108 STAT. 2194 PUBLIC LAW 103-325—SEPT. 23, 1994 "(1) in the form of an instrument that is payable to the consumer or jointly to the consumer and the contractor; or "(2) at the election of the consumer, by a third party escrow agent in accordance with terms established in a written agreement signed by the consumer, the creditor, and the contractor before the date of payment. "(j) CONSEQUENCE OF FAILURE TO COMPLY.— Any mortgage that contains a provision prohibited by this section shall be deemed a failure to deliver the material disclosures required under this title, for the purpose of section 125. "(k) DEFINITION. —For purposes of this section, the term 'affiliate' has the same meaning as in section 2(k) of the Bank Holding Company Act of 1956. "(1) DISCRETIONARY REGULATORY AUTHORITY OF BOARD.— "(1) EXEMPTIONS.—The Board may, by regulation or order, exempt specific mortgage products or categories of mortgages from any or all of the prohibitions specified in subsections (c) through (i), if the Board finds that the exemption— "(A) is in the interest of the borrowing public; and "(B) will apply only to products that maintain and strengthen home ownership and equity protection. "(2) PROHIBITIONS. —The Board, by regulation or order, shall prohibit acts or practices in connection with— "(A) mortgage loans that the Board finds to be unfair, deceptive, or designed to evade the provisions of this section; and "(B) refinancing of mortgage loans that the Board finds to be associated with abusive lending practices, or that are otherwise not in the interest of the borrower.". (e) CONFORMING AMENDMENTS.— (1) TABLE OF SECTIONS.— The table of sections at the beginning of chapter 2 of the Truth in Lending Act is amended by striking the item relating to section 129 and inserting the following: "129. Requirements for certain mortgages.". (2) TRUTH IN LENDING ACT.— The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended— 15 USC 1604. (A) in the second sentence of section 105(a), by striking "These" and inserting "Except in the case of a mortgage referred to in section 103(aa), these"; 15 USC 1610. (B) in section 111(a)(2), by inserting before the period the following: ", and such State-required disclosure may not be made in lieu of the disclosures applicable to certain mortgages under section 129"; and (C) in section 111(b)— (i) by striking "This" and inserting "Except as provided in section 129, this"; and (ii) by adding at the end the following: "The provisions of section 129 do not annul, alter, or affect the applicability of the laws of any State or exempt any person subject to the provisions of section 129 from complying with the laws of any State, with respect to the requirements for mortgages referred to in section 103(aa), except to the extent that those State laws are inconsistent with any provisions of section 129, and then only to the extent of the inconsistency.".