Code of the District of Columbia

Subchapter III. Violations and Remedies; Enforcement and Civil Liability.


§ 26–1153.01. Violations and remedies.

(a) The Mayor or any borrower under a covered loan may recover damages for a lender’s violation of § 26-1151.02 or subchapter II of this chapter.

(b) Notwithstanding subsection (a) of this section, if the violation of § 26-1151.02 or subchapter II of this chapter was caused by the borrower, his or her employer, or a creditor providing materially incorrect information to the lender, which inaccuracy the lender did not discover prior to the covered loan funding, and if the lender reasonably attempted to verify the current and expected income and current debts of the borrowers in accordance with § 26-1152.02(c), the lender shall not be liable.

(c) Damages or other relief awarded to the borrower under this section may include:

(1) Reformation of the covered loan to correct or remove an unfair term or a term obtained in violation of § 26-1151.02 or subchapter II of this chapter, whichever is applicable as of the date of initial funding;

(2) Actual damages;

(3) Injunctive relief;

(4) Reasonable attorneys’ fees and costs; or

(5) Statutory damages in an amount to be determined by the finder of fact if the finder of fact determines that the lender has engaged in a systematic pattern of practices and acted in violation of § 26-1151.02 or subchapter II of this chapter.

(d) An action for violation of § 26-1151.02 or subchapter II of this chapter shall be filed no later than 3 years after the violation has been discovered or should have been discovered.

(e)(1) A lender making a covered loan who, when acting in good faith, fails to comply with § 26-1151.02 or subchapter II of this chapter, shall not be deemed to have violated § 26-1151.02 or subchapter II of this chapter if the lender establishes one of the following:

(A) Without regard to who discovered the error, within 120 days of the covered loan initial funding and prior to the institution of judicial process under this section, the borrower was notified of the violation, appropriate restitution was made, and whatever adjustments are necessary were made to the covered loan, at the choice of the lender, to:

(i) Conform the covered loan to the requirements of § 26-1151.02 or subchapter II of this chapter;

(ii) Materially change the terms of the covered loan to benefit the borrower; or

(iii) Remove the features that caused the loan to be considered a covered loan.

(B) The violation resulted from a bona fide error notwithstanding the lender’s maintenance of procedures reasonably designed to avoid the error and, within 60 days after the discovery of the compliance failure and prior to the filing of an action under this section, the borrower was notified of the compliance failure, appropriate restitution was made, and whatever adjustments are necessary were made to the covered loan, at the choice of the lender, to:

(i) Conform the covered loan to the requirements of § 26-1151.02 or subchapter II of this chapter;

(ii) Materially change the terms of the covered loan to benefit the borrower; or

(iii) Remove the features that caused the loan to be considered a covered loan.

(2) If the lender fails to comply with § 26-1152.11 or section 129(a) and (b) of the Truth in Lending Act in the case of a lender covered by § 26-1151.02, the lender shall not be deemed to have violated § 26-1151.02 or subchapter II of this chapter, only if:

(A) The lender satisfies paragraph (1) (A) (i) or (B) (ii) of this subsection;

(B) The lender provided the borrower with a disclosure notice prior to the closing of the covered loan; and

(C) The failure to comply with § 26-1152.11, or section 129(a) or (b) of the Truth in Lending Act in the case of a lender covered by § 26-1151.02, shall not have been shown to be part of a pattern or practice of such non-compliance.

(3) For the purposes of this subsection, a bona fide error shall include clerical error or, calculation, computer malfunction, and programming and printing errors. An error of legal judgment with respect to a lender’s obligations under § 26-1151.02 or subchapter II of this chapter shall not constitute a bona fide error.

(f) No provision of this chapter shall be applied or interpreted to bar a borrower from bringing an action in an appropriate court of competent jurisdiction pursuant to any District or federal law for damages, injunctive relief, or any other relief.

(g) The remedies provided in this chapter shall be the sole and exclusive remedies for the violation of any provision of this chapter.


(May 7, 2002, D.C. Law 14-132, § 301, 49 DCR 2551.)

Emergency Legislation

For temporary (90 day) addition of section, see § 301 of Home Loan Protection Emergency Act of 2002 (D.C. Act 14-295, March 1, 2002, 49 DCR 2534).

References in Text

Sections 129(a) and (b) of the Truth in Lending Act, referred to in subsecs. (e)(2) and (e)(2)(C), is classified to 15 U.S.C. § 1639(a) and (b).


§ 26–1153.02. Enforcement.

The Mayor may conduct examinations and investigations, and issue orders to enforce the provisions of this chapter, with respect to lenders over which it otherwise has jurisdiction. The Mayor may examine any relevant instrument, document, account, book, record, or file of a lender over which the Mayor has jurisdiction. The Mayor may recover the reasonable cost of the examinations and investigations from the lender. A lender shall maintain records which allow the Mayor to determine compliance with this chapter and any regulations promulgated hereunder.


(May 7, 2002, D.C. Law 14-132, § 302, 49 DCR 2551.)

Emergency Legislation

For temporary (90 day) addition of section, see § 302 of Home Loan Protection Emergency Act of 2002 (D.C. Act 14-295, March 1, 2002, 49 DCR 2534).


§ 26–1153.03. Administrative penalties.

(a) If the Mayor determines that a person has violated this chapter, the Mayor may impose one or more of the following penalties:

(1) A civil penalty imposed as follows:

(A) $1,000 for the first violation;

(B) For the second and each subsequent violation occurring within a 24-month period of a prior violation, twice the immediately preceding civil penalty imposed (or which could have been imposed).

(2) Order a person to cease and desist from engaging in any violation of this chapter and to make restitution for actual damages to the borrower.

(b) If the Mayor determines that any person has a systematic pattern of violations of this chapter, the Mayor may impose one or more of the following penalties in addition to the penalties set forth in subsection (a) of this section:

(1) Suspend, revoke, or refuse to renew any license issued by the Mayor;

(2) Prohibit or suspend an individual responsible for a violation of this chapter from working in his or her present capacity or in any other capacity related to the activities regulated by the Mayor; or

(3) Obtain an injunction or other process against any person to restrain and prevent the person from engaging in any activity violating this chapter.


(May 7, 2002, D.C. Law 14-132, § 303, 49 DCR 2551.)

Section References

This section is referenced in § 26-1153.04.

Emergency Legislation

For temporary (90 day) addition of section, see § 303 of Home Loan Protection Emergency Act of 2002 (D.C. Act 14-295, March 1, 2002, 49 DCR 2534).


§ 26–1153.04. Final decision.

A decision of the Mayor under § 26-1153.03 shall be a final order for the purposes of subchapter I of Chapter 5 of Title 2, and shall be enforceable in a court of competent jurisdiction. The Mayor shall publish the final decisions, subject to redaction or modification to preserve confidentiality. Any person aggrieved by a final decision of the Mayor pursuant to this subchapter may appeal the decision to Superior Court of the District of Columbia.


(May 7, 2002, D.C. Law 14-132, § 304, 49 DCR 2551.)

Emergency Legislation

For temporary (90 day) addition of section, see § 304 of Home Loan Protection Emergency Act of 2002 (D.C. Act 14-295, March 1, 2002, 49 DCR 2534).


§ 26–1153.05. Assignee liability.

(a) Any person who purchases or is otherwise assigned a covered loan shall be subject to all claims and defenses with respect to the covered loan that the borrower could assert against the originator of the covered loan, unless the purchaser or assignee demonstrates, by a preponderance of the evidence, that a reasonable person exercising ordinary due diligence could not determine that the loan was a covered loan for the purposes of this chapter, based on:

(1) The documentation required by § 26-1151.02 or subchapter II of this chapter;

(2) The itemization of the amount financed; and

(3) Other disclosure of disbursements.

(b) Nothing in subsection (a) of this section shall affect the rights of a borrower under any other provision of this chapter.

(c) Notwithstanding any other provision of law, the relief provided under this section shall not exceed:

(1) With respect to actions based upon a violation of this chapter, the amount of actual damages; and

(2) With respect to all other causes of action, the sum of:

(A) The amount of all remaining indebtedness; and

(B) The total amount paid by the consumer in connection with the transaction, reduced by the amount of any damages awarded under paragraph (1) of this subsection.

(d) Any person who sells or otherwise assigns a covered loan shall include a prominent notice, in the form as provided by the Mayor pursuant to rules of the potential liability under this section.


(May 7, 2002, D.C. Law 14-132, § 305, 49 DCR 2551; Apr. 13, 2005, D.C. Law 15-354, § 38, 52 DCR 2638.)

Effect of Amendments

D.C. Law 15-354, in subsec. (c)(2), validated a previously made technical correction.

Emergency Legislation

For temporary (90 day) addition of section, see § 305 of Home Loan Protection Emergency Act of 2002 (D.C. Act 14-295, March 1, 2002, 49 DCR 2534).