Prepayment penalty
(6) Prepayment penalty(i) Closed-end credit transactions. For a closed-end credit transaction, prepayment penalty means a charge imposed for paying all or part of the transaction's principal before the date on which the principal is due, other than a waived, bona fide third-party charge that the creditor imposes if the consumer prepays all of the transaction's principal sooner than 36 months after consummation, provided, however, that interest charged consistent with the monthly interest accrual amortization method is not a prepayment penalty for extensions of credit insured by the Federal Housing Administration that are consummated before January 21, 2015.
(ii) [Reserved]
2. At 78 FR 6962, Jan. 31, 2013, 1026.32 was amended by adding paragraphs (b)(2), (b)(3)(ii), (b)(4)(ii), and (b)(6)(ii); revising paragraph (a); revising paragraphs (c)(3) through (5); and revising paragraph (d) introductory text, revising paragraphs (d)(1) and (6), removing and reserving paragraph (d)(7), and revising paragraph (d)(8), effective Jan. 10, 2014. For the convenience of the user, the added and revised text is set forth as follows: