I 

109TH CONGRESS 

2D SESSION H. R. 4866 

To promote responsibility by improving development education. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 2, 2006 

Mr. FORD introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committees on Financial 

Services, Education and the Workforce, and Judiciary, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To promote responsibility by improving development 

education. 

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 ‘‘Promote Responsibility 

5 by Improving Development Education Act of 2006’’. 

6 SEC. 2. TABLE OF CONTENTS. 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—CHARACTER EDUCATION 


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Sec. 101. Short title. 

Sec. 102. Increased funding for Partnerships in Character Education Program. 

Sec. 103. Model State character education curriculum. 

TITLE II—CHILDHOOD ADOPTION 

Sec. 201. Short title. 

Sec. 202. Increase in allowable expenses for adoption; adoption credit made refundable. 

Sec. 203. Increase in adoption incentive payments. 

TITLE III—BORROWER’S BILL OF RIGHTS 

Sec. 301. Short title. 

Sec. 302. Assistant secretary of the treasury for financial education. 

Sec. 303. Financial literacy for middle and high school students. 

Sec. 304. ‘‘Plain language’’ disclosures. 

Sec. 305. Limitation on usurious interest rates and unfair practices. 

Sec. 306. Limitation on rollovers of payday loans. 

Sec. 307. Fair treatment of employee benefits. 

Sec. 308. Wage priority and employee benefit cap. 

Sec. 309. Subordination. 

1 TITLE I—CHARACTER 

2 EDUCATION 

3 SEC. 101. SHORT TITLE. 

4 This title may be cited as the ‘‘Character Education 

5 Act of 2006’’. 

6 SEC. 102. INCREASED FUNDING FOR PARTNERSHIPS IN 

7 CHARACTER EDUCATION PROGRAM. 

8 Section 5401 of the Elementary and Secondary Edu9 cation Act of 1965 (20 U.S.C. 7241) is amended— 

10 (1) in the matter preceding paragraph (1), by 

11 striking ‘‘There are’’ and inserting ‘‘(a) IN GEN12 ERAL.—There are’’; 

13 (2) in paragraph (6), by striking 

14 ‘‘$675,000,000 for fiscal year 2007’’ and inserting 

15 ‘‘$700,000,000 for fiscal year 2007’’; and 


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1 (3) by adding at the end the following: 

2 ‘‘(b) PARTNERSHIPS IN CHARACTER EDUCATION.— 

3 From the amount appropriated to carry out this part for 

4 each of fiscal years 2007 and 2008, the Secretary shall 

5 reserve $50,000,000 to carry out subpart 3.’’. 

6 SEC. 103. MODEL STATE CHARACTER EDUCATION CUR7 RICULUM. 

8 (a) IN GENERAL.—The Comptroller General of the 

9 United States shall— 

10 (1) conduct a study of best practices in the field 

11 of character education; and 

12 (2) develop a model State character education 

13 curriculum for kindergarten through grade 12. 

14 (b) MODEL STATE CHARACTER EDUCATION CUR15 RICULUM.— 

16 (1) PRINCIPLES OF CURRICULUM.—The model 

17 State character education curriculum developed 

18 under this section shall embody the principles that 

19 character education— 

20 (A) is premised on the notion that widely 

21 shared core ethical values, including honesty, 

22 fairness, justice, caring, responsibility, and re23 spect for self and others, form the basis of good 

24 character; 


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1 (B) by promoting the validity of these val2 ues and the responsibility to uphold them, af3 firms human dignity, promotes the development 

4 and welfare of the individual, serves the com5 mon good, and promotes the exercise of citizen6 ship in a democratic society; and 

7 (C) should be an integral part of the cur8 riculum at all grade levels, should be part of a 

9 comprehensive approach that integrates char10 acter development into every aspect of school 

11 life, and should reach out to families and in12 clude them in character-building efforts. 

13 (2) FOCUS ON ASPECTS OF CHARACTER.—The 

14 model State character education curriculum devel15 oped under this section shall focus on aspects of 

16 character including honesty, fairness, justice, caring, 

17 responsibility, and respect for self and others. 

18 (c) REPORT.—Not later than 1 year after the date 

19 of the enactment of this Act, the Comptroller General of 

20 the United States shall submit to the Congress a report 

21 containing— 

22 (1) the results of the study conducted under 

23 this section; and 

24 (2) the model State character education cur25 riculum developed under this section. 


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1 TITLE II—CHILDHOOD 

2 ADOPTION 

3 SEC. 201. SHORT TITLE. 

4 This title may be cited as the ‘‘Childhood Adoption 

5 Act of 2006’’. 

6 SEC. 202. INCREASE IN ALLOWABLE EXPENSES FOR ADOP7 TION; ADOPTION CREDIT MADE REFUND8 ABLE. 

9 (a) INCREASE IN DOLLAR LIMITATION.— 

10 (1) ADOPTION CREDIT.— 

11 (A) IN GENERAL.—Paragraph (1) of sec12 tion 23(b) of the Internal Revenue Code of 

13 1986 (relating to dollar limitation) is amended 

14 by striking ‘‘$10,000’’ and inserting ‘‘$15,000’’. 

15 (B) CHILD WITH SPECIAL NEEDS.—Para16 graph (3) of section 23(a) of such Code (relat17 ing to $10,000 credit for adoption of child with 

18 special needs regardless of expenses) is amend19 ed— 

20 (i) in the text by striking ‘‘$10,000’’ 

21 and inserting ‘‘$15,000’’, and 

22 (ii) in the heading by striking 

23 ‘‘$10,000’’ and inserting ‘‘$15,000’’. 

24 (C) CONFORMING AMENDMENT TO INFLA25 TION ADJUSTMENT.—Subsection (h) of section 


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1 23 of such Code (relating to adjustments for in2 flation) is amended to read as follows: 

3 ‘‘(h) ADJUSTMENTS FOR INFLATION.— 

4 ‘‘(1) DOLLAR LIMITATIONS.—In the case of a 

5 taxable year beginning after December 31, 2006, 

6 each of the dollar amounts in subsections (a)(3) and 

7 (b)(1) shall be increased by an amount equal to— 

8 ‘‘(A) such dollar amount, multiplied by 

9 ‘‘(B) the cost-of-living adjustment deter10 mined under section 1(f)(3) for the calendar 

11 year in which the taxable year begins, deter12 mined by substituting ‘calendar year 2005’ for 

13 ‘calendar year 1992’ in subparagraph (B) 

14 thereof. 

15 If any amount as increased under the preceding sen16 tence is not a multiple of $10, such amount shall be 

17 rounded to the nearest multiple of $10. 

18 ‘‘(2) INCOME LIMITATION.—In the case of a 

19 taxable year beginning after December 31, 2002, the 

20 dollar amount in subsection (b)(2)(A)(i) shall be in21 creased by an amount equal to— 

22 ‘‘(A) such dollar amount, multiplied by 

23 ‘‘(B) the cost-of-living adjustment deter24 mined under section 1(f)(3) for the calendar 

25 year in which the taxable year begins, deterVerDate Aug 31 2005 23:49 Mar 04, 2006 Jkt 049196 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4866.IH H4866

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1 mined by substituting ‘calendar year 2001’ for 

2 ‘calendar year 1992’ in subparagraph (B) 

3 thereof. 

4 If any amount as increased under the preceding sen5 tence is not a multiple of $10, such amount shall be 

6 rounded to the nearest multiple of $10.’’. 

7 (2) ADOPTION ASSISTANCE PROGRAMS.— 

8 (A) IN GENERAL.—Paragraph (1) of sec9 tion 137(b) of the Internal Revenue Code of 

10 1986 (relating to dollar limitation) is amended 

11 by striking ‘‘$10,000’’ and inserting ‘‘$15,000’’. 

12 (B) CHILD WITH SPECIAL NEEDS.—Para13 graph (2) of section 137(a) of such Code (relat14 ing to $10,000 exclusion for adoption of child 

15 with special needs regardless of expenses) is 

16 amended— 

17 (i) in the text by striking ‘‘$10,000’’ 

18 and inserting ‘‘$15,000’’, and 

19 (ii) in the heading by striking 

20 ‘‘$10,000’’ and inserting ‘‘$15,000’’. 

21 (C) CONFORMING AMENDMENT TO INFLA22 TION ADJUSTMENT.—Subsection (f) of section 

23 137 of such Code (relating to adjustments for 

24 inflation) is amended to read as follows: 

25 ‘‘(f) ADJUSTMENTS FOR INFLATION.— 


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1 ‘‘(1) DOLLAR LIMITATIONS.—In the case of a 

2 taxable year beginning after December 31, 2006, 

3 each of the dollar amounts in subsections (a)(2) and 

4 (b)(1) shall be increased by an amount equal to— 

5 ‘‘(A) such dollar amount, multiplied by 

6 ‘‘(B) the cost-of-living adjustment deter7 mined under section 1(f)(3) for the calendar 

8 year in which the taxable year begins, deter9 mined by substituting ‘calendar year 2005’ for 

10 ‘calendar year 1992’ in subparagraph (B) 

11 thereof. 

12 If any amount as increased under the preceding sen13 tence is not a multiple of $10, such amount shall be 

14 rounded to the nearest multiple of $10. 

15 ‘‘(2) INCOME LIMITATION.—In the case of a 

16 taxable year beginning after December 31, 2002, the 

17 dollar amount in subsection (b)(2)(A)(i) shall be in18 creased by an amount equal to— 

19 ‘‘(A) such dollar amount, multiplied by 

20 ‘‘(B) the cost-of-living adjustment deter21 mined under section 1(f)(3) for the calendar 

22 year in which the taxable year begins, deter23 mined by substituting ‘calendar year 2001’ for 

24 ‘calendar year 1992’ in subparagraph (B) 

25 thereof. 


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1 If any amount as increased under the preceding sen2 tence is not a multiple of $10, such amount shall be 

3 rounded to the nearest multiple of $10.’’. 

4 (b) CREDIT MADE REFUNDABLE.— 

5 (1) CREDIT MOVED TO SUBPART RELATING TO

6 REFUNDABLE CREDITS.—The Internal Revenue 

7 Code of 1986 is amended— 

8 (A) by redesignating section 36 as section 

9 37, 

10 (B) by redesignating section 23, as amend11 ed by subsection (a), as section 36, and 

12 (C) by moving section 36 (as so redesig13 nated) from subpart A of part IV of subchapter 

14 A of chapter 1 to the location immediately be15 fore section 37 (as so redesignated) in subpart 

16 C of part IV of subchapter A of chapter 1. 

17 (2) CONFORMING AMENDMENTS.— 

18 (A) Section 24(b)(3)(B) of such Code is 

19 amended by striking ‘‘and sections 23’’ and in20 serting ‘‘section’’. 

21 (B) Section 25(e)(1)(C) of such Code is 

22 amended by striking ‘‘23,’’. 

23 (C) Section 25B(g)(2) of such Code is 

24 amended by striking ‘‘and section 23’’. 


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1 (D) Section 137 of such Code is amend2 ed— 

3 (i) in subsection (d) by striking ‘‘sec4 tion 23(d)’’ and inserting ‘‘section 36(d)’’, 

5 and 

6 (ii) in subsection (e) by striking ‘‘sec7 tion 23’’ and inserting ‘‘section 36’’. 

8 (E) Section 1400C(d) of such Code is 

9 amended by striking ‘‘23, 24,’’ and inserting 

10 ‘‘24’’. 

11 (F) The table of sections for subpart A of 

12 part IV of subchapter A of chapter 1 of such 

13 Code of 1986 is amended by striking the item 

14 relating to section 23. 

15 (G) Paragraph (2) of section 1324(b) of 

16 title 31, United States Code, is amended by in17 serting ‘‘or 36’’ after ‘‘section 35’’. 

18 (H) The table of sections for subpart C of 

19 part IV of subchapter A of chapter 1 of the In20 ternal Revenue Code of 1986 is amended by 

21 striking the last item and inserting the fol22 lowing new items: 

‘‘Sec. 36. Adoption expenses. 

‘‘Sec. 37. Overpayments of tax.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2005. 

4 SEC. 203. INCREASE IN ADOPTION INCENTIVE PAYMENTS. 

5 (a) IN GENERAL.—Section 473A(d)(1) of the Social 

6 Security Act (42 U.S.C. 673a(d)(1)) is amended— 

7 (1) in subparagraph (A), by striking ‘‘$4,000’’ 

8 and inserting ‘‘$8,000’’; 

9 (2) in subparagraph (B), by striking ‘‘$2,000’’ 

10 and inserting ‘‘$8,000’’; and 

11 (3) in subparagraph (C), by striking ‘‘$4,000’’ 

12 and inserting ‘‘$8,000’’. 

13 (b) INCREASED PROGRAM FUNDING.—Section 

14 473A(h)(1) of such Act (42 U.S.C. 673a(h)(1)) is amend15 ed— 

16 (1) in subparagraph (C), by striking ‘‘and’’; 

17 (2) in subparagraph (D), by striking ‘‘through 

18 2008.’’ and inserting ‘‘and 2005; and’’; and 

19 (3) by adding at the end the following: 

20 ‘‘(E) $86,000,000 for each of fiscal years 

21 2006 through 2008.’’. 


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1 TITLE III—BORROWER’S BILL OF 

2 RIGHTS 

3 SEC. 301. SHORT TITLE. 

4 This title may be cited as the ‘‘Borrower’s Bill of 

5 Rights Act’’. 

6 SEC. 302. ASSISTANT SECRETARY OF THE TREASURY FOR 

7 FINANCIAL EDUCATION. 

8 Section 301(e) of title 31, United States Code, is 

9 amended— 

10 (1) by striking ‘‘7 Assistant Secretaries’’ and 

11 inserting ‘‘8 Assistant Secretaries’’; and 

12 (2) by inserting after the 2nd sentence the fol13 lowing new sentence: ‘‘One of the Assistant Secre14 taries shall be the Assistant Secretary for Financial 

15 Education.’’. 

16 SEC. 303. FINANCIAL LITERACY FOR MIDDLE AND HIGH 

17 SCHOOL STUDENTS. 

18 The Financial Literacy and Education Improvement 

19 Act (20 U.S.C. 9701, et seq.) is amended— 

20 (1) by redesignating section 519 as section 520; 

21 and 

22 (2) by inserting after section 518 the following 

23 new section: 


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1 ‘‘SEC. 519. FINANCIAL LITERACY FOR MIDDLE AND HIGH 

2 SCHOOL STUDENTS. 

3 ‘‘(a) PILOT PROGRAM.—The Assistant Secretary for 

4 Financial Education (hereafter in this section referred to 

5 as the ‘Assistant Secretary’ shall establish a 2-year pilot 

6 financial literacy pilot program for middle and high school 

7 students. 

8 ‘‘(b) REQUIREMENTS.—The pilot program estab9 lished by the Assistant Secretary shall comply with the 

10 following requirements: 

11 ‘‘(1) The pilot program shall be implemented in 

12 10 middle schools and 10 high schools, selected by 

13 the Assistant Secretary based on such criteria as the 

14 Assistant Secretary may determine to be appro15 priate, in 10 different school systems and provided 

16 to 8th grade students at the middle schools selected 

17 and 12th grade students at the high schools selected. 

18 ‘‘(2) The program shall use as guidance the fi19 nancial education program in the secondary schools 

20 of the State of Delaware called the ‘Keys to Finan21 cial Success’. 

22 ‘‘(3) The program shall be funded by the Sec23 retary of the Treasury, out of funds appropriated to 

24 the Secretary, and administered by the State and 

25 the local school administration of each school se26 lected, based on criteria established by the Assistant 


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1 Secretary, including an annual update of the mate2 rials used in the curriculum. 

3 ‘‘(c) REPORT.—Upon the completion of the 2-year 

4 pilot program, the Assistant Secretary shall submit to the 

5 Secretary of the Treasury and the Congress a report con6 taining a detailed description of the findings and conclu7 sions of the Assistant Secretary with respect to the pilot 

8 program.’’. 

9 SEC. 304. ‘‘PLAIN LANGUAGE’’ DISCLOSURES. 

10 Section 122 of the Truth in Lending Act (15 U.S.C. 

11 1632) is amended by adding at the end the following new 

12 subsection: 

13 ‘‘(d) PLAIN AND SIMPLE LANGUAGE DISCLOSURES

14 REQUIRED FOR ALL DISCLOSURES.—The Board shall 

15 take such action as may be necessary to ensure that all 

16 disclosures that are required to be provided under this title 

17 with respect to any consumer credit transaction, including 

18 all the disclosures required under section 129, shall be 

19 simple and easy to understand and in a language under20 stood by the consumer.’’. 

21 SEC. 305. LIMITATION ON USURIOUS INTEREST RATES AND 

22 UNFAIR PRACTICES. 

23 (a) REPEAL OF PREEMPTION OF STATE MORTGAGE

24 USURY LAWS.— 


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1 (1) IN GENERAL.—Sections 501, 511, 512, 525, 

2 526, 527, 528, and 529 of the Depository Institu3 tions Deregulation and Monetary Control Act of 

4 1980 are hereby repealed. 

5 (2) TECHNICAL AND CONFORMING AMEND6 MENTS.— 

7 (A) INSURED DEPOSITORY INSTITU8 TIONS.—Section 27 of the Federal Deposit In9 surance Act (12 U.S.C. 1831d) is amended to 

10 read as follows: 

11 ‘‘SEC. 27. UNIFORM APPLICABILITY OF STATE LAW. 

12 ‘‘In order to prevent discrimination against State13 chartered insured depository institutions, including in14 sured savings banks and insured branches of foreign 

15 banks and notwithstanding any other provision of Federal 

16 law, the provision of the constitution or the laws of any 

17 State expressly limiting the rate or amount of interest, 

18 discount points, finance charges, or other charges which 

19 may be charged, taken, received, or reserved shall apply 

20 to all depository institutions that are located in, have any 

21 branch in, or do business in such State with respect to 

22 customers of any such institution which reside in or are 

23 located in such State.’’. 


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1 (B) INSURED CREDIT UNIONS.—Section 

2 205(g) of the Federal Credit Union Act (12 

3 U.S.C. 1785(g)) is amended to read as follows: 

4 ‘‘(g) UNIFORM APPLICABILITY OF STATE LAW.—In 

5 order to prevent discrimination against State-chartered in6 sured credit unions and notwithstanding any other provi7 sion of Federal law, the provision of the constitution or 

8 the laws of any State expressly limiting the rate or amount 

9 of interest, discount points, finance charges, or other 

10 charges which may be charged, taken, received, or re11 served shall apply to all credit unions that are located in, 

12 have any branch in, or do business in such State with re13 spect to customers of any such credit union which reside 

14 in or are located in such State.’’. 

15 (b) PROHIBITION ON LOAN ‘‘FLIPPING’’ AND MAN16 DATORY ARBITRATION.— 

17 (1) IN GENERAL.—Chapter 2 of the Truth in 

18 Lending Act (15 U.S.C. 1631 et seq.) is amended by 

19 inserting after section 129 the following new section: 

20 ‘‘§ 129A. Protections for all loans 

21 ‘‘(a) FLIPPING.— 

22 ‘‘(1) IN GENERAL.—No creditor may knowingly 

23 or intentionally engage in the unfair act or practice 

24 of flipping. 


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1 ‘‘(2) FLIPPING DEFINED.—For purposes of this 

2 subsection, the term ‘flipping’ means the making of 

3 a loan or extension of credit to a consumer which re4 finances an existing loan or other extension of credit 

5 when the new loan or extension of credit does not 

6 have reasonable, tangible net benefit to the con7 sumer considering all of the circumstances, including 

8 the terms of both the new and the refinanced loans 

9 or credit, the cost of the new loan or credit, and the 

10 consumer’s circumstances. 

11 ‘‘(3) TANGIBLE NET BENEFIT.—The Board 

12 may prescribe regulations, in the discretion of the 

13 Board, defining the term ‘tangible net benefit’ for 

14 purposes of this subsection. 

15 ‘‘(b) ARBITRATION.— 

16 ‘‘(1) IN GENERAL.—A loan or other extension 

17 of credit subject to this title may not include terms 

18 which require arbitration or any other nonjudicial 

19 procedure as the method for resolving any con20 troversy or settling any claims arising out of the 

21 transaction. 

22 ‘‘(2) POST-CONTROVERSY AGREEMENTS.—Sub23 ject to paragraph (3), paragraph (1) shall not be 

24 construed as limiting the right of the consumer and 

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1 judicial procedure as the method for resolving any 

2 controversy at any time after a dispute or claim 

3 under the transaction arises. 

4 ‘‘(3) NO WAIVER OF STATUTORY CAUSE OF AC5 TION.—No provision of any loan or other extension 

6 of credit or any agreement between the consumer 

7 and the creditor shall be applied or interpreted so as 

8 to bar a consumer from bringing an action in an ap9 propriate district court of the United States, or any 

10 other court of competent jurisdiction, pursuant to 

11 section 130 or any other provision of law, for dam12 ages or other relief in connection with any alleged 

13 violation of this section, any other provision of this 

14 title, or any other Federal law.’’. 

15 (2) CLERICAL AMENDMENT.—The table of sec16 tions for chapter 2 of the Truth in Lending Act is 

17 amended by inserting after the item relating to sec18 tion 129 the following new item: 

‘‘129A. Protections for all loans.’’. 

19 (3) REGULATIONS.—The Board of Governors of 

20 the Federal Reserve System shall publish regulations 

21 implementing the amendments made by this section 

22 in final form before the end of the 6-month period 

23 beginning on the date of enactment of this Act. 

24 (c) AMENDMENT TO DEFINITION OF HIGH COST

25 MORTGAGES.—Subparagraph (A) of section 103(aa)(1) of 


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1 the Truth in Lending Act (15 U.S.C. 1602(aa)(1)(A)) is 

2 amended by striking ‘‘10 percentage points’’ and inserting 

3 ‘‘8 percentage points’’. 

4 (d) PRE-LOAN COUNSELING REQUIRED FOR HIGH

5 COST MORTGAGES.—Section 129 of the Truth in Lending 

6 Act (15 U.S.C. 1639) is amended by inserting after sub7 section (l) the following new subsection: 

8 ‘‘(m) PRE-LOAN COUNSELING.— 

9 ‘‘(1) IN GENERAL.—A creditor may not extend 

10 credit to a consumer under a mortgage referred to 

11 in section 103(aa) without first receiving certifi12 cation from a counselor that is approved by the Sec13 retary of Housing and Urban Development, that the 

14 consumer has received— 

15 ‘‘(A) and successfully completed coun16 seling, in person or by telephone, on the advis17 ability of the loan transaction; and 

18 ‘‘(B) a general range of interest rates that 

19 the applicant qualifies for given their credit 

20 score. 

21 ‘‘(2) NONAFFILIATION RULE FOR COUN22 SELORS.—A counselor providing a certification to a 

23 creditor under paragraph (1) may not be employed 

24 by the creditor or an affiliate of the creditor or be 


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1 affiliated with the creditor in any other manner (in2 cluding any referral agreement). 

3 ‘‘(3) DISCLOSURES REQUIRED PRIOR TO COUN4 SELING.—No counselor may certify that a borrower 

5 has received counseling on the advisability of the 

6 loan transaction unless the counselor can verify that 

7 the consumer has received each statement required 

8 (in connection with such loan) by this section, or by 

9 the Real Estate Settlement Procedures Act of 1974, 

10 with respect to the transaction. 

11 ‘‘(4) REGULATIONS.—The Secretary of Housing 

12 and Urban Development may prescribe such regula13 tions as the Secretary determines to be appropriate 

14 to carry out the requirements of paragraph (1).’’. 

15 SEC. 306. LIMITATION ON ROLLOVERS OF PAYDAY LOANS. 

16 Section 128 of the Truth in Lending Act (15 U.S.C. 

17 1638) is amended by adding at the end the following new 

18 subsection: 

19 ‘‘(e) LIMITATIONS ON ROLLOVERS OR REFINANCING

20 OF PAYDAY LOANS WITH THE SAME CREDITOR.— 

21 ‘‘(1) IN GENERAL.—A payday lender— 

22 ‘‘(A) may not refinance or roll over any 

23 payday loan made by such lender, or any affil24 iate or other associate of the payday lender, to 


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1 any consumer with another payday loan more 

2 than 3 times; and 

3 ‘‘(B) shall provide a consumer who seeks 

4 to refinance or roll over any payday loan made 

5 by such lender, or any affiliate or other asso6 ciate of the payday lender, to the consumer 

7 with another payday loan more than 2 times 

8 with a disclosure notice, which the Board shall 

9 prescribe by regulation, regarding the hazards 

10 of payday lending and the benefits of banking 

11 traditionally, in prominent format and type-size, 

12 that is separate from the disclosures required 

13 under subsection (a) with regard to such exten14 sion of credit. 

15 ‘‘(2) DEFINITIONS.— 

16 ‘‘(A) CHECK.—The term ‘check’ means 

17 any negotiable demand draft drawn on or pay18 able through an office of a depository institu19 tion (as defined in section 19(b)(1)(A) of the 

20 Federal Reserve Act) located in any State. 

21 ‘‘(B) PAYDAY LENDER.—The term ‘payday 

22 lender’ means any person who extends credit to 

23 any other person through a payday loan. 

24 ‘‘(C) PAYDAY LOAN.—The term ‘payday 

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1 it is extended by a payday lender, for a speci2 fied period of time, upon receipt by the lender 

3 of— 

4 ‘‘(i) a check made by the borrower for 

5 the amount of the credit extended, the pre6 sentment or negotiation of which, by mu7 tual agreement of the lender and borrower, 

8 will be deferred for such specified period; 

9 or 

10 ‘‘(ii) authorization from the borrower 

11 for the payday lender to initiate an elec12 tronic fund transfer at the end of the spec13 ified period from the account of the bor14 rower for the amount of the credit ex15 tended.’’. 

16 SEC. 307. FAIR TREATMENT OF EMPLOYEE BENEFITS. 

17 (a) DEFINITION OF CLAIM.—Section 101(5) of title 

18 11, United States Code, is amended— 

19 (1) in subparagraph (A), by striking ‘‘or’’ at 

20 the end; 

21 (2) in subparagraph (B), by inserting ‘‘or’’ 

22 after the semicolon; and 

23 (3) by adding at the end the following: 

24 ‘‘(C) right or interest in equity securities 

25 of the debtor, or an affiliate of the debtor, held 


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1 in a pension plan (within the meaning of sec2 tion 3(2) of the Employee Retirement Income 

3 Security Act of 1974 (29 U.S.C. 1002(2))) for 

4 the benefit of an individual who is not an offi5 cer or director of the debtor, if such securities 

6 were attributable to— 

7 ‘‘(i) employer contributions by the 

8 debtor or an affiliate of the debtor other 

9 than elective deferrals (within the meaning 

10 of section 402(g) of the Internal Revenue 

11 Code of 1986), and any earnings thereon; 

12 and 

13 ‘‘(ii) elective deferrals (and any earn14 ings thereon) that are required to be in15 vested in such securities under the terms 

16 of the plan or at the direction of a person 

17 other than the individual or any bene18 ficiary, 

19 except that this subparagraph shall not apply to 

20 any such securities during any period during 

21 which the individual or any beneficiary has the 

22 right to direct the plan to divest such securities 

23 and to reinvest an equivalent amount in other 

24 investment options of the plan;’’. 


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24 

•HR 4866 IH 

1 (b) PRIORITIES.—Section 507(a)(4) of title 11, 

2 United States Code, is amended— 

3 (1) in subparagraph (B), by indenting the left 

4 margin of clauses (i) and (ii) 2 ems to the right and 

5 redesignating such clauses as subclauses (I) and 

6 (II), respectively; 

7 (2) by indenting the left margin of subpara8 graphs (A) and (B) 2 ems to the right and redesig9 nating such subparagraphs as clauses (i) and (ii), 

10 respectively; 

11 (3) in the matter preceding clause (i), as so re12 designated, by striking ‘‘Fourth’’ and all that follows 

13 through ‘‘plan—’’ and inserting the following: 

14 ‘‘Fourth— 

15 ‘‘(A) allowed unsecured claims for con16 tributions to an employee benefit plan—’’. 

17 (4) by striking the period at the end and insert18 ing the following: ‘‘or’’; and 

19 (5) by adding at the end the following: 

20 ‘‘(B) allowed unsecured claims with respect 

21 to rights or interests in equity securities of the 

22 debtor, or an affiliate of the debtor, that are 

23 held in a pension plan (within the meaning of 

24 section 3(2) of the Employee Retirement In25 come Security Act of 1974), without regard to 


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25 

•HR 4866 IH 

1 when services were rendered or limitation in 

2 amount, and measured by the market value of 

3 the stock at the time the stock was contributed 

4 to, or purchased by, the plan.’’. 

5 SEC. 308. WAGE PRIORITY AND EMPLOYEE BENEFIT CAP. 

6 Section 507(a) of title 11, United States Code, is 

7 amended— 

8 (1) in paragraph (3), by striking ‘‘$4,000’’ and 

9 inserting ‘‘$13,500’’; and 

10 (2) in paragraph (4)(B)(i), by striking 

11 ‘‘$4,000’’ and inserting ‘‘$13,500’’. 

12 SEC. 309. SUBORDINATION. 

13 Section 510(b) of title 11, United States Code, is 

14 amended by inserting ‘‘, other than a claim described in 

15 section 105(5)(C).’’ after ‘‘claim’’ the 1st place it appears. 

Æ 


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