§ 1040.3 - Coverage and exclusions from coverage.

§ 1040.3 Coverage and exclusions from coverage.

(a) Covered products and services. Except for persons when excluded from coverage pursuant to paragraph (b) of this section, this part applies to the offering or provision of the following products or services when such offering or provision is a consumer financial product or service as defined by 12 U.S.C. 5481(5):

(1)

(i) Providing an “extension of credit” that is “consumer credit” when performed by a “creditor” as those terms are defined in Regulation B, 12 CFR 1002.2;

(ii) “Participat[ing] in [ ] credit decision[s]” within the meaning of 12 CFR 1002.2(l) when performed by a “creditor” with regard to “consumer credit” as those terms are defined in 12 CFR 1002.2;

(iii)

(A) Referring applicants or prospective applicants for “consumer credit” to creditors when performed by a “creditor” as those terms are defined in 12 CFR 1002.2; or

(B) Selecting or offering to select creditors to whom requests for “consumer credit” may be made when done by a “creditor” as those terms are defined in 12 CFR 1002.2;

(C) Except that this paragraph (a)(1)(iii) does not apply when the referral or selection activity by the creditor described in paragraphs (a)(1)(iii)(A) or (B) of this section is incidental to a business activity of that creditor that is not covered by this section;

(iv) Acquiring, purchasing, or selling an extension of consumer credit covered by paragraph (a)(1)(i) of this section; or

(v) Servicing an extension of consumer credit covered by paragraph (a)(1)(i) of this section;

(2) Extending automobile leases as defined by 12 CFR 1090.108 or brokering such leases;

(3)

(i) Providing services to assist with debt management or debt settlement, modify the terms of any extension of consumer credit covered by paragraph (a)(1)(i) of this section, or avoid foreclosure;

(ii) Providing products or services represented to remove derogatory information from, or improve, a person's credit history, credit record, or credit rating;

(4) Providing directly to a consumer a consumer report, as defined by the Fair Credit Reporting Act, 15 U.S.C. 1681a(d), a credit score, as defined by 15 U.S.C. 1681g(f)(2)(A), or other information specific to a consumer derived from a consumer file, as defined by 15 U.S.C. 1681a(g), in each case except for a consumer report provided solely in connection with an adverse action as defined in 15 U.S.C. 1681a(k) with respect to a product or service that is not covered by this section;

(5) Providing accounts subject to the Truth in Savings Act, 12 U.S.C. 4301 et seq., as implemented by 12 CFR part 707 and Regulation DD, 12 CFR part 1030;

(6) Providing accounts or remittance transfers subject to the Electronic Fund Transfer Act, 15 U.S.C. 1693 et seq., as implemented by Regulation E, 12 CFR part 1005;

(7) Transmitting or exchanging funds as defined by 12 U.S.C. 5481(29) except when necessary to another product or service if that product or service:

(i) Is offered or provided by the person transmitting or exchanging funds; and

(ii) Is not covered by this section;

(8) Accepting financial or banking data or providing a product or service to accept such data directly from a consumer for the purpose of initiating a payment by a consumer via any payment instrument as defined by 12 U.S.C. 5481(18) or initiating a credit card or charge card transaction for the consumer, except by a person selling or marketing a good or service that is not covered by this section, for which the payment or credit card or charge card transaction is being made;

(9) Providing check cashing, check collection, or check guaranty services; or

(10) Collecting debt arising from any of the consumer financial products or services described in paragraphs (a)(1) through (9) of this section when performed by:

(i) A person offering or providing the product or service giving rise to the debt being collected, an affiliate of such person, or a person acting on behalf of such person or affiliate;

(ii) A person purchasing or acquiring an extension of consumer credit covered by paragraph (a)(1)(i) of this section, an affiliate of such person, or a person acting on behalf of such person or affiliate; or

(iii) A debt collector as defined by 15 U.S.C. 1692a(6).

(b) Excluded persons. This part does not apply to the following persons in the following circumstances:

(1)

(i) A person regulated by the Securities and Exchange Commission as defined by 12 U.S.C. 5481(21); or

(ii) A person to the extent regulated by a State securities commission as described in 12 U.S.C. 5517(h) as either:

(A) A broker dealer; or

(B) An investment adviser; or

(iii) A person regulated by the Commodity Futures Trading Commission as defined by 12 U.S.C. 5481(20) or a person with respect to any account, contract, agreement, or transaction to the extent subject to the jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act, 7 U.S.C. 1 et seq.

(2)

(i) A Federal agency as defined in 28 U.S.C. 2671;

(ii) Any State, Tribe, or other person to the extent such person qualifies as an “arm” of a State or Tribe under Federal sovereign immunity law and the person's immunities have not been abrogated by the U.S. Congress;

(3) Any person with respect to a product or service described in paragraph (a) of this section that the person and any of its affiliates collectively provide to no more than 25 consumers in the current calendar year and to no more than 25 consumers in the preceding calendar year;

(4) A merchant, retailer, or other seller of nonfinancial goods or services to the extent such person:

(i) Offers or provides an extension of consumer credit covered by paragraph (a)(1)(i) of this section that is of the type described in 12 U.S.C. 5517(a)(2)(A)(i); and

(A) Is not subject to the Bureau's rulemaking authority under 12 U.S.C. 5517(a)(2)(B); or

(B) Is subject to the Bureau's rulemaking authority only under 12 U.S.C. 5517(a)(2)(B)(i) but not 12 U.S.C. 5517(a)(2)(B)(ii) or (iii); or

(ii) Purchases or acquires an extension of consumer credit excluded by paragraph (b)(4)(i) of this section.

(5) Any “employer” as defined in the Fair Labor Standards Act, 29 U.S.C. 203(d), to the extent it is offering or providing a product or service described in paragraph (a) of this section to its employee as an employee benefit; or

(6) A person to the extent providing a product or service in circumstances where they are excluded from the Bureau's rulemaking authority including pursuant to 12 U.S.C. 5517 or 5519.