(a) No person shall, with the intent to avoid the application or provisions of this chapter:

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Terms Used In Tennessee Code 45-20-106

  • Borrower: means a natural person obligated to pay a home loan, including a co-borrower. See Tennessee Code 45-20-102
  • Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
  • High-cost home loan: means a home loan in which the terms of the loan meet or exceed the rate threshold or the total points and fees threshold. See Tennessee Code 45-20-102
  • Open-end credit: A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus any interest due. (Also called a charge account or revolving credit.) Source: OCC
  • Person: means any individual, corporation, partnership, trust, or any other business unit or legal entity, as the context may require. See Tennessee Code 45-20-102
(1) Divide a loan transaction into separate parts;
(2) Structure a loan transaction as an open-end credit plan for the purpose and with the intent of evading this chapter, when the loan would have been a high-cost home loan if the loan had been structured as a closed-end loan; or
(3) Engage in any other subterfuge.
(b) For purposes of this section, “open-end credit plan” means “open-end loan” as defined in 12 C.F.R. § 226.2(a)(20), and as used in the official staff commentary of the board of governors of the federal reserve system.
(c) For open-end credit plan, “points and fees” means “points and fees” as defined in 12 C.F.R. § 226.32, and as used in the official staff commentary of the board of governors of the federal reserve system that are known at or before closing, plus the minimum additional fees the borrower would be required to pay to draw down an amount equal to the total credit line.
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