Version	Word Count	Changes From Previous Version	Percent Change
Introduced in House	4,587	n/a	n/a
Reported in House	6,261	104	45%
Engrossed in House	9,141	89	56%
Placed on Calendar Senate	9,156	8	3%
Engrossed Amendment Senate	15,383	462	92%
Enrolled Bill	14,835	14 Show Changes Hide Changes	3%

Display Version Introduced in House Reported in House Engrossed in House Placed on Calendar Senate Engrossed Amendment Senate Enrolled Bill

HR 627 EAS

In the Senate of the United States,May 19, 2009.Resolved, That the bill from the House of Representatives (H.R.627CommentsClose CommentsPermalink

) entitled ‘An Act t One Hundred Eleventh Congress CommentsClose CommentsPermalink

CommentsClose CommentsPermalink

To amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes.CommentsClose CommentsPermalink

’, do pass with the followingAMENDMENT:Strike all after the enacting clause and insert the following: Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.CommentsClose CommentsPermalink

(a) Short Title- This Act may be cited as the ‘Credit Card Accountability Responsibility and Disclosure Act of 2009’ or the ‘Credit CARD Act of 2009’.CommentsClose CommentsPermalink





(b) Table of Contents-CommentsClose CommentsPermalink





The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents.CommentsClose CommentsPermalink





Sec. 2. Regulatory authority.CommentsClose CommentsPermalink





Sec. 3. Effective date.CommentsClose CommentsPermalink

TITLE I--CONSUMER PROTECTION

Sec. 101. Protection of credit cardholders.CommentsClose CommentsPermalink





Sec. 102. Limits on fees and interest charges.CommentsClose CommentsPermalink





Sec. 103. Use of terms clarified.CommentsClose CommentsPermalink





Sec. 104. Application of card payments.CommentsClose CommentsPermalink





Sec. 105. Standards applicable to initial issuance of subprime or ‘fee harvester’ cards.CommentsClose CommentsPermalink





Sec. 106. Rules regarding periodic statements.CommentsClose CommentsPermalink





Sec. 107. Enhanced penalties.CommentsClose CommentsPermalink





Sec. 108. Clerical amendments.CommentsClose CommentsPermalink





Sec. 109. Consideration of Ability to repay.CommentsClose CommentsPermalink

TITLE II--ENHANCED CONSUMER DISCLOSURES

Sec. 201. Payoff timing disclosures.CommentsClose CommentsPermalink





Sec. 202. Requirements relating to late payment deadlines and penalties.CommentsClose CommentsPermalink





Sec. 203. Renewal disclosures.CommentsClose CommentsPermalink





Sec. 204. Internet posting of credit card agreements.CommentsClose CommentsPermalink





Sec. 205. Prevention of deceptive marketing of credit reports.CommentsClose CommentsPermalink

TITLE III--PROTECTION OF YOUNG CONSUMERS

Sec. 301. Extensions of credit to underage consumers.CommentsClose CommentsPermalink





Sec. 302. Protection of young consumers from prescreened credit offers.CommentsClose CommentsPermalink





Sec. 303. Issuance of credit cards to certain college students.CommentsClose CommentsPermalink





Sec. 304. Privacy Protections for college students.CommentsClose CommentsPermalink





Sec. 305. College Credit Card Agreements.CommentsClose CommentsPermalink

TITLE IV--GIFT CARDS

Sec. 401. General-use prepaid cards, gift certificates, and store gift cards.CommentsClose CommentsPermalink





Sec. 402. Relation to State laws.CommentsClose CommentsPermalink





Sec. 403. Effective date.CommentsClose CommentsPermalink

TITLE V--MISCELLANEOUS PROVISIONS

Sec. 501. Study and report on interchange fees.CommentsClose CommentsPermalink





Sec. 502. Board review of consumer credit plans and regulations.CommentsClose CommentsPermalink





Sec. 503. Stored value.CommentsClose CommentsPermalink





Sec. 504 Procedure for timely settlement of estates of decedent obligors.CommentsClose CommentsPermalink





Sec. 505. Report to Congress on reductions of consumer credit card limits based on certain information as to experience or transactions of the consumer.CommentsClose CommentsPermalink





Sec. 506. Board review of small business credit plans and recommendations.CommentsClose CommentsPermalink





Sec. 507. Small business information security task force.CommentsClose CommentsPermalink





Sec. 508. Study and report on emergency pin technology.CommentsClose CommentsPermalink





Sec. 509. Study and report on the marketing of products with credit offers.CommentsClose CommentsPermalink





Sec. 510. Financial and economic literacy.CommentsClose CommentsPermalink





Sec. 511. Federal trade commission rulemaking on mortgage lending.CommentsClose CommentsPermalink





Sec. 512. Protecting Americans from violent crime.CommentsClose CommentsPermalink





Sec. 513. GAO study and report on fluency in the English language and financial literacy.CommentsClose CommentsPermalink

SEC. 2. REGULATORY AUTHORITY.CommentsClose CommentsPermalink

The Board of Governors of the Federal Reserve System (in this Act referred to as the ‘Board’) may issue such rules and publish such model forms as it considers necessary to carry out this Act and the amendments made by this Act.CommentsClose CommentsPermalink

SEC. 3. EFFECTIVE DATE.CommentsClose CommentsPermalink

This Act and the amendments made by this Act shall become effective 9 months after the date of enactment of this Act, except as otherwise specifically provided in this Act.CommentsClose CommentsPermalink

TITLE I--CONSUMER PROTECTIONCommentsClose CommentsPermalink

SEC. 101. PROTECTION OF CREDIT CARDHOLDERS.CommentsClose CommentsPermalink

(a) Advance Notice of Rate Increase and Other Changes Required-CommentsClose CommentsPermalink





(1) AMENDMENT TO TILA- Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(i) Advance Notice of Rate Increase and Other Changes Required-CommentsClose CommentsPermalink





‘(1) ADVANCE NOTICE OF INCREASE IN INTEREST RATE REQUIRED- In the case of any credit card account under an open end consumer credit plan, a creditor shall provide a written notice of an increase in an annual percentage rate (except in the case of an increase described in paragraph (1), (2), or (3) of section 171(b)) not later than 45 days prior to the effective date of the increase.CommentsClose CommentsPermalink





‘(2) ADVANCE NOTICE OF OTHER SIGNIFICANT CHANGES REQUIRED- In the case of any credit card account under an open end consumer credit plan, a creditor shall provide a written notice of any significant change, as determined by rule of the Board, in the terms (including an increase in any fee or finance charge, other than as provided in paragraph (1)) of the cardholder agreement between the creditor and the obligor, not later than 45 days prior to the effective date of the change.CommentsClose CommentsPermalink





‘(3) NOTICE OF RIGHT TO CANCEL- Each notice required by paragraph (1) or (2) shall be made in a clear and conspicuous manner, and shall contain a brief statement of the right of the obligor to cancel the account pursuant to rules established by the Board before the effective date of the subject rate increase or other change.CommentsClose CommentsPermalink





‘(4) RULE OF CONSTRUCTION- Closure or cancellation of an account by the obligor shall not constitute a default under an existing cardholder agreement, and shall not trigger an obligation to immediately repay the obligation in full or through a method that is less beneficial to the obligor than one of the methods described in section 171(c)(2), or the imposition of any other penalty or fee.’.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- Notwithstanding section 3, section 127(i) of the Truth in Lending Act, as added by this subsection, shall become effective 90 days after the date of enactment of this Act.CommentsClose CommentsPermalink





(b) Retroactive Increase and Universal Default Prohibited- Chapter 4 of the Truth in Lending Act (15 U.S.C. 1666 et seq.) is amended--CommentsClose CommentsPermalink





(1) by redesignating section 171 as section 173; andCommentsClose CommentsPermalink





(2) by inserting after section 170 the following:CommentsClose CommentsPermalink

‘SEC. 171. LIMITS ON INTEREST RATE, FEE, AND FINANCE CHARGE INCREASES APPLICABLE TO OUTSTANDING BALANCES.CommentsClose CommentsPermalink

‘(a) In General- In the case of any credit card account under an open end consumer credit plan, no creditor may increase any annual percentage rate, fee, or finance charge applicable to any outstanding balance, except as permitted under subsection (b).CommentsClose CommentsPermalink





‘(b) Exceptions- The prohibition under subsection (a) shall not apply to--CommentsClose CommentsPermalink





‘(1) an increase in an annual percentage rate upon the expiration of a specified period of time, provided that--CommentsClose CommentsPermalink





‘(A) prior to commencement of that period, the creditor disclosed to the consumer, in a clear and conspicuous manner, the length of the period and the annual percentage rate that would apply after expiration of the period;CommentsClose CommentsPermalink





‘(B) the increased annual percentage rate does not exceed the rate disclosed pursuant to subparagraph (A); andCommentsClose CommentsPermalink





‘(C) the increased annual percentage rate is not applied to transactions that occurred prior to commencement of the period;CommentsClose CommentsPermalink





‘(2) an increase in a variable annual percentage rate in accordance with a credit card agreement that provides for changes in the rate according to operation of an index that is not under the control of the creditor and is available to the general public;CommentsClose CommentsPermalink





‘(3) an increase due to the completion of a workout or temporary hardship arrangement by the obligor or the failure of the obligor to comply with the terms of a workout or temporary hardship arrangement, provided that--CommentsClose CommentsPermalink





‘(A) the annual percentage rate, fee, or finance charge applicable to a category of transactions following any such increase does not exceed the rate, fee, or finance charge that applied to that category of transactions prior to commencement of the arrangement; andCommentsClose CommentsPermalink





‘(B) the creditor has provided the obligor, prior to the commencement of such arrangement, with clear and conspicuous disclosure of the terms of the arrangement (including any increases due to such completion or failure); orCommentsClose CommentsPermalink





‘(4) an increase due solely to the fact that a minimum payment by the obligor has not been received by the creditor within 60 days after the due date for such payment, provided that the creditor shall--CommentsClose CommentsPermalink





‘(A) include, together with the notice of such increase required under section 127(i), a clear and conspicuous written statement of the reason for the increase and that the increase will terminate not later than 6 months after the date on which it is imposed, if the creditor receives the required minimum payments on time from the obligor during that period; andCommentsClose CommentsPermalink





‘(B) terminate such increase not later than 6 months after the date on which it is imposed, if the creditor receives the required minimum payments on time during that period.CommentsClose CommentsPermalink





‘(c) Repayment of Outstanding Balance-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The creditor shall not change the terms governing the repayment of any outstanding balance, except that the creditor may provide the obligor with one of the methods described in paragraph (2) of repaying any outstanding balance, or a method that is no less beneficial to the obligor than one of those methods.CommentsClose CommentsPermalink





‘(2) METHODS- The methods described in this paragraph are--CommentsClose CommentsPermalink





‘(A) an amortization period of not less than 5 years, beginning on the effective date of the increase set forth in the notice required under section 127(i); orCommentsClose CommentsPermalink





‘(B) a required minimum periodic payment that includes a percentage of the outstanding balance that is equal to not more than twice the percentage required before the effective date of the increase set forth in the notice required under section 127(i).CommentsClose CommentsPermalink





‘(d) Outstanding Balance Defined- For purposes of this section, the term ‘outstanding balance’ means the amount owed on a credit card account under an open end consumer credit plan as of the end of the 14th day after the date on which the creditor provides notice of an increase in the annual percentage rate, fee, or finance charge in accordance with section 127(i).’.CommentsClose CommentsPermalink





(c) Interest Rate Reduction on Open End Consumer Credit Plans- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661 et seq.) is amended by adding at the end the following:CommentsClose CommentsPermalink

‘SEC. 148. INTEREST RATE REDUCTION ON OPEN END CONSUMER CREDIT PLANS.CommentsClose CommentsPermalink

‘(a) In General- If a creditor increases the annual percentage rate applicable to a credit card account under an open end consumer credit plan, based on factors including the credit risk of the obligor, market conditions, or other factors, the creditor shall consider changes in such factors in subsequently determining whether to reduce the annual percentage rate for such obligor.CommentsClose CommentsPermalink





‘(b) Requirements- With respect to any credit card account under an open end consumer credit plan, the creditor shall--CommentsClose CommentsPermalink





‘(1) maintain reasonable methodologies for assessing the factors described in subsection (a);CommentsClose CommentsPermalink





‘(2) not less frequently than once every 6 months, review accounts as to which the annual percentage rate has been increased since January 1, 2009, to assess whether such factors have changed (including whether any risk has declined);CommentsClose CommentsPermalink





‘(3) reduce the annual percentage rate previously increased when a reduction is indicated by the review; andCommentsClose CommentsPermalink





‘(4) in the event of an increase in the annual percentage rate, provide in the written notice required under section 127(i) a statement of the reasons for the increase.CommentsClose CommentsPermalink





‘(c) Rule of Construction- This section shall not be construed to require a reduction in any specific amount.CommentsClose CommentsPermalink





‘(d) Rulemaking- The Board shall issue final rules not later than 9 months after the date of enactment of this section to implement the requirements of and evaluate compliance with this section, and subsections (a), (b), and (c) shall become effective 15 months after that date of enactment.’.CommentsClose CommentsPermalink





(d) Introductory and Promotional Rates- Chapter 4 of the Truth in Lending Act (15 U.S.C. 1666 et seq.) is amended by inserting after section 171, as amended by this Act, the following:CommentsClose CommentsPermalink

‘SEC. 172. ADDITIONAL LIMITS ON INTEREST RATE INCREASES.CommentsClose CommentsPermalink

‘(a) Limitation on Increases Within First Year- Except in the case of an increase described in paragraph (1), (2), (3), or (4) of section 171(b), no increase in any annual percentage rate, fee, or finance charge on any credit card account under an open end consumer credit plan shall be effective before the end of the 1-year period beginning on the date on which the account is opened.CommentsClose CommentsPermalink





‘(b) Promotional Rate Minimum Term- No increase in any annual percentage rate applicable to a credit card account under an open end consumer credit plan that is a promotional rate (as that term is defined by the Board) shall be effective before the end of the 6-month period beginning on the date on which the promotional rate takes effect, subject to such reasonable exceptions as the Board may establish, by rule.’.CommentsClose CommentsPermalink





(e) Clerical Amendment- The table of sections for chapter 4 of the Truth in Lending Act is amended by striking the item relating to section 171 and inserting the following:CommentsClose CommentsPermalink





‘171. Limits on interest rate, fee, and finance charge increases applicable to outstanding balances.CommentsClose CommentsPermalink





‘172. Additional limits on interest rate increases.CommentsClose CommentsPermalink





‘173. Applicability of State laws.’.CommentsClose CommentsPermalink

SEC. 102. LIMITS ON FEES AND INTEREST CHARGES.CommentsClose CommentsPermalink

(a) In General- Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(j) Prohibition on Penalties for On-Time Payments-CommentsClose CommentsPermalink





‘(1) PROHIBITION ON DOUBLE-CYCLE BILLING AND PENALTIES FOR ON-TIME PAYMENTS- Except as provided in paragraph (2), a creditor may not impose any finance charge on a credit card account under an open end consumer credit plan as a result of the loss of any time period provided by the creditor within which the obligor may repay any portion of the credit extended without incurring a finance charge, with respect to--CommentsClose CommentsPermalink





‘(A) any balances for days in billing cycles that precede the most recent billing cycle; orCommentsClose CommentsPermalink





‘(B) any balances or portions thereof in the current billing cycle that were repaid within such time period.CommentsClose CommentsPermalink





‘(2) EXCEPTIONS- Paragraph (1) does not apply to--CommentsClose CommentsPermalink





‘(A) any adjustment to a finance charge as a result of the resolution of a dispute; orCommentsClose CommentsPermalink





‘(B) any adjustment to a finance charge as a result of the return of a payment for insufficient funds.CommentsClose CommentsPermalink





‘(k) Opt-in Required for Over-the-Limit Transactions if Fees Are Imposed-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In the case of any credit card account under an open end consumer credit plan under which an over-the-limit fee may be imposed by the creditor for any extension of credit in excess of the amount of credit authorized to be extended under such account, no such fee shall be charged, unless the consumer has expressly elected to permit the creditor, with respect to such account, to complete transactions involving the extension of credit under such account in excess of the amount of credit authorized.CommentsClose CommentsPermalink





‘(2) DISCLOSURE BY CREDITOR- No election by a consumer under paragraph (1) shall take effect unless the consumer, before making such election, received a notice from the creditor of any over-the-limit fee in the form and manner, and at the time, determined by the Board. If the consumer makes the election referred to in paragraph (1), the creditor shall provide notice to the consumer of the right to revoke the election, in the form prescribed by the Board, in any periodic statement that includes notice of the imposition of an over-the-limit fee during the period covered by the statement.CommentsClose CommentsPermalink





‘(3) FORM OF ELECTION- A consumer may make or revoke the election referred to in paragraph (1) orally, electronically, or in writing, pursuant to regulations prescribed by the Board. The Board shall prescribe regulations to ensure that the same options are available for both making and revoking such election.CommentsClose CommentsPermalink





‘(4) TIME OF ELECTION- A consumer may make the election referred to in paragraph (1) at any time, and such election shall be effective until the election is revoked in the manner prescribed under paragraph (3).CommentsClose CommentsPermalink





‘(5) REGULATIONS- The Board shall prescribe regulations--CommentsClose CommentsPermalink





‘(A) governing disclosures under this subsection; andCommentsClose CommentsPermalink





‘(B) that prevent unfair or deceptive acts or practices in connection with the manipulation of credit limits designed to increase over-the-limit fees or other penalty fees.CommentsClose CommentsPermalink





‘(6) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed to prohibit a creditor from completing an over-the-limit transaction, provided that a consumer who has not made a valid election under paragraph (1) is not charged an over-the-limit fee for such transaction.CommentsClose CommentsPermalink





‘(7) RESTRICTION ON FEES CHARGED FOR AN OVER-THE-LIMIT TRANSACTION- With respect to a credit card account under an open end consumer credit plan, an over-the-limit fee may be imposed only once during a billing cycle if the credit limit on the account is exceeded, and an over-the-limit fee, with respect to such excess credit, may be imposed only once in each of the 2 subsequent billing cycles, unless the consumer has obtained an additional extension of credit in excess of such credit limit during any such subsequent cycle or the consumer reduces the outstanding balance below the credit limit as of the end of such billing cycle.CommentsClose CommentsPermalink





‘(l) Limit on Fees Related to Method of Payment- With respect to a credit card account under an open end consumer credit plan, the creditor may not impose a separate fee to allow the obligor to repay an extension of credit or finance charge, whether such repayment is made by mail, electronic transfer, telephone authorization, or other means, unless such payment involves an expedited service by a service representative of the creditor.’.CommentsClose CommentsPermalink





(b) Reasonable Penalty Fees-CommentsClose CommentsPermalink





(1) IN GENERAL- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661 et seq.), as amended by this Act, is amended by adding at the end the following:CommentsClose CommentsPermalink

‘SEC. 149. REASONABLE PENALTY FEES ON OPEN END CONSUMER CREDIT PLANS.CommentsClose CommentsPermalink

‘(a) In General- The amount of any penalty fee or charge that a card issuer may impose with respect to a credit card account under an open end consumer credit plan in connection with any omission with respect to, or violation of, the cardholder agreement, including any late payment fee, over-the-limit fee, or any other penalty fee or charge, shall be reasonable and proportional to such omission or violation.CommentsClose CommentsPermalink





‘(b) Rulemaking Required- The Board, in consultation with the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision, and the National Credit Union Administration Board, shall issue final rules not later than 9 months after the date of enactment of this section, to establish standards for assessing whether the amount of any penalty fee or charge described under subsection (a) is reasonable and proportional to the omission or violation to which the fee or charge relates. Subsection (a) shall become effective 15 months after the date of enactment of this section.CommentsClose CommentsPermalink





‘(c) Considerations- In issuing rules required by this section, the Board shall consider--CommentsClose CommentsPermalink





‘(1) the cost incurred by the creditor from such omission or violation;CommentsClose CommentsPermalink





‘(2) the deterrence of such omission or violation by the cardholder;CommentsClose CommentsPermalink





‘(3) the conduct of the cardholder; andCommentsClose CommentsPermalink





‘(4) such other factors as the Board may deem necessary or appropriate.CommentsClose CommentsPermalink





‘(d) Differentiation Permitted- In issuing rules required by this subsection, the Board may establish different standards for different types of fees and charges, as appropriate.CommentsClose CommentsPermalink





‘(e) Safe Harbor Rule Authorized- The Board, in consultation with the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision, and the National Credit Union Administration Board, may issue rules to provide an amount for any penalty fee or charge described under subsection (a) that is presumed to be reasonable and proportional to the omission or violation to which the fee or charge relates.’.CommentsClose CommentsPermalink





(2) CLERICAL AMENDMENTS- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661 et seq.) is amended--CommentsClose CommentsPermalink





(A) in the chapter heading, by inserting ‘AND LIMITS ON CREDIT CARD FEES’ after ‘ADVERTISING’; andCommentsClose CommentsPermalink





(B) in the table of sections for the chapter, by adding at the end the following:CommentsClose CommentsPermalink





‘148. Interest rate reduction on open end consumer credit plans.CommentsClose CommentsPermalink





‘149. Reasonable penalty fees on open end consumer credit plans.’.CommentsClose CommentsPermalink

SEC. 103. USE OF TERMS CLARIFIED.CommentsClose CommentsPermalink

Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(m) Use of Term ‘Fixed Rate’- With respect to the terms of any credit card account under an open end consumer credit plan, the term ‘fixed’, when appearing in conjunction with a reference to the annual percentage rate or interest rate applicable with respect to such account, may only be used to refer to an annual percentage rate or interest rate that will not change or vary for any reason over the period specified clearly and conspicuously in the terms of the account.’.CommentsClose CommentsPermalink

SEC. 104. APPLICATION OF CARD PAYMENTS.CommentsClose CommentsPermalink

Section 164 of the Truth in Lending Act (15 U.S.C. 1666c) is amended--CommentsClose CommentsPermalink





(1) by striking the section heading and all that follows through ‘Payments’ and inserting the following:CommentsClose CommentsPermalink

-‘Sec. 164. Prompt and fair crediting of paymentsCommentsClose CommentsPermalink

‘(a) In General- Payments’;CommentsClose CommentsPermalink





(2) by inserting ‘, by 5:00 p.m. on the date on which such payment is due,’ after ‘in readily identifiable form’;CommentsClose CommentsPermalink





(3) by striking ‘manner, location, and time’ and inserting ‘manner, and location’; andCommentsClose CommentsPermalink





(4) by adding at the end the following:CommentsClose CommentsPermalink





‘(b) Application of Payments-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted.CommentsClose CommentsPermalink





‘(2) CLARIFICATION RELATING TO CERTAIN DEFERRED INTEREST ARRANGEMENTS- A creditor shall allocate the entire amount paid by the consumer in excess of the minimum payment amount to a balance on which interest is deferred during the last 2 billing cycles immediately preceding the expiration of the period during which interest is deferred.CommentsClose CommentsPermalink





‘(c) Changes by Card Issuer- If a card issuer makes a material change in the mailing address, office, or procedures for handling cardholder payments, and such change causes a material delay in the crediting of a cardholder payment made during the 60-day period following the date on which such change took effect, the card issuer may not impose any late fee or finance charge for a late payment on the credit card account to which such payment was credited.’.CommentsClose CommentsPermalink

SEC. 105. STANDARDS APPLICABLE TO INITIAL ISSUANCE OF SUBPRIME OR ‘FEE HARVESTER’ CARDS.CommentsClose CommentsPermalink

Section 127 of the Truth in Lending Act (15 U.S.C. 1637), as amended by this Act, is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(n) Standards Applicable to Initial Issuance of Subprime or ‘Fee Harvester’ Cards-CommentsClose CommentsPermalink





‘(1) IN GENERAL- If the terms of a credit card account under an open end consumer credit plan require the payment of any fees (other than any late fee, over-the-limit fee, or fee for a payment returned for insufficient funds) by the consumer in the first year during which the account is opened in an aggregate amount in excess of 25 percent of the total amount of credit authorized under the account when the account is opened, no payment of any fees (other than any late fee, over-the-limit fee, or fee for a payment returned for insufficient funds) may be made from the credit made available under the terms of the account.CommentsClose CommentsPermalink





‘(2) RULE OF CONSTRUCTION- No provision of this subsection may be construed as authorizing any imposition or payment of advance fees otherwise prohibited by any provision of law.’.CommentsClose CommentsPermalink

SEC. 106. RULES REGARDING PERIODIC STATEMENTS.CommentsClose CommentsPermalink

(a) In General- Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(o) Due Dates for Credit Card Accounts-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The payment due date for a credit card account under an open end consumer credit plan shall be the same day each month.CommentsClose CommentsPermalink





‘(2) WEEKEND OR HOLIDAY DUE DATES- If the payment due date for a credit card account under an open end consumer credit plan is a day on which the creditor does not receive or accept payments by mail (including weekends and holidays), the creditor may not treat a payment received on the next business day as late for any purpose.’.CommentsClose CommentsPermalink





(b) Length of Billing Period-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 163 of the Truth in Lending Act (15 U.S.C. 1666b) is amended to read as follows:CommentsClose CommentsPermalink

‘SEC. 163. TIMING OF PAYMENTS.CommentsClose CommentsPermalink

‘(a) Time To Make Payments- A creditor may not treat a payment on an open end consumer credit plan as late for any purpose, unless the creditor has adopted reasonable procedures designed to ensure that each periodic statement including the information required by section 127(b) is mailed or delivered to the consumer not later than 21 days before the payment due date.CommentsClose CommentsPermalink





‘(b) Grace Period- If an open end consumer credit plan provides a time period within which an obligor may repay any portion of the credit extended without incurring an additional finance charge, such additional finance charge may not be imposed with respect to such portion of the credit extended for the billing cycle of which such period is a part, unless a statement which includes the amount upon which the finance charge for the period is based was mailed or delivered to the consumer not later than 21 days before the date specified in the statement by which payment must be made in order to avoid imposition of that finance charge.’.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- Notwithstanding section 3, section 163 of the Truth in Lending Act, as amended by this subsection, shall become effective 90 days after the date of enactment of this Act.CommentsClose CommentsPermalink





(c) Clerical Amendments- The table of sections for chapter 4 of the Truth in Lending Act is amended--CommentsClose CommentsPermalink





(1) by striking the item relating to section 163 and inserting the following:CommentsClose CommentsPermalink





‘163. Timing of payments.’; andCommentsClose CommentsPermalink





(2) by striking the item relating to section 171 and inserting the following:CommentsClose CommentsPermalink





‘171. Universal defaults prohibited.CommentsClose CommentsPermalink





‘172. Unilateral changes in credit card agreement prohibited.CommentsClose CommentsPermalink





‘173. Applicability of State laws.’.CommentsClose CommentsPermalink

SEC. 107. ENHANCED PENALTIES.CommentsClose CommentsPermalink

Section 130(a)(2)(A) of the Truth in Lending Act (15 U.S.C. 1640(a)(2)(A)) is amended by striking ‘or (iii) in the’ and inserting the following: ‘(iii) in the case of an individual action relating to an open end consumer credit plan that is not secured by real property or a dwelling, twice the amount of any finance charge in connection with the transaction, with a minimum of $500 and a maximum of $5,000, or such higher amount as may be appropriate in the case of an established pattern or practice of such failures; or (iv) in the’.CommentsClose CommentsPermalink

SEC. 108. CLERICAL AMENDMENTS.CommentsClose CommentsPermalink

Section 103(i) of the Truth in Lending Act (15 U.S.C. 1602(i)) is amended--CommentsClose CommentsPermalink





(1) by striking ‘term’ and all that follows through ‘means’ and inserting the following: ‘terms ‘open end credit plan’ and ‘open end consumer credit plan’ mean’; andCommentsClose CommentsPermalink





(2) in the second sentence, by inserting ‘or open end consumer credit plan’ after ‘credit plan’ each place that term appears.CommentsClose CommentsPermalink

SEC. 109. CONSIDERATION OF ABILITY TO REPAY.CommentsClose CommentsPermalink

(a) In General- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1666 et seq.), as amended by this title, is amended by adding at the end the following:CommentsClose CommentsPermalink

‘SEC. 150. CONSIDERATION OF ABILITY TO REPAY.CommentsClose CommentsPermalink

‘A card issuer may not open any credit card account for any consumer under an open end consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the ability of the consumer to make the required payments under the terms of such account.’.CommentsClose CommentsPermalink





(b) Clerical Amendment- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661 et seq.) is amended in the table of sections for the chapter, by adding at the end the following:CommentsClose CommentsPermalink





‘150. Consideration of ability to repay.’.CommentsClose CommentsPermalink

TITLE II--ENHANCED CONSUMER DISCLOSURESCommentsClose CommentsPermalink

SEC. 201. PAYOFF TIMING DISCLOSURES.CommentsClose CommentsPermalink

(a) In General- Section 127(b)(11) of the Truth in Lending Act (15 U.S.C. 1637(b)(11)) is amended to read as follows:CommentsClose CommentsPermalink





‘(11)(A) A written statement in the following form: ‘Minimum Payment Warning: Making only the minimum payment will increase the amount of interest you pay and the time it takes to repay your balance.’, or such similar statement as is established by the Board pursuant to consumer testing.CommentsClose CommentsPermalink





‘(B) Repayment information that would apply to the outstanding balance of the consumer under the credit plan, including--CommentsClose CommentsPermalink





‘(i) the number of months (rounded to the nearest month) that it would take to pay the entire amount of that balance, if the consumer pays only the required minimum monthly payments and if no further advances are made;CommentsClose CommentsPermalink





‘(ii) the total cost to the consumer, including interest and principal payments, of paying that balance in full, if the consumer pays only the required minimum monthly payments and if no further advances are made;CommentsClose CommentsPermalink





‘(iii) the monthly payment amount that would be required for the consumer to eliminate the outstanding balance in 36 months, if no further advances are made, and the total cost to the consumer, including interest and principal payments, of paying that balance in full if the consumer pays the balance over 36 months; andCommentsClose CommentsPermalink





‘(iv) a toll-free telephone number at which the consumer may receive information about accessing credit counseling and debt management services.CommentsClose CommentsPermalink





‘(C)(i) Subject to clause (ii), in making the disclosures under subparagraph (B), the creditor shall apply the interest rate or rates in effect on the date on which the disclosure is made until the date on which the balance would be paid in full.CommentsClose CommentsPermalink





‘(ii) If the interest rate in effect on the date on which the disclosure is made is a temporary rate that will change under a contractual provision applying an index or formula for subsequent interest rate adjustment, the creditor shall apply the interest rate in effect on the date on which the disclosure is made for as long as that interest rate will apply under that contractual provision, and then apply an interest rate based on the index or formula in effect on the applicable billing date.CommentsClose CommentsPermalink





‘(D) All of the information described in subparagraph (B) shall--CommentsClose CommentsPermalink





‘(i) be disclosed in the form and manner which the Board shall prescribe, by regulation, and in a manner that avoids duplication; andCommentsClose CommentsPermalink





‘(ii) be placed in a conspicuous and prominent location on the billing statement.CommentsClose CommentsPermalink





‘(E) In the regulations prescribed under subparagraph (D), the Board shall require that the disclosure of such information shall be in the form of a table that--CommentsClose CommentsPermalink





‘(i) contains clear and concise headings for each item of such information; andCommentsClose CommentsPermalink





‘(ii) provides a clear and concise form stating each item of information required to be disclosed under each such heading.CommentsClose CommentsPermalink





‘(F) In prescribing the form of the table under subparagraph (E), the Board shall require that--CommentsClose CommentsPermalink





‘(i) all of the information in the table, and not just a reference to the table, be placed on the billing statement, as required by this paragraph; andCommentsClose CommentsPermalink





‘(ii) the items required to be included in the table shall be listed in the order in which such items are set forth in subparagraph (B).CommentsClose CommentsPermalink





‘(G) In prescribing the form of the table under subparagraph (D), the Board shall employ terminology which is different than the terminology which is employed in subparagraph (B), if such terminology is more easily understood and conveys substantially the same meaning.’.CommentsClose CommentsPermalink





(b) Civil Liability- Section 130(a) of the Truth in Lending Act (15 U.S.C. 1640(a)) is amended, in the undesignated paragraph following paragraph (4), by striking the second sentence and inserting the following: ‘In connection with the disclosures referred to in subsections (a) and (b) of section 127, a creditor shall have a liability determined under paragraph (2) only for failing to comply with the requirements of section 125, 127(a), or any of paragraphs (4) through (13) of section 127(b), or for failing to comply with disclosure requirements under State law for any term or item that the Board has determined to be substantially the same in meaning under section 111(a)(2) as any of the terms or items referred to in section 127(a), or any of paragraphs (4) through (13) of section 127(b).’.CommentsClose CommentsPermalink





(c) Guidelines Required-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than 6 months after the date of enactment of this Act, the Board shall issue guidelines, by rule, in consultation with the Secretary of the Treasury, for the establishment and maintenance by creditors of a toll-free telephone number for purposes of providing information about accessing credit counseling and debt management services, as required under section 127(b)(11)(B)(iv) of the Truth in Lending Act, as added by this section.CommentsClose CommentsPermalink





(2) APPROVED AGENCIES- Guidelines issued under this subsection shall ensure that referrals provided by the toll-free number referred to in paragraph (1) include only those nonprofit budget and credit counseling agencies approved by a United States bankruptcy trustee pursuant to section 111(a) of title 11, United States Code.CommentsClose CommentsPermalink

SEC. 202. REQUIREMENTS RELATING TO LATE PAYMENT DEADLINES AND PENALTIES.CommentsClose CommentsPermalink

Section 127(b)(12) of the Truth in Lending Act (15 U.S.C. 1637(b)(12)) is amended to read as follows:CommentsClose CommentsPermalink





‘(12) REQUIREMENTS RELATING TO LATE PAYMENT DEADLINES AND PENALTIES-CommentsClose CommentsPermalink





‘(A) LATE PAYMENT DEADLINE REQUIRED TO BE DISCLOSED- In the case of a credit card account under an open end consumer credit plan under which a late fee or charge may be imposed due to the failure of the obligor to make payment on or before the due date for such payment, the periodic statement required under subsection (b) with respect to the account shall include, in a conspicuous location on the billing statement, the date on which the payment is due or, if different, the date on which a late payment fee will be charged, together with the amount of the fee or charge to be imposed if payment is made after that date.CommentsClose CommentsPermalink





‘(B) DISCLOSURE OF INCREASE IN INTEREST RATES FOR LATE PAYMENTS- If 1 or more late payments under an open end consumer credit plan may result in an increase in the annual percentage rate applicable to the account, the statement required under subsection (b) with respect to the account shall include conspicuous notice of such fact, together with the applicable penalty annual percentage rate, in close proximity to the disclosure required under subparagraph (A) of the date on which payment is due under the terms of the account.CommentsClose CommentsPermalink





‘(C) PAYMENTS AT LOCAL BRANCHES- If the creditor, in the case of a credit card account referred to in subparagraph (A), is a financial institution which maintains branches or offices at which payments on any such account are accepted from the obligor in person, the date on which the obligor makes a payment on the account at such branch or office shall be considered to be the date on which the payment is made for purposes of determining whether a late fee or charge may be imposed due to the failure of the obligor to make payment on or before the due date for such payment.’.CommentsClose CommentsPermalink

SEC. 203. RENEWAL DISCLOSURES.CommentsClose CommentsPermalink

Section 127(d) of the Truth in Lending Act (15 U.S.C. 1637(d)) is amended--CommentsClose CommentsPermalink





(1) by striking paragraph (2);CommentsClose CommentsPermalink





(2) by redesignating paragraph (3) as paragraph (2); andCommentsClose CommentsPermalink





(3) in paragraph (1), by striking ‘Except as provided in paragraph (2), a card issuer’ and inserting the following: ‘A card issuer that has changed or amended any term of the account since the last renewal that has not been previously disclosed or’.CommentsClose CommentsPermalink

SEC. 204. INTERNET POSTING OF CREDIT CARD AGREEMENTS.CommentsClose CommentsPermalink

(a) In General- Section 122 of the Truth and Lending Act (15 U.S.C. 1632) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(d) Additional Electronic Disclosures-CommentsClose CommentsPermalink





‘(1) POSTING AGREEMENTS- Each creditor shall establish and maintain an Internet site on which the creditor shall post the written agreement between the creditor and the consumer for each credit card account under an open-end consumer credit plan.CommentsClose CommentsPermalink





‘(2) CREDITOR TO PROVIDE CONTRACTS TO THE BOARD- Each creditor shall provide to the Board, in electronic format, the consumer credit card agreements that it publishes on its Internet site.CommentsClose CommentsPermalink





‘(3) RECORD REPOSITORY- The Board shall establish and maintain on its publicly available Internet site a central repository of the consumer credit card agreements received from creditors pursuant to this subsection, and such agreements shall be easily accessible and retrievable by the public.CommentsClose CommentsPermalink





‘(4) EXCEPTION- This subsection shall not apply to individually negotiated changes to contractual terms, such as individually modified workouts or renegotiations of amounts owed by a consumer under an open end consumer credit plan.CommentsClose CommentsPermalink





‘(5) REGULATIONS- The Board, in consultation with the other Federal banking agencies (as that term is defined in section 603) and the Federal Trade Commission, may promulgate regulations to implement this subsection, including specifying the format for posting the agreements on the Internet sites of creditors and establishing exceptions to paragraphs (1) and (2), in any case in which the administrative burden outweighs the benefit of increased transparency, such as where a credit card plan has a de minimis number of consumer account holders.’.CommentsClose CommentsPermalink

SEC. 205. PREVENTION OF DECEPTIVE MARKETING OF CREDIT REPORTS.CommentsClose CommentsPermalink

(a) Preventing Deceptive Marketing- Section 612 of the Fair Credit Reporting Act (15 U.S.C. 1681j) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(g) Prevention of Deceptive Marketing of Credit Reports-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Subject to rulemaking pursuant to section 205(b) of the Credit CARD Act of 2009, any advertisement for a free credit report in any medium shall prominently disclose in such advertisement that free credit reports are available under Federal law at: ‘AnnualCreditReport.com’ (or such other source as may be authorized under Federal law).CommentsClose CommentsPermalink





‘(2) TELEVISION AND RADIO ADVERTISEMENT- In the case of an advertisement broadcast by television, the disclosures required under paragraph (1) shall be included in the audio and visual part of such advertisement. In the case of an advertisement broadcast by televison or radio, the disclosure required under paragraph (1) shall consist only of the following: ‘This is not the free credit report provided for by Federal law’.’.CommentsClose CommentsPermalink





(b) Rulemaking-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than 9 months after the date of enactment of this Act, the Federal Trade Commission shall issue a final rule to carry out this section.CommentsClose CommentsPermalink





(2) CONTENT- The rule required by this subsection--CommentsClose CommentsPermalink





(A) shall include specific wording to be used in advertisements in accordance with this section; andCommentsClose CommentsPermalink





(B) for advertisements on the Internet, shall include whether the disclosure required under section 612(g)(1) of the Fair Credit Reporting Act (as added by this section) shall appear on the advertisement or the website on which the free credit report is made available.CommentsClose CommentsPermalink





(3) INTERIM DISCLOSURES- If an advertisement subject to section 612(g) of the Fair Credit Reporting Act, as added by this section, is made public after the 9-month deadline specified in paragraph (1), but before the rule required by paragraph (1) is finalized, such advertisement shall include the disclosure: ‘Free credit reports are available under Federal law at: ‘AnnualCreditReport.com’.’.CommentsClose CommentsPermalink

TITLE III--PROTECTION OF YOUNG CONSUMERSCommentsClose CommentsPermalink

SEC. 301. EXTENSIONS OF CREDIT TO UNDERAGE CONSUMERS.CommentsClose CommentsPermalink

Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(8) APPLICATIONS FROM UNDERAGE CONSUMERS-CommentsClose CommentsPermalink





‘(A) PROHIBITION ON ISSUANCE- No credit card may be issued to, or open end consumer credit plan established by or on behalf of, a consumer who has not attained the age of 21, unless the consumer has submitted a written application to the card issuer that meets the requirements of subparagraph (B).CommentsClose CommentsPermalink





‘(B) APPLICATION REQUIREMENTS- An application to open a credit card account by a consumer who has not attained the age of 21 as of the date of submission of the application shall require--CommentsClose CommentsPermalink





‘(i) the signature of a cosigner, including the parent, legal guardian, spouse, or any other individual who has attained the age of 21 having a means to repay debts incurred by the consumer in connection with the account, indicating joint liability for debts incurred by the consumer in connection with the account before the consumer has attained the age of 21; orCommentsClose CommentsPermalink





‘(ii) submission by the consumer of financial information, including through an application, indicating an independent means of repaying any obligation arising from the proposed extension of credit in connection with the account.CommentsClose CommentsPermalink





‘(C) SAFE HARBOR- The Board shall promulgate regulations providing standards that, if met, would satisfy the requirements of subparagraph (B)(ii).’.CommentsClose CommentsPermalink

SEC. 302. PROTECTION OF YOUNG CONSUMERS FROM PRESCREENED CREDIT OFFERS.CommentsClose CommentsPermalink

Section 604(c)(1)(B) of the Fair Credit Reporting Act (15 U.S.C. 1681b(c)(1)(B)) is amended--CommentsClose CommentsPermalink





(1) in clause (ii), by striking ‘and’ at the end; andCommentsClose CommentsPermalink





(2) in clause (iii), by striking the period at the end and inserting the following: ‘; andCommentsClose CommentsPermalink





‘(iv) the consumer report does not contain a date of birth that shows that the consumer has not attained the age of 21, or, if the date of birth on the consumer report shows that the consumer has not attained the age of 21, such consumer consents to the consumer reporting agency to such furnishing.’.CommentsClose CommentsPermalink

SEC. 303. ISSUANCE OF CREDIT CARDS TO CERTAIN COLLEGE STUDENTS.CommentsClose CommentsPermalink

Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(p) Parental Approval Required To Increase Credit Lines for Accounts for Which Parent Is Jointly Liable- No increase may be made in the amount of credit authorized to be extended under a credit card account for which a parent, legal guardian, or spouse of the consumer, or any other individual has assumed joint liability for debts incurred by the consumer in connection with the account before the consumer attains the age of 21, unless that parent, guardian, or spouse approves in writing, and assumes joint liability for, such increase.’.CommentsClose CommentsPermalink

SEC. 304. PRIVACY PROTECTIONS FOR COLLEGE STUDENTS.CommentsClose CommentsPermalink

Section 140 of the Truth in Lending Act (15 U.S.C. 1650) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(f) Credit Card Protections for College Students-CommentsClose CommentsPermalink





‘(1) DISCLOSURE REQUIRED- An institution of higher education shall publicly disclose any contract or other agreement made with a card issuer or creditor for the purpose of marketing a credit card.CommentsClose CommentsPermalink





‘(2) INDUCEMENTS PROHIBITED- No card issuer or creditor may offer to a student at an institution of higher education any tangible item to induce such student to apply for or participate in an open end consumer credit plan offered by such card issuer or creditor, if such offer is made--CommentsClose CommentsPermalink





‘(A) on the campus of an institution of higher education;CommentsClose CommentsPermalink





‘(B) near the campus of an institution of higher education, as determined by rule of the Board; orCommentsClose CommentsPermalink





‘(C) at an event sponsored by or related to an institution of higher education.CommentsClose CommentsPermalink





‘(3) SENSE OF THE CONGRESS- It is the sense of the Congress that each institution of higher education should consider adopting the following policies relating to credit cards:CommentsClose CommentsPermalink





‘(A) That any card issuer that markets a credit card on the campus of such institution notify the institution of the location at which such marketing will take place.CommentsClose CommentsPermalink





‘(B) That the number of locations on the campus of such institution at which the marketing of credit cards takes place be limited.CommentsClose CommentsPermalink





‘(C) That credit card and debt education and counseling sessions be offered as a regular part of any orientation program for new students of such institution.’.CommentsClose CommentsPermalink

SEC. 305. COLLEGE CREDIT CARD AGREEMENTS.CommentsClose CommentsPermalink

(a) In General- Section 127 of the Truth in Lending Act (15 U.S.C. 1637), as otherwise amended by this Act, is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(r) College Card Agreements-CommentsClose CommentsPermalink





‘(1) DEFINITIONS- For purposes of this subsection, the following definitions shall apply:CommentsClose CommentsPermalink





‘(A) COLLEGE AFFINITY CARD- The term ‘college affinity card’ means a credit card issued by a credit card issuer under an open end consumer credit plan in conjunction with an agreement between the issuer and an institution of higher education, or an alumni organization or foundation affiliated with or related to such institution, under which such cards are issued to college students who have an affinity with such institution, organization and--CommentsClose CommentsPermalink





‘(i) the creditor has agreed to donate a portion of the proceeds of the credit card to the institution, organization, or foundation (including a lump sum or 1-time payment of money for access);CommentsClose CommentsPermalink





‘(ii) the creditor has agreed to offer discounted terms to the consumer; orCommentsClose CommentsPermalink





‘(iii) the credit card bears the name, emblem, mascot, or logo of such institution, organization, or foundation, or other words, pictures, or symbols readily identified with such institution, organization, or foundation.CommentsClose CommentsPermalink





‘(B) COLLEGE STUDENT CREDIT CARD ACCOUNT- The term ‘college student credit card account’ means a credit card account under an open end consumer credit plan established or maintained for or on behalf of any college student.CommentsClose CommentsPermalink





‘(C) COLLEGE STUDENT- The term ‘college student’ means an individual who is a full-time or a part-time student attending an institution of higher education.CommentsClose CommentsPermalink





‘(D) INSTITUTION OF HIGHER EDUCATION- The term ‘institution of higher education’ has the same meaning as in section 101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001 and 1002).CommentsClose CommentsPermalink





‘(2) REPORTS BY CREDITORS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Each creditor shall submit an annual report to the Board containing the terms and conditions of all business, marketing, and promotional agreements and college affinity card agreements with an institution of higher education, or an alumni organization or foundation affiliated with or related to such institution, with respect to any college student credit card issued to a college student at such institution.CommentsClose CommentsPermalink





‘(B) DETAILS OF REPORT- The information required to be reported under subparagraph (A) includes--CommentsClose CommentsPermalink





‘(i) any memorandum of understanding between or among a creditor, an institution of higher education, an alumni association, or foundation that directly or indirectly relates to any aspect of any agreement referred to in such subparagraph or controls or directs any obligations or distribution of benefits between or among any such entities;CommentsClose CommentsPermalink





‘(ii) the amount of any payments from the creditor to the institution, organization, or foundation during the period covered by the report, and the precise terms of any agreement under which such amounts are determined; andCommentsClose CommentsPermalink





‘(iii) the number of credit card accounts covered by any such agreement that were opened during the period covered by the report, and the total number of credit card accounts covered by the agreement that were outstanding at the end of such period.CommentsClose CommentsPermalink





‘(C) AGGREGATION BY INSTITUTION- The information required to be reported under subparagraph (A) shall be aggregated with respect to each institution of higher education or alumni organization or foundation affiliated with or related to such institution.CommentsClose CommentsPermalink





‘(D) INITIAL REPORT- The initial report required under subparagraph (A) shall be submitted to the Board before the end of the 9-month period beginning on the date of enactment of this subsection.CommentsClose CommentsPermalink





‘(3) REPORTS BY BOARD- The Board shall submit to the Congress, and make available to the public, an annual report that lists the information concerning credit card agreements submitted to the Board under paragraph (2) by each institution of higher education, alumni organization, or foundation.’.CommentsClose CommentsPermalink





(b) Study and Report by the Comptroller General-CommentsClose CommentsPermalink





(1) STUDY- The Comptroller General of the United States shall, from time to time, review the reports submitted by creditors under section 127(r) of the Truth in Lending Act, as added by this section, and the marketing practices of creditors to determine the impact that college affinity card agreements and college student card agreements have on credit card debt.CommentsClose CommentsPermalink





(2) REPORT- Upon completion of any study under paragraph (1), the Comptroller General shall periodically submit a report to the Congress on the findings and conclusions of the study, together with such recommendations for administrative or legislative action as the Comptroller General determines to be appropriate.CommentsClose CommentsPermalink

TITLE IV--GIFT CARDSCommentsClose CommentsPermalink

SEC. 401. GENERAL-USE PREPAID CARDS, GIFT CERTIFICATES, AND STORE GIFT CARDS.CommentsClose CommentsPermalink

The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) is amended--CommentsClose CommentsPermalink





(1) by redesignating sections 915 through 921 as sections 916 through 922, respectively; andCommentsClose CommentsPermalink





(2) by inserting after section 914 the following:CommentsClose CommentsPermalink

‘SEC. 915. GENERAL-USE PREPAID CARDS, GIFT CERTIFICATES, AND STORE GIFT CARDS.CommentsClose CommentsPermalink

‘(a) Definitions- In this section, the following definitions shall apply:CommentsClose CommentsPermalink





‘(1) DORMANCY FEE; INACTIVITY CHARGE OR FEE- The terms ‘dormancy fee’ and ‘inactivity charge or fee’ mean a fee, charge, or penalty for non-use or inactivity of a gift certificate, store gift card, or general-use prepaid card.CommentsClose CommentsPermalink





‘(2) GENERAL USE PREPAID CARD, GIFT CERTIFICATE, AND STORE GIFT CARD-CommentsClose CommentsPermalink





‘(A) GENERAL-USE PREPAID CARD- The term ‘general-use prepaid card’ means a card or other payment code or device issued by any person that is--CommentsClose CommentsPermalink





‘(i) redeemable at multiple, unaffiliated merchants or service providers, or automated teller machines;CommentsClose CommentsPermalink





‘(ii) issued in a requested amount, whether or not that amount may, at the option of the issuer, be increased in value or reloaded if requested by the holder;CommentsClose CommentsPermalink





‘(iii) purchased or loaded on a prepaid basis; andCommentsClose CommentsPermalink





‘(iv) honored, upon presentation, by merchants for goods or services, or at automated teller machines.CommentsClose CommentsPermalink





‘(B) GIFT CERTIFICATE- The term ‘gift certificate’ means an electronic promise that is--CommentsClose CommentsPermalink





‘(i) redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo;CommentsClose CommentsPermalink





‘(ii) issued in a specified amount that may not be increased or reloaded;CommentsClose CommentsPermalink





‘(iii) purchased on a prepaid basis in exchange for payment; andCommentsClose CommentsPermalink





‘(iv) honored upon presentation by such single merchant or affiliated group of merchants for goods or services.CommentsClose CommentsPermalink





‘(C) STORE GIFT CARD- The term ‘store gift card’ means an electronic promise, plastic card, or other payment code or device that is--CommentsClose CommentsPermalink





‘(i) redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo;CommentsClose CommentsPermalink





‘(ii) issued in a specified amount, whether or not that amount may be increased in value or reloaded at the request of the holder;CommentsClose CommentsPermalink





‘(iii) purchased on a prepaid basis in exchange for payment; andCommentsClose CommentsPermalink





‘(iv) honored upon presentation by such single merchant or affiliated group of merchants for goods or services.CommentsClose CommentsPermalink





‘(D) EXCLUSIONS- The terms ‘general-use prepaid card’, ‘gift certificate’, and ‘store gift card’ do not include an electronic promise, plastic card, or payment code or device that is--CommentsClose CommentsPermalink





‘(i) used solely for telephone services;CommentsClose CommentsPermalink





‘(ii) reloadable and not marketed or labeled as a gift card or gift certificate;CommentsClose CommentsPermalink





‘(iii) a loyalty, award, or promotional gift card, as defined by the Board;CommentsClose CommentsPermalink





‘(iv) not marketed to the general public;CommentsClose CommentsPermalink





‘(v) issued in paper form only (including for tickets and events); orCommentsClose CommentsPermalink





‘(vi) redeemable solely for admission to events or venues at a particular location or group of affiliated locations, which may also include services or goods obtainable--CommentsClose CommentsPermalink





‘(I) at the event or venue after admission; orCommentsClose CommentsPermalink





‘(II) in conjunction with admission to such events or venues, at specific locations affiliated with and in geographic proximity to the event or venue.CommentsClose CommentsPermalink





‘(3) SERVICE FEE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘service fee’ means a periodic fee, charge, or penalty for holding or use of a gift certificate, store gift card, or general-use prepaid card.CommentsClose CommentsPermalink





‘(B) EXCLUSION- With respect to a general-use prepaid card, the term ‘service fee’ does not include a one-time initial issuance fee.CommentsClose CommentsPermalink





‘(b) Prohibition on Imposition of Fees or Charges-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Except as provided under paragraphs (2) through (4), it shall be unlawful for any person to impose a dormancy fee, an inactivity charge or fee, or a service fee with respect to a gift certificate, store gift card, or general-use prepaid card.CommentsClose CommentsPermalink





‘(2) EXCEPTIONS- A dormancy fee, inactivity charge or fee, or service fee may be charged with respect to a gift certificate, store gift card, or general-use prepaid card, if--CommentsClose CommentsPermalink





‘(A) there has been no activity with respect to the certificate or card in the 12-month period ending on the date on which the charge or fee is imposed;CommentsClose CommentsPermalink





‘(B) the disclosure requirements of paragraph (3) have been met;CommentsClose CommentsPermalink





‘(C) not more than one fee may be charged in any given month; andCommentsClose CommentsPermalink





‘(D) any additional requirements that the Board may establish through rulemaking under subsection (d) have been met.CommentsClose CommentsPermalink





‘(3) DISCLOSURE REQUIREMENTS- The disclosure requirements of this paragraph are met if--CommentsClose CommentsPermalink





‘(A) the gift certificate, store gift card, or general-use prepaid card clearly and conspicuously states--CommentsClose CommentsPermalink





‘(i) that a dormancy fee, inactivity charge or fee, or service fee may be charged;CommentsClose CommentsPermalink





‘(ii) the amount of such fee or charge;CommentsClose CommentsPermalink





‘(iii) how often such fee or charge may be assessed; andCommentsClose CommentsPermalink





‘(iv) that such fee or charge may be assessed for inactivity; andCommentsClose CommentsPermalink





‘(B) the issuer or vendor of such certificate or card informs the purchaser of such charge or fee before such certificate or card is purchased, regardless of whether the certificate or card is purchased in person, over the Internet, or by telephone.CommentsClose CommentsPermalink





‘(4) EXCLUSION- The prohibition under paragraph (1) shall not apply to any gift certificate--CommentsClose CommentsPermalink





‘(A) that is distributed pursuant to an award, loyalty, or promotional program, as defined by the Board; andCommentsClose CommentsPermalink





‘(B) with respect to which, there is no money or other value exchanged.CommentsClose CommentsPermalink





‘(c) Prohibition on Sale of Gift Cards With Expiration Dates-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Except as provided under paragraph (2), it shall be unlawful for any person to sell or issue a gift certificate, store gift card, or general-use prepaid card that is subject to an expiration date.CommentsClose CommentsPermalink





‘(2) EXCEPTIONS- A gift certificate, store gift card, or general-use prepaid card may contain an expiration date if--CommentsClose CommentsPermalink





‘(A) the expiration date is not earlier than 5 years after the date on which the gift certificate was issued, or the date on which card funds were last loaded to a store gift card or general-use prepaid card; andCommentsClose CommentsPermalink





‘(B) the terms of expiration are clearly and conspicuously stated.CommentsClose CommentsPermalink





‘(d) Additional Rulemaking-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Board shall--CommentsClose CommentsPermalink





‘(A) prescribe regulations to carry out this section, in addition to any other rules or regulations required by this title, including such additional requirements as appropriate relating to the amount of dormancy fees, inactivity charges or fees, or service fees that may be assessed and the amount of remaining value of a gift certificate, store gift card, or general-use prepaid card below which such charges or fees may be assessed; andCommentsClose CommentsPermalink





‘(B) shall determine the extent to which the individual definitions and provisions of the Electronic Fund Transfer Act or Regulation E should apply to general-use prepaid cards, gift certificates, and store gift cards.CommentsClose CommentsPermalink





‘(2) CONSULTATION- In prescribing regulations under this subsection, the Board shall consult with the Federal Trade Commission.CommentsClose CommentsPermalink





‘(3) TIMING; EFFECTIVE DATE- The regulations required by this subsection shall be issued in final form not later than 9 months after the date of enactment of the Credit CARD Act of 2009.’.CommentsClose CommentsPermalink

SEC. 402. RELATION TO STATE LAWS.CommentsClose CommentsPermalink

Section 920 of the Electronic Fund Transfer Act (as redesignated by this title) is amended by inserting ‘dormancy fees, inactivity charges or fees, service fees, or expiration dates of gift certificates, store gift cards, or general-use prepaid cards,’ after ‘electronic fund transfers,’.CommentsClose CommentsPermalink

SEC. 403. EFFECTIVE DATE.CommentsClose CommentsPermalink

This title and the amendments made by this title shall become effective 15 months after the date of enactment of this Act.CommentsClose CommentsPermalink

TITLE V--MISCELLANEOUS PROVISIONSCommentsClose CommentsPermalink

SEC. 501. STUDY AND REPORT ON INTERCHANGE FEES.CommentsClose CommentsPermalink

(a) Study Required- The Comptroller General of the United States (in this section referred to as the ‘Comptroller’) shall conduct a study on use of credit by consumers, interchange fees, and their effects on consumers and merchants.CommentsClose CommentsPermalink





(b) Subjects for Review- In conducting the study required by this section, the Comptroller shall review--CommentsClose CommentsPermalink





(1) the extent to which interchange fees are required to be disclosed to consumers and merchants, whether merchants are restricted from disclosing interchange or merchant discount fees, and how such fees are overseen by the Federal banking agencies or other regulators;CommentsClose CommentsPermalink





(2) the ways in which the interchange system affects the ability of merchants of varying size to negotiate pricing with card associations and banks;CommentsClose CommentsPermalink





(3) the costs and factors incorporated into interchange fees, such as advertising, bonus miles, and rewards, how such costs and factors vary among cards;CommentsClose CommentsPermalink





(4) the consequences of the undisclosed nature of interchange fees on merchants and consumers with regard to prices charged for goods and services;CommentsClose CommentsPermalink





(5) how merchant discount fees compare to the credit losses and other costs that merchants incur to operate their own credit networks or store cards;CommentsClose CommentsPermalink





(6) the extent to which the rules of payment card networks and their policies regarding interchange fees are accessible to merchants;CommentsClose CommentsPermalink





(7) other jurisdictions where the central bank has regulated interchange fees and the impact on retail prices to consumers in such jurisdictions;CommentsClose CommentsPermalink





(8) whether and to what extent merchants are permitted to discount for cash; andCommentsClose CommentsPermalink





(9) the extent to which interchange fees allow smaller financial institutions and credit unions to offer payment cards and compete against larger financial institutions.CommentsClose CommentsPermalink





(c) Report Required- Not later than 180 days after the date of enactment of this Act, the Comptroller shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives containing a detailed summary of the findings and conclusions of the study required by this section, together with such recommendations for legislative or administrative actions as may be appropriate.CommentsClose CommentsPermalink

SEC. 502. BOARD REVIEW OF CONSUMER CREDIT PLANS AND REGULATIONS.CommentsClose CommentsPermalink

(a) Required Review- Not later than 2 years after the effective date of this Act and every 2 years thereafter, except as provided in subsection (c)(2), the Board shall conduct a review, within the limits of its existing resources available for reporting purposes, of the consumer credit card market, including--CommentsClose CommentsPermalink





(1) the terms of credit card agreements and the practices of credit card issuers;CommentsClose CommentsPermalink





(2) the effectiveness of disclosure of terms, fees, and other expenses of credit card plans;CommentsClose CommentsPermalink





(3) the adequacy of protections against unfair or deceptive acts or practices relating to credit card plans; andCommentsClose CommentsPermalink





(4) whether or not, and to what extent, the implementation of this Act and the amendments made by this Act has affected--CommentsClose CommentsPermalink





(A) cost and availability of credit, particularly with respect to non-prime borrowers;CommentsClose CommentsPermalink





(B) the safety and soundness of credit card issuers;CommentsClose CommentsPermalink





(C) the use of risk-based pricing; orCommentsClose CommentsPermalink





(D) credit card product innovation.CommentsClose CommentsPermalink





(b) Solicitation of Public Comment- In connection with conducting the review required by subsection (a), the Board shall solicit comment from consumers, credit card issuers, and other interested parties, such as through hearings or written comments.CommentsClose CommentsPermalink





(c) Regulations-CommentsClose CommentsPermalink





(1) NOTICE- Following the review required by subsection (a), the Board shall publish a notice in the Federal Register that--CommentsClose CommentsPermalink





(A) summarizes the review, the comments received from the public solicitation, and other evidence gathered by the Board, such as through consumer testing or other research; andCommentsClose CommentsPermalink





(B) either--CommentsClose CommentsPermalink





(i) proposes new or revised regulations or interpretations to update or revise disclosures and protections for consumer credit cards, as appropriate; orCommentsClose CommentsPermalink





(ii) states the reason for the determination of the Board that new or revised regulations are not necessary.CommentsClose CommentsPermalink





(2) REVISION OF REVIEW PERIOD FOLLOWING MATERIAL REVISION OF REGULATIONS- In the event that the Board materially revises regulations on consumer credit card plans, a review need not be conducted until 2 years after the effective date of the revised regulations, which thereafter shall be treated as the new date for the biennial review required by subsection (a).CommentsClose CommentsPermalink





(d) Board Report to the Congress- The Board shall report to Congress not less frequently than every 2 years, except as provided in subsection (c)(2), on the status of its most recent review, its efforts to address any issues identified from the review, and any recommendations for legislation.CommentsClose CommentsPermalink





(e) Additional Reporting- The Federal banking agencies (as that term is defined in section 3 of the Federal Deposit Insurance Act) and the Federal Trade Commission shall provide annually to the Board, and the Board shall include in its annual report to Congress under section 10 of the Federal Reserve Act, information about the supervisory and enforcement activities of the agencies with respect to compliance by credit card issuers with applicable Federal consumer protection statutes and regulations, including--CommentsClose CommentsPermalink





(1) this Act, the amendments made by this Act, and regulations prescribed under this Act and such amendments; andCommentsClose CommentsPermalink





(2) section 5 of the Federal Trade Commission Act, and regulations prescribed under the Federal Trade Commission Act, including part 227 of title 12 of the Code of Federal Regulations, as prescribed by the Board (referred to as ‘Regulation AA’).CommentsClose CommentsPermalink

SEC. 503. STORED VALUE.CommentsClose CommentsPermalink

(a) In General- Not later than 270 days after the date of enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of Homeland Security, shall issue regulations in final form implementing the Bank Secrecy Act, regarding the sale, issuance, redemption, or international transport of stored value, including stored value cards.CommentsClose CommentsPermalink





(b) Consideration of International Transport- Regulations under this section regarding international transport of stored value may include reporting requirements pursuant to section 5316 of title 31, United States Code.CommentsClose CommentsPermalink





(c) Emerging Methods for Transmittal and Storage in Electronic Form- Regulations under this section shall take into consideration current and future needs and methodologies for transmitting and storing value in electronic form.CommentsClose CommentsPermalink

SEC. 504. PROCEDURE FOR TIMELY SETTLEMENT OF ESTATES OF DECEDENT OBLIGORS.CommentsClose CommentsPermalink

(a) In General- Chapter 2 of the Truth in Lending Act ( U.S.C. 1631 et seq.) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

-‘Sec. 140A Procedure for timely settlement of estates of decedent obligorsCommentsClose CommentsPermalink

‘The Board, in consultation with the Federal Trade Commission and each other agency referred to in section 108(a), shall prescribe regulations to require any creditor, with respect to any credit card account under an open end consumer credit plan, to establish procedures to ensure that any administrator of an estate of any deceased obligor with respect to such account can resolve outstanding credit balances in a timely manner.’.CommentsClose CommentsPermalink





(b) Clerical Amendment- The table of sections for chapter 2 of the Truth in Lending Act is amended by inserting after the item relating to section 140 the following new item:CommentsClose CommentsPermalink





‘140A. Procedure for timely settlement of estates of decedent obligors’.’.CommentsClose CommentsPermalink

SEC. 505. REPORT TO CONGRESS ON REDUCTIONS OF CONSUMER CREDIT CARD LIMITS BASED ON CERTAIN INFORMATION AS TO EXPERIENCE OR TRANSACTIONS OF THE CONSUMER.CommentsClose CommentsPermalink

(a) Report on Creditor Practices Required- Before the end of the 1-year period beginning on the date of enactment of this Act, the Board, in consultation with the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, the National Credit Union Administration Board, and the Federal Trade Commission, shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on the extent to which, during the 3-year period ending on such date of enactment, creditors have reduced credit limits or raised interest rates applicable to credit card accounts under open end consumer credit plans based on--CommentsClose CommentsPermalink





(1) the geographic location where a credit transaction with the consumer took place, or the identity of the merchant involved in the transaction;CommentsClose CommentsPermalink





(2) the credit transactions of the consumer, including the type of credit transaction, the type of items purchased in such transaction, the price of items purchased in such transaction, any change in the type or price of items purchased in such transactions, and other data pertaining to the use of such credit card account by the consumer; andCommentsClose CommentsPermalink





(3) the identity of the mortgage creditor which extended or holds the mortgage loan secured by the primary residence of the consumer.CommentsClose CommentsPermalink





(b) Other Information- The report required under subsection (a) shall also include--CommentsClose CommentsPermalink





(1) the number of creditors that have engaged in the practices described in subsection (a);CommentsClose CommentsPermalink





(2) the extent to which the practices described in subsection (a) have an adverse impact on minority or low-income consumers;CommentsClose CommentsPermalink





(3) any other relevant information regarding such practices; andCommentsClose CommentsPermalink





(4) recommendations to the Congress on any regulatory or statutory changes that may be needed to restrict or prevent such practices.CommentsClose CommentsPermalink

SEC. 506. BOARD REVIEW OF SMALL BUSINESS CREDIT PLANS AND RECOMMENDATIONS.CommentsClose CommentsPermalink

(a) Required Review- Not later than 9 months after the date of enactment of this Act, the Board shall conduct a review of the use of credit cards by businesses with not more than 50 employees (in this section referred to as ‘small businesses’) and the credit card market for small businesses, including--CommentsClose CommentsPermalink





(1) the terms of credit card agreements for small businesses and the practices of credit card issuers relating to small businesses;CommentsClose CommentsPermalink





(2) the adequacy of disclosures of terms, fees, and other expenses of credit card plans for small businesses;CommentsClose CommentsPermalink





(3) the adequacy of protections against unfair or deceptive acts or practices relating to credit card plans for small businesses;CommentsClose CommentsPermalink





(4) the cost and availability of credit for small businesses, particularly with respect to non-prime borrowers;CommentsClose CommentsPermalink





(5) the use of risk-based pricing for small businesses;CommentsClose CommentsPermalink





(6) credit card product innovation relating to small businesses; andCommentsClose CommentsPermalink





(7) the extent to which small business owners use personal credit cards to fund their business operations.CommentsClose CommentsPermalink





(b) Recommendations- Following the review required by subsection (a), the Board shall, not later than 12 months after the date of enactment of this Act--CommentsClose CommentsPermalink





(1) provide a report to Congress that summarizes the review and other evidence gathered by the Board, such as through consumer testing or other research, andCommentsClose CommentsPermalink