PUBLIC LAW 109–364—OCT. 17, 2006
120 STAT. 2267
member or a dependent of such a member in addition to the protection provided by this section. ‘‘(2) DIFFERENT TREATMENT UNDER STATE LAW OF MEMBERS AND DEPENDENTS PROHIBITED.—States shall not— ‘‘(A) authorize creditors to charge covered members and their dependents annual percentage rates of interest for loans higher than the legal limit for residents of the State; or ‘‘(B) permit violation or waiver of any State consumer lending protections for the benefit of residents of the State on the basis of nonresident or military status of a covered member or dependent of such a member, regardless of the member’s or dependent’s domicile or permanent home of record. ‘‘(e) LIMITATIONS.—It shall be unlawful for any creditor to extend consumer credit to a covered member or a dependent of such a member with respect to which— ‘‘(1) the creditor rolls over, renews, repays, refinances, or consolidates any consumer credit extended to the borrower by the same creditor with the proceeds of other credit extended to the same covered member or a dependent; ‘‘(2) the borrower is required to waive the borrower’s right to legal recourse under any otherwise applicable provision of State or Federal law, including any provision of the Servicemembers Civil Relief Act; ‘‘(3) the creditor requires the borrower to submit to arbitration or imposes onerous legal notice provisions in the case of a dispute; ‘‘(4) the creditor demands unreasonable notice from the borrower as a condition for legal action; ‘‘(5) the creditor uses a check or other method of access to a deposit, savings, or other financial account maintained by the borrower, or the title of a vehicle as security for the obligation; ‘‘(6) the creditor requires as a condition for the extension of credit that the borrower establish an allotment to repay an obligation; or ‘‘(7) the borrower is prohibited from prepaying the loan or is charged a penalty or fee for prepaying all or part of the loan. ‘‘(f) PENALTIES AND REMEDIES.— ‘‘(1) MISDEMEANOR.—A creditor who knowingly violates this section shall be fined as provided in title 18, or imprisoned for not more than one year, or both. ‘‘(2) PRESERVATION OF OTHER REMEDIES.—The remedies and rights provided under this section are in addition to and do not preclude any remedy otherwise available under law to the person claiming relief under this section, including any award for consequential and punitive damages. ‘‘(3) CONTRACT VOID.—Any credit agreement, promissory note, or other contract prohibited under this section is void from the inception of such contract. ‘‘(4) ARBITRATION.—Notwithstanding section 2 of title 9, or any other Federal or State law, rule, or regulation, no agreement to arbitrate any dispute involving the extension of consumer credit shall be enforceable against any covered member or dependent of such a member, or any person who
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