12 CFR § 34.23 - Prepayment fees.

---
identifier: "/us/cfr/t12/s34.23"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 34.23 - Prepayment fees."
title_number: 12
title_name: "Banks and Banking"
section_number: "34.23"
section_name: "Prepayment fees."
chapter_name: "COMPTROLLER OF THE CURRENCY, DEPARTMENT OF THE TREASURY"
part_number: "34"
part_name: "REAL ESTATE LENDING AND APPRAISALS"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "12 U.S.C. 1  25b, 29, 93a, 371, 1462a, 1463, 1464, 1465, 1701j-3, 1828(o), 3331  5101  5412(b)(2)(B) and 15 U.S.C. 1639h."
cfr_part: "34"
---


# 34.23 Prepayment fees.

A national bank offering or purchasing ARM loans may impose fees for prepayments notwithstanding any State law limitations to the contrary. For purposes of this section, prepayments do not include:

(a) Payments that exceed the required payment amount to avoid or reduce negative amortization; or

(b) Principal payments, in excess of those necessary to retire the outstanding debt over the remaining loan term at the then-current interest rate, that are made in accordance with rules governing the determination of monthly payments contained in the loan documents.