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10.11

<< Title X Overview

10.11 Limitations on Coverage of Nonfinancial Companies and Other Exclusions

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10.11.  Limitations on Coverage of Nonfinancial Companies and Other Exclusions.  The Act specifies certain types of activities and entities that are not subject to rulemaking, supervisory, enforcement or other authority of the Bureau.[§ 1027]

10.11.1.            Sellers of Nonfinancial Goods.  The Bureau will have no authority over sellers of nonfinancial goods, except to the extent that they are offering consumer financial products or are otherwise subject to a Designated Law.  In general, the Bureau will have no authority over entities that provide credit directly to consumers exclusively for the purpose of purchasing a nonfinancial good or service from that entity, or for collection or sale of the debt.  However, the Bureau will have authority over credit transactions involving the sale of non-delinquent debt and transactions, if the credit extended significantly exceeds the market value of the nonfinancial good or service, or in cases where a seller of nonfinancial goods or services regularly extends credit subject to a finance charge.  The Bureau also generally will not have authority over a merchant, retailer or seller of nonfinancial goods or services that is not engaged significantly in offering or providing consumer financial products or services.  Certain entities that qualify as a small business will be exempt from otherwise applicable Bureau jurisdiction over the entity. 

10.11.2.            Real Estate Brokers.  The Bureau will have no authority over licensed real estate brokers or real estate agents to the extent they: (i) act as a real estate agent or broker for a buyer, seller, lessor, or lessee of real property; (ii) bring together parties interested in the sale, purchase, lease, rental, or exchange of real property; or (iii) negotiate any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property (other than in connection with the provision of financing).

10.11.3.            Other Exempted Activities.  The Act also includes certain exclusions from the Bureau's authority for: (i) manufactured and modular home retailers under certain circumstances; (ii) accountants and tax preparers, subject to certain exceptions; (iii) the practice of law; (iv) an entity regulated by a State insurance regulator, subject to certain exceptions; (v) offerors of employee benefit and compensation plans; (vi) any entity regulated by a State securities commission to the extent that it is engaging in such regulated capacity, subject to certain exceptions; (vii) activities relating to charitable contributions; and (viii) activities regulated by the SEC, the CFTC, or the Farm Credit Administration.[§1027]  Motor vehicle dealers that are predominately engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both, generally are not subject to the jurisdiction of the Bureau.  The Bureau will have jurisdiction, however, if such a dealer: (i) provides consumers with any services related to residential or commercial mortgages or self-financing transactions involving real property; (ii) extends credit or leases involving motor vehicles directly to consumers and does not routinely assign the governing contract to an unaffiliated third-party; or (iii) offers a consumer financial product or service unrelated to a motor vehicle.[§1029]

10.11.4.            No Federal Usury Limit.  The Bureau does not have the authority to establish a usury limit applicable to an extension of credit offered or made by a Covered Person to a consumer, unless explicitly authorized by another law.  1027(o)]