I 

113TH CONGRESS 

1ST SESSION H. R. 1566 

To create a Federal charter for Internet consumer credit corporations, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 15, 2013 

Mr. LUETKEMEYER (for himself and Mr. MEEKS) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To create a Federal charter for Internet consumer credit 

corporations, 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 Ac5 cess, Innovation, and Modernization Act’’. 

6 SEC. 2. FINDINGS; PURPOSE; AND INTENT. 

7 (a) FINDINGS.—Congress finds the following: 

8 (1) Studies by the Federal Deposit Insurance 

9 Corporation (FDIC), National Bureau of Economic 

10 Research, FINRA Investor Education Foundation, 


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1 and other credible parties have shown that roughly 

2 half of all American families, including not only 

3 lower and moderate income families but also a large 

4 segment of middle and higher income families who 

5 have poor credit scores and limited disposable in6 comes, are literally living paycheck-to-paycheck, 

7 lacking adequate savings and other resources to 

8 cover unplanned expenses that frequently arise in 

9 every household. 

10 (2) These consumers (in this Act referred to as 

11 ‘‘underserved consumers’’) include those who are 

12 ‘‘unbanked’’, having neither a checking or savings 

13 account at a depository institution, and those who 

14 are ‘‘underbanked’’, having such an account and fre15 quently having higher incomes but credit impair16 ments, while nonetheless needing to rely on non17 depository financial institutions for short-term, small 

18 loans and other credit products and financial serv19 ices they desperately need, but generally cannot ob20 tain from traditional banking institutions. 

21 (3) Credit alternatives for underserved con22 sumers generally are limited and often not well suit23 ed to their particular needs and in some instances 

24 lack any statutory consumer protections. 


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1 (4) Programs by the FDIC and other parties to 

2 expand access to small loans and other financial 

3 products or services for underserved consumers 

4 through banking institutions have had very limited 

5 success because banks, which typically have rel6 atively high operating costs, generally have been un7 able to make affordable small personal loans on a 

8 widespread, commercially viable basis to these higher 

9 risk consumers, most of whom may not even qualify 

10 for a loan under the high-credit standards regulators 

11 necessarily require insured depositories to maintain. 

12 (5) To the extent that depository institutions 

13 offer underserved consumers affordable small loans 

14 and other financial products or services on a com15 mercially viable basis, they should be encouraged to 

16 do so, but it must be recognized that overcoming the 

17 practical business obstacles for depositories to offer 

18 such products or services appears to be quite dif19 ficult at best for most depositories, and given the 

20 massive scope of the short-term credit needs of such 

21 consumers, depositories most likely will be unable to 

22 provide affordable small loans and other financial 

23 products or services for a significant number of 

24 them. 


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1 (6) Efforts of governmental, nonprofit, and pri2 vate sector institutions to help underserved con3 sumers manage their personal finances more effec4 tively through financial education and counseling 

5 programs also are important and must continue, but 

6 given the tremendous number of consumers who face 

7 significant ongoing financial challenges, most such 

8 underserved consumers are likely to be unable to 

9 overcome their financial difficulties through such ef10 forts. 

11 (7) Nondepository creditors historically have 

12 been primarily State-regulated, are not federally in13 sured, generally pose little or no systemic or tax14 payer risk, typically have lower operating costs and 

15 can employ less restrictive credit standards than de16 positories, and are a major source of small loans and 

17 financial products or services for underserved con18 sumers, providing such consumers annually with bil19 lions of dollars in credit. 

20 (8) A number of nondepository creditors have 

21 developed advanced proprietary loan underwriting 

22 and servicing procedures and cutting-edge tech23 nologies allowing them to offer credit to more under24 served consumers, but such creditors lack the au25 thority available to national banks to operate on a 


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1 multistate or nationwide basis using a single lending 

2 charter and subject to strong, uniform Federal regu3 lation that would enable them to maximize their ca4 pacities to operate more innovatively and efficiently. 

5 (9) Nondepository creditors are instead subject 

6 to widely differing State licensing laws that impose 

7 substantial cost and compliance burdens, and, more 

8 significantly, laws that severely limit the types of fi9 nancial products or services that may be offered, 

10 prevent loans from being provided on a commercially 

11 viable basis, stifle innovation, reduce competition, 

12 and leave underserved consumers with a limited 

13 choice of products or services that in many cases are 

14 not well suited to their personal needs and cost sig15 nificantly more because of these conflicting and out16 dated restrictive State laws. 

17 (10) It is in the national interest and will great18 ly benefit the millions of underserved consumers who 

19 have pressing needs for additional credit alternatives 

20 for Congress to adopt legislation to authorize credi21 tors the option of receiving a Federal charter under 

22 which they can provide such consumers loans and 

23 other financial products and services through the 

24 Internet and electronic devices and not traditional 

25 brick-and-mortar storefront locations, allowing them 


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1 to operate more innovatively and efficiently on a na2 tionwide basis. 

3 (11) An Internet consumer credit corporation 

4 chartered under this Act will be adequately regu5 lated under Federal laws and regulations prescribed 

6 by the Comptroller of the Currency and the Director 

7 of the Consumer Financial Protection Bureau, and 

8 such laws and regulations shall be enforced in ac9 cordance with this Act without such corporation 

10 being subjected to duplicative and conflicting State 

11 laws that in many cases severely and unnecessarily 

12 restrict product innovation and choice and raise the 

13 cost of the limited credit choices now available to un14 derserved consumers. 

15 (12) Allowing such federally regulated lending 

16 by Internet creditors as authorized by this Act 

17 through the Internet and by electronic devices, but 

18 not through traditional storefront, brick-and-mortar 

19 locations, on a nationwide basis, is consistent with 

20 the fact that consumers’ borrowing habits are shift21 ing rapidly to seeking more financial product and 

22 service choices with the convenience, ease of credit 

23 access, and more alternatives provided by computers, 

24 mobile phones, and other electronic devices, and mil25 lions of underserved consumers will be able to secure 


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1 credit from Internet consumer credit corporations 

2 that are subject to applicable State and Federal 

3 laws. 

4 (13) Small businesses, which are vital to job 

5 creation and the health of the Nation’s economy, 

6 also have a continuing need for additional credit al7 ternatives, and allowing Internet consumer credit 

8 corporations to offer certain financial products and 

9 services to small businesses through the Internet 

10 and by electronic devices will be in the national in11 terest. 

12 (b) PURPOSE AND INTENT.—The purpose and intent 

13 of this Act is to— 

14 (1) provide underserved consumers greater ac15 cess to innovative, affordable, commercially viable, 

16 and better suited financial products and services; 

17 (2) create a Federal charter for creditors that 

18 offer financial products or services through the 

19 Internet and electronic devices and not traditional 

20 brick-and-mortar storefront locations and focus their 

21 business primarily on meeting the credit needs of 

22 underserved consumers and small businesses, ena23 bling such Internet creditors to provide more innova24 tive, affordable, and appropriate credit options, sub25 ject to uniform Federal lending standards rather 


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1 than operating under the widely varying, often con2 flicting, overly restrictive, and unnecessarily costly 

3 system of State lending laws that currently prevent 

4 nondepository creditors from offering underserved 

5 consumers and small businesses the credit options 

6 they need; 

7 (3) clarify that Congress understands that even 

8 with the more innovative and efficient lending au9 thorized by this Act and reasonable pricing by Inter10 net consumer credit corporations, the cost of com11 mercially viable, short-term, small-dollar credit for 

12 higher risk underserved consumers typically will be 

13 considerably higher than the cost for other con14 sumers who have no credit impairments and that 

15 when the cost of such credit is expressed in terms 

16 of an annual percentage rate, in most cases such 

17 rate will be much higher than such rate for larger, 

18 longer term loans, especially those made to con19 sumers with unimpaired credit records, and there20 fore it should not be presumed or necessarily con21 cluded that such credit extensions to underserved 

22 consumers are unfair or abusive, provided full disclo23 sure of the cost of such credit is made as required 

24 by this Act and such corporation has a reasonable 

25 basis for determining that an underserved consumer 


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1 can repay, therefore indicating that the credit is af2 fordable; 

3 (4) require that the Comptroller exercise his or 

4 her authorities to administer, enforce, and imple5 ment the provisions of this Act and regulations pre6 scribed pursuant to this Act to provide for ongoing 

7 prudential regulatory oversight of Internet consumer 

8 credit corporations and to promptly adopt reasonable 

9 and flexible policies and procedures to ensure the ap10 proval of Federal charters for qualified applicants, 

11 while also promoting the offering of innovative, af12 fordable, and commercially viable financial products 

13 or services; and 

14 (5) require that the Director exercise his or her 

15 authorities to administer, enforce, and implement 

16 the provisions of Federal consumer financial laws 

17 and applicable provisions of this Act and regulations 

18 prescribed pursuant to this Act to ensure that un19 derserved consumers receive effective consumer fi20 nancial protections, while also promoting the offer21 ing of innovative, affordable, and commercially viable 

22 financial products or services. 

23 SEC. 3. INTERNET CONSUMER CREDIT CORPORATIONS. 

24 (a) FEDERAL CHARTER.—In accordance with the 

25 provisions of this Act, and regulations prescribed pursuant 


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1 to this Act, the Comptroller shall charter creditors which 

2 shall become Internet consumer credit corporations (here3 inafter referred to as ‘‘Internet creditors’’) to offer finan4 cial products or services primarily to underserved con5 sumers and small businesses as provided for in this Act. 

6 (b) APPLICATION REQUIRED.— 

7 (1) IN GENERAL.—A person that desires to ob8 tain a Federal charter under this Act shall submit 

9 an application to the Comptroller at such time, in 

10 such manner, and accompanied by such information 

11 as the Comptroller may require. 

12 (2) EXPEDITIOUS DETERMINATION.—The 

13 Comptroller shall make a determination as to wheth14 er an application submitted under paragraph (1) is 

15 approved or denied expeditiously. 

16 (c) REQUIREMENTS.—In seeking a Federal charter 

17 under this Act, an applicant shall meet the following re18 quirements: 

19 (1) A business plan shall be established cov20 ering at least the initial 3-year period of operation 

21 as a commercially viable entity with its primary 

22 business activities being to serve the needs of under23 served consumers and small businesses for credit 

24 and related financial services through the Internet 


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1 and electronic devices and not through brick-and2 mortar locations, and such plan shall— 

3 (A) realistically forecast market demand, 

4 the intended customer base, competition, eco5 nomic conditions, financial projections, and 

6 business risks; 

7 (B) include a marketing plan that de8 scribes the types of financial products or serv9 ices such creditor intends to offer, how it will 

10 market them, and how such products or serv11 ices are expected to be affordable for under12 served consumers and small businesses and 

13 commercially viable for the creditor; and 

14 (C) contain an acceptable plan for— 

15 (i) ensuring compliance with all appli16 cable laws and regulations; and 

17 (ii) for promptly addressing com18 plaints from underserved consumers and 

19 small businesses. 

20 (2) A competent and experienced management 

21 team of good moral character with expertise in and 

22 a commitment to serving the credit needs of under23 served consumers, experience in offering financial 

24 services products to consumers through the Internet 

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1 standing of applicable legal requirements shall be es2 tablished. 

3 (3) Adequate capital structure relative to the 

4 operational and financial assumptions and business 

5 plans of the applicant, including the cost of utilizing 

6 advanced technology and information management 

7 systems for its operating and compliance needs, shall 

8 be established. 

9 (4) No Internet creditor shall be directly or in10 directly owned or controlled by any person unless— 

11 (A) the person is an individual, a Federal12 or State-chartered depository institution, a 

13 bank holding company (as defined in section 

14 2(a) of the Bank Holding Company Act of 

15 1956 (12 U.S.C. 1841(a))), a savings and loan 

16 holding company (as defined in section 

17 10(a)(1)(D) of the Home Owners’ Loan Act 

18 (12 U.S.C. 1467a(a)(1)(D))), or a nonprofit 

19 corporation; or 

20 (B) the primary business activity of the 

21 person involves— 

22 (i) providing financial products or 

23 services to consumers; or 

24 (ii) owning or controlling persons 

25 whose primary business activity is proVerDate Mar 15 2010 03:26 Apr 20, 2013 Jkt 029200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H1566.IH H1566

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1 viding financial products or services to con2 sumers. 

3 (5) Any other requirements provided for under 

4 this Act or in regulations prescribed by the Comp5 troller consistent with the purposes of this Act. 

6 (d) AUTHORITY OF INTERNET CREDITORS.—Upon 

7 receiving a Federal charter pursuant to subsection (a), an 

8 Internet creditor shall become, as from the date of the 

9 execution of its charter, a body corporate, and, as such, 

10 an Internet consumer credit corporation, and in the name 

11 designated in the charter it is authorized to— 

12 (1) adopt and use a corporate seal; 

13 (2) have succession from the date its charter is 

14 issued until such time as it be dissolved by the act 

15 of its shareholders owning two-thirds of its stock, or 

16 until its charter is revoked by the Comptroller, or 

17 until terminated by an Act of Congress, or until its 

18 affairs are placed in the hands of a receiver and fi19 nally wound up by the receiver in accordance with 

20 title 11, United States Code, or other applicable law; 

21 (3) borrow money, issue stock, and enter into 

22 contracts; 

23 (4) sue and be sued and complain and defend, 

24 in any court of law and equity of competent jurisdic25 tion, as fully as natural persons; 


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1 (5) elect or appoint directors, and by its board 

2 of directors to appoint a president, vice president, 

3 and other officers, define their duties, require bonds 

4 of them and fix the penalty thereof, dismiss such of5 ficers or any of them at pleasure, and appoint others 

6 to fill their places; 

7 (6) prescribe, by its board of directors, bylaws 

8 not inconsistent with law, regulating the manner in 

9 which its stock shall be transferred, its directors 

10 elected or appointed, its officers appointed, its prop11 erty transferred, its general business conducted, and 

12 the privileges granted to it by law exercised and en13 joyed; 

14 (7) hire employees and consultants and fix their 

15 compensation, define their duties, and give such per16 sons appropriate authority to carry on its business 

17 operations; 

18 (8) enter into joint ventures and other business 

19 partnerships with other Internet creditors, deposi20 tory institutions, State-chartered or licensed non21 depository creditors, third-party service providers 

22 and vendors, and other parties to promote or facili23 tate providing as herein authorized commercially via24 ble financial products or services to underserved con25 sumers and small businesses; 


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1 (9) contribute to community funds, or to chari2 table, philanthropic, or benevolent instrumentalities 

3 conducive to public welfare, such sums as its board 

4 of directors may deem expedient and in the interests 

5 of the Internet creditor; 

6 (10) invest in, or buy or lease, real estate or 

7 tangible personal property, including vehicles, equip8 ment, furnishings and furniture, to be used by the 

9 Internet creditor in conducting business related op10 erations authorized under this Act; 

11 (11) provide loans and other financial services 

12 only through the Internet and electronic devices as 

13 its board of directors or duly authorized officers or 

14 agents may determine, in accordance with this Act 

15 and regulations prescribed pursuant to this Act, are 

16 appropriate for providing financial products or serv17 ices to consumers, including underserved consumers, 

18 and to small businesses in accordance with the pro19 visions of this Act and regulations prescribed pursu20 ant to this Act; 

21 (12) exercise by its board of directors or duly 

22 authorized officers or agents, subject to law, all such 

23 incidental, implied, or reasonably necessary powers 

24 as may be appropriate to carry on its corporate op25 erations and the business of providing commercially 


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1 viable financial products or services to consumers, 

2 including underserved consumers and small busi3 nesses in accordance with the provisions of this Act 

4 and regulations prescribed pursuant to this Act; 

5 (13) be affiliated with, or owned by, an insured 

6 depository institution, nondepository creditor, non7 profit organization, or other qualified entities unless 

8 otherwise limited by this Act or regulations pre9 scribed pursuant to this Act; 

10 (14) acquire or merge with other Internet credi11 tors; and 

12 (15) exercise such other powers as may be rea13 sonably necessary or appropriate to offer financial 

14 products or services as provided for pursuant to this 

15 Act, or provided for through regulations prescribed 

16 by the Comptroller pursuant to the provisions of this 

17 Act. 

18 (e) DUTIES AND RESPONSIBILITIES.— 

19 (1) COMPTROLLER OF THE CURRENCY.—The 

20 Comptroller shall— 

21 (A) ensure that Internet creditors only 

22 provide loans and other financial products or 

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1 ness operations on providing underserved con2 sumers a variety of affordable financial prod3 ucts or services that are commercially viable for 

4 such creditors, including certain products or 

5 services that contain features to facilitate per6 sonal savings and enhance the credit record of 

7 such consumers; 

8 (B) encourage and facilitate— 

9 (i) innovation with respect to the fi10 nancial products or services offered to un11 derserved consumers; and 

12 (ii) joint ventures and other business 

13 partnerships among Internet creditors, in14 sured depository institutions, other non15 depository creditors, third-party service 

16 providers and vendors, nonprofit organiza17 tions, and other parties in order to ensure 

18 greater credit access for underserved con19 sumers and small businesses; 

20 (C) provide, through regulations, details on 

21 how Internet creditors should be organized, in22 corporated, and operated in a prudential man23 ner; 

24 (D) conduct examination and supervisory 

25 activities of Internet creditors to— 


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1 (i) access their internal controls and 

2 management ability; 

3 (ii) evaluate their financial condition 

4 and risk profile; 

5 (iii) determine if they are meeting the 

6 needs of underserved consumers and small 

7 businesses; and 

8 (iv) monitor their compliance with this 

9 Act and other applicable laws and regula10 tions that the Comptroller may have ad11 ministrative responsibly for, and identify 

12 areas in which corrective action is needed; 

13 (E) consult, cooperate and coordinate, as 

14 appropriate, with the Director and with other 

15 Federal and State regulatory agencies, includ16 ing State bank supervisors, to promote much 

17 greater availability of innovative, affordable, 

18 commercially viable credit for underserved con19 sumers, and consistent regulatory treatment of 

20 consumer and small business financial products 

21 and services; 

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1 ducted in a coordinated and efficient manner; 

2 and 

3 (G) adopt adequate safeguards to ensure 

4 appropriate privacy and confidentiality protec5 tions with respect to individually identifiable 

6 personal data and proprietary corporate data. 

7 (2) DIRECTOR OF THE BUREAU OF CONSUMER

8 FINANCIAL PROTECTION.—The Director shall— 

9 (A) regulate the offering and provision of 

10 consumer financial products or services by 

11 Internet creditors under the Federal consumer 

12 financial laws pursuant to its authorities under 

13 the Dodd-Frank Wall Street Reform and Con14 sumer Protection Act (12 U.S.C. 5301 et seq.), 

15 this Act, and regulations prescribed pursuant to 

16 this Act; 

17 (B) consult, cooperate, and coordinate, as 

18 appropriate, with the Comptroller and with 

19 other Federal and State regulatory agencies, in20 cluding State bank supervisors, to promote— 

21 (i) much greater availability of inno22 vative, affordable, commercially viable 

23 credit for underserved consumers and 

24 small businesses; and 


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1 (ii) consistent regulatory treatment of 

2 consumer and small business financial 

3 products or services; 

4 (C) help ensure that the supervisory activi5 ties, including examination schedules, of Inter6 net creditors and affiliated companies are con7 ducted in a coordinated and efficient manner; 

8 and 

9 (D) adopt adequate safeguards to ensure 

10 appropriate privacy and confidentially protec11 tions with respect to individually identifiable 

12 personal data and proprietary corporate data. 

13 (3) INTERNET CREDITORS.—Each Internet 

14 creditor shall— 

15 (A) make financial education information 

16 available to each consumer it offers a financial 

17 product or service, including information on 

18 how a consumer may obtain financial coun19 seling services, the benefits of following a reg20 ular personal savings program, and how con21 sumers can improve their credit ratings; 

22 (B) comply with all applicable Federal laws 

23 and regulations, including Federal consumer fi24 nancial protection law requirements and such 

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1 tions as are authorized under the provisions of 

2 this Act; 

3 (C) provide account access to its customers 

4 through the Internet and a toll-free telephone 

5 number; 

6 (D) provide, in accordance with regulations 

7 prescribed pursuant to this Act, to all con8 sumers who are extended credit with a repay9 ment term of 1 year or less by the Internet 

10 creditor a clear and conspicuous statement in 

11 the loan agreement that discloses the true cost 

12 of the loan, including all interest, fees, and 

13 other loan-related charges, as a dollar amount 

14 and as a percentage of the principal amount of 

15 the loan in lieu of the annual percentage rate 

16 disclosure that otherwise would be required 

17 under the Truth in Lending Act (15 U.S.C. 

18 1601 et seq.) or regulations prescribed pursu19 ant to such Act; 

20 (E) report to the Comptroller or Director 

21 such data as either may require regarding its 

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1 cused primarily on serving underserved con2 sumers and small businesses as required by this 

3 Act; 

4 (F) offer— 

5 (i) an underserved consumer who is 

6 unable to repay an extension of credit by 

7 an Internet creditor that has a loan repay8 ment term of less than 120 days, an ex9 tended repayment plan, at no cost to the 

10 consumer, at least once in a 12-month pe11 riod; and 

12 (ii) to the extent reasonably possible, 

13 certain financial products or services that 

14 contain features to facilitate personal sav15 ings that could help underserved con16 sumers enhance their credit records if such 

17 consumers fully comply with the terms and 

18 conditions of such products or services; 

19 and 

20 (G) not— 

21 (i) accept consumer or commercial de22 posits; 

23 (ii) make commercial loans, except to 

24 the extent allowed by the provisions of this 


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1 Act and regulations prescribed pursuant to 

2 this Act, with respect to small businesses; 

3 (iii) make a consumer loan with a 

4 term of 30 days or less; 

5 (iv) make a loan that requires a con6 sumer to repay the loan balance in one 

7 lump-sum payment; or 

8 (v) extend credit to a consumer— 

9 (I) unless the Internet creditor 

10 has a reasonable basis for believing 

11 that the consumer will have the ability 

12 to repay the credit extension; 

13 (II) if the maximum principal 

14 amount of the credit outstanding from 

15 all financial products or services au16 thorized by the Internet creditor to 

17 such consumer, in the case of an un18 secured credit transaction, exceeds 

19 $5,000, or in the case of a secured 

20 credit transaction, $25,000, unless a 

21 higher amount is authorized by regu22 lations prescribed by the Comptroller; 

23 or 

24 (III) if the loan terms include a 

25 prepayment penalty; or 


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1 (vi) extend credit to a small business 

2 in excess of $25,000. 

3 (f) ADDITIONAL PRODUCT OR SERVICE OFFER4 INGS.—Financial products or services that may be offered 

5 to underserved consumers pursuant to this subsection for 

6 underserved consumers and certain small businesses may 

7 also be offered to other consumers and businesses. 

8 (g) RULE OF CONSTRUCTION.—Nothing in this Act 

9 is intended to provide the Comptroller or the Director with 

10 the authority to— 

11 (1) regulate financial products or services that 

12 are provided or offered by an affiliate company or 

13 another entity that the Internet creditor has a busi14 ness relationship with, but the Internet creditor does 

15 not provide or offer to underserved consumers or 

16 small businesses in accordance with this Act; 

17 (2) determine, directly or indirectly, pricing ap18 plicable to an extension of credit offered by an Inter19 net creditor to a consumer or small business pursu20 ant to this Act through a usury limit, a cap on the 

21 rate of interest, fees, or other charges, or otherwise; 

22 (3) prohibit, directly or indirectly, the offering 

23 of a financial product or service to underserved con24 sumers or small businesses by an Internet creditor 

25 pursuant to this Act unless a determination is made 


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1 by the Comptroller or Director, based on a fair and 

2 reasonable determination of the facts and cir3 cumstances regarding the financial product or serv4 ice, that offering such a product or service will seri5 ously harm the financial interests of underserved 

6 consumers or small businesses; or 

7 (4) presume or conclude that a credit extension 

8 offered to underserved consumers by an Internet 

9 creditor under the provisions of this Act, regulations 

10 prescribed by this Act, and such other statutes and 

11 regulations as either may have administrative and 

12 enforcement authority for is unfair, abusive, or oth13 erwise inappropriate solely on the basis that the in14 terest rates and other charges to such consumers, 

15 who typically pose relatively high credit risks, are 

16 significantly higher than those on credit extensions 

17 offered to other consumers who do not pose such 

18 high credit risks. 

19 (h) INTERNET CREDITOR REGULATORY FEE.—Each 

20 Internet creditor shall pay to the Comptroller an annual 

21 fee in a reasonable amount that the Comptroller deter22 mines is sufficient, in the aggregate of all such fees paid 

23 by Internet creditors, to offset the cost to the Comptroller 

24 of carrying out the provisions of this Act. 


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1 (i) CHARTER SUSPENSION OR REVOCATION.—The 

2 Comptroller, pursuant to procedures established in regula3 tions prescribed by the Comptroller, may suspend or re4 voke the charter of an Internet creditor if there has been 

5 a material failure by the Internet creditor to comply with 

6 the requirements set forth in the charter, provisions of this 

7 Act, or other applicable statutes, regulations, or orders. 

8 (j) RELATIONSHIP TO OTHER FEDERAL AND STATE

9 LAWS.— 

10 (1) FEDERAL LAW.—An Internet creditor is 

11 subject to— 

12 (A) all otherwise applicable provisions of 

13 Federal statutes and regulations, including the 

14 consumer financial laws listed under section 

15 1002(14) of the Consumer Financial Protection 

16 Act of 2010 (12 U.S.C. 5481(14)), section 987 

17 of title 10, United States Code (relating to con18 sumer credit extended to servicemembers and 

19 dependents), and the provisions of this Act and 

20 regulations established pursuant to this Act; 

21 and 

22 (B) the administration and enforcement of 

23 such statutes and regulations by the Comp24 troller, the Director, any other Federal agency, 


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1 or State attorney general (or the equivalent 

2 thereof) having enforcement authority. 

3 (2) STATE LAW.—An Internet creditor, or an 

4 employee, agent, or other business partner of an 

5 Internet creditor, shall not be subject to— 

6 (A) State laws that relate to office loca7 tion, licensing, education, or training that apply 

8 to the operations of an Internet creditor, or its 

9 employees, agents, or other business partners to 

10 the extent that these operations relate to the 

11 exercise of its powers or authorities under this 

12 Act and implementing regulations to provide fi13 nancial products or services to underserved con14 sumers and small businesses; or 

15 (B) other State laws that— 

16 (i) have a discriminatory effect on an 

17 Internet creditor compared to the effect of 

18 such laws on any other depository or non19 depository creditor chartered or licensed in 

20 that State; 

21 (ii) consistent with the legal standard 

22 for preemption in the decision of the Su23 preme Court of the United States in 

24 Barnett Bank of Marion County, N.A. v. 

25 Nelson, Florida Insurance Commissioner, 


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1 et al., 517 U.S. 25 (1996), prevent or sig2 nificantly interfere with the exercise by an 

3 Internet creditor of its powers and authori4 ties as set forth in this Act; or 

5 (iii) are preempted by any provision of 

6 Federal law. 

7 (3) DETERMINATION OF PREEMPTION.—An 

8 Internet creditor may challenge the applicability of a 

9 State law as preventing or significantly interfering 

10 with the exercise of such creditor’s powers under 

11 this Act, or for violating any provision of paragraph 

12 (2), in any court of competent jurisdiction, and the 

13 Comptroller or Director, by regulation or order, or 

14 any court of competent jurisdiction may make a de15 termination, on a case-by-case basis, that a State 

16 law prevents or significantly interferes with the exer17 cise of an Internet creditor’s powers under this Act, 

18 or violates a provision of paragraph (2), in accord19 ance with applicable law. 

20 (k) ENFORCEMENT.— 

21 (1) IN GENERAL.—The Comptroller or the Di22 rector may enforce in any court of competent juris23 diction the provisions of this Act, regulations pre24 scribed pursuant to this Act relating to their respec25 tive regulatory authority in this Act, and their reVerDate Mar 15 2010 03:26 Apr 20, 2013 Jkt 029200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\H1566.IH H1566

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1 spective cease and desist or other orders or regu2 latory requirements. 

3 (2) ACTION BY STATE.—The attorney general 

4 (or the equivalent thereof) of any State shall have 

5 the power to investigate violations of this Act and 

6 may bring a civil enforcement action in the name of 

7 such State against an Internet creditor in any dis8 trict court of the United States or in State court 

9 that has jurisdiction over the Internet creditor and 

10 to secure civil penalties and such other remedies 

11 under provisions of this Act or otherwise provided 

12 under other applicable law. 

13 (3) CONSULTATION REQUIRED.— 

14 (A) NOTICE.— 

15 (i) IN GENERAL.—When initiating any 

16 action in a court or other administrative or 

17 regulatory proceeding against any Internet 

18 creditor as authorized by this Act to en19 force any provision of this Act, including 

20 any regulation pursuant to this Act, a copy 

21 of the complete complaint filed or to be 

22 filed and written notice describing such ac23 tion or proceeding shall be provided to the 

24 Comptroller and the Director by the State 

25 attorney general (or the equivalent thereof) 


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1 prior to or immediately upon instituting 

2 the action or proceeding. 

3 (ii) CONTENTS OF NOTICE.—The noti4 fication required under this paragraph 

5 shall, at a minimum, describe— 

6 (I) the identity of the parties; 

7 (II) the alleged facts underlying 

8 the proceeding; and 

9 (III) whether there may be a 

10 need to coordinate the prosecution of 

11 the proceeding so as not to interfere 

12 with any action, including any rule13 making, undertaken by the Comp14 troller or the Director. 

15 (B) COMPTROLLER AND DIRECTOR RE16 SPONSE.—In any action brought by a State at17 torney general (or equivalent thereof), the 

18 Comptroller and Director may— 

19 (i) intervene in the action as a party; 

20 and 

21 (ii) upon intervening— 

22 (I) remove the action to the ap23 propriate United States district court, 

24 if the action was not originally 

25 brought there; 


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1 (II) be heard on all matters aris2 ing in the action; and 

3 (III) appeal any order or judg4 ment, to the same extent as any other 

5 party in the proceeding may. 

6 (4) REGULATIONS.—The Comptroller and the 

7 Director shall jointly prescribe regulations to imple8 ment the requirements of this subsection and, from 

9 time to time, consult with State attorneys general 

10 (or the equivalent thereof) in order to develop appro11 priate protocols to coordinate actions with the State 

12 attorneys general and other appropriate regulators. 

13 (5) PRESERVATION OF STATE AUTHORITY.—No 

14 provision of this Act shall be construed as modi15 fying, limiting, or superseding the operation of any 

16 provision of any Federal consumer financial protec17 tion law or regulations prescribed pursuant to such 

18 laws that relates to the authority of a State attorney 

19 general (or the equivalent thereof) to enforce such 

20 Federal law and regulations. 

21 (l) PENALTIES FOR VIOLATIONS.—The relief avail22 able for violations of provisions of this Act, regulations 

23 prescribed pursuant to this Act, or orders or supervisory 

24 mandates, including cease and desist orders, with respect 

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1 troller, the Director, or State attorneys general (or the 

2 equivalent thereof) shall be the same as or equivalent to 

3 that provided with respect to actions by the Director in 

4 section 1055 of the Dodd-Frank Wall Street Reform and 

5 Consumer Protection Act (12 U.S.C. 5565). 

6 (m) REPORTS TO CONGRESS.—Not later than 180 

7 days after the effective date of this Act, and annually for 

8 5 years thereafter, the Comptroller and the Director shall 

9 submit to Congress a joint report on their activities and 

10 progress in helping to expand access to innovative and af11 fordable credit for underserved consumers and small busi12 nesses, and such reports shall include— 

13 (1) a descriptive summary of the actions of the 

14 Comptroller and the Director during the reporting 

15 period to carry out the purposes of this Act; 

16 (2) the number of charter applications received 

17 by the Comptroller; 

18 (3) the number of charter applications that 

19 were approved, disapproved, conditionally approved, 

20 or are pending and a detailed explanation of each 

21 disapproval or conditional approval; 

22 (4) a description of any further actions the 

23 Comptroller or the Director believes should be un24 dertaken to— 


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1 (A) facilitate the chartering of qualified 

2 nondepository institutions; and 

3 (B) increase the number of financial prod4 ucts that are available to help increase competi5 tion and consumer choice for underserved con6 sumers; and 

7 (5) any recommendations the Comptroller or 

8 the Director may have regarding other legislative 

9 measures that would improve the ability of an Inter10 net creditor to provide additional financial products 

11 or services to underserved consumers or small busi12 nesses. 

13 (n) REGULATIONS.—The Comptroller and the Direc14 tor shall consult and prescribe joint regulations imple15 menting the provisions of this Act not later than 180 days 

16 after the effective date of this Act. 

17 SEC. 4. DEFINITIONS. 

18 In this Act: 

19 (1) AFFILIATE.—The term ‘‘affiliate’’ means 

20 any person that controls, is controlled by, or is 

21 under common control with another person. 

22 (2) AFFORDABLE.—The term ‘‘affordable’’ 

23 means that a creditor has a reasonable expectation 

24 that a consumer or small business will be able to 

25 repay an extension of credit. 


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1 (3) COMMERCIALLY VIABLE.—The term ‘‘com2 mercially viable’’ means that a reasonable economic 

3 profit is expected to be made when a financial prod4 uct or service is provided to a consumer or small 

5 business. 

6 (4) COMPTROLLER.—The term ‘‘Comptroller’’ 

7 means the Comptroller of the Currency. 

8 (5) CONSUMER.—The term ‘‘consumer’’ means 

9 an individual or agent, trustee, or representative act10 ing on behalf of an individual. 

11 (6) CONTROL AND CONTROLLED BY.—The 

12 terms ‘‘control’’ and ‘‘controlled by’’ mean that— 

13 (A) a person directly or indirectly or acting 

14 through 1 or more other persons owns, controls, 

15 or has power to vote 25 percent or more of any 

16 class of voting stock of a company; 

17 (B) a person controls in any manner the 

18 election of a majority of the directors or trust19 ees of a company; or 

20 (C) the Comptroller makes a determina21 tion, after notice and opportunity for hearing, 

22 that a person directly or indirectly exercises a 

23 controlling influence over the management or 

24 policies of a company. 


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1 (7) CREDIT.—The term ‘‘credit’’ means the 

2 right granted by a person to a consumer or a small 

3 business to defer payment of a debt, incur debt and 

4 defer its payment, or purchase property or services 

5 and defer payment for such purchase. 

6 (8) CREDITOR.—The term ‘‘creditor’’ has the 

7 same meaning as is given such term in section 

8 103(g) of the Truth in Lending Act (15 U.S.C. 

9 1602(g)), and for purposes of this Act, shall include 

10 a person who extends credit to a small business pur11 suant to the provisions of this Act. 

12 (9) DIRECTOR.—The term ‘‘Director’’ means 

13 the Director of the Bureau of Consumer Financial 

14 Protection. 

15 (10) ELECTRONIC DEVICE.—The term ‘‘elec16 tronic device’’ means an electronic device that com17 municates by any transfer of signs, signals, writing, 

18 images, sounds, data, or intelligence of any nature 

19 transmitted in whole or in part by a wire, radio, 

20 electromagnetic, photoelectronic, or photo-optical 

21 system that affects interstate or foreign commerce. 

22 (11) EXTENDED REPAYMENT PLAN.—The term 

23 ‘‘extended repayment plan’’ means an installment 

24 plan under which a consumer who is unable to repay 

25 a credit extension on a loan with a term of less than 


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1 120 days on the date due, and who complies with 

2 applicable requirements established in regulations 

3 pursuant to this Act, may repay a creditor the out4 standing balance of the loan in at least 4 substan5 tially equal payments without being charged any ad6 ditional interest, fees, or other charges. 

7 (12) FEDERAL CONSUMER FINANCIAL LAWS.— 

8 The term ‘‘Federal consumer financial laws’’ has the 

9 same meaning as is given to that term in section 

10 1002(14) of the Consumer Financial Protection Act 

11 of 2010 (12 U.S.C. 5481(14)). 

12 (13) FINANCIAL PRODUCT OR SERVICE.—The 

13 term ‘‘financial product or service’’ has the same 

14 meaning as is given the term ‘‘consumer financial 

15 product or service’’ in section 1002(5) of the Con16 sumer Financial Protection Act of 2010 (12 U.S.C. 

17 5481(5)), and for purposes of this Act, shall also in18 clude a financial product or service provided to a 

19 small business. 

20 (14) INSURED DEPOSITORY INSTITUTION AND

21 DEPOSITORY INSTITUTION.—The terms ‘‘insured de22 pository institution’’ and ‘‘depository institution’’ 

23 (also referred to herein as ‘‘depositories’’) have the 

24 same meanings as are given such terms under sec25 tion 3(c) of the Federal Deposit Insurance Act (12 


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1 U.S.C. 1813(c)), and for purposes of this Act, also 

2 includes an ‘‘insured credit union’’ as such term is 

3 defined under section 101(7) of the Federal Credit 

4 Union Act (12 U.S.C. 1752(7)). 

5 (15) INTERNET.—The term ‘‘Internet’’ means 

6 the international computer network of interoperable 

7 packet-switched data networks. 

8 (16) NONDEPOSITORY CREDITOR.—The term 

9 ‘‘nondepository creditor’’ means an entity that is 

10 chartered or licensed by a State and offers personal 

11 loans or other financial products or services to con12 sumers or small businesses, but does not accept con13 sumer or commercial deposits. 

14 (17) PERSON.—The term ‘‘person’’ means an 

15 individual, partnership, company, corporation, asso16 ciation (incorporated or unincorporated), trust, es17 tate, cooperative organization, or any other entity. 

18 (18) PRIMARY BUSINESS ACTIVITIES.—The 

19 term ‘‘primary business activities’’ means that the 

20 business activities of an Internet creditor predomi21 nately involve providing financial products and serv22 ices to underserved consumers and small businesses. 

23 (19) SECURED CREDIT TRANSACTION.—The 

24 term ‘‘secured credit transaction’’ means— 


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1 (A) a consumer credit transaction where 

2 the performance of the credit obligation is se3 cured by an interest in property; and 

4 (B) such transaction is recognized as se5 cured by State or Federal law, provided, how6 ever, a consumer’s authorization for an elec7 tronic fund transfer as a payment on a finan8 cial product or service shall not be considered, 

9 for purposes of this Act, as security on a credit 

10 transaction. 

11 (20) SMALL BUSINESS.—The term ‘‘small busi12 ness’’ means a business entity, including a sole pro13 prietorship, that has less than 500 full-time employ14 ees. 

15 (21) STATE.—The term ‘‘State’’ means— 

16 (A) a State, territory, or possession of the 

17 United States, the District of Columbia, the 

18 Commonwealth of Puerto Rico, the Common19 wealth of the Northern Mariana Islands, Guam, 

20 American Samoa, and the United States Virgin 

21 Islands. 

22 (22) UNDERSERVED CONSUMER.—The term 

23 ‘‘underserved consumer’’ means a natural person 

24 who— 


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1 (A) does not have a checking or savings 

2 account with an insured depository institution; 

3 or 

4 (B) has a deposit account with an insured 

5 depository institution, but has limited or no 

6 ability to obtain small personal loans or other 

7 nondepository financial products or services 

8 from an insured depository institution. 

9 (23) UNSECURED CREDIT TRANSACTION.—The 

10 term ‘‘unsecured credit transaction’’ means a con11 sumer credit transaction where the performance of 

12 the credit obligation is not secured by an interest in 

13 property or where the security interest is not recog14 nized by State or Federal law. 

15 SEC. 5. CONFORMING AMENDMENT TO TILA. 

16 Section 104 of the Truth in Lending Act (15 U.S.C. 

17 1603) is amended by adding at the end the following: 

18 ‘‘(8) Credit transactions involving extensions of 

19 credit with a term of 1 year or less in which the 

20 creditor provides consumers in all such credit trans21 actions with a clear and conspicuous statement in 

22 the loan agreement that discloses the true cost of 

23 the loan, including all interest, fees, and other loan 

24 related charges, as a dollar amount and as a per25 centage of the principal amount of the loan.’’. 


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1 SEC. 6. EFFECTIVE DATE. 

2 This Act shall be effective 180 days after the date 

3 of the enactment of this Act. 

Æ 


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