§ 1735f-7. — Exemption from State usury laws; applicability.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1735f-7]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER V--MISCELLANEOUS
Sec. 1735f-7. Exemption from State usury laws; applicability
(a) The provisions of the constitution of any State expressly
limiting the rate or amount of interest, discount points, or other
charges which may be charged, taken, received, or reserved by lenders
and the provisions of any State law expressly limiting the rate or
amount of interest, discount points, or other charges which may be
charged, taken, received, or reserved shall not apply to any loan,
mortgage, or advance which is insured under subchapter I or II of this
chapter.
(b) The provisions of subsection (a) of this section shall apply to
loans, mortgages, or advances made or executed in any State until the
effective date (after December 21, 1979) of a provision of law of that
State limiting the rate or amount of interest, discount points, or other
charges on any such loan, mortgage, or advance.
(June 27, 1934, ch. 847, title V, Sec. 529, as added Pub. L. 96-153,
title III, Sec. 308, Dec. 21, 1979, 93 Stat. 1113.)
Choice of Highest Applicable Interest Rate
In any case in which one or more provisions of, or amendments made
by, title V of Pub. L. 96-221 [enacting sections 86a, 1730g, 1735f-7a,
1785(g), and 1831d of this title and section 687(i) of Title 15,
Commerce and Trade, and enacting provisions set out as notes under
sections 86a, 1730g, and 1735f-7 of this title], this section, or any
other provisions of law, including section 85 of this title, apply with
respect to the same loan, mortgage, credit sale, or advance, such loan,
mortgage, credit sale, or advance may be made at the highest applicable
rate, see section 528 of Pub. L. 96-221, set out as a note under section
1735f-7a of this title.
State Constitutions or Laws Limiting Interest, Discount Points, or Other
Charges; Exemption Until Close of March 31, 1980
Pub. L. 96-161, title I, Sec. 105, Dec. 28, 1979, 93 Stat. 1234, as
amended by Pub. L. 96-221, title V, Sec. 529, Mar. 31, 1980, 94 Stat.
168, provided that (a)(1) the provisions of the constitution or law of
any State expressly limiting the rate or amount of interest, discount
points, or other charges which could be charged, taken, received, or
reserved were not to apply to any loan, mortgage, or advance which was
secured by a first lien on residential real property or by a first lien
on stock in a residential cooperative housing corporation where the
loan, mortgage, or advance was used to finance the acquisition of such
stock; made after Dec. 28, 1979; and described in section 1735f-5(b) of
this title, except that the limitation described in section 1735f-
5(b)(1) of this title that the property must be designed principally for
the occupancy of from one to four families was not to apply, the
requirement contained in section 1735f(5)(b)(1) of this title that the
loan be secured by residential real property was not to apply to a loan
secured by stock in a residential cooperative housing corporation, and
for the purpose of this section, the term ``lender'' in section 1735f-
5(b)(2)(A) of this title was also to be deemed to include any lender
approved by the Secretary of Housing and Urban Development for
participation in any mortgage insurance program under this chapter; (2)
[Repealed by Pub. L. 96-221, title V, Sec. 529, Mar. 31, 1980, 94 Stat.
168, eff. at the close of Mar. 31, 1980.]; that (b) the provisions of
subsection (a)(1) were to apply to loans, mortgages, and advances made
in any State unless and until the State adopted a provision of law
(prior to the close of March 31, 1980) limiting the rate or amount of
interest, discount points, or other charges on any such loan, mortgage,
or advance, except that at any time after Dec. 28, 1979, any State could
adopt a provision of law placing limitations on discount points or such
other charges on any such loan, mortgage, or advance; that (c) the
Federal Home Loan Bank Board was authorized to issue rules and
regulations and to publish interpretations governing the implementation
of this section; that (d) the provisions of subsection (a)(1) expired at
the close of March 31, 1980, except that such provisions were to
continue to apply to any loan, mortgage, or advance described in
subsection (a)(1) for the duration of such loan, mortgage, or advance if
made prior to such expiration or if made during the two-year period
beginning on Dec. 28, 1979, pursuant to a commitment issued prior to
such expiration, and that (e) for the purpose of this Act [Pub. L. 96-
161] and any amendment made by this Act [see Tables for classification
of Pub. L. 96-161], the term ``State'' included the several States,
Puerto Rico, the District of Columbia, Guam, the Trust Territories of
the Pacific Islands, and the Virgin Islands.
