Fair Credit Card Application Act of 1997

Summary: Fair Credit Card Application Act of 1997 - Amends the Truth in Lending Act to require that certain credit card and charge card applications (including telephone solicitations) disclose to the consumer the maximum authorized credit limit, and the consumer's right to state in the application the lowest credit limit acceptable to the consumer.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Credit Card Application Act of 
1997''.

SEC. 2. FAIRNESS IN CREDIT AND CHARGE CARD APPLICATIONS.

    (a) In General.--Section 127(c)(1) of the Truth in Lending Act (15 
U.S.C. 1637(c)(1)) is amended by adding at the end the following new 
subparagraphs:
                    ``(C) Election of minimum amount of credit limit.--
                If a credit card account established pursuant to an 
                application or solicitation to which subparagraph (A) 
                applies would be subject to a maximum dollar amount 
                limitation on the amount of the credit which is 
                authorized to be extended with respect to such account 
                (hereafter in this subparagraph referred to as the 
                `credit limit'), the following provisions shall apply:
                            ``(i) The application or solicitation shall 
                        disclose to the consumer that--
                                    ``(I) a credit limit will or may be 
                                applicable with respect to such 
                                account; and
                                    ``(II) the consumer has the right 
                                to state the lowest amount of the 
                                credit limit which such consumer is 
                                willing to accept if the credit card 
                                account is established.
                            ``(ii) A completed application or 
                        solicitation submitted by a consumer may not be 
                        processed by a credit card issuer unless the 
                        application or solicitation contains--
                                    ``(I) an explicit statement by the 
                                consumer, in the format prescribed by 
                                the Board pursuant to section 
                                122(c)(3), of the lowest amount of any 
                                credit limit that the consumer is 
                                willing to accept; or
                                    ``(II) an explicit positive 
                                statement by the consumer that the 
                                consumer has no preference with regard 
                                to the amount of a credit limit.
                            ``(iii) If a credit card issuer is 
                        unwilling to open a credit card account with a 
                        credit limit equal to or greater than an amount 
                        indicated by the consumer as the lowest amount 
                        the consumer is willing to accept, the credit 
                        card issuer may not issue a credit card on the 
                        basis of such application or solicitation.
                    ``(D) Different type, designation, or brand of 
                credit card.--If an application or solicitation to 
                which subparagraph (A) applies may result in the 
issuance of a different type, designation, or brand of credit card to a 
consumer than the type, designation, or brand of credit card to which 
such application or solicitation relates, the following provisions 
shall apply:
                            ``(i) The application or solicitation shall 
                        disclose to the consumer that--
                                    ``(I) the submission of the 
                                application or solicitation may result 
                                in the issuance of a different type, 
                                designation, or brand of credit card to 
                                the consumer than the type, 
                                designation, or brand of credit card to 
                                which such application or solicitation 
                                relates; and
                                    ``(II) the consumer has the right 
                                to state whether or not the consumer is 
                                willing to accept such other credit 
                                card.
                            ``(ii) The application or solicitation 
                        shall contain (for each type, designation, or 
                        brand of credit card which could be issued on 
                        the basis of the submission of such application 
                        or solicitation) all the information and 
                        disclosures which would be required under this 
                        subsection and subsection (e) (in the format 
                        required under section 122(c)) if the 
                        application or disclosure relates to such other 
                        type, designation, or brand of credit card.
                            ``(iii) A completed application or 
                        solicitation submitted by a consumer may not be 
                        processed by a credit card issuer unless the 
                        application or solicitation contains an 
                        explicit statement by the consumer, in the 
                        format prescribed by the Board pursuant to 
                        section 122(c)(3), that the consumer is or is 
                        not willing to accept a different type, 
                        designation, or brand of credit card than the 
                        type, designation, or brand of credit card to 
                        which such application or solicitation relates.
                            ``(iv) If a credit card issuer is unwilling 
                        to issue a credit card of the type, 
                        designation, or brand of credit card to which 
                        an application or solicitation relates and the 
                        consumer has indicated that the consumer is not 
                        willing to accept a different type, 
                        designation, or brand of credit card, then the 
                        credit card issuer may not issue a credit card 
                        on the basis of such application or 
                        solicitation.''.
    (b) Disclosures in Telephone Solicitations.--Section 127(c)(2) of 
the Truth in Lending Act (15 U.S.C. 1637(c)(2)) is amended by adding at 
the end the following new subparagraph:
                    ``(C) Additional disclosures and consumer 
                responses.--
                            ``(i) In general.--In the case of a 
                        telephone solicitation to open a credit card 
                        account for any person under an open end 
                        consumer credit plan, the person making the 
                        solicitation shall orally disclose, to the 
                        extent applicable, the information described in 
                        paragraph (1)(C)(i) and clauses (i) and (ii) of 
                        paragraph (1)(D) with regard to such 
                        solicitation.
                            ``(ii) Consumer responses.--If a person 
                        making a telephone solicitation described in 
                        clause (i) is required to orally disclose 
                        information pursuant to such clause, clauses 
                        (ii) and (iii) of paragraph (1)(C) and clauses 
                        (iii) and (iv) of paragraph (1)(D), as the case 
                        may be, shall apply with regard to such 
                        solicitation.''.
    (c) Disclosures in Applications and Solicitations by Other Means.--
Section 127(c)(3) of the Truth in Lending Act (15 U.S.C. 1637(c)(3)) is 
amended--
            (1) in subparagraph (A)--
                    (A) by inserting ``, including publications or 
                websites on the worldwide web or other distribution 
                networks,'' after ``publications''; and
                    (B) by inserting ``and the requirements of 
                subparagraph (F)'' before the period at the end; and
            (2) by adding at the end the following new subparagraph:
                    ``(F) Additional disclosures and consumer 
                responses.--
                            ``(i) In general.--An application or 
                        solicitation described in subparagraph (A) 
                        meets the requirements of this subparagraph if 
                        the application or solicitation contains, to 
                        the extent applicable, the information 
                        described in paragraph (1)(C)(i) and clauses 
                        (i) and (ii) of paragraph (1)(D) with regard to 
                        such application or solicitation.
                            ``(ii) Consumer responses.--If an 
                        application or solicitation described in 
                        subparagraph (A) is required to contain 
                        information pursuant to clause (i) of this 
                        subparagraph, clauses (ii) and (iii) of 
                        paragraph (1)(C) and clauses (iii) and (iv) of 
                        paragraph (1)(D), as the case may be, shall 
                        apply with regard to such application or 
                        solicitation.''.
    (d) Disclosures in Applications and Solicitations for Charge 
Cards.--Section 127(c)(4) of the Truth in Lending Act (15 U.S.C. 
1637(c)(4)) is amended by adding at the end the following new 
subparagraph:
                    ``(F) Full disclosure requirements.--In the case of 
                any application or solicitation for a charge card to 
                which subparagraph (A), (C), or (D) applies, the 
                requirements of paragraph (1)(D) shall apply to such 
                application or solicitation in the same manner and to 
                the same extent that such subparagraphs of paragraph 
                (1) apply to credit card applications and 
                solicitations.''.
    (e) Format of Disclosures.--
            (1) In general.--Section 122(c)(1) of the Truth in Lending 
        Act (15 U.S.C. 1632(c)) is amended in the matter preceding 
        subparagraph (A)--
                    (A) by inserting ``(1)(C)(i), (1)(D)(i), (3)(F),'' 
                after ``(1)(A),'';
                    (B) by striking ``and'' after ``(4)(A),''; and
                    (C) by inserting ``, and (4)(F)'' after 
                ``(4)(C)(i)(I)''.
            (2) Requirements relating to format for disclosures of 
        consumer options and consumer responses.--Section 122(c) of the 
        Truth in Lending Act (15 U.S.C. 1632(c)) is amended by adding 
        at the end the following new paragraph:
            ``(3) Format for disclosure of consumer options and 
        consumer responses.--In the regulations prescribed under 
        paragraph (1), the Board shall prescribe the format for any 
        consumer response pursuant to--
                    ``(A) subparagraph (C)(ii) or (D)(iii) of paragraph 
                (1) of section 127(c), in connection with any 
                application or solicitation to which paragraph (1), 
                (2), or (3) of such section applies; or
                    ``(B) subparagraph (F) of section 127(c)(4), in 
                connection with any application or solicitation to 
                which subparagraph (A), (C), or (D) of such section 
                applies.''.