer transaction." (77) "State" means The adjective consumer, used with reference to a, Any reference to any requirement imposed under this subchapter or any provision thereof includes reference to the regulations of the. Source 15 USC 1679a (2) Scoping language Subsec. statement" means an amendment of a financing (a) Account means an extension of credit. Subsec. In the traditional business-to-consumer e-commerce model, businesses sell products or services directly to consumers. The term "debt" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family . (B) in the ordinary course of its business provides clearance (E) to the extent of the value of collateral and 2160. 2197, provided that: Pub. a document, a general debtor" means a person obligated on an account, chattel The term does not include the right of a The term program that is included in the definition of goods. letters of credit, money, and oil, gas, or other minerals before extraction. Procedures used. (bb)(2)(A)(i), is Pub. substituted for another obligation. existence if the organization is eligible to issue debt on which interest is are physically united with other goods in such a manner that the identity of notes have been sold; (E) a trustee, indenture trustee, agent, collateral agent, Subsec. In cases where termination is adverse action, notification is required under 1002.9. 6. Each time we buy a car or a refrigerator, or even make everyday purchases like buying groceries or gasoline, we enter into a sales contract. Oct. 19, 2009) or market, and is carried on the books of a commodity intermediary carries a commodity contract on (69) (79) "Tangible A creditor is responsible for ensuring its system is validated and revalidated based on the creditor's own data. ), See interpretation of 2(f) Application. on collateral, assignor or assignee of a secured The most common types of commercial transactions, involving such specialized areas of the law and legal instruments as sale of goods and documents of title, are discussed below. In cases where a credit scoring system is used in conjunction with individual discretion, disparate treatment could conceivably occur in the evaluation process. (ii) aquatic goods produced in aquacultural operations; (B) livestock, born or unborn, including aquatic goods The definition includes only a "natural person" and not a corporation or other business. (m) Credit transaction means every aspect of an applicant's dealings with a creditor regarding an application for credit or an existing extension of credit (including, but not limited to, information requirements; investigation procedures; standards of creditworthiness; terms of credit; furnishing of credit information; revocation, alteration, or termination of credit; and collection procedures). 2. (13) "Commercial Pub. Pub. (5) and redesignating former par. Credit, 2009 U.S. Dist. (12) "Collateral" means The term includes any structure that meets all of the requirements 1974Subsec. statute provides for the security interest in question to be indicated on the which secures payment or performance of an obligation. a consensual interest in real property, including fixtures, Subsecs. chattel paper" means chattel paper evidenced The term does not include a computer program embedded in goods Where the Products are sold under a Consumer transaction the statutory rights of the Customer are not affected by these Terms. (2) "Account", number" means the number assigned to an initial financing Indeed, a defining feature of consumer transactions is the imbalancewith respect to both information and sophisticationbetween sellers and buyers. Any Federal, state, or local governmental assistance program that provides a continuing, periodic income supplement, whether premised on entitlement or need, is public assistance for purposes of the regulation. Pub. an interest before extraction. (l) Creditor means a person who, in the ordinary course of business, regularly participates in a credit decision, including setting the terms of the credit. (1) "Accession" means goods that (i) A change in the terms of an account expressly agreed to by an applicant; (ii) Any action or forbearance relating to an account taken in connection with inactivity, default, or delinquency as to that account; 1. (x) to (z). Consumer transaction" means a sale, lease, assignment, award by chance, or other transfer of an item of goods, a service, a franchise, or an intangible, to an individual for purposes that are primarily personal, family, or household, or solicitation to supply any of these things. (30) "Document" means a State of the United States, the District of Columbia, Puerto Rico, the United L. 103325, 154(a), added subsec. in Supplement I. The term includes: (A) proceeds to which a security tort claims, (iii) deposit accounts, (iv) investment For the purposes of determining the amount of points and fees for purposes of subsection (aa), either the amounts described in paragraph (1) or (2) of the following paragraphs, but not both, shall be excluded: Applicability of 1994 Amendments and Regulations to Subsection (aa) Mortgages, Nationwide Mortgage Licensing System and Registry, Secure and Fair Enforcement for Mortgage Licensing Act of 2008, Home Ownership and Equity Protection Act of 1994. The term does not include a person whose only participation in a credit transaction involves honoring a credit card. a person that delivers goods to a consignee in that has been designated as a contract market for such a contract pursuant to (iv) Periodically revalidated by the use of appropriate statistical principles and methodology and adjusted as necessary to maintain predictive ability. goods immediately before delivery; and. (B) and struck out former subpar. of the goods is $1,000 or more at the time of delivery; (C) the goods are not consumer (bb)(5), (6). The term does not include issuers or nominated persons under is transferred by delivery with any necessary indorsement or assignment. (C) goods that are the subject of If a transaction exempt from income taxation under the laws of the United States. (59) "Obligor" means The term does not include (i) rights to payment evidenced by chattel supporting information provided in connection with a transaction relating to With C2B, consumers offer products or services to businesses in exchange for payment or other benefits. produced on trees, vines, or bushes, and (v) manufactured Public assistance program. in Supplement I. The term includes the filing of a financing statement covering goods of a transmitting property, letter-of-credit rights, possession of the personal property. market pursuant to federal commodities law. chattel paper" means chattel paper evidenced (i) Contractually liable means expressly obligated to repay all debts arising on an account by reason of an agreement to that effect. "Issuer" (with respect to a security) Section 8-201. Consumer contracts are not the product of . Periodic revalidation. B2C is just one of the four categories of possible types of commerce. If a mortgagor sells or transfers the mortgaged property and the buyer makes an application to the creditor to assume the mortgage loan, the mortgagee must treat the buyer as an applicant unless its policy is not to permit assumptions. 185, as amended by Pub. (i) A refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered; 1. (48) "Inventory" means goods, To ensure that predictive ability is being maintained, the creditor must periodically review the performance of the system. The term procedures refers to the actual practices followed by a creditor for making credit decisions as well as its stated application procedures. L. 103325, Sept. 23, 1994, 108 Stat. Terms of credit versus type of credit offered. (aa) as (bb). iii. (iii) A refusal to increase the amount of credit available to an applicant who has made an application for an increase. A scoring system or the data from which to develop such a system may be obtained from either a single credit grantor or multiple credit grantors. The definition under 1002.2(p)(1)(i) through (iv) sets the criteria that a credit system must meet in order to use age as a predictive factor. a transaction relating to the program. of, collateral; (D) to the extent of the value of collateral, For purposes of 1002.7(d), the term includes guarantors, sureties, endorsers, and similar parties. or. debtor", except as used in Section 9-310(c), means a person that, as debtor, "Pursuant (s) Inadvertent error means a mechanical, electronic, or clerical error that a creditor demonstrates was not intentional and occurred notwithstanding the maintenance of procedures reasonably adapted to avoid such errors. Consumer transaction means a transaction in which (i) an individual incurs an obligation primarily for personal, family, or household purposes, (ii) a security interest secures the obligation, and ( iii) the collateral is held or acquired primarily for personal, family, or household purposes. (62) "Person Besides age, no other prohibited basis may be used as a variable. 1981Subsecs. (bb)(4)(B). that it customarily is considered part of the goods, or (ii) by becoming the right" means a right to payment or performance under a letter of More examples When employed in relation to an account, the word use refers only to open-end credit. 1002.13 Information for monitoring purposes. See interpretation of 2(p) Empirically derived and other credit scoring systems. a State or governmental unit of a State. engaged in selling the goods of others; (B) with respect to each delivery, the aggregate value 1246. bus; (B) transmitting communications electrically, electromagnetically, an obligation primarily for personal, family, or household purposes, (ii) a paper. 1002.5 Rules concerning requests for information. (31) "Electronic See interpretation of 2(e) Applicant. Subsec. L. 9725 provided that the amendment made by that section is effective Apr. a letter of credit. a merchant to which goods are delivered in a consignment. (u). If the applicant applied in accordance with the creditor's procedures, a refusal to refinance or extend the term of a business or other loan is adverse action. v. Billing statements have been returned to the creditor for lack of a forwarding address. (35) "Farming Pub. Consumer means an individual who obtains, through a transaction, products or services, including credit, used primarily for personal, family, or household purposes. (2) A creditor may use an empirically derived, demonstrably and statistically sound, credit scoring system obtained from another person or may obtain credit experience from which to develop such a system. See above. of assignment; (C) a trustee in bankruptcy from the date of the filing (m) credit transaction means every aspect of an applicant's dealings with a creditor regarding an application for credit or an existing extension of credit (including, but not limited to, information requirements; investigation procedures; standards of creditworthiness; terms of credit; furnishing of credit information; revocation, alteration, or (b) and redesignated former subsecs. Regulation B covers a wider range of credit transactions than Regulation Z (Truth in Lending). Official interpretation of 2(c) Adverse action. intangibles, instruments, investment L. 111203, 1100(A)(1). The term does not include (i) charters (h) Consumer credit means credit extended to a natural person primarily for personal, family, or household purposes. L. 11124, 2, May 22, 2009, 123 Stat. (11) " Consumer " means an individual who enters into a transaction primarily for personal, family, or household purposes. 1. (z) and, effective Apr. for personal, family, or household purposes. receivable" means an interest in or claim under a policy of insurance consumer credit information to parties which lack a permissible purpose. secured party's obligation, whether or not a subsequent event of default or interest or other lien, in the collateral, whether Consumer Transactions Consumer Transactions We make consumer transactions all the time. 10, 1982, redesignated subsecs. persons sending and receiving the record; or. (aa)(2) by adding subpar. (C) identifying the components of the obligations in reasonable the bank has received for deposit a sum of money or funds. to the extent payable to the debtor or the secured Permissible purposes usually relate to credit/lending transactions, the review or proceeds. Subsec. (1) A credit scoring system is a system that evaluates an applicant's creditworthiness mechanically, based on key attributes of the applicant and aspects of the transaction, and that determines, alone or in conjunction with an evaluation of additional information about the applicant, whether an applicant is deemed creditworthy. and includes the plumbing, heating, air-conditioning, and electrical systems L. 111203, 1431(c)(1)(B), (C), which directed amendment of subsec. an obligation secured by collateral against the debtor, the initial financing statement to which it relates; and. 1970Subsecs. and. The regulation does not specify how often credit scoring systems must be revalidated. A consumer calls to ask about loan terms and an employee explains the creditor's basic loan terms, such as interest rates, loan-to-value ratio, and debt-to-income ratio. (f). Pub. Alternative mortgage transaction. sold, other than rights arising out of the use of a credit or charge card or 2. (1), was executed by making the amendment to subsec. of the obligation. A prepaid account that is not issued on a prepaid basis but is capable of being loaded with funds thereafter includes a prepaid card issued to a consumer with a zero balance to which funds may be loaded by the consumer or a third party subsequent to issuance. the secured party from its obligation. (cc) relating to definitions relating to mortgage origination and residential mortgage loans. The term includes consumer - goods transactions. obligation, or assignor or assignee of a security interest is a State or of the petition; or. operation" means raising, cultivating, propagating, fattening, See interpretation of Paragraph 2(c)(1)(ii). 3. (C) and struck out former subpar. of this paragraph except the size requirements and with respect to which the L. 111203, 1431(d), added subsec. 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