I 

109TH CONGRESS 

1ST SESSION H. R. 3492

To amend the Truth in Lending Act to protect consumers from unfair 

practices of credit card issuers, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 27, 2005

Mr. SANDERS (for himself, Mr. FRANK of Massachusetts, Mrs. MCCARTHY, 

and Ms. LEE) introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL

To amend the Truth in Lending Act to protect consumers 

from unfair practices of credit card issuers, and for 

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Consumer Credit Card 

5 Protection Act of 2005’’. 
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1 SEC. 2. PROHIBIT UNIVERSAL DEFAULTS ON CREDIT CARD 

2 ACCOUNTS. 

3 Section 127 of the Truth in Lending Act (15 U.S.C. 

4 1637) is amended by adding at the end the following new 

5 subsection: 

6 ‘‘(i) UNIVERSAL DEFAULTS PROHIBITED.—

7 ‘‘(1) IN GENERAL.—No creditor may use any 

8 adverse information concerning any consumer, in9 cluding any information in any consumer report (as 

10 defined in section 603) or any change in the credit 

11 score of the consumer, as the basis for increasing 

12 any annual percentage rate of interest applicable to 

13 a credit card account of the consumer under an open 

14 end consumer credit plan, or to remove or increase 

15 any introductory annual percentage rate of interest 

16 applicable to such account, for reasons other than 

17 actions or omissions of the consumer that are di18 rectly related to such account. 

19 ‘‘(2) NOTICE TO CONSUMER.—The limitation 

20 under paragraph (1) on the use of adverse informa21 tion by a credit card issuer shall be clearly and con22 spicuously described to the consumer by the credit 

23 card issuer in any disclosure or statement required 

24 under subsection (a) or (b).’’. 
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1 SEC. 3. BOX DISCLOSURE OF PAYMENT PERIOD FOR MIN2 IMUM PAYMENTS ON CREDIT CARD BALANCE. 

3 Section 127(b) of the Truth in Lending Act (15 

4 U.S.C. 1637(b)) is amended by adding at the end the fol5 lowing new paragraph: 

6 ‘‘(12) MINIMUM PAYMENT TERMS.—

7 ‘‘(A) IN GENERAL.—In a clear and con8 spicuous manner, repayment information appli9 cable with respect to any outstanding balance 

10 on the account, including the following ex11 pressed in a tabular format and in close prox12 imity: 

13 ‘‘(i) The required minimum monthly 

14 payment on that balance, represented as 

15 both a dollar figure and a percentage of 

16 the outstanding balance. 

17 ‘‘(ii) The number of months (rounded 

18 to the nearest month) that it would take to 

19 pay the entire amount of the current out20 standing balance if—

21 ‘‘(I) the consumer pays only the 

22 required minimum monthly payments 

23 (as in effect at the time such state24 ment is issued); and 
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1 ‘‘(II) no further advances or ex2 tensions of credit are made with re3 spect to such account. 

4 ‘‘(B) APPLICABLE TERMS.— 

5 ‘‘(i) APPLICABLE APR.—Subject to 

6 clause (ii), in making any determination 

7 required for purposes of the disclosures 

8 under subparagraph (A), the creditor shall 

9 apply any applicable annual percentage 

10 rate of interest in effect on the date on 

11 which the disclosure is made, taking into 

12 account the different rates that may be ap13 plicable with respect to different portions 

14 of the outstanding balance, without regard 

15 to whether any such rate is a fixed rate or 

16 a variable rate. 

17 ‘‘(ii) INTRODUCTORY RATE.—If the 

18 annual percentage rate of interest in effect 

19 on the date on which the disclosure is 

20 made is a temporary or introductory rate 

21 that will change pursuant to a contractual 

22 provision applying an index or formula for 

23 subsequent interest rate adjustment, the 

24 creditor shall apply— 
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1 ‘‘(I) the annual percentage rate 

2 of interest in effect on the date on 

3 which the disclosure is made, in mak4 ing a determination for the balance of 

5 the introductory or temporary period, 

6 and 

7 ‘‘(II) an annual percentage rate 

8 of interest, based on an index, for9 mula, or contractual provision that is, 

10 or but for the temporary or introduc11 tory rate referred to in subclause (I) 

12 would be, in effect as of the date on 

13 which the disclosure is made, in mak14 ing a determination for the remainder 

15 of the amortization period.’’. 

16 SEC. 4. ADVANCED NOTICE REQUIRED BEFORE INCREAS17 ING RATES OR FEES ON CREDIT CARD AC18 COUNTS. 

19 Section 127 of the Truth in Lending Act (15 U.S.C. 

20 1637) is amended by inserting after subsection (i) (as 

21 added by section 2 of this Act) the following new sub22 section: 

23 ‘‘(j) ADVANCE NOTICE OF INCREASE IN ANY INTER24 EST RATE AND IMPOSITION OF ANY FEE REQUIRED.—
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1 ‘‘(1) INTEREST RATES.—In the case of any 

2 credit card account under an open end consumer 

3 credit plan, no increase in any annual percentage 

4 rate of interest (other than an increase due to the 

5 expiration of any introductory percentage rate of in6 terest) applicable to such account, or any portion of 

7 any outstanding balance on such account—

8 ‘‘(A) may take effect before the beginning 

9 of the billing cycle which begins not less than—

10 ‘‘(i) 30 days after the obligor receives 

11 a specific notice of such increase in accord12 ance with paragraph (3), in the case of any 

13 change in any such annual percentage rate 

14 that is due solely to a change in another 

15 rate of interest to which such rate is in16 dexed; or 

17 ‘‘(ii) 60 days after the obligor receives 

18 a specific notice of such increase in accord19 ance with paragraph (3), in the case of any 

20 change in any such annual percentage rate 

21 that is not described in clause (i); and 

22 ‘‘(B) may, in the case of any change in any 

23 such annual percentage rate that is not de24 scribed in subparagraph (A)(i), apply to any 

25 outstanding balance of credit under such plan 
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1 as of the date of the notice of the increase re2 quired under subparagraph (A). 

3 ‘‘(2) FEES.—In the case of any credit card ac4 count under an open end consumer credit plan, no 

5 fee, including any annual fee, late payment fee, or 

6 over-the-limit fee, may be imposed on such account 

7 before the end of the 30-day period beginning on the 

8 date the obligor receives a specific notice of the im9 position of such fee in accordance with paragraph 

10 (3). 

11 ‘‘(3) NOTICE REQUIREMENTS.—

12 ‘‘(A) IN GENERAL.—Any notice required 

13 under this subsection shall be mailed (or e14 mailed, if the consumer has requested to receive 

15 such notices electronically) to the obligor sepa16 rately from any statement or other notice and 

17 without any advertising or other disclosures. 

18 ‘‘(B) FEE EXPLANATION.—In the case of 

19 any notice pursuant to paragraph (2), the no20 tice shall include an explanation of how, when, 

21 and why a fee will be imposed and what options 

22 the obligor may have for addressing the imposi23 tion of the fee or any reason for such imposi-
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1 tion, including the prevention of any future im2 position of such fee.’’.

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