S. 4803: Home Equity Lending Integrity Act

This bill would change federal lending law so that home equity investment loans are clearly covered under the Truth in Lending Act, the main law that requires lenders to disclose the terms and costs of consumer credit.

What a “home equity investment loan” means

The bill defines this type of loan broadly. In plain terms, it would include a transaction that is:

• secured by a mortgage, deed of trust, or similar claim on a home or other residential property, and
• involves a consumer receiving money or something of value in exchange for giving another person or company an interest in the home, or a future interest in it, plus a promise to pay an amount that depends partly or fully on the home’s value.

This definition appears aimed at products often described as home equity investments, shared appreciation arrangements, or similar home-equity-based financing products.

What the bill would require

The bill would direct the Consumer Financial Protection Bureau to issue regulations applying the Truth in Lending Act’s penalty provisions to violations involving these loans. In practical terms, that means lenders offering these products would be subject to the same federal disclosure and compliance framework that applies to other covered consumer credit transactions.

Purpose of the change

By explicitly listing home equity investment loans in the law, the bill would make clear that these products are treated as residential mortgage loans for Truth in Lending Act purposes. The bill also states that this change is meant to reflect the existing state of the law and is not intended to make a substantive change in how the law is administered.

Practical effect

If enacted, the bill would likely make it more certain that consumers receiving these kinds of home-based financing offers get the disclosures and protections already associated with mortgage-related lending. It would also give regulators clearer authority to enforce the law against violations involving these products.

Relevant Companies

• RKT — Rocket Companies, via mortgage and home-lending businesses, could face additional compliance requirements if it offers or partners in products covered by the bill.
• WFC — Wells Fargo, as a large mortgage and consumer lender, could be affected if it participates in or services home-equity investment-style products.
• COF — Capital One, if involved in home-equity or mortgage-adjacent lending products, could see compliance and disclosure impacts.
• USB — U.S. Bancorp, as a bank with mortgage and consumer finance operations, could be affected if it offers similar secured home-value-based products.
• ALLY — Ally Financial, if engaged in consumer lending tied to housing collateral, could face added regulatory obligations.