I 

118TH CONGRESS 

2D SESSION H. R. 8356 

To amend the Truth in Lending Act to provide for a safe harbor for smalldollar credit products, 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 amend the Truth in Lending Act to provide for a safe 

harbor for small-dollar credit products, 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 ‘‘Small Dollar Loan 

5 Certainty Act’’. 

6 SEC. 2. SAFE HARBOR FOR SMALL-DOLLAR CREDIT PROD7 UCTS. 

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

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

10 109 the following: 


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

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

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

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

5 a consumer, such covered entity shall not be liable in con6 nection with such offering of a small-dollar product, for— 

7 ‘‘(1) any civil money penalties from any en8 forcement action brought by the Bureau, the appro9 priate Federal banking agency, or the National 

10 Credit Union Administration for a violation of this 

11 title; or 

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

13 through a private right of action brought under this 

14 title. 

15 ‘‘(b) PRODUCT STRUCTURE REQUIREMENTS.— 

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

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

18 by a covered entity as an installment loan— 

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

20 than 45 days; 

21 ‘‘(B) payments shall be fully amortized 

22 across more than one payment; 

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

24 products shall be prohibited; and 

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

26 small-dollar credit product to a consumer if 


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1 such consumer has a small-dollar credit product 

2 open with such covered entity at the time such 

3 consumer applies for a small-dollar credit prod4 uct. 

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

6 a small-dollar credit product is structured by a cov7 ered entity as a line of credit— 

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

9 shall be more than 45 days unless a single pay10 ment is used and the draw is not more than 10 

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

12 the total amount of a consumer’s average 

13 monthly direct deposits during the preceding six 

14 months; and 

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

16 amortized across more than one payment, ex17 cept in the case of any single-payment loans. 

18 ‘‘(3) RULES OF CONSTRUCTION.— 

19 ‘‘(A) IN GENERAL.—Nothing in this sub20 section may be construed to prohibit the Bu21 reau, a Federal banking agency, or the National 

22 Credit Union Administration from issuing a 

23 cease-and-desist order or restitution order 

24 under this title against a covered entity. 


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1 ‘‘(B) ENFORCEMENT OF OTHER STAT2 UTES.—Nothing in this subsection may be con3 strued to prohibit the Bureau, a Federal bank4 ing agency, or the National Credit Union Ad5 ministration from enforcing any provision of 

6 law not contained within this title against a 

7 covered entity. 

8 ‘‘(c) UNDERWRITING REQUIREMENTS.—When con9 sidering whether to offer a small-dollar credit product to 

10 a specific consumer, a covered entity— 

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

12 and 

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

14 sources, including consumer deposit account activity, 

15 to assess the creditworthiness of a consumer. 

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

17 may be construed to prohibit a covered entity from offer18 ing a small-dollar product that does not comply with the 

19 safe harbor requirements set forth under this section. 

20 ‘‘(e) ADDITIONAL LIMITATIONS AND REQUIRE21 MENTS.— 

22 ‘‘(1) BALLOON PAYMENTS.—No payment re23 quired in association with a small-dollar credit prod24 uct offered by a covered entity may be greater than 


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1 double the amount of any other payment required in 

2 association with such product. 

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

4 offers a small-dollar credit product shall comply with 

5 all disclosure requirements set forth by this title. 

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

7 may not impose any prepayment penalty, overdraft 

8 fee, or nonsufficient funds fee in connection with a 

9 small-dollar credit product. 

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

11 available to a consumer through a small-dollar credit 

12 product offered by a covered entity shall be dis13 bursed to the account of such consumer by such cov14 ered entity not later than 5 days after the approval 

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

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

17 ‘‘(1) COVERED ENTITY.—The term ‘covered en18 tity’ means— 

19 ‘‘(A) an insured depository institution; 

20 ‘‘(B) an insured credit union; 

21 ‘‘(C) a third party with whom an insured 

22 depository institution has contracted for prod23 ucts or services related to origination, servicing, 

24 or administrative management of a small-dollar 

25 credit product; or 


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1 ‘‘(D) a third party with whom an insured 

2 credit union has contracted for products or 

3 services related to origination, servicing, or ad4 ministrative management of a small-dollar cred5 it product. 

6 ‘‘(2) FEDERAL BANKING AGENCY DEFINI7 TIONS.—The terms ‘appropriate Federal banking 

8 agency’ and ‘Federal banking agency’ have the 

9 meaning given those terms, respectively, in section 3 

10 of the Federal Deposit Insurance Act. 

11 ‘‘(3) INSURED CREDIT UNION.—The term ‘in12 sured credit union’ has the meaning given the term 

13 in section 101 of the Federal Credit Union Act. 

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

15 term ‘insured depository institution’ has the mean16 ing given the term in section 3 of the Federal De17 posit Insurance Act. 

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

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

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

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

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

23 by striking the item relating to section 110 and inserting 

24 the following: 

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

Æ 


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