I 

114TH CONGRESS 

2D SESSION H. R. 5023 

To amend the Truth in Lending Act to address certain issues related to 

the extension of consumer credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 21, 2016 

Ms. BONAMICI (for herself, Mr. CUMMINGS, Mr. BLUMENAUER, Ms. JUDY

CHU of California, Ms. DELAURO, Ms. EDWARDS, Mr. GRIJALVA, Ms. 

NORTON, Mr. MCGOVERN, Ms. SCHAKOWSKY, Mr. TAKANO, and Ms. 

WASSERMAN SCHULTZ) introduced the following bill; which was referred 

to the Committee on Financial Services 

A BILL 

To amend the Truth in Lending Act to address certain 

issues related to the extension of consumer credit, 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 ‘‘Stopping Abuse and 

5 Fraud in Electronic Lending Act of 2016’’ or the ‘‘SAFE 

6 Lending Act of 2016’’. 

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1 SEC. 2. CONSUMER CONTROL OVER BANK ACCOUNTS. 

2 (a) PROHIBITING UNAUTHORIZED REMOTELY CRE3 ATED CHECKS.—Section 905 of the Electronic Fund 

4 Transfer Act (15 U.S.C. 1693c) is amended by adding at 

5 the end the following: 

6 ‘‘(d) LIMITATIONS ON REMOTELY CREATED

7 CHECKS.— 

8 ‘‘(1) DEFINITION.—In this subsection, the term 

9 ‘remotely created check’ means a check, including a 

10 paper or electronic check and any other payment 

11 order that the Bureau, by rule, determines is appro12 priately covered by this subsection, that— 

13 ‘‘(A) is not created by the financial institu14 tion that holds the customer account from 

15 which the check is to be paid; and 

16 ‘‘(B) does not bear a signature applied, or 

17 purported to be applied, by the person from 

18 whose account the check is to be paid. 

19 ‘‘(2) LIMITATIONS.—Subject to the limitations 

20 in paragraph (3) and any additional limitations that 

21 the Bureau may establish, by rule, a remotely cre22 ated check may only be issued by a person des23 ignated in writing by the consumer with the designa24 tion specifically provided in writing by the consumer 

25 to the insured depository institution at which the 

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1 consumer maintains the account from which the 

2 check is to be drawn. 

3 ‘‘(3) ADDITIONAL LIMITATIONS.— 

4 ‘‘(A) IN GENERAL.—An authorization pro5 vided under paragraph (2) may be revoked at 

6 any time by the consumer. 

7 ‘‘(B) CONSUMER FINANCIAL PROTECTION

8 LAWS.—No payment order, including a re9 motely created check, may be issued by any per10 son in response to the exercise of, or attempt to 

11 exercise, any rights by a consumer under any 

12 Federal consumer financial law, as defined in 

13 section 1002 of the Consumer Financial Protec14 tion Act of 2010 (12 U.S.C. 5481), or any 

15 other provision of any law or regulation within 

16 the jurisdiction of the Bureau.’’. 

17 (b) CONSUMER PROTECTIONS FOR CERTAIN ONE18 TIME ELECTRONIC FUND TRANSFERS.—Section 913 of 

19 the Electronic Fund Transfer Act (15 U.S.C. 1693k) is 

20 amended— 

21 (1) by inserting ‘‘(a) IN GENERAL.—’’ before 

22 ‘‘No person’’; 

23 (2) in subsection (a)(1), as so designated, by 

24 striking ‘‘preauthorized electronic fund transfers’’ 

25 and inserting ‘‘an electronic fund transfer’’; and 

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

2 ‘‘(b) TREATMENT FOR ELECTRONIC FUND TRANS3 FERS IN CREDIT EXTENSIONS.—If a consumer voluntarily 

4 agrees to repay an extension of a small-dollar consumer 

5 credit transaction, as defined in section 110(a) of the 

6 Truth in Lending Act, by means of an electronic fund 

7 transfer, the electronic fund transfer shall be treated as 

8 a preauthorized electronic fund transfer subject to the pro9 tections of this title.’’. 

10 SEC. 3. TRANSPARENCY AND CONSUMER EMPOWERMENT 

11 IN SMALL-DOLLAR LENDING. 

12 (a) SMALL-DOLLAR CONSUMER CREDIT TRANS13 ACTIONS.—The Truth in Lending Act (15 U.S.C. 1601 

14 et seq.) is amended— 

15 (1) by inserting after section 109 (15 U.S.C. 

16 1608) the following: 

17 ‘‘SEC. 110. REGISTRATION REQUIREMENT FOR SMALL-DOL18 LAR LENDERS. 

19 ‘‘(a) DEFINITION.—In this section, the term ‘small20 dollar consumer credit transaction’ means any transaction 

21 that extends, facilitates, brokers, arranges, or gathers ap22 plications for credit that is— 

23 ‘‘(1) made to a consumer in an amount of not 

24 more than $5,000, or such greater amount as the 

25 Bureau may, by rule, determine, with the amount to 

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1 be adjusted annually to reflect changes in the Con2 sumer Price Index for all urban consumers published 

3 by the Department of Labor; and 

4 ‘‘(2) extended pursuant to an agreement that 

5 is— 

6 ‘‘(A)(i) other than an open-end credit plan; 

7 and 

8 ‘‘(ii) payable in 1 or more installments of 

9 less than 12 months (or such longer period as 

10 the Bureau may, by rule, determine); 

11 ‘‘(B) an open-end credit plan in which each 

12 advance is fully repayable within a defined time 

13 or in connection with a defined event, or both; 

14 or 

15 ‘‘(C) any other plan as the Bureau deter16 mines, by rule. 

17 ‘‘(b) REGISTRATION REQUIREMENT.—A person shall 

18 register with the Bureau before issuing credit in a small19 dollar consumer credit transaction.’’; 

20 (2) in section 173 (15 U.S.C. 1666j), by adding 

21 at the end the following: 

22 ‘‘(d) Notwithstanding any other provisions of this 

23 title, any small-dollar consumer credit transaction, as de24 fined in section 110(a), shall comply with the laws of the 

25 State in which the consumer resides with respect to annual 

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1 percentage rates, interest, fees, charges, and such other 

2 similar or related matters as the Bureau may, by rule, 

3 determine if the small-dollar consumer credit transaction 

4 is— 

5 ‘‘(1) made over— 

6 ‘‘(A) the Internet; 

7 ‘‘(B) telephone; 

8 ‘‘(C) facsimile; 

9 ‘‘(D) mail; 

10 ‘‘(E) electronic mail; or 

11 ‘‘(F) other electronic communication; or 

12 ‘‘(2) conducted by a national bank.’’; and 

13 (3) in the table of sections of chapter 1, by in14 serting after the item relating to section 109 the fol15 lowing: 

‘‘110. Registration requirement for small-dollar lenders.’’. 

16 (b) PROHIBITION ON CERTAIN FEES.—Section 915 

17 of the Electronic Fund Transfer Act (15 U.S.C. 1693l– 

18 1) is amended— 

19 (1) by redesignating subsection (d) as sub20 section (e); and 

21 (2) by inserting after subsection (c) the fol22 lowing: 

23 ‘‘(d) ADDITIONAL FEES PROHIBITED.— 

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1 ‘‘(1) DEFINITION.—In this subsection, the term 

2 ‘general-use prepaid card’ has the meaning given the 

3 term— 

4 ‘‘(A) in subsection (a)(2); or 

5 ‘‘(B) by rule of the Bureau. 

6 ‘‘(2) PROHIBITION.—With respect to the use of 

7 a general-use prepaid card by a consumer— 

8 ‘‘(A) it shall be unlawful for any person to 

9 charge the consumer a fee for an overdraft, in10 cluding a shortage of funds or a transaction 

11 processed for an amount exceeding the account 

12 balance on the general-use prepaid card; 

13 ‘‘(B) any transaction for an amount ex14 ceeding the account balance on the general-use 

15 prepaid card may be declined, except that the 

16 consumer may not be charged a fee for that 

17 purpose; and 

18 ‘‘(C) the Bureau may, by rule, prohibit the 

19 charging of any fee so that the Bureau may— 

20 ‘‘(i) prevent unfair, deceptive, or abu21 sive practices; and 

22 ‘‘(ii) promote the ability of the con23 sumer to understand and compare the 

24 costs of general-use prepaid cards.’’. 

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1 SEC. 4. RESTRICTIONS ON LEAD GENERATION IN SMALL2 DOLLAR CONSUMER CREDIT TRANSACTIONS. 

3 Chapter 2 of the Truth in Lending Act (15 U.S.C. 

4 1631 et seq.) is amended by adding at the end the fol5 lowing: 

6 ‘‘SEC. 140B. RESTRICTIONS ON LEAD GENERATION IN 

7 SMALL-DOLLAR CONSUMER CREDIT TRANS8 ACTIONS. 

9 ‘‘(a) DEFINITIONS.—In this section— 

10 ‘‘(1) the term ‘sensitive personal financial infor11 mation’ means the social security number, financial 

12 account number, bank routing number, bank ac13 count number, or any required security or access 

14 code that is immediately necessary to permit access 

15 to the financial account of an individual; and 

16 ‘‘(2) the term ‘small-dollar consumer credit 

17 transaction’ has the meaning given the term in sec18 tion 110(a). 

19 ‘‘(b) IDENTIFICATION INFORMATION.—Any person 

20 facilitating, brokering, arranging, gathering applications 

21 for, or distributing sensitive personal financial information 

22 in connection with a small-dollar consumer credit trans23 action shall prominently disclose information by which the 

24 person may be contacted or identified, including for serv25 ice of process and for identification of the registrant of 

26 any domain name registered or used. 

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1 ‘‘(c) PROHIBITION ON LEAD GENERATION IN SMALL2 DOLLAR CONSUMER CREDIT TRANSACTIONS.—No person 

3 may facilitate, broker, arrange, gather applications for, or 

4 distribute sensitive personal financial information in con5 nection with a small-dollar consumer credit transaction, 

6 unless the person is directly providing the small-dollar 

7 consumer credit to the consumer. 

8 ‘‘(d) RULE OF CONSTRUCTION.— 

9 ‘‘(1) IN GENERAL.—Nothing in this section 

10 may be interpreted to limit the authority of the Bu11 reau to further restrict activities covered by this sec12 tion. 

13 ‘‘(2) CLARIFICATION.—It shall not be consid14 ered ‘facilitating’ in connection with a small-dollar 

15 consumer credit transaction to be engaged solely in 

16 1 of the following activities: 

17 ‘‘(A) The provision of a telecommuni18 cations service, or of an Internet access service 

19 or Internet information location tool (as those 

20 terms are defined in section 231 of the Commu21 nications Act of 1934 (47 U.S.C. 231)). 

22 ‘‘(B) The transmission, storage, retrieval, 

23 hosting, formatting, or translation (or any com24 bination thereof) of a communication, without 

25 selection or alteration of the content of the 

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1 communication, except that deletion of a par2 ticular communication or material made by an3 other person in a manner consistent with sec4 tion 230(c) of the Communications Act of 1934 

5 (47 U.S.C. 230(c)).’’. 

6 SEC. 5. STUDIES. 

7 (a) IN GENERAL.—Not later than 180 days after the 

8 date of enactment of this Act, the Government Account9 ability Office (in this section referred to as the ‘‘GAO’’) 

10 shall conduct a study regarding— 

11 (1) the availability of capital on reservations of 

12 Indian tribes (as defined in section 4 of the Indian 

13 Self-Determination and Education Assistance Act 

14 (25 U.S.C. 450b)); and 

15 (2) the impact that small-dollar consumer credit 

16 extended through Internet and non-Internet means 

17 to members of Indian tribes has had on economic 

18 opportunity and wealth for members of Indian 

19 tribes. 

20 (b) CONSULTATION.—In conducting the study de21 scribed in subsection (a), the GAO shall consult, as appro22 priate, with— 

23 (1) the Bureau of Consumer Financial Protec24 tion; 

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1 (2) the Board of Governors of the Federal Re2 serve System; 

3 (3) the Bureau of Indian Affairs; 

4 (4) federally recognized Indian tribes; and 

5 (5) community development financial institu6 tions operating in Indian lands. 

7 (c) CONGRESSIONAL CONSIDERATION.—The study 

8 described in subsections (a) and (b) shall be presented to 

9 the Committee on Banking, Housing, and Urban Affairs 

10 and the Committee on Indian Affairs of the Senate and 

11 the Committee on Financial Services and the Committee 

12 on Natural Resources of the House of Representatives. 

13 SEC. 6. RULEMAKING. 

14 Not later than 1 year after the date of enactment 

15 of this Act, the Bureau of Consumer Financial Protection 

16 shall adopt any final rules necessary to implement the pro17 visions of this Act and the amendments made by this Act. 

Æ 

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