II 

109TH CONGRESS 

1ST SESSION S. 1040 

To amend the Truth in Lending Act to provide for enhanced disclosure 

under an open end credit plan. 

IN THE SENATE OF THE UNITED STATES 

MAY 16, 2005 

Mrs. FEINSTEIN introduced the following bill; which was read twice and 

referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL

To amend the Truth in Lending Act to provide for enhanced 

disclosure under an open end credit plan.

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 ‘‘Credit Card Minimum 

5 Payment Notification Act’’. 

6 SEC. 2. ENHANCED DISCLOSURE UNDER AN OPEN END 

7 CREDIT PLAN. 

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

9 U.S.C. 1637(b)) is amended by adding at the end the fol10 lowing: 
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1 ‘‘(13) ENHANCED DISCLOSURE UNDER AN

2 OPEN END CREDIT PLAN.— 

3 ‘‘(A) IN GENERAL.—A credit card issuer 

4 shall, with each billing statement provided to a 

5 cardholder in a State, provide the following on 

6 the front of the first page of the billing state7 ment in type no smaller than that required for 

8 any other required disclosure, but in no case in 

9 less than 8-point capitalized type: 

10 ‘‘(i) A written statement in the fol11 lowing form: ‘Minimum Payment Warning: 

12 Making only the minimum payment will in13 crease the interest you pay and the time it 

14 takes to repay your balance.’. 

15 ‘‘(ii) Either of the following: 

16 ‘‘(I) A written statement in the 

17 form of and containing the informa18 tion described in item (aa) or (bb), as 

19 applicable, as follows: 

20 ‘‘(aa) A written 3-line state21 ment, as follows: ‘A one thousand 

22 dollar ($1,000) balance will take 

23 17 years and 3 months to pay off 

24 at a total cost of two thousand 

25 five hundred ninety dollars and 
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1 thirty-five cents ($2,590.35). A 

2 two thousand five hundred dollar 

3 ($2,500) balance will take 30 

4 years and 3 months to pay off at 

5 a total cost of seven thousand 

6 seven hundred thirty-three dol7 lars and forty-nine cents 

8 ($7,733.49). A five thousand dol9 lar ($5,000) balance will take 40 

10 years and 2 months to pay off at 

11 a total cost of sixteen thousand 

12 three hundred five dollars and 

13 thirty-four cents ($16,305.34). 

14 This information is based on an 

15 annual percentage rate of 17 per16 cent and a minimum payment of 

17 2 percent or ten dollars ($10), 

18 whichever is greater.’. In the al19 ternative, a credit card issuer 

20 may provide this information for 

21 the 3 specified amounts at the 

22 annual percentage rate and re23 quired minimum payment that 

24 are applicable to the cardholder’s 

25 account. The statement provided 
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1 shall be immediately preceded by 

2 the statement required by clause 

3 (i). 

4 ‘‘(bb) Instead of the infor5 mation required by item (aa), re6 tail credit card issuers shall pro7 vide a written 3-line statement to 

8 read, as follows: ‘A two hundred 

9 fifty dollar ($250) balance will 

10 take 2 years and 8 months to 

11 pay off at a total cost of three 

12 hundred twenty-five dollars and 

13 twenty-four cents ($325.24). A 

14 five hundred dollar ($500) bal15 ance will take 4 years and 5 

16 months to pay off at a total cost 

17 of seven hundred nine dollars and 

18 ninety cents ($709.90). A seven 

19 hundred fifty dollar ($750) bal20 ance will take 5 years and 5 

21 months to pay off at a total cost 

22 of one thousand ninety-four dol23 lars and forty-nine cents 

24 ($1,094.49). This information is 

25 based on an annual percentage 
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1 rate of 21 percent and a min2 imum payment of 5 percent or 

3 ten dollars ($10), whichever is 

4 greater.’. In the alternative, a re5 tail credit card issuer may pro6 vide this information for the 3 

7 specified amounts at the annual 

8 percentage rate and required 

9 minimum payment that are appli10 cable to the cardholder’s account. 

11 The statement provided shall be 

12 immediately preceded by the 

13 statement required by clause (i). 

14 A retail credit card issuer is not 

15 required to provide this state16 ment if the cardholder has a bal17 ance of less than five hundred 

18 dollars ($500). 

19 ‘‘(II) A written statement pro20 viding individualized information indi21 cating an estimate of the number of 

22 years and months and the approxi23 mate total cost to pay off the entire 

24 balance due on an open-end credit 

25 card account if the cardholder were to 
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1 pay only the minimum amount due on 

2 the open-ended account based upon 

3 the terms of the credit agreement. 

4 For purposes of this subclause only, if 

5 the account is subject to a variable 

6 rate, the creditor may make disclo7 sures based on the rate for the entire 

8 balance as of the date of the disclo9 sure and indicate that the rate may 

10 vary. In addition, the cardholder shall 

11 be provided with referrals or, in the 

12 alternative, with the ‘800’ telephone 

13 number of the National Foundation 

14 for Credit Counseling through which 

15 the cardholder can be referred, to 

16 credit counseling services in, or closest 

17 to, the cardholder’s county of resi18 dence. The credit counseling service 

19 shall be in good standing with the Na20 tional Foundation for Credit Coun21 seling or accredited by the Council on 

22 Accreditation for Children and Family 

23 Services. The creditor is required to 

24 provide, or continue to provide, the in25 formation required by this clause only 
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1 if the cardholder has not paid more 

2 than the minimum payment for 6 con3 secutive months, beginning after July 

4 1, 2002. 

5 ‘‘(iii)(I) A written statement in the 

6 following form: ‘For an estimate of the 

7 time it would take to repay your balance, 

8 making only minimum payments, and the 

9 total amount of those payments, call this 

10 toll-free telephone number: (Insert toll-free 

11 telephone number).’. This statement shall 

12 be provided immediately following the 

13 statement required by clause (ii)(I). A 

14 credit card issuer is not required to provide 

15 this statement if the disclosure required by 

16 clause (ii)(II) has been provided. 

17 ‘‘(II) The toll-free telephone number 

18 shall be available between the hours of 8 

19 a.m. and 9 p.m., 7 days a week, and shall 

20 provide consumers with the opportunity to 

21 speak with a person, rather than a record22 ing, from whom the information described 

23 in subclause (I) may be obtained. 

24 ‘‘(III) The Federal Trade Commission 

25 shall establish not later than 1 month after 
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1 the date of enactment of this paragraph a 

2 detailed table illustrating the approximate 

3 number of months that it would take and 

4 the approximate total cost to repay an out5 standing balance if the consumer pays only 

6 the required minimum monthly payments 

7 and if no other additional charges or fees 

8 are incurred on the account, such as addi9 tional extension of credit, voluntary credit 

10 insurance, late fees, or dishonored check 

11 fees by assuming all of the following: 

12 ‘‘(aa) A significant number of 

13 different annual percentage rates. 

14 ‘‘(bb) A significant number of 

15 different account balances, with the 

16 difference between sequential exam17 ples of balances being no greater than 

18 $100. 

19 ‘‘(cc) A significant number of dif20 ferent minimum payment amounts. 

21 ‘‘(dd) That only minimum 

22 monthly payments are made and no 

23 additional charges or fees are incurred 

24 on the account, such as additional ex25 tensions of credit, voluntary credit in-
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1 surance, late fees, or dishonored check 

2 fees. 

3 ‘‘(IV) A creditor that receives a re4 quest for information described in sub5 clause (I) from a cardholder through the 

6 toll-free telephone number disclosed under 

7 subclause (I), or who is required to provide 

8 the information required by clause (ii)(II), 

9 may satisfy the creditor’s obligation to dis10 close an estimate of the time it would take 

11 and the approximate total cost to repay the 

12 cardholder’s balance by disclosing only the 

13 information set forth in the table described 

14 in subclause (III). Including the full chart 

15 along with a billing statement does not sat16 isfy the obligation under this paragraph. 

17 ‘‘(B) DEFINITIONS.—In this paragraph: 

18 ‘‘(i) OPEN-END CREDIT CARD AC19 COUNT.—The term ‘open-end credit card 

20 account’ means an account in which con21 sumer credit is granted by a creditor under 

22 a plan in which the creditor reasonably 

23 contemplates repeated transactions, the 

24 creditor may impose a finance charge from 

25 time to time on an unpaid balance, and the 
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1 amount of credit that may be extended to 

2 the consumer during the term of the plan 

3 is generally made available to the extent 

4 that any outstanding balance is repaid and 

5 up to any limit set by the creditor. 

6 ‘‘(ii) RETAIL CREDIT CARD.—The 

7 term ‘retail credit card’ means a credit 

8 card that is issued by or on behalf of a re9 tailer, or a private label credit card, that is 

10 limited to customers of a specific retailer. 

11 ‘‘(C) EXEMPTIONS.— 

12 ‘‘(i) MINIMUM PAYMENT OF NOT LESS

13 THAN TEN PERCENT.—This paragraph 

14 shall not apply in any billing cycle in which 

15 the account agreement requires a min16 imum payment of not less than 10 percent 

17 of the outstanding balance. 

18 ‘‘(ii) NO FINANCE CHARGES.—This 

19 paragraph shall not apply in any billing 

20 cycle in which finance charges are not im21 posed.’’.

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