I 

118TH CONGRESS 

2D SESSION H. R. 8338 

To regulate small-dollar, short-term credit products, to protect the privacy 

of lenders, and to improve the unfair, deceptive, or abusive acts or 

practices authority of the Bureau of Consumer Financial Protection, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 10, 2024 

Mrs. KIM of California introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To regulate small-dollar, short-term credit products, to protect the privacy of lenders, and to improve the unfair, 

deceptive, or abusive acts or practices authority of the 

Bureau of Consumer Financial Protection, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Clarity in Lending Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—SMALL-DOLLAR CREDIT PRODUCTS 

Sec. 101. Safe harbor for small-dollar credit products. 

TITLE II—RECTIFYING UNDEFINED DESCRIPTIONS OF ABUSIVE 

ACTS AND PRACTICES 

Sec. 201. Mitigating factors in assessing civil penalties. 

Sec. 202. Rulemaking relating to unfair, deceptive or abusive acts or practices. 

Sec. 203. Authority to declare an act unlawful based on discrimination or service as government contractor. 

Sec. 204. Clarifying the abusive standard for the Bureau of Consumer Financial Protection. 

Sec. 205. Notice and opportunity to cure. 

Sec. 206. Abusive, unfair, or deceptive acts or practices enforcement actions. 

Sec. 207. Look-back provisions for the Bureau of Consumer Financial Protection. 

TITLE III—SMALL LENDERS EXEMPT FROM NEW DATA AND 

EXCESSIVE REPORTING 

Sec. 301. Small business loan data collection. 

TITLE IV—BANK LOAN PRIVACY 

Sec. 401. Rulemaking requirement. 

1 TITLE I—SMALL-DOLLAR 

2 CREDIT PRODUCTS 

3 SEC. 101. SAFE HARBOR FOR SMALL-DOLLAR CREDIT 

4 PRODUCTS. 

5 (a) IN GENERAL.—The Truth in Lending Act (15 

6 U.S.C. 1601 et seq.) is amended by inserting after section 

7 109 the following: 

8 ‘‘§ 110. Safe harbor for small-dollar credit products 

9 ‘‘(a) IN GENERAL.—If a covered entity complies with 

10 the requirements set forth in subsections (b), (c), and (e) 

11 with respect to the offering of a small-dollar product to 

12 a consumer, such covered entity shall not be liable in con13 nection with such offering of a small-dollar product, for— 


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1 ‘‘(1) any civil money penalties from any en2 forcement action brought by the Bureau, the appro3 priate Federal banking agency, or the National 

4 Credit Union Administration for a violation of this 

5 title; or 

6 ‘‘(2) any damages or other monetary relief 

7 through a private right of action brought under this 

8 title. 

9 ‘‘(b) PRODUCT STRUCTURE REQUIREMENTS.— 

10 ‘‘(1) IN THE CASE OF AN INSTALLMENT

11 LOAN.—If a small-dollar credit product is structured 

12 by a covered entity as an installment loan— 

13 ‘‘(A) the repayment term shall be more 

14 than 45 days; 

15 ‘‘(B) payments shall be fully amortized 

16 across more than one payment; 

17 ‘‘(C) rollovers into new small-dollar credit 

18 products shall be prohibited; and 

19 ‘‘(D) the covered entity may not issue any 

20 small-dollar credit product to a consumer if 

21 such consumer has a small-dollar credit product 

22 open with such covered entity at the time such 

23 consumer applies for a small-dollar credit prod24 uct. 


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1 ‘‘(2) IN THE CASE OF A LINE OF CREDIT.—If 

2 a small-dollar credit product is structured by a cov3 ered entity as a line of credit— 

4 ‘‘(A) the repayment term for each draw 

5 shall be more than 45 days unless a single pay6 ment is used and the draw is not more than 10 

7 percent of the lesser of $3,500 or 20 percent of 

8 the total amount of a consumer’s average 

9 monthly direct deposits during the preceding six 

10 months; and 

11 ‘‘(B) payments for each draw shall be fully 

12 amortized across more than one payment, ex13 cept in the case of any single-payment loans. 

14 ‘‘(3) RULES OF CONSTRUCTION.— 

15 ‘‘(A) IN GENERAL.—Nothing in this sub16 section may be construed to prohibit the Bu17 reau, a Federal banking agency, or the National 

18 Credit Union Administration from issuing a 

19 cease-and-desist order or restitution order 

20 under this title against a covered entity. 

21 ‘‘(B) ENFORCEMENT OF OTHER STAT22 UTES.—Nothing in this subsection may be con23 strued to prohibit the Bureau, a Federal bank24 ing agency, or the National Credit Union Ad25 ministration from enforcing any provision of 


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1 law not contained within this title against a 

2 covered entity. 

3 ‘‘(c) UNDERWRITING REQUIREMENTS.—When con4 sidering whether to offer a small-dollar credit product to 

5 a specific consumer, a covered entity— 

6 ‘‘(1) shall use sound underwriting processes; 

7 and 

8 ‘‘(2) may analyze internal or external data 

9 sources, including consumer deposit account activity, 

10 to assess the creditworthiness of a consumer. 

11 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this title 

12 may be construed to prohibit a covered entity from offer13 ing a small-dollar product that does not comply with the 

14 safe harbor requirements set forth under this section. 

15 ‘‘(e) ADDITIONAL LIMITATIONS AND REQUIRE16 MENTS.— 

17 ‘‘(1) BALLOON PAYMENTS.—No payment re18 quired in association with a small-dollar credit prod19 uct offered by a covered entity may be greater than 

20 double the amount of any other payment required in 

21 association with such product. 

22 ‘‘(2) DISCLOSURES.—Each covered entity that 

23 offers a small-dollar credit product shall comply with 

24 all disclosure requirements set forth by this title. 


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1 ‘‘(3) PENALTIES AND FEES.—A covered entity 

2 may not impose any prepayment penalty, overdraft 

3 fee, or nonsufficient funds fee in connection with a 

4 small-dollar credit product. 

5 ‘‘(4) TRANSFER OF AMOUNTS.—Amounts made 

6 available to a consumer through a small-dollar credit 

7 product offered by a covered entity shall be dis8 bursed to the account of such consumer by such cov9 ered entity not later than 5 days after the approval 

10 of the consumer for the small-dollar credit product. 

11 ‘‘(f) DEFINITIONS.—In this section: 

12 ‘‘(1) COVERED ENTITY.—The term ‘covered en13 tity’ means— 

14 ‘‘(A) an insured depository institution; 

15 ‘‘(B) an insured credit union; 

16 ‘‘(C) a third-party with whom an insured 

17 depository institution has contracted for prod18 ucts or services related to origination, servicing, 

19 or administrative management of a small-dollar 

20 credit product; or 

21 ‘‘(D) a third-party with whom an insured 

22 credit union has contracted for products or 

23 services related to origination, servicing, or ad24 ministrative management of a small-dollar cred25 it product. 


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1 ‘‘(2) FEDERAL BANKING AGENCY DEFINI2 TIONS.—The terms ‘appropriate Federal banking 

3 agency’ and ‘Federal banking agency’ have the 

4 meaning given those terms, respectively, in section 3 

5 of the Federal Deposit Insurance Act. 

6 ‘‘(3) INSURED CREDIT UNION.—The term ‘in7 sured credit union’ has the meaning given the term 

8 in section 101 of the Federal Credit Union Act. 

9 ‘‘(4) INSURED DEPOSITORY INSTITUTION.—The 

10 term ‘insured depository institution’ has the mean11 ing given the term in section 3 of the Federal De12 posit Insurance Act. 

13 ‘‘(5) SMALL-DOLLAR CREDIT PRODUCT.—The 

14 term ‘small-dollar product’ means a loan or line of 

15 credit with a value of $3,500 or less.’’. 

16 (b) CLERICAL AMENDMENT.—The table of contents 

17 for chapter 1 of the Truth in Lending Act is amended 

18 by striking the item relating to section 110 and inserting 

19 the following: 

‘‘110. Safe harbor for Small-dollar credit products.’’. 


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1 TITLE II—RECTIFYING UNDE2 FINED DESCRIPTIONS OF 

3 ABUSIVE ACTS AND PRAC4 TICES 

5 SEC. 201. MITIGATING FACTORS IN ASSESSING CIVIL PEN6 ALTIES. 

7 Section 1055(c) of the Consumer Financial Protec8 tion Act of 2010 (12 U.S.C. 5565(c)) is amended by add9 ing at the end the following: 

10 ‘‘(6) RULEMAKING.—The Bureau shall, not 

11 later than 180 days after the date of the enactment 

12 of this paragraph, issue a rule that establishes poli13 cies and procedures relating to the imposition of civil 

14 monetary penalties sought under this subsection, in15 cluding the application of the mitigating factors de16 scribed in paragraph (3).’’. 

17 SEC. 202. RULEMAKING RELATING TO UNFAIR, DECEPTIVE 

18 OR ABUSIVE ACTS OR PRACTICES. 

19 (a) IN GENERAL.—Section 1031 of the Consumer Fi20 nancial Protection Act of 2010 (12 U.S.C. 5531) is 

21 amended by striking subsection (b) and inserting the fol22 lowing: 

23 ‘‘(b) RULEMAKING.— 

24 ‘‘(1) IN GENERAL.—The Bureau may prescribe 

25 rules applicable to a covered person or service proVerDate Sep 11 2014 00:40 May 11, 2024 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8338.IH H8338

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1 vider identifying as unlawful unfair, deceptive, or 

2 abusive acts or practices in connection with any 

3 transaction with a consumer for a consumer finan4 cial product or service, or the offering of a consumer 

5 financial product or service. Rules under this section 

6 may include requirements for the purpose of pre7 venting such acts or practices. 

8 ‘‘(2) COST-BENEFIT ANALYSIS REQUIRED.— 

9 Any final rule issued by the Bureau relating to abu10 sive, unfair, or deceptive acts or practices shall in11 clude a cost-benefit analysis. 

12 ‘‘(3) DEFINITION OF ABUSIVE ACT OR PRAC13 TICE.—The Bureau shall, not later than 180 days 

14 after the date of the enactment of this subsection, 

15 issue a rule that defines the term ‘abusive act or 

16 practice’ for the purposes of this section.’’. 

17 (b) OPPORTUNITY FOR COMMENT.—The Bureau of 

18 Consumer Financial Protection shall, not later than 180 

19 days after the date of the enactment of this subsection, 

20 allow the public to submit comments with respect to any 

21 confusion about how the Bureau of Consumer Financial 

22 Protection uses its authority with respect to unfair, decep23 tive, or abusive acts or practices. 


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1 SEC. 203. AUTHORITY TO DECLARE AN ACT UNLAWFUL 

2 BASED ON DISCRIMINATION OR SERVICE AS 

3 GOVERNMENT CONTRACTOR. 

4 Section 1031 of the Consumer Financial Protection 

5 Act of 2010 (12 U.S.C. 5531) is amended by adding at 

6 the end the following: 

7 ‘‘(h) AUTHORITY TO DECLARE AN ACT UNLAWFUL

8 BASED ON DISCRIMINATION OR SERVICE AS GOVERN9 MENT CONTRACTOR.—The Bureau may not interpret the 

10 authority of the Bureau relating to unfair, deceptive, or 

11 abusive acts and practices to include— 

12 ‘‘(1) discriminatory practices; or 

13 ‘‘(2) acts or practices by a covered person per14 forming the acts or practices pursuant to and in 

15 compliance with a contract with a Federal agency 

16 (as defined under section 701(b) of title 5, United 

17 States Code).’’. 

18 SEC. 204. CLARIFYING THE ABUSIVE STANDARD FOR THE 

19 BUREAU OF CONSUMER FINANCIAL PROTEC20 TION. 

21 Section 1031 of the Consumer Financial Protection 

22 Act of 2010 (12 U.S.C. 5531) is amended— 

23 (1) by redesignating subsections (e) and (f) as 

24 subsections (f) and (g); and 

25 (2) by striking subsection (d) and inserting the 

26 following: 


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1 ‘‘(d) ABUSIVE.— 

2 ‘‘(1) IN GENERAL.—The Bureau shall have no 

3 authority to declare an act or practice of a covered 

4 person abusive in connection with the provision of a 

5 consumer financial product or service, unless the act 

6 or practice— 

7 ‘‘(A) intentionally and materially interferes 

8 with the ability of a consumer to understand a 

9 term or condition of a consumer financial prod10 uct or service; or 

11 ‘‘(B) takes unreasonable advantage of— 

12 ‘‘(i) a lack of understanding by the 

13 consumer with respect to the possible im14 pact, material risks, costs, or conditions of 

15 the product or service, or the likelihood of 

16 the risks, costs, or conditions of the prod17 uct or service negatively affecting the con18 sumer; and 

19 ‘‘(ii) the reasonable reliance the con20 sumer places on an affirmative action or 

21 representation of such covered person to 

22 induce such consumer to rely on such ac23 tion or representation. 


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1 ‘‘(2) ABUSIVE ACTIONS.—An act or practice 

2 shall not be considered abusive if the act or prac3 tice— 

4 ‘‘(A) is also unfair or deceptive; or 

5 ‘‘(B) is otherwise prohibited by Federal 

6 consumer financial law. 

7 ‘‘(e) GOOD-FAITH EFFORT TO COMPLY.— 

8 ‘‘(1) IN GENERAL.—The Bureau may not seek 

9 monetary relief from a covered person under this 

10 section unless the covered person has not established 

11 by a preponderance of the evidence that they made 

12 a good-faith effort to comply. 

13 ‘‘(2) AUTHORITY TO SEEK LEGAL OR EQUI14 TABLE REMEDIES.—The limitation described in 

15 paragraph (1) shall not restrict the authority of the 

16 Bureau to seek legal or equitable remedies, such as 

17 damages and restitution, to redress an identifiable 

18 consumer injury caused by the abusive acts or prac19 tices of such covered person.’’. 

20 SEC. 205. NOTICE AND OPPORTUNITY TO CURE. 

21 Section 1031 of the Consumer Financial Protection 

22 Act of 2010 (12 U.S.C. 5531), as amended by section 403, 

23 is further amended by adding at the end the following: 

24 ‘‘(i) NOTICE AND OPPORTUNITY TO CURE.— 


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1 ‘‘(1) IN GENERAL.—If a covered person self2 identifies a potential unfair, deceptive, or abusive act 

3 or practice carried out by such covered person, the 

4 Bureau shall, not later than 90 days after such self5 identification, provide a written notice in the form of 

6 a potential action and request for response letter or 

7 a notice and opportunity to respond and advise let8 ter of the potential unfair, deceptive, or abusive act 

9 or practice to such covered person and inform the 

10 covered person that such person has 180 days after 

11 the date the covered person receives such notice to 

12 cure such potential unfair, deceptive, or abusive act 

13 before the Bureau may pursue other legal action. 

14 ‘‘(2) TOLLING OF STATUTE OF LIMITATIONS.— 

15 Any applicable statute of limitations that applies to 

16 conduct under which the Bureau has given notice 

17 and an opportunity to cure shall not toll until— 

18 ‘‘(A) the covered person cures the potential 

19 unfair, deceptive, or abusive act or practice and 

20 notifies the Bureau that such act or practice 

21 has been cured; 

22 ‘‘(B) the covered person notifies the Bu23 reau that such covered person will not cure the 

24 act or practice; or 

25 ‘‘(C) the 180-day period to cure ends.’’. 


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1 SEC. 206. ABUSIVE, UNFAIR, OR DECEPTIVE ACTS OR PRAC2 TICES ENFORCEMENT ACTIONS. 

3 (a) ACTIONS UNDER SECTION 1031.—Section 1031 

4 of the Consumer Financial Protection Act of 2010 (12 

5 U.S.C. 5531), as amended by section 405, is further 

6 amended by adding at the end the following: 

7 ‘‘(j) UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR

8 PRACTICES ENFORCEMENT ACTIONS.—Enforcement ac9 tions brought by the Bureau under this section shall be 

10 brought in— 

11 ‘‘(1) the United States district court located 

12 where the covered person has its headquarters loca13 tion; or 

14 ‘‘(2) the United States District Court for the 

15 District of Columbia. 

16 ‘‘(k) ENFORCEMENT ACTIONS.— 

17 ‘‘(1) IN GENERAL.—If the Bureau brings an 

18 enforcement action under this section, the Bureau 

19 shall state with particularity the circumstances that 

20 the Bureau alleges constitute a violation of this sec21 tion. 

22 ‘‘(2) ALTERNATIVE CLAIMS.—If the Bureau 

23 brings an enforcement action under this section— 

24 ‘‘(A) claiming that an activity is unfair or 

25 deceptive, the Bureau may not claim in the al26 ternative that the activity is abusive; and 


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1 ‘‘(B) claiming that an activity is abusive, 

2 the Bureau may not claim in the alternative 

3 that the activity is unfair or deceptive.’’. 

4 (b) CLERICAL AMENDMENT.—The table of contents 

5 in section 1(b) of the Dodd-Frank Wall Street Reform and 

6 Consumer Protection Act is amended by inserting after 

7 the item relating to section 1058 the following: 

‘‘Sec. 1059. Unfair, deceptive, or abusive acts or practices enforcement actions.’’. 

8 SEC. 207. LOOK-BACK PROVISIONS FOR THE BUREAU OF 

9 CONSUMER FINANCIAL PROTECTION. 

10 (a) IN GENERAL.—Subtitle B of title X of the Con11 sumer Financial Protection Act of 2010 (12 U.S.C. 5511 

12 et seq.) is amended by adding at the end the following 

13 new section: 

14 ‘‘SEC. 1029B. EXAMINATION PERIOD LIMITATIONS. 

15 ‘‘(a) IN GENERAL.—When enforcing Federal con16 sumer financial laws, the Bureau may not seek a civil 

17 money penalty for any violation that occurred prior to the 

18 most recent assignment of a consumer compliance rating 

19 that had not been identified in writing as a material find20 ing or supervisory concern at the time the rating was as21 signed. 

22 ‘‘(b) EXCEPTION IN CASES OF FRAUD OR A MATE23 RIAL MISREPRESENTATION.—Subsection (a) shall not 


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1 apply to a violation that involved fraud or a material mis2 representation. 

3 ‘‘(c) RULE OF CONSTRUCTION.—The limitation de4 scribed in subsection (a) may not be construed to restrict 

5 the ability of the Bureau to seek other forms of legal or 

6 equitable relief available under subparagraphs (A) through 

7 (G) of section 1055(a)(2).’’. 

8 (b) CLERICAL AMENDMENT.—The table of contents 

9 in section 1(b) of the Dodd-Frank Wall Street Reform and 

10 Consumer Protection Act is amended by inserting after 

11 the item relating to section 1029 the following: 

‘‘Sec. 1029B. Examination period limitations,’’. 

12 TITLE III—SMALL LENDERS EX13 EMPT FROM NEW DATA AND 

14 EXCESSIVE REPORTING 

15 SEC. 301. SMALL BUSINESS LOAN DATA COLLECTION. 

16 Section 704B of the Equal Credit Opportunity Act 

17 (15 U.S.C. 1691c–2) is amended— 

18 (1) in subsection (g), by adding at the end the 

19 following: 

20 ‘‘(4) COMPLIANCE.— 

21 ‘‘(A) IN GENERAL.—With respect to any 

22 rules or guidance issued under this subsection 

23 on or after the date of the enactment of this 

24 paragraph, the Bureau shall provide a financial 

25 institution a 3-year period to comply with such 


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1 rule or guidance, regardless of the date on 

2 which such financial institution began its oper3 ations. 

4 ‘‘(B) SAFE HARBOR.—With respect to any 

5 rules or guidance issued under this subsection 

6 on or after the date of the enactment of this 

7 paragraph, beginning on the date after the last 

8 day of the 3-year period described in subpara9 graph (A), the Bureau shall provide a 2-year 

10 safe harbor to financial institutions during 

11 which each such financial institution is required 

12 to comply with the rule or guidance but not 

13 subject to any penalties for failure to comply.’’; 

14 and 

15 (2) in subsection (h)— 

16 (A) by striking paragraph (1) and insert17 ing the following: 

18 ‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi19 nancial institution’ means— 

20 ‘‘(A) any partnership, company, corpora21 tion, association (incorporated or unincor22 porated), trust, estate, cooperative organization, 

23 or other entity that engages in any financial ac24 tivity; and 


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1 ‘‘(B) in each of the two calendar years pre2 ceding the first day of the safe harbor period 

3 described in subsection (g)(4)(B), originated 

4 not less than 500 credit transactions for small 

5 businesses.’’; and 

6 (B) by striking paragraph (2) and insert7 ing the following: 

8 ‘‘(2) SMALL BUSINESS.—The term ‘small busi9 ness’ means any entity with gross annual revenues 

10 of $1,000,000 or less in the most recently completed 

11 fiscal year preceding the first day of the safe harbor 

12 period described in subsection (g)(4)(B).’’. 

13 TITLE IV—BANK LOAN PRIVACY 

14 SEC. 401. RULEMAKING REQUIREMENT. 

15 Section 704B(e)(4) of the Equal Credit Opportunity 

16 Act (15 U.S.C. 1691c–2(e)(4)) is amended— 

17 (1) by striking ‘‘The Bureau may,’’ and insert18 ing: 

19 ‘‘(A) IN GENERAL.—The Bureau may,’’; 

20 and 

21 (2) by adding at the end the following: 

22 ‘‘(B) RULEMAKING REQUIREMENT.—The 

23 Bureau shall, before deleting or modifying data 

24 under this paragraph issue, through advance 

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1 scription of what modifications and deletions 

2 the Bureau intends to make to the data and 

3 how such modifications and deletions will ad4 vance a privacy interest.’’. 

Æ 


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