I 

111TH CONGRESS 

1ST SESSION H. R. 627 

To amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer 

credit plan, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 22, 2009 

Mrs. MALONEY (for herself, Mr. FRANK of Massachusetts, Mr. JONES, Mr. 

KANJORSKI, Ms. WATERS, Mr. GUTIERREZ, Mr. ACKERMAN, Mr. 

CAPUANO, Mr. ELLISON, Mr. DAVIS of Tennessee, Mr. CLEAVER, Mr. 

GEORGE MILLER of California, Mr. OBEY, Mr. DEFAZIO, Mr. HINOJOSA, 

Mr. MCGOVERN, Mr. YARMUTH, Mr. OLVER, Ms. EDWARDS of Maryland, 

Mr. COURTNEY, Ms. DELAURO, Mr. KENNEDY, Mrs. LOWEY, Mr. BRADY

of Pennsylvania, Mr. CHANDLER, Mr. LOEBSACK, Mr. PASCRELL, Mr. 

BISHOP of New York, Mr. FILNER, Mr. CARNAHAN, Mr. WEINER, Mr. 

MARKEY of Massachusetts, Mr. GRIJALVA, Mr. CUMMINGS, Ms. 

SCHAKOWSKY, Mr. GENE GREEN of Texas, Mr. MORAN of Virginia, Ms. 

SUTTON, Mr. HINCHEY, Ms. BORDALLO, Ms. LEE of California, Mr. 

WELCH, and Mr. HIGGINS) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Truth in Lending Act to establish fair and 

transparent practices relating to the extension of credit 

under an open end consumer credit plan, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Credit Cardholders’ 

3 Bill of Rights Act of 2009’’. 

4 SEC. 2. CREDIT CARDS ON TERMS CONSUMERS CAN REPAY. 

5 (a) RETROACTIVE RATE INCREASES AND UNIVERSAL

6 DEFAULT LIMITED.—Chapter 2 of the Truth in Lending 

7 Act (15 U.S.C. 1631 et seq.) is amended by inserting after 

8 section 127A the following new section: 

9 ‘‘§ 127B. Additional requirements for credit card ac10 counts under an open end consumer 

11 credit plan 

12 ‘‘(a) RETROACTIVE RATE INCREASES AND UNI13 VERSAL DEFAULT LIMITED.— 

14 ‘‘(1) IN GENERAL.—Except as provided in sub15 section (b), no creditor may increase any annual per16 centage rate of interest applicable to the existing 

17 balance on a credit card account of the consumer 

18 under an open end consumer credit plan. 

19 ‘‘(2) EXISTING BALANCE DEFINED.—For pur20 poses of this subsection and subsections (b) and (c), 

21 the term ‘existing balance’ means the amount owed 

22 on a consumer credit card account as of the end of 

23 the 14th day after the creditor provides notice of an 

24 increase in the annual percentage rate in accordance 

25 with subsection (c). 


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1 ‘‘(3) TREATMENT OF EXISTING BALANCES FOL2 LOWING RATE INCREASE.—If a creditor increases 

3 any annual percentage rate of interest applicable to 

4 the credit card account of a consumer under an open 

5 end consumer credit plan and there is an existing 

6 balance in the account to which such increase may 

7 not apply, the creditor shall allow the consumer to 

8 repay the existing balance using a method provided 

9 by the creditor which is at least as beneficial to the 

10 consumer as 1 of the following methods: 

11 ‘‘(A) An amortization period for the exist12 ing balance of at least 5 years starting from the 

13 date on which the increased annual percentage 

14 rate went into effect. 

15 ‘‘(B) The percentage of the existing bal16 ance that was included in the required min17 imum periodic payment before the rate increase 

18 cannot be more than doubled. 

19 ‘‘(4) LIMITATION ON CERTAIN FEES.—If— 

20 ‘‘(A) a creditor increases any annual per21 centage rate of interest applicable on a credit 

22 card account of the consumer under an open 

23 end consumer credit plan; and 


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1 ‘‘(B) the creditor is prohibited by this sec2 tion from applying the increased rate to an ex3 isting balance, 

4 the creditor may not assess any fee or charge based 

5 solely on the existing balance.’’. 

6 (b) EXCEPTIONS TO THE AMENDMENT MADE BY

7 SUBSECTION (a).—Section 127B of the Truth in Lending 

8 Act is amended by inserting after subsection (a) (as added 

9 by subsection (a)) the following new subsection: 

10 ‘‘(b) EXCEPTIONS.— 

11 ‘‘(1) IN GENERAL.—A creditor may increase 

12 any annual percentage rate of interest applicable to 

13 the existing balance on a credit card account of the 

14 consumer under an open end consumer credit plan 

15 only under the following circumstances: 

16 ‘‘(A) CHANGE IN INDEX.—The increase is 

17 due solely to the operation of an index that is 

18 not under the creditor’s control and is available 

19 to the general public. 

20 ‘‘(B) EXPIRATION OR LOSS OF PRO21 MOTIONAL RATE.—The increase is due solely 

22 to— 

23 ‘‘(i) the expiration of a promotional 

24 rate; or 


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1 ‘‘(ii) the loss of a promotional rate for 

2 a reason specified in the account agree3 ment (e.g., late payment). 

4 ‘‘(C) PAYMENT NOT RECEIVED DURING 30- 

5 DAY GRACE PERIOD AFTER DUE DATE.—The 

6 increase is due solely to the fact that the con7 sumer’s minimum payment has not been re8 ceived within 30 days after the due date for 

9 such minimum payment. 

10 ‘‘(2) LIMITATION ON INCREASES DUE TO LOSS

11 OF PROMOTIONAL RATE.—Notwithstanding para12 graph (1)(B)(ii), the annual percentage rate in effect 

13 after the increase permitted under such subsection 

14 due to the loss of a promotional rate may not exceed 

15 the annual percentage rate that would have applied 

16 under the terms of the agreement after the expira17 tion of the promotional rate.’’. 

18 (c) ADVANCE NOTICE OF RATE INCREASES.—Section 

19 127B of the Truth in Lending Act is amended by inserting 

20 after subsection (b) (as added by subsection (b)) the fol21 lowing new subsection: 

22 ‘‘(c) ADVANCE NOTICE OF RATE INCREASES.—In the 

23 case of any credit card account under an open end con24 sumer credit plan, no increase in any annual percentage 

25 rate of interest may take effect unless the creditor proVerDate Nov 24 2008 00:06 Jan 23, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H627.IH H627

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1 vides a written notice to the consumer at least 45 days 

2 before the increase takes effect which fully describes the 

3 changes in the annual percentage rate, in a complete and 

4 conspicuous manner, and the extent to which such in5 crease would apply to an existing balance.’’. 

6 (d) CLERICAL AMENDMENT.—The table of sections 

7 for chapter 2 of the Truth in Lending Act (15 U.S.C. 

8 1631 et seq.) is amended by inserting after the item relat9 ing to section 127A the following new item: 

‘‘127B. Additional requirements for credit card accounts under an open end consumer credit plan.’’. 

10 SEC. 3. ADDITIONAL PROVISIONS REGARDING ACCOUNT 

11 FEATURES, TERMS, AND PRICING. 

12 (a) DOUBLE CYCLE BILLING PROHIBITED.—Section 

13 127B of the Truth in Lending Act is amended by inserting 

14 after subsection (c) (as added by section 2(c)) the fol15 lowing new subsection: 

16 ‘‘(d) DOUBLE CYCLE BILLING.— 

17 ‘‘(1) IN GENERAL.—No finance charge may be 

18 imposed by a creditor with respect to any balance on 

19 a credit card account under an open end consumer 

20 credit plan that is based on balances for days in bill21 ing cycles preceding the most recent billing cycle. 

22 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 

23 apply so as to prohibit a creditor from— 


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1 ‘‘(A) charging a consumer for deferred in2 terest even though that interest may have ac3 crued over multiple billing cycles; or 

4 ‘‘(B) adjusting finance charges following 

5 resolution of a billing error dispute.’’. 

6 (b) LIMITATIONS RELATING TO ACCOUNT BALANCES

7 ATTRIBUTABLE ONLY TO ACCRUED INTEREST.—Section 

8 127B is amended by inserting after subsection (d) (as 

9 added by subsection (a)) the following new subsection: 

10 ‘‘(e) LIMITATIONS RELATING TO ACCOUNT BAL11 ANCES ATTRIBUTABLE ONLY TO ACCRUED INTEREST.— 

12 ‘‘(1) IN GENERAL.—If the outstanding balance 

13 on a credit card account under an open end con14 sumer credit plan at the end of a billing period rep15 resents an amount attributable only to interest ac16 crued during the preceding billing period on an out17 standing balance that was fully repaid during the 

18 preceding billing period— 

19 ‘‘(A) no fee may be imposed or collected in 

20 connection with such balance attributable only 

21 to interest before such end of the billing period; 

22 and 

23 ‘‘(B) any failure to make timely repay24 ments of the balance attributable only to interVerDate Nov 24 2008 00:06 Jan 23, 2009 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H627.IH H627

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1 est before such end of the billing period shall 

2 not constitute a default on the account. 

3 Such balance remains a legally binding debt obliga4 tion. 

5 ‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 

6 shall not be construed as affecting— 

7 ‘‘(A) the consumer’s obligation to pay any 

8 accrued interest on a credit card account under 

9 an open end consumer credit plan; or 

10 ‘‘(B) the accrual of interest on the out11 standing balance on any such account in ac12 cordance with the terms of the account and this 

13 title.’’. 

14 (c) ACCESS TO PAYOFF BALANCE INFORMATION.— 

15 Section 127B of the Truth in Lending Act is amended 

16 by inserting after subsection (e) (as added by subsection 

17 (b)) the following new subsection: 

18 ‘‘(f) PAYOFF BALANCE INFORMATION.—Each peri19 odic statement provided by a creditor to a consumer with 

20 respect to a credit card account under an open end con21 sumer credit plan shall contain the telephone number, 

22 Internet address, and website at which the consumer may 

23 request the payoff balance on the account.’’. 

24 (d) CONSUMER RIGHT TO REJECT CARD BEFORE

25 NOTICE IS PROVIDED OF OPEN ACCOUNT.—Section 127B 


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1 of the Truth in Lending Act is amended by inserting after 

2 subsection (g) (as added by subsection (c)) the following 

3 new subsection: 

4 ‘‘(g) CONSUMER RIGHT TO REJECT CARD BEFORE

5 NOTICE OF NEW ACCOUNT IS PROVIDED TO CONSUMER

6 REPORTING AGENCY.— 

7 ‘‘(1) IN GENERAL.—A creditor may not furnish 

8 any information to a consumer reporting agency (as 

9 defined in section 603) concerning the establishment 

10 of a newly opened credit card account under an open 

11 end consumer credit plan until the credit card has 

12 been used or activated by the consumer. 

13 ‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 

14 shall not be construed as prohibiting a creditor from 

15 furnishing information about any application for a 

16 credit card account under an open end consumer 

17 credit plan or any inquiry about any such account 

18 to a consumer reporting agency (as so defined).’’. 

19 (e) USE OF TERMS CLARIFIED.—Section 127B of the 

20 Truth in Lending Act is amended by inserting after sub21 section (g) (as added by subsection (d)) the following new 

22 subsection: 

23 ‘‘(h) USE OF TERMS.—The following requirements 

24 shall apply with respect to the terms of any credit card 

25 account under any open end consumer credit plan: 


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1 ‘‘(1) ‘FIXED’ RATE.—The term ‘fixed’, when 

2 appearing in conjunction with a reference to the an3 nual percentage rate or interest rate applicable with 

4 respect to such account, may only be used to refer 

5 to an annual percentage rate or interest rate that 

6 will not change or vary for any reason over the pe7 riod clearly and conspicuously specified in the terms 

8 of the account. 

9 ‘‘(2) PRIME RATE.—The term ‘prime rate’, 

10 when appearing in any agreement or contract for 

11 any such account, may only be used to refer to the 

12 bank prime rate published in the Federal Reserve 

13 Statistical Release on selected interest rates (daily or 

14 weekly), and commonly referred to as the H.15 re15 lease (or any successor publication). 

16 ‘‘(3) DUE DATE.— 

17 ‘‘(A) IN GENERAL.—Each periodic state18 ment for any such account shall contain a date 

19 by which the next periodic payment on the ac20 count must be made to avoid a late fee or be 

21 considered a late payment, and any payment re22 ceived by 5 p.m., local time at the location spec23 ified by the creditor for the receipt of payment, 

24 on such date shall be treated as a timely pay25 ment for all purposes. 


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1 ‘‘(B) CERTAIN ELECTRONIC FUND TRANS2 FERS.—Any payment with respect to any such 

3 account made by a consumer online to the 

4 website of the credit card issuer or by telephone 

5 directly to the credit card issuer before 5 p.m., 

6 local time at the location specified by the cred7 itor for the receipt of payment, on any business 

8 day shall be credited to the consumer’s account 

9 that business day. 

10 ‘‘(C) PRESUMPTION OF TIMELY PAY11 MENT.—Any evidence provided by a consumer 

12 in the form of a receipt from the United States 

13 Postal Service or other common carrier indi14 cating that a payment on a credit card account 

15 was sent to the issuer not less than 7 days be16 fore the due date contained in the periodic 

17 statement under subparagraph (A) for such 

18 payment shall create a presumption that such 

19 payment was made by the due date, which may 

20 be rebutted by the creditor for fraud or dishon21 esty on the part of the consumer with respect 

22 to the mailing date.’’. 

23 (f) PRO RATA PAYMENT ALLOCATIONS.—Section 

24 127B of the Truth in Lending Act is amended by inserting 


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1 after subsection (h) (as added by subsection (e)) the fol2 lowing new subsection: 

3 ‘‘(i) PRO RATA PAYMENT ALLOCATIONS.— 

4 ‘‘(1) IN GENERAL.—Except as permitted under 

5 paragraph (2), if the outstanding balance on a credit 

6 card account under an open end consumer credit 

7 plan accrues interest at 2 or more different annual 

8 percentage rates, the total amount of each periodic 

9 payment made on such account shall be allocated by 

10 the creditor between or among the outstanding bal11 ances at each such annual percentage rate in the 

12 same proportion as each such balance bears to the 

13 total outstanding balance on the account. 

14 ‘‘(2) ALLOCATION TO HIGHER RATE.—Notwith15 standing paragraph (1), a creditor may elect, in any 

16 case described in such paragraph, to allocate more 

17 than a pro rata share of any payment to a portion 

18 of the outstanding balance that bears a higher an19 nual percentage rate than another portion of such 

20 outstanding balance. 

21 ‘‘(3) SPECIAL RULES FOR ACCOUNTS WITH

22 PROMOTIONAL RATE BALANCES OR DEFERRED IN23 TEREST BALANCES.— 

24 ‘‘(A) IN GENERAL.—Notwithstanding para25 graph (1) or (2), in the case of a credit card 


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1 account under an open end consumer credit 

2 plan the current terms of which allow the con3 sumer to receive the benefit of a promotional 

4 rate or deferred interest plan, amounts paid in 

5 excess of the required minimum payment shall 

6 be allocated to the promotional rate balance or 

7 the deferred interest balance only if other bal8 ances have been fully paid. 

9 ‘‘(B) EXCEPTION FOR DEFERRED INTER10 EST BALANCES.—Notwithstanding subpara11 graph (A), a creditor may allocate the entire 

12 amount paid by the consumer in excess of the 

13 required minimum periodic payment to a bal14 ance on which interest is deferred during the 2 

15 billing cycles immediately preceding the expira16 tion of the period during which interest is de17 ferred. 

18 ‘‘(4) PROHIBITION ON RESTRICTED GRACE PE19 RIODS UNDER CERTAIN CIRCUMSTANCES.—If, with 

20 respect to any credit card account under an open 

21 end consumer credit, a creditor offers a time period 

22 in which to repay credit extended without incurring 

23 finance charges to cardholders who pay the balance 

24 in full, the creditor may not deny a consumer who 

25 takes advantage of a promotional rate balance or deVerDate Nov 24 2008 00:06 Jan 23, 2009 Jkt 079200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H627.IH H627

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1 ferred interest rate balance offer with respect to 

2 such an account any such time period for repaying 

3 credit without incurring finance charges.’’. 

4 (g) TIMELY PROVISION OF PERIODIC STATE5 MENTS.—Section 127B of the Truth in Lending Act is 

6 amended by inserting after subsection (i) (as added by 

7 subsection (f)) the following new subsection: 

8 ‘‘(j) TIMELY PROVISION OF PERIODIC STATE9 MENTS.—Each periodic statement with respect to a credit 

10 card account under an open end consumer credit plan 

11 shall be sent by the creditor to the consumer not less than 

12 25 calendar days before the due date identified in such 

13 statement for the next payment on the outstanding bal14 ance on such account, and section 163(a) shall be applied 

15 with respect to any such account by substituting ‘25’ for 

16 ‘fourteen’.’’. 

17 SEC. 4. CONSUMER CHOICE WITH RESPECT TO OVER-THE18 LIMIT TRANSACTIONS. 

19 Section 127B of the Truth in Lending Act is amend20 ed by inserting after subsection (j) (as added by section 

21 3(g)) the following new subsections: 

22 ‘‘(k) OPT-OUT OF CREDITOR AUTHORIZATION OF

23 OVER-THE-LIMIT TRANSACTIONS IF FEES ARE IM24 POSED.— 


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1 ‘‘(1) IN GENERAL.—In the case of any credit 

2 card account under an open end consumer credit 

3 plan under which an over-the-limit-fee may be im4 posed by the creditor for any extension of credit in 

5 excess of the amount of credit authorized to be ex6 tended under such account, the consumer may elect 

7 to prohibit the creditor, with respect to such ac8 count, from completing any transaction involving the 

9 extension of credit, with respect to such account, in 

10 excess of the amount of credit authorized by noti11 fying the creditor of such election in accordance with 

12 paragraph (2). 

13 ‘‘(2) NOTIFICATION BY CONSUMER.—A con14 sumer shall notify a creditor under paragraph (1)— 

15 ‘‘(A) through the notification system main16 tained by the creditor under paragraph (4); or 

17 ‘‘(B) by submitting to the creditor a signed 

18 notice of election, by mail or electronic commu19 nication, on a form issued by the creditor for 

20 purposes of this subparagraph. 

21 ‘‘(3) EFFECTIVENESS OF ELECTION.—An elec22 tion by a consumer under paragraph (1) shall be ef23 fective beginning 3 business days after the creditor 

24 receives notice from the consumer in accordance 


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1 with paragraph (2) and shall remain effective until 

2 the consumer revokes the election. 

3 ‘‘(4) NOTIFICATION SYSTEM.—Each creditor 

4 that maintains credit card accounts under an open 

5 end consumer credit plan shall establish and main6 tain a notification system, including a toll-free tele7 phone number, Internet address, and website, which 

8 permits any consumer whose credit card account is 

9 maintained by the creditor to notify the creditor of 

10 an election under this subsection in accordance with 

11 paragraph (2). 

12 ‘‘(5) ANNUAL NOTICE TO CONSUMERS OF

13 AVAILABILITY OF ELECTION.—In the case of any 

14 credit card account under an open end consumer 

15 credit plan, the creditor shall include a notice, in 

16 clear and conspicuous language, of the availability of 

17 an election by the consumer under this paragraph as 

18 a means of avoiding over-the limit fees and a higher 

19 amount of indebtedness, and the method for pro20 viding such notice— 

21 ‘‘(A) in the periodic statement required 

22 under subsection (b) with respect to such ac23 count at least once each calendar year; and 

24 ‘‘(B) in any such periodic statement which 

25 includes a notice of the imposition of an overVerDate Nov 24 2008 00:06 Jan 23, 2009 Jkt 079200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H627.IH H627

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1 the-limit fee during the period covered by the 

2 statement. 

3 ‘‘(6) NO FEES IF CONSUMER HAS MADE AN

4 ELECTION.—If a consumer has made an election 

5 under paragraph (1), no over-the-limit fee may be 

6 imposed on the account for any reason that has 

7 caused the outstanding balance in the account to ex8 ceed the credit limit. 

9 ‘‘(7) REGULATIONS.— 

10 ‘‘(A) IN GENERAL.—The Board shall issue 

11 regulations allowing for the completion of over12 the-limit transactions that for operational rea13 sons exceed the credit limit by a de minimis 

14 amount, even where the cardholder has made 

15 an election under paragraph (1). 

16 ‘‘(B) SUBJECT TO NO FEE LIMITATION.— 

17 The regulations prescribed under subparagraph 

18 (A) shall not allow for the imposition of any fee 

19 or any rate increase based on the permitted 

20 over-the-limit transactions. 

21 ‘‘(l) OVER-THE-LIMIT FEE RESTRICTIONS.—With re22 spect to a credit card account under an open end consumer 

23 credit plan, an over-the-limit fee may be imposed only once 

24 during a billing cycle if, on the last day of such billing 

25 cycle, the credit limit on the account is exceeded, and an 


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1 over-the-limit fee, with respect to such excess credit, may 

2 be imposed only once in each of the 2 subsequent billing 

3 cycles, unless the consumer has obtained an additional ex4 tension of credit in excess of such credit limit during any 

5 such subsequent cycle or the consumer reduces the out6 standing balance below the credit limit as of the end of 

7 such billing cycle. 

8 ‘‘(m) OVER-THE-LIMIT FEES PROHIBITED IN CON9 JUNCTION WITH CERTAIN CREDIT HOLDS.—Notwith10 standing subsection (l), an over-the-limit fee may not be 

11 imposed if the credit limit was exceeded due to a hold un12 less the actual amount of the transaction for which the 

13 hold was placed would have resulted in the consumer ex14 ceeding the credit limit.’’. 

15 SEC. 5. STRENGTHEN CREDIT CARD INFORMATION COL16 LECTION. 

17 Section 136(b) of the Truth in Lending Act (15 

18 U.S.C. 1646(b)) is amended— 

19 (1) in paragraph (1)— 

20 (A) by striking ‘‘COLLECTION RE21 QUIRED.—The Board shall’’ and inserting 

22 ‘‘COLLECTION REQUIRED.— 

23 ‘‘(A) IN GENERAL.—The Board shall’’. 

24 (B) by adding at the end the following new 

25 subparagraph: 


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1 ‘‘(B) INFORMATION TO BE INCLUDED.— 

2 The information under subparagraph (A) shall 

3 include, for the relevant semiannual period, the 

4 following information with respect each creditor 

5 in connection with any consumer credit card ac6 count: 

7 ‘‘(i) A list of each type of transaction 

8 or event during the semiannual period for 

9 which 1 or more creditors has imposed a 

10 separate interest rate upon a consumer 

11 credit card accountholder, including pur12 chases, cash advances, and balance trans13 fers. 

14 ‘‘(ii) For each type of transaction or 

15 event identified under clause (i)— 

16 ‘‘(I) each distinct interest rate 

17 charged by the card issuer to a con18 sumer credit card accountholder dur19 ing the semiannual period; and 

20 ‘‘(II) the number of cardholders 

21 to whom each such interest rate was 

22 applied during the last calendar 

23 month of the semiannual period, and 

24 the total amount of interest charged 


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1 to such accountholders at each such 

2 rate during such month. 

3 ‘‘(iii) A list of each type of fee that 1 

4 or more of the creditors has imposed upon 

5 a consumer credit card accountholder dur6 ing the semiannual period, including any 

7 fee imposed for obtaining a cash advance, 

8 making a late payment, exceeding the cred9 it limit on an account, making a balance 

10 transfer, or exchanging United States dol11 lars for foreign currency. 

12 ‘‘(iv) For each type of fee identified 

13 under clause (iii), the number of 

14 accountholders upon whom the fee was im15 posed during each calendar month of the 

16 semiannual period, and the total amount of 

17 fees imposed upon cardholders during such 

18 month. 

19 ‘‘(v) The total number of consumer 

20 credit card accountholders that incurred 

21 any finance charge or any other fee during 

22 the semiannual period. 

23 ‘‘(vi) The total number of consumer 

24 credit card accounts maintained by each 


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1 creditor as of the end of the semiannual 

2 period. 

3 ‘‘(vii) The total number and value of 

4 cash advances made during the semiannual 

5 period under a consumer credit card ac6 count. 

7 ‘‘(viii) The total number and value of 

8 purchases involving or constituting con9 sumer credit card transactions during the 

10 semiannual period. 

11 ‘‘(ix) The total number and amount of 

12 repayments on outstanding balances on 

13 consumer credit card accounts in each 

14 month of the semiannual period. 

15 ‘‘(x) The percentage of all consumer 

16 credit card accountholders (with respect to 

17 any creditor) who— 

18 ‘‘(I) incurred a finance charge in 

19 each month of the semiannual period 

20 on any portion of an outstanding bal21 ance on which a finance charge had 

22 not previously been incurred; and 

23 ‘‘(II) incurred any such finance 

24 charge at any time during the semi25 annual period. 


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1 ‘‘(xi) The total number and amount of 

2 balances accruing finance charges during 

3 the semiannual period. 

4 ‘‘(xii) The total number and amount 

5 of the outstanding balances on consumer 

6 credit card accounts as of the end of such 

7 semiannual period. 

8 ‘‘(xiii) Total credit limits in effect on 

9 consumer credit card accounts as of the 

10 end of such semiannual period and the 

11 amount by which such credit limits exceed 

12 the credit limits in effect as of the begin13 ning of such period. 

14 ‘‘(xiv) Any other information related 

15 to interest rates, fees, or other charges 

16 that the Board deems of interest.’’; and 

17 (2) by adding at the end the following new 

18 paragraph: 

19 ‘‘(5) REPORT TO CONGRESS.—The Board shall, 

20 on an annual basis, transmit to Congress and make 

21 public a report containing estimates by the Board of 

22 the approximate, relative percentage of income de23 rived by the credit card operations of depository in24 stitutions from— 


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1 ‘‘(A) the imposition of interest rates on 

2 cardholders, including separate estimates for— 

3 ‘‘(i) interest with an annual percent4 age rate of less than 25 percent; and 

5 ‘‘(ii) interest with an annual percent6 age rate equal to or greater than 25 per7 cent; 

8 ‘‘(B) the imposition of fees on cardholders; 

9 ‘‘(C) the imposition of fees on merchants; 

10 and 

11 ‘‘(D) any other material source of income, 

12 while specifying the nature of that income.’’. 

13 SEC. 6. STANDARDS APPLICABLE TO INITIAL ISSUANCE OF 

14 SUBPRIME OR ‘‘FEE HARVESTER’’ CARDS. 

15 Section 127B of the Truth in Lending Act is amend16 ed by inserting after subsection (m) (as added by section 

17 4) the following new subsection: 

18 ‘‘(n) STANDARDS APPLICABLE TO INITIAL ISSUANCE

19 OF SUBPRIME OR ‘FEE HARVESTER’ CARDS.— 

20 ‘‘(1) IN GENERAL.—In the case of any credit 

21 card account under an open end consumer credit 

22 plan the terms of which require the payment of fees 

23 (other than late fees or over-the-limit fees) by the 

24 consumer in the first year the account is opened in 

25 an amount in excess of 25 percent of the total 


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1 amount of credit authorized under the account, no 

2 payment of any fees (other than late fees or over3 the-limit fees) may be made from the credit made 

4 available by the card. 

5 ‘‘(2) RULE OF CONSTRUCTION.—No provision 

6 of this subsection may be construed as authorizing 

7 any imposition or payment of advance fees otherwise 

8 prohibited by any provision of law.’’. 

9 SEC. 7. EXTENSIONS OF CREDIT TO UNDERAGE CON10 SUMERS. 

11 Section 127(c) of the Truth in Lending Act (15 

12 U.S.C. 1637(c)) is amended by adding at the end the fol13 lowing new paragraph: 

14 ‘‘(8) EXTENSIONS OF CREDIT TO UNDERAGE

15 CONSUMERS.— 

16 ‘‘(A) IN GENERAL.—No credit card may be 

17 knowingly issued to, or open end credit plan es18 tablished on behalf of, a consumer who has not 

19 attained the age of 18, unless the consumer is 

20 emancipated under applicable State law. 

21 ‘‘(B) RULE OF CONSTRUCTION.—For the 

22 purposes of determining the age of an appli23 cant, the submission of a signed application by 

24 a consumer stating that the consumer is over 

25 18 shall be considered sufficient proof of age.’’. 


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25 

•HR 627 IH

1 SEC. 8. EFFECTIVE DATE. 

2 (a) IN GENERAL.—The amendments made by this 

3 Act shall apply to all credit card accounts under open end 

4 consumer credit plans as of the end of the 3-month period 

5 beginning on the date of the enactment of this Act. 

6 (b) REGULATIONS.—The Board of Governors of the 

7 Federal Reserve System, in consultation with the Comp8 troller of the Currency, the Director of the Office of Thrift 

9 Supervision, the Federal Deposit Insurance Corporation, 

10 the National Credit Union Administration Board, and the 

11 Federal Trade Commission, shall prescribe regulations, in 

12 final form, implementing the amendments made by this 

13 Act before the end of the 3-month period referred to in 

14 subsection (a). 

Æ 


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