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15 U.S. Code § 1615

Prohibition on use of “Rule of 78’s” in connection with mortgage refinancings and other consumer loans

15 U.S. Code § 1615. Prohibition on use of “Rule of 78’s” in connection with mortgage refinancings and other consumer loans

(a) Prompt refund of unearned interest required
(1) In general
If a consumer prepays in full the financed amount under any consumer credit transaction, the creditor shall promptly refund any unearned portion of the interest charge to the consumer.
(2) Exception for refund of de minimus [1] amount
No refund shall be required under paragraph (1) with respect to the prepayment of any consumer credit transaction if the total amount of the refund would be less than $1.
(3) Applicability to refinanced transactions and acceleration by the creditorThis subsection shall apply with respect to any prepayment of a consumer credit transaction described in paragraph (1) without regard to the manner or the reason for the prepayment, including—
(A)
any prepayment made in connection with the refinancing, consolidation, or restructuring of the transaction; and
(B)
any prepayment made as a result of the acceleration of the obligation to repay the amount due with respect to the transaction.
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