To express the sense of the Congress with respect to the price and terms of credit used to pay large medical bills, to amend the Truth in Lending Act with respect to credit card issuers obligations for credit extended to pay medical expenses under certain circumstances, and for other purposes.

Summary: Medical Bills Interest Rate Relief Act - Expresses the sense of the Congress that: (1) no American family or individual should be forced to choose between the health and life of a loved one and the financial constraints of medical care; (2) financial institutions, including credit card issuers, should not take financial advantage of unforeseen, nonpreventive, or catastrophic medical situations; and (3) individuals or families saddled with large medical bills should receive a fair and equitable credit rating that disregards off-schedule medical bill payments.

Amends the Truth in Lending Act to prescribe guidelines governing the obligations of credit card issuers for credit extended to pay medical expenses.

Amends the Fair Credit Reporting Act to prohibit a hospital or other medical treatment facility from submitting to a consumer reporting agency during a five-year period any negative information regarding the failure of a consumer to maintain full payments for medical expenses if the consumer continues in good faith to make partial payments on the outstanding balance on prescribed payment schedule due dates.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medical Bills Interest Rate Relief 
Act''.

SEC. 2. FINDINGS; SENSE OF THE CONGRESS.

    (a) Findings.--The Congress finds as follows:
            (1) Many families and individuals are forced deep into debt 
        by the combination of large medical bills and excessively high 
        interest rates.
            (2) The policy journal Health Affairs reports that illness 
        and medical bills cause half of all bankruptcies.
            (3) The same report notes that over 2 million Americans are 
        financially ruined by medical care costs each year.
            (4) Consumers whose debt consists largely of credit 
        extended to pay medical expenses are 42 percent more likely 
        than other debtors to experience lapses in coverage.
            (5) Many of those forced into bankruptcy by medical 
        expenses are middle class and have health insurance.
            (6) Major credit card issuers tie credit card interest 
        rates to credit records and credit scores.
            (7) However, previously unforeseen and burdensome medical 
        expenses may arise whereby the hospital-mandated schedule of 
        payment is more than the individual can immediately afford.
            (8) Hospitals often report late- or delinquent-payers to 
        consumer reporting agencies thereby directly affecting the 
        rates, terms, and availability of credit from other sources 
        that might otherwise be used to pay the medical expenses.
            (9) Many individuals and families are forced to place large 
        medical expenses on their credit cards over time.
            (10) Credit card issuers are able to raise interest rates 
        on late- and delinquent-payers with impunity and without 
        regards to the nature of the delinquency.
            (11) There currently exists no government-enforced ceiling 
        cap on credit card interest rates.
    (b) Purpose.--The purpose of this Act is to stem the loss from 
rising instances of payment delinquencies and bankruptcies so that 
people who meet their bill payment requirements on time and in full 
receive the lowest interest rates.
    (c) Sense of the Congress.--It is the sense of the Congress that--
            (1) no American family or individual should be forced to 
        choose between the health and life of a loved one and the 
        financial constraints of medical care;
            (2) financial institutions, including credit card issuers, 
        should not take financial advantage of unforeseen, 
        nonpreventive, or catastrophic medical situations; and
            (3) individuals or families saddled with large medical 
        bills should receive a fair and equitable credit rating that 
        disregards off-schedule medical bill payments.

SEC. 3. CREDIT CARD ISSUERS OBLIGATIONS FOR CREDIT EXTENDED TO PAY 
              MEDICAL EXPENSES.

    Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
by adding at the end the following new subsection:
    ``(h) Credit Card Issuers Obligations for Credit Extended to Pay 
Medical Expenses.--
            ``(1) In general.--If, with respect to a credit card 
        account under an open end consumer credit plan, the consumer 
        notifies the credit card issuer of anticipated, any upcoming 
        medical expense to be incurred by the consumer, or a member of 
        the consumer's household, within 30 days of the date of the 
        expense--
                    ``(A) the annual percentage rate on credit extended 
                under the plan to pay such medical expenses shall not 
                exceed the annual percentage rate in effect for any 
                outstanding balance of the consumer under the plan at 
                the time such notice is given; and
                    ``(B) the annual percentage rate extended under the 
                plan to pay nonmedical expenses may not be increased on 
                the basis of, or due to, the extension of credit to pay 
                such medical expenses.
            ``(2) Medical expenses.--For purposes of this subsection, 
        the term `medical expenses' includes necessary treatments, 
        drugs, tests, hospital stays, and expenses, doctor fees, and 
        elective surgeries.''.

SEC. 4. CREDIT HISTORY REPORTING REQUIREMENT IN CASE OF CERTAIN MEDICAL 
              EXPENSES.

    Section 623 of the Fair Credit Reporting Act (15 U.S.C. 1681s-2) is 
amended by adding at the end the following new subsection:
    ``(f) Reports Furnished by Hospitals.--
            ``(1) In general.--If a consumer, who is unable to make 
        full payments for medical expenses (as defined in section 
        127(h)(2)) to a hospital or other medical treatment facility in 
        accordance with a schedule of payments imposed by such hospital 
        or facility, continues, in good faith, to make partial payments 
        on the outstanding balance on the prescribed due dates under 
        such schedule, the hospital or facility may not submit negative 
        information relating to the failure of such consumer to 
        maintain the payment schedule in full during the 5-year period 
        beginning when the consumer first fails to make full payment 
        under the payment schedule.
            ``(2) Good faith partial payment.--For purposes of 
        paragraph (1), a consumer shall be deemed to be making partial 
        payments in good faith on the prescribed due dates if the 
        consumer is paying at least 20 percent of the amount of the 
        scheduled payment for each due date.''.

SEC. 5. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall take effect on 
January 1, 2006.