To amend the Truth in Lending Act to provide an interest rate cap and other requirements for creditors making covered loans, and for other purposes.

Summary: Predatory Lending Sunset Act - Amends the Truth in Lending Act to limit the maximum interest rate which a creditor may charge on a covered consumer credit loan of up to $3,000 to an annual percentage rate (APR) of 36%.

Prohibits a creditor from extending a covered loan with respect to which the creditor uses as security either: (1) access to a borrower's financial account; or (2) the title of a vehicle.

Amends the Electronic Fund Transfer Act to prohibit a remotely created check that: (1) is not created by the financial institution that holds the customer account from which the check is to be paid; and (2) does not bear a signature applied by the person from whose account the check is to be paid.

Declares unenforceable, with respect to any consumer, any contract made in violation of this Act.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Predatory Lending Sunset Act''.

SEC. 2. COVERED LENDING.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended--
            (1) by redesignating the second section 129 (as so 
        designated by section 201(b) of the Helping Families Save Their 
        Homes Act of 2009) as section 129A; and
            (2) by inserting after section 129A, as so redesignated, 
        the following new section:

``SEC. 129B. COVERED LENDING.

    ``(a) Maximum Interest Rate.--The maximum interest rate a creditor 
may charge on a covered loan shall be the rate equal to an annual 
percentage rate of 36 percent.
    ``(b) Prohibition on Using Certain Means of Access for Security.--
It shall be unlawful for any creditor to extend a covered loan with 
respect to which the creditor uses, as security for the obligation or 
as a condition of extending the credit--
            ``(1) a check or other method of access to a deposit, 
        savings, or other financial account maintained by the borrower; 
        or
            ``(2) the title of a vehicle.
    ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Annual percentage rate.--Notwithstanding the manner 
        described in section 107 for determining the annual percentage 
        rate, the term `annual percentage rate' means all charges 
        payable directly or indirectly incident to, ancillary to, or as 
        a condition of the extension of a covered loan, including--
                    ``(A) all fees which constitute a finance charge; 
                and
                    ``(B) any other payments, fees or charges, 
                including but not limited to application, membership 
                and administrative fees, compensating a creditor for 
                making the covered loan.
            ``(2) Covered loan.--The term `covered loan'--
                    ``(A) means a consumer credit transaction that--
                            ``(i) is unsecured by any interest in the 
                        consumer's personal property;
                            ``(ii) is in an amount that does not exceed 
                        $3,000 or, in the case of a line of credit, a 
                        credit limit that does not exceed $3,000;
                            ``(iii) in the case of a closed end credit 
                        transaction, has a term of 91 days or less; and
                            ``(iv) in the case of an open end credit 
                        transaction--
                                    ``(I) has an amortization period of 
                                91 days or less; or
                                    ``(II) in the case of a line of 
                                credit, the amount due in the first 91 
                                days, including finance charges, fees, 
                                service charges, renewals, credit 
                                insurance premiums, and any other 
                                charge or premium with respect to the 
                                extension of credit, exceed 25 percent 
                                of the credit limit of the line of 
                                credit; and
                    ``(B) does not include a non-recourse extension of 
                credit--
                            ``(i) extended by a pawn broker creditor; 
                        and
                            ``(ii) secured by a possessory security 
                        interest in tangible goods physically delivered 
                        by the consumer to the pawn broker creditor, 
                        for which the consumer does not provide a 
                        written or electronic promise, order, or 
                        authorization to pay, or in any other manner 
                        authorize a debit of a deposit account, prior 
                        to or contemporaneously with the disbursement 
                        of the original proceeds and the creditor takes 
                        no security other than the goods and makes no 
                        effort to collect the credit.
            ``(3) Creditor.--Notwithstanding the definition of the term 
        `creditor' in section 103, the term `creditor'--
                    ``(A) means a person who makes or offers covered 
                loans; and
                    ``(B) includes--
                            ``(i) any affiliate of a creditor that 
                        offers or makes a covered loan, buys a whole or 
                        partial interest in a covered loan, arranges a 
                        covered loan for a third party, or acts as an 
                        agent for a third party in making a covered 
                        loan, regardless of whether approval, 
                        acceptance, or ratification by the third party 
                        is necessary to create a legal obligation for 
                        the third party; and
                            ``(ii) any other person or entity that is 
                        engaged in a transaction that is in substance a 
                        disguised covered loan or a subterfuge for the 
                        purpose of avoiding the requirements of this 
                        section.''.
    (b) Closing the Single Payment Loophole.--Section 903(9) of the 
Electronic Fund Transfer Act (15 U.S.C. 1693a(9)) is amended by 
striking ``to recur at substantially regular intervals''.
    (c) Remotely Created Checks Prohibited.--Section 905 of the 
Electronic Fund Transfer Act (15 U.S.C. 1693c) is amended by adding at 
the end the following new subsection:
    ``(d) Remotely Created Checks Prohibited.--
            ``(1) In general.--No person shall deposit, pay, obtain 
        payment with respect to, or otherwise negotiate a remotely 
        created check.
            ``(2) Remotely created check defined.--For purposes of this 
        subsection, the term `remotely created check' means a check 
        that--
                    ``(A) is not created by the financial institution 
                that holds the customer account from which the check is 
                to be paid; and
                    ``(B) does not bear a signature applied, or 
                purported to be applied, by the person from whose 
                account the check is to be paid.''.
    (d) Treatment of State Law.--No provision of this Act or any 
amendment made by this Act shall be construed as--
            (1) preempting any provision of State law, to the extent 
        that such State law provides greater protection to consumers 
        than is provided under such provision;
            (2) preventing any State from enacting any provision of law 
        that provides greater protection to consumers than is provided 
        under such provision;
            (3) authorizing covered loans to be made in a State where 
        they are otherwise not permitted under State law; or
            (4) authorizing an extension of credit at an annual 
        percentage rate that would be prohibited by applicable State 
        law.
    (e) Unenforceability of Contracts.--No contract made in violation 
of this Act or any amendment made by this Act may be enforced with 
respect to any consumer.
    (f) Definitions.--For purposes of this Act, the terms ``consumer'' 
and ``covered loan'' shall have the meaning given those terms under the 
Truth in Lending Act.
    (g) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act is amended by inserting after section 129 the 
follow new items:

``129A. Duty of servicers of residential mortgages.
``129B. Covered lending.''.
    (h) Effective Date.--The amendments made by this Act shall take 
effect at the end of the 180-day period beginning on the date of the 
enactment of this Act and shall apply to all covered loans initiated on 
or after such date.