To provide authority to the Federal Trade Commission to expedite rulemakings concerning consumer credit or debt and to direct the Commission to examine and promulgate rules with regard to debt settlement and automobile sales, and for other purposes.

Summary: Consumer Credit and Debt Protection Act - Amends the Federal Trade Commission Act to give the Federal Trade Commission (FTC) authority to expedite rulemakings concerning consumer credit or debt.

Directs the FTC to examine the practices of providers of debt settlement services and prescribe rules necessary to prevent unfair and deceptive acts or practices by such providers.

Directs the FTC to examine the practices of automobile dealers with respect to credit and lending and prescribe rules necessary to prevent unfair and deceptive dealer acts or practices.

Gives the FTC authority to commence a civil action to recover a civil penalty in a U.S. district court against any person, partnership, or corporation which engages in any unfair or deceptive acts or practices in connection with consumer credit or debt with actual knowledge or knowledge fairly implied on the basis of objective circumstances that such act is unfair or deceptive.

Authorizes enforcement of this Act by state attorneys general.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Credit and Debt Protection 
Act''.

SEC. 2. FTC RULEMAKING RELATING TO CREDIT OR DEBT.

    (a) Expedited Rulemaking.--Section 18 of the Federal Trade 
Commission Act (15 U.S.C. 57a) is amended by adding at the end the 
following new subsection:
    ``(k) Notwithstanding any other procedures set forth in this 
section or section 22, for any rulemaking relating to consumer credit 
or debt, the Commission shall conduct such rulemaking in accordance 
with section 553 of title 5, United States Code, and the provisions for 
judicial review of rules promulgated in accordance such section shall 
apply to any rule promulgated in such a rulemaking.''.
    (b) Specific Rulemakings.--
            (1) Debt settlement.--
                    (A) In general.--The Federal Trade Commission shall 
                examine the practices of providers of debt settlement 
                services and prescribe such rules as the Commission 
                determines necessary (in accordance with section 553 of 
                title 5, United States Code) in order to prevent unfair 
                and deceptive acts or practices of providers of such 
                services. The Commission shall consider adopting rules 
                that--
                            (i) prohibit the charging of fees to 
                        consumers prior to any debt settlement service 
                        being fully rendered and limiting fees that may 
                        be charged after a settlement with a creditor 
                        is reached; and
                            (ii) require disclosures before a contract 
                        is signed regarding the fee structure, expected 
                        time frames for a successful settlement, 
                        success rate of debtors in settling their 
                        debts, information about creditor participation 
                        in settlement plans, and the potential impact 
                        on a consumer's credit score.
                    (B) Definition.--For purposes of subparagraph (A), 
                the term ``debt settlement service'' means a commercial 
                service provided to assist consumers in managing and 
                repaying consumer debt, including the offering of 
                advice or acting as an intermediary between a debtor 
                and one or more of the debtor's creditors, where the 
                primary purpose of the advice or action is to obtain a 
                settlement for less than the full amount of debt owed.
            (2) Automobile sales.--The Federal Trade Commission shall 
        examine the practices of automobile dealers with respect to 
        credit and lending and shall prescribe such rules as the 
        Commission determines necessary (in accordance with section 553 
        of title 5, United States Code) in order to prevent unfair and 
        deceptive acts or practices of such dealers. The Commission 
        shall consider adopting rules that--
                    (A) restrict post-sale changes in financing terms;
                    (B) require that automobile purchase agreements or 
                sales contracts entered into between a consumer and an 
                automobile dealer include a provision which permits the 
                consumer to cancel the transaction within a specified 
                period following the sale or receipt of final 
                information concerning the terms of the sale or 
                financing; and
                    (C) limit the ability of automobile dealers to 
                accept or solicit compensation that is based on the 
                interest rate, annual percentage rate, or the amount 
                financed with respect to the sale of an automobile and 
                that is either--
                            (i) for the provision, procurement, or 
                        arrangement of financing; or
                            (ii) for the sale, assignment, or transfer 
                        of the installment sale contract.
    (c) Deadline for Rulemakings.--The Commission shall commence the 
rulemakings required under subsection (b) within 6 months after the 
date of enactment of this Act.

SEC. 3. AUTHORITY TO OBTAIN CIVIL PENALTIES IN CONNECTION WITH UNFAIR 
              AND DECEPTIVE ACTS OR PRACTICES RELATING TO CONSUMER 
              CREDIT OR DEBT.

    Section 5(m)(1) of the Federal Trade Commission Act (15 U.S.C. 
45(m)(1)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D), 
        and in such subparagraph (as so redesignated), by striking 
        ``subparagraphs (A) and (B)'' and inserting ``subparagraphs 
        (A), (B), and (C)''; and
            (2) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) The Commission may commence a civil action to 
                recover a civil penalty in a district court of the 
                United States against any person, partnership, or 
                corporation which engages in any unfair or deceptive 
                acts or practices in connection with consumer credit or 
                debt with actual knowledge or knowledge fairly implied 
                on the basis of objective circumstances that such an 
                act is unfair or deceptive. In such action, such 
                person, partnership, or corporation shall be liable for 
                a civil penalty as provided in subparagraph (A).''.

SEC. 4. ENFORCEMENT BY STATE ATTORNEYS GENERAL.

    (a) In General.--Except as provided in subsection (f), a State, as 
parens patriae, may bring a civil action on behalf of its residents in 
an appropriate State or district court of the United States to enforce 
the provisions of the Federal Trade Commission Act or any other Act 
enforced by the Federal Trade Commission to obtain penalties and relief 
provided under such Acts whenever the attorney general of the State has 
reason to believe that the interests of the residents of the State have 
been or are being threatened or adversely affected by a violation of a 
rule prescribed under section 2(b) or any other rule relating to 
consumer credit or debt promulgated by the Federal Trade Commission.
    (b) Notice.--The State shall serve written notice to the Commission 
of any civil action under subsection (a) at least 60 days prior to 
initiating such civil action. The notice shall include a copy of the 
complaint to be filed to initiate such civil action, except that if it 
is not feasible for the State to provide such prior notice, the State 
shall provide notice immediately upon instituting such civil action.
    (c) Intervention by FTC.--Upon receiving the notice required by 
subsection (b), the Commission may intervene in such civil action and 
upon intervening--
            (1) be heard on all matters arising in such civil action;
            (2) remove the action to the appropriate United States 
        district court; and
            (3) file petitions for appeal of a decision in such civil 
        action.
    (d) Savings Clause.--Nothing in this section shall prevent the 
attorney general of a State from exercising the powers conferred on the 
attorney general by the laws of such State to conduct investigations or 
to administer oaths or affirmations or to compel the attendance of 
witnesses or the production of documentary and other evidence. Nothing 
in this section shall prohibit the attorney general of a State, or 
other authorized State officer, from proceeding in State or Federal 
court on the basis of an alleged violation of any civil or criminal 
statute of that State.
    (e) Venue; Service of Process; Joinder.--In a civil action brought 
under subsection (a)--
            (1) the venue shall be a judicial district in which the 
        lender or a related party operates or is authorized to do 
        business;
            (2) process may be served without regard to the territorial 
        limits of the district or of the State in which the civil 
        action is instituted; and
            (3) a person who participated with a lender or related 
        party to an alleged violation that is being litigated in the 
        civil action may be joined in the civil action without regard 
        to the residence of the person.
    (f) Preemptive Action by FTC.--Whenever a civil action or an 
administrative action has been instituted by or on behalf of the 
Commission for violation of any rule described under subsection (a), no 
State may, during the pendency of such action instituted by or on 
behalf of the Commission, institute a civil action under subsection (a) 
against any defendant named in the complaint in such action for 
violation of any rule as alleged in such complaint.
    (g) Award of Costs and Fees.--If the attorney general of a State 
prevails in any civil action under subsection (a), the State can 
recover reasonable costs and attorney fees from the lender or related 
party.