I 

111TH CONGRESS 

1ST SESSION H. R. 2309 

To provide authority to the Federal Trade Commission to expedite 

rulemakings concerning consumer credit or debt and to direct the Commission to examine and promulgate rules with regard to debt settlement 

and automobile sales, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 7, 2009 

Mr. RUSH (for himself, Ms. SCHAKOWSKY, and Ms. MATSUI) introduced the 

following bill; which was referred to the Committee on Energy and Commerce 

A BILL 

To provide authority to the Federal Trade Commission to 

expedite rulemakings concerning consumer credit or debt 

and to direct the Commission to examine and promulgate 

rules with regard to debt settlement and automobile 

sales, 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 and 

5 Debt Protection Act’’. 


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1 SEC. 2. FTC RULEMAKING RELATING TO CREDIT OR DEBT. 

2 (a) EXPEDITED RULEMAKING.—Section 18 of the 

3 Federal Trade Commission Act (15 U.S.C. 57a) is amend4 ed by adding at the end the following new subsection: 

5 ‘‘(k) Notwithstanding any other procedures set forth 

6 in this section or section 22, for any rulemaking relating 

7 to consumer credit or debt, the Commission shall conduct 

8 such rulemaking in accordance with section 553 of title 

9 5, United States Code, and the provisions for judicial re10 view of rules promulgated in accordance such section shall 

11 apply to any rule promulgated in such a rulemaking.’’. 

12 (b) SPECIFIC RULEMAKINGS.— 

13 (1) DEBT SETTLEMENT.— 

14 (A) IN GENERAL.—The Federal Trade 

15 Commission shall examine the practices of pro16 viders of debt settlement services and prescribe 

17 such rules as the Commission determines nec18 essary (in accordance with section 553 of title 

19 5, United States Code) in order to prevent un20 fair and deceptive acts or practices of providers 

21 of such services. The Commission shall consider 

22 adopting rules that— 

23 (i) prohibit the charging of fees to 

24 consumers prior to any debt settlement 

25 service being fully rendered and limiting 


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1 fees that may be charged after a settle2 ment with a creditor is reached; and 

3 (ii) require disclosures before a con4 tract is signed regarding the fee structure, 

5 expected time frames for a successful set6 tlement, success rate of debtors in settling 

7 their debts, information about creditor par8 ticipation in settlement plans, and the po9 tential impact on a consumer’s credit 

10 score. 

11 (B) DEFINITION.—For purposes of sub12 paragraph (A), the term ‘‘debt settlement serv13 ice’’ means a commercial service provided to as14 sist consumers in managing and repaying con15 sumer debt, including the offering of advice or 

16 acting as an intermediary between a debtor and 

17 one or more of the debtor’s creditors, where the 

18 primary purpose of the advice or action is to 

19 obtain a settlement for less than the full 

20 amount of debt owed. 

21 (2) AUTOMOBILE SALES.—The Federal Trade 

22 Commission shall examine the practices of auto23 mobile dealers with respect to credit and lending and 

24 shall prescribe such rules as the Commission deter25 mines necessary (in accordance with section 553 of 


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1 title 5, United States Code) in order to prevent un2 fair and deceptive acts or practices of such dealers. 

3 The Commission shall consider adopting rules 

4 that— 

5 (A) restrict post-sale changes in financing 

6 terms; 

7 (B) require that automobile purchase 

8 agreements or sales contracts entered into be9 tween a consumer and an automobile dealer in10 clude a provision which permits the consumer 

11 to cancel the transaction within a specified pe12 riod following the sale or receipt of final infor13 mation concerning the terms of the sale or fi14 nancing; and 

15 (C) limit the ability of automobile dealers 

16 to accept or solicit compensation that is based 

17 on the interest rate, annual percentage rate, or 

18 the amount financed with respect to the sale of 

19 an automobile and that is either— 

20 (i) for the provision, procurement, or 

21 arrangement of financing; or 

22 (ii) for the sale, assignment, or trans23 fer of the installment sale contract. 

24 (c) DEADLINE FOR RULEMAKINGS.—The Commis25 sion shall commence the rulemakings required under subVerDate Nov 24 2008 21:14 May 08, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2309.IH H2309

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1 section (b) within 6 months after the date of enactment 

2 of this Act. 

3 SEC. 3. AUTHORITY TO OBTAIN CIVIL PENALTIES IN CON4 NECTION WITH UNFAIR AND DECEPTIVE 

5 ACTS OR PRACTICES RELATING TO CON6 SUMER CREDIT OR DEBT. 

7 Section 5(m)(1) of the Federal Trade Commission 

8 Act (15 U.S.C. 45(m)(1)) is amended— 

9 (1) by redesignating subparagraph (C) as sub10 paragraph (D), and in such subparagraph (as so re11 designated), by striking ‘‘subparagraphs (A) and 

12 (B)’’ and inserting ‘‘subparagraphs (A), (B), and 

13 (C)’’; and 

14 (2) by inserting after subparagraph (B) the fol15 lowing new subparagraph: 

16 ‘‘(C) The Commission may commence a 

17 civil action to recover a civil penalty in a dis18 trict court of the United States against any 

19 person, partnership, or corporation which en20 gages in any unfair or deceptive acts or prac21 tices in connection with consumer credit or debt 

22 with actual knowledge or knowledge fairly im23 plied on the basis of objective circumstances 

24 that such an act is unfair or deceptive. In such 

25 action, such person, partnership, or corporation 


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1 shall be liable for a civil penalty as provided in 

2 subparagraph (A).’’. 

3 SEC. 4. ENFORCEMENT BY STATE ATTORNEYS GENERAL. 

4 (a) IN GENERAL.—Except as provided in subsection 

5 (f), a State, as parens patriae, may bring a civil action 

6 on behalf of its residents in an appropriate State or dis7 trict court of the United States to enforce the provisions 

8 of the Federal Trade Commission Act or any other Act 

9 enforced by the Federal Trade Commission to obtain pen10 alties and relief provided under such Acts whenever the 

11 attorney general of the State has reason to believe that 

12 the interests of the residents of the State have been or 

13 are being threatened or adversely affected by a violation 

14 of a rule prescribed under section 2(b) or any other rule 

15 relating to consumer credit or debt promulgated by the 

16 Federal Trade Commission. 

17 (b) NOTICE.—The State shall serve written notice to 

18 the Commission of any civil action under subsection (a) 

19 at least 60 days prior to initiating such civil action. The 

20 notice shall include a copy of the complaint to be filed 

21 to initiate such civil action, except that if it is not feasible 

22 for the State to provide such prior notice, the State shall 

23 provide notice immediately upon instituting such civil ac24 tion. 


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1 (c) INTERVENTION BY FTC.—Upon receiving the no2 tice required by subsection (b), the Commission may inter3 vene in such civil action and upon intervening— 

4 (1) be heard on all matters arising in such civil 

5 action; 

6 (2) remove the action to the appropriate United 

7 States district court; and 

8 (3) file petitions for appeal of a decision in such 

9 civil action. 

10 (d) SAVINGS CLAUSE.—Nothing in this section shall 

11 prevent the attorney general of a State from exercising 

12 the powers conferred on the attorney general by the laws 

13 of such State to conduct investigations or to administer 

14 oaths or affirmations or to compel the attendance of wit15 nesses or the production of documentary and other evi16 dence. Nothing in this section shall prohibit the attorney 

17 general of a State, or other authorized State officer, from 

18 proceeding in State or Federal court on the basis of an 

19 alleged violation of any civil or criminal statute of that 

20 State. 

21 (e) VENUE; SERVICE OF PROCESS; JOINDER.—In a 

22 civil action brought under subsection (a)— 

23 (1) the venue shall be a judicial district in 

24 which the lender or a related party operates or is au25 thorized to do business; 


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1 (2) process may be served without regard to the 

2 territorial limits of the district or of the State in 

3 which the civil action is instituted; and 

4 (3) a person who participated with a lender or 

5 related party to an alleged violation that is being 

6 litigated in the civil action may be joined in the civil 

7 action without regard to the residence of the person. 

8 (f) PREEMPTIVE ACTION BY FTC.—Whenever a civil 

9 action or an administrative action has been instituted by 

10 or on behalf of the Commission for violation of any rule 

11 described under subsection (a), no State may, during the 

12 pendency of such action instituted by or on behalf of the 

13 Commission, institute a civil action under subsection (a) 

14 against any defendant named in the complaint in such ac15 tion for violation of any rule as alleged in such complaint. 

16 (g) AWARD OF COSTS AND FEES.—If the attorney 

17 general of a State prevails in any civil action under sub18 section (a), the State can recover reasonable costs and at19 torney fees from the lender or related party. 

Æ 


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