Urgent Federal Legislative ARDA Call-To-Action

Legislation pending in the U.S. Senate (H.R.3221, the Foreclosure Prevention Act of 2008) would expand the Truth in Lending Act (TILA) requirements to all “dwellings.” This proposal, authored by Senator Jack Reed (D-RI), would require the timeshare industry to provide buyers with TILA disclosure “no later than 7 business days before the date of the consummation of the transaction.”

Such an unworkable requirement would create enormous hardship by forcing the timeshare industry to alter its traditional method of sale and financing.

It is critical that you call your U.S. Senators and urge them to modify H.R. 3121 in order to avoid the unintended damage it would cause to the timeshare industry.

Beginning Monday, April 7, 2008 at 9:00A.M. (EST) dial (202) 224-3121. Ask the U.S. Capitol switchboard operator to connect you to your Senator’s office.

Once connected, tell them:

* Timeshares are fully pre-paid, lifetime vacation experiences — not a dwelling or residence;

* The proposed Truth in Lending Act requirements contained in H.R. 3221 are impractical and unworkable;

* Urge your Senator to contact Senator Reed (D-RI) and urge him to modify H.R.3221 so as not to harm the timeshare industry.

While calls to all Senators are important, special emphasis is being placed on the following targeted Senators:

Senator Mel Martinez (R-FL)
Senator Bill Nelson (D-FL)
Senator Harry Reid (D-NV)
Senator John Ensign (R-NV)
Senator Ken Salazar (D-CO)
Senator Wayne Allard (R-CO)
Senator Elizabeth Dole (R-NC)
Senator Richard Burr (R-NC)

Remember: Dial (202) 224-3121 beginning Monday, April 7, 2008 and call both your U.S. Senators and urge them to contact Senator Jack Reed (D-RI) and urge him to modify H.R. 3221 and avoid damaging the timeshare industry. Your help is vitally important to the timeshare industry!


Background: The Negative Impact on the Timeshare Industry of H.R.3121

* Despite the very serious problems generally afflicting America’s housing industry, the timeshare industry remains healthy and resilient.


* A study released by PriceWaterhouseCoopers in February of this year confirmed that there has been no significant increase in consumer loan delinquencies in the portfolios of timeshare developer/lenders, nor is there a foreclosure problem or a credit crunch today in the timeshare industry.


* State laws typically have rescission periods of 5 days to 15 days during which time a consumer can cancel the purchase for any reason whatsoever. Timeshare sales are heavily regulated at the state level, with rescission rights available to consumers in about 45 states, which afford as much or greater opportunity for a customer to make a fully informed purchase decision.


* Section 502(a)(B) of H.R. 3221 would amend the Truth in Lending Act (”TILA”) in an effort to provide consumers with additional protections when borrowing funds secured by the consumer’s “dwelling.”


* If enacted into law in its present form, without recognizing the additional concerns required by state law, Section 502(a)(B) would have material adverse impact on America’s timeshare industry. Here’s why:


* Section 502(a)(B)(ii) would require that TILA disclosures “be furnished to the borrower not later than 7 business days before the date of consummation of the transaction.”

* In the typical timeshare sale, buyers (who generally live in different locales than the location of the timeshare resort) sign the sales and loan documents for their purchase of a timeshare interest while on vacation at a resort or sales center and do not return for the closing.

* The timeshare consumer is buying a fully pre-paid, lifetime vacation experience; not a “dwelling” or a “residence.”

* The American Resort Development Association (”ARDA”) has a long history of supporting consumer protection for timeshare buyers and has been active in establishing and supporting the system of state timeshare registration laws which has been very effective for more than 25 years in regulating developers and in forcing unscrupulous developers and sellers out of the industry.

* Without clarification, Section 502(a)(B) of H.R. 3221 may compel timeshare developers to provide buyers with a truth-in-lending statement 7 business days prior to the date a potential purchaser visits the resort. Such a requirement greatly complicates the buying process and is unnecessary and impractical and would essentially destroy a successful business model that has served consumers and resort locations well for more than a quarter of a century.


What Can You Do?

Please call 202-224-3121 and ask to be connected to your U.S. Senator’s office. Ask your Senators to contact Senator Jack Reed (D-RI) and urge him to modify H.R. 3221 in order to avoid the unintended damage it would cause to one segment of the real estate industry that has remained healthy and resilient despite the trauma of the subprime crisis.

If you have any questions or would like additional information, please contact Sam DePoy at ARDA at (202) 258-3350 or by e-mail at SDePoy@arda.org