To amend the Truth in Lending Act to expand protections for consumers by adjusting statutory exemptions and civil penalties to reflect inflation, to eliminate the Rule of 78s accounting for interest rebates in consumer credit transactions, and for other purposes.

Summary: Truth in Lending Modernization Act of 2001 - Amends the Consumer Credit Protection Act to: (1) apply consumer credit information and disclosure requirements to all credit and lease transactions involving real and personal property in which the total amount financed exceeds $75,000 (currently $25,000); and (2) increase the civil penalties for creditor violations of such requirements.Amends the Truth in Lending Act to: (1) deem ineffective any consumer waiver of the right to rescission of a transaction required (as a condition of the transaction), urged, or discussed by a creditor; and (2) deem unenforceable any contract provision which requires binding arbitration or any other nonjudicial procedure to resolve a dispute if it would deny the consumer any right to bring an action for any liability of the creditor.Amends the Housing and Community Development Act of 1992 to eliminate the Rule of 78s accounting method for calculating refunds of unearned interest on credit transactions consummated after September 30, 1999 (currently, September 30, 1993).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Truth in Lending Modernization Act 
of 2001''.

SEC. 2. APPLICABLE CONSUMER CREDIT AND LEASE TRANSACTIONS.

    (a) Credit Transactions.--Section 104(3) of the Consumer Credit 
Protection Act (15 U.S.C. 1603(3)) is amended by striking ``$25,000'' 
and inserting ``$75,000''.
    (b) Lease Transactions.--Section 181(1) of the Consumer Credit 
Protection Act (15 U.S.C. 1667(1)) is amended by striking ``$25,000'' 
and inserting ``$75,000''.

SEC. 3. AMENDMENTS RELATING TO RIGHT OF RESCISSION.

    (a) Timing of Waiver by Consumer.--Section 125(a) of the Truth in 
Lending Act (15 U.S.C. 1635(a)) is amended--
            (1) by striking ``(a) Except as otherwise provided'' and 
        inserting ``(a) Right Established.--
            ``(1) In general.--Except as otherwise provided''; and
            (2) by adding at the end the following new paragraph:
            ``(2) Timing of election of waiver by consumer.--No 
        election by a consumer to waive the right established under 
        paragraph (1) to rescind a transaction shall be effective if--
                    ``(A) the waiver was required by the creditor as a 
                condition for the transaction;
                    ``(B) the creditor advised or encouraged the 
                consumer to waive such right of the consumer; or
                    ``(C) the creditor had any discussion with the 
                consumer about a waiver of such right during the period 
                beginning when the consumer provides written 
                acknowledgement of the receipt of the disclosures and 
                the delivery of forms and information required to be 
                provided to the consumer under paragraph (1) and ending 
                at such time as the Board determines, by regulation, to 
                be appropriate.''.
    (b) Noncompliance With Requirements as Recoupment in Foreclosure 
Proceeding.--Section 130(e) of the Truth in Lending Act (15 U.S.C. 
1640(e)) is amended by inserting after the 2d sentence the following 
new sentence: ``This subsection also does not bar a person from 
asserting a rescission under section 125, in an action to collect the 
debt as a defense to a judicial or nonjudicial foreclosure after the 
expiration of the time periods for affirmative actions set forth in 
this section and section 125.''.

SEC. 4. CIVIL LIABILITY.

    (a) In General.--Section 130(a)(2)(A) of the Consumer Credit 
Protection Act (15 U.S.C. 1640(a)(2)(A)) is amended--
            (1) in clause (ii)--
                    (A) by striking ``$100'' and inserting ``$200''; 
                and
                    (B) by striking ``$1,000'' and inserting 
                ``$5,000''; and
            (2) in clause (iii), by striking ``$2,000'' and inserting 
        ``$10,000''.
    (b) Maximum Amount.--Section 130(a)(2)(B) (15 U.S.C. 1640(a)(2)(B)) 
is amended by striking ``lesser of $500,000 or 1 percentum of the net 
worth of the creditor'' and inserting ``the greater of--
                            ``(i) the amount determined by multiplying 
                        the maximum amount of liability under 
                        subparagraph (A) for such failure to comply in 
                        an individual action by the number of members 
                        in the certified class; or
                            ``(ii) the amount equal to 2 percent of the 
                        net worth of the creditor.''.

SEC. 5. USE OF RULE OF 78S PROHIBITED.

    Section 933(b) of the Housing and Community Development Act of 1992 
(15 U.S.C. 1615(b)) is amended--
            (1) by striking ``of a term exceeding 61 months''; and
            (2) by striking ``September 30, 1993'' and inserting 
        ``September 30, 1999''.

SEC. 6. ACCESS TO COURT PROVISION.

    (a) In General.--Section 130(i) of the Truth in Lending Act (15 
U.S.C. 1640(i)) is amended to read as follows:
    ``(i) Availability of Statutory Remedies.--
            ``(1) In general.--No provision of any agreement or 
        contract between a consumer and any creditor which requires 
        binding arbitration or any other nonjudicial procedure to 
        resolve any controversy or settle any claim arising out of such 
        contract or any transaction covered by the contract, or the 
        refusal to perform the whole or any part of the transaction, 
        shall be enforceable to the extent that the construction or 
        application of such provision with respect to such controversy, 
        claim, or refusal would deny the consumer the right to bring 
        any action under this section or any other provision of this 
        title for any liability of the creditor to the consumer under 
        this title.
            ``(2) Rule of construction.--Paragraph (1) shall not be 
        construed as creating any inference that any provision of any 
        contract or agreement described in such paragraph could be 
        construed so as to deny any consumer the right to bring an 
        action under this title absent this subsection.''.

SEC. 7. REGULATIONS.

    Before the end of the 6-month period beginning on the date of the 
enactment of this Act, the Board of Governors of the Federal Reserve 
System shall issue regulations in final form to implement the 
amendments made by this Act.