IIB 

110TH CONGRESS 

2D SESSION H. R. 5244 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 24 (legislative day, SEPTEMBER 17), 2008 

Received 

OCTOBER 2 (legislative day, SEPTEMBER 17), 2008 

Read twice and referred to the Committee on Banking, Housing, and Urban 

Affairs 

AN ACT 

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 2008’’. 

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 fourteenth day after the creditor provides notice 

24 of an increase in the annual percentage rate in ac25 cordance 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 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 Aug 31 2005 05:56 Oct 03, 2008 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5244.RFS H5244

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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 Aug 31 2005 05:56 Oct 03, 2008 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5244.RFS H5244

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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 Worldwide Web site at which the 

23 consumer may request the payoff balance on the ac24 count.’’. 


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1 (d) CONSUMER RIGHT TO REJECT CARD BEFORE

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

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

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

5 new subsection: 

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

7 NOTICE OF NEW ACCOUNT IS PROVIDED TO CONSUMER

8 REPORTING AGENCY.— 

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

10 any information to a consumer reporting agency (as 

11 defined in section 603) concerning the establishment 

12 of a newly opened credit card account under an open 

13 end consumer credit plan until the credit card has 

14 been used or activated by the consumer. 

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

16 shall not be construed as prohibiting a creditor from 

17 furnishing information about any application for 

18 credit card account under an open end consumer 

19 credit plan or any inquiry about any such account 

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

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

22 Truth in Lending Act is amended by inserting after sub23 section (g) (as added by subsection (d)) the following new 

24 subsection: 


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

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

3 account under any open end consumer credit plan: 

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

5 appearing in conjunction with a reference to the an6 nual percentage rate or interest rate applicable with 

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

8 to an annual percentage rate or interest rate that 

9 will not change or vary for any reason over the pe10 riod clearly and conspicuously specified in the terms 

11 of the account. 

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

13 when appearing in any agreement or contract for 

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

15 bank prime rate published in the Federal Reserve 

16 Statistical Release on selected interest rates (daily or 

17 weekly), and commonly referred to as the H.15 re18 lease (or any successor publication). 

19 ‘‘(3) DUE DATE.— 

20 ‘‘(A) IN GENERAL.—Each periodic state21 ment for any such account shall contain a date 

22 by which the next periodic payment on the ac23 count must be made to avoid a late fee or be 

24 considered a late payment, and any payment re25 ceived by 5 p.m., local time at the location specVerDate Aug 31 2005 05:56 Oct 03, 2008 Jkt 079200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5244.RFS H5244

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1 ified by the creditor for the receipt of payment, 

2 on such date shall be treated as a timely pay3 ment for all purposes. 

4 ‘‘(B) CERTAIN ELECTRONIC FUND TRANS5 FERS.—Any payment with respect to any such 

6 account made by a consumer on-line to the Web 

7 site of the credit card issuer or by telephone di8 rectly to the credit card issuer before 5 p.m., 

9 local time at the location specified by the cred10 itor for the receipt of payment, on any business 

11 day shall be credited to the consumer’s account 

12 that business day. 

13 ‘‘(C) PRESUMPTION OF TIMELY PAY14 MENT.—Any evidence provided by a consumer 

15 in the form of a receipt from the United States 

16 Postal Service or other common carrier indi17 cating that a payment on a credit card account 

18 was sent to the issuer not less than 7 days be19 fore the due date contained in the periodic 

20 statement under subparagraph (A) for such 

21 payment shall create a presumption that such 

22 payment was made by the due date, which may 

23 be rebutted by the creditor for fraud or dishon24 esty on the part of the consumer with respect 

25 to the mailing date.’’. 


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1 (f) PRO RATA PAYMENT ALLOCATIONS.—Section 

2 127B of the Truth in Lending Act is amended by inserting 

3 after subsection (h) (as added by subsection (e)) the fol4 lowing new subsection: 

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

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

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

8 card account under an open end consumer credit 

9 plan accrues interest at 2 or more different annual 

10 percentage rates, the total amount of each periodic 

11 payment made on such account shall be allocated by 

12 the creditor between or among the outstanding bal13 ances at each such annual percentage rate in the 

14 same proportion as each such balance bears to the 

15 total outstanding balance on the account. 

16 ‘‘(2) ALLOCATION TO HIGHER RATE.—Notwith17 standing paragraph (1), a creditor may elect, in any 

18 case described in such paragraph, to allocate more 

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

20 of the outstanding balance that bears a higher an21 nual percentage rate than another portion of such 

22 outstanding balance. 

23 ‘‘(3) SPECIAL RULES FOR ACCOUNTS WITH

24 PROMOTIONAL RATE BALANCES OR DEFERRED IN25 TEREST BALANCES.— 


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1 ‘‘(A) IN GENERAL.—Notwithstanding para2 graph (1) or (2), in the case of a credit card 

3 account under an open end consumer credit 

4 plan the current terms of which allow the con5 sumer to receive the benefit of a promotional 

6 rate or deferred interest plan, amounts paid in 

7 excess of the required minimum payment shall 

8 be allocated to the promotional rate balance or 

9 the deferred interest balance only if other bal10 ances have been fully paid. 

11 ‘‘(B) EXCEPTION FOR DEFERRED INTER12 EST BALANCES.—Notwithstanding subpara13 graph (A), a creditor may allocate the entire 

14 amount paid by the consumer in excess of the 

15 required minimum periodic payment to a bal16 ance on which interest is deferred during the 2 

17 billing cycles immediately preceding the expira18 tion of the period during which interest is de19 ferred. 

20 ‘‘(4) PROHIBITION ON RESTRICTED GRACE PE21 RIODS UNDER CERTAIN CIRCUMSTANCES.—If, with 

22 respect to any credit card account under an open 

23 end consumer credit, a creditor offers a time period 

24 in which to repay credit extended without incurring 

25 finance charges to cardholders who pay the balance 


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

2 takes advantage of a promotional rate balance or de3 ferred interest rate balance offer with respect to 

4 such an account any such time period for repaying 

5 credit without incurring finance charges.’’. 

6 (g) TIMELY PROVISION OF PERIODIC STATE7 MENTS.—Section 127B of the Truth in Lending Act is 

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

9 subsection (f)) the following new subsection: 

10 ‘‘(j) TIMELY PROVISION OF PERIODIC STATE11 MENTS.—Each periodic statement with respect to a credit 

12 card account under an open end consumer credit plan 

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

14 25 calendar days before the due date identified in such 

15 statement for the next payment on the outstanding bal16 ance on such account, and section 163(a) shall be applied 

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

18 ‘fourteen’.’’. 

19 SEC. 4. CONSUMER CHOICE WITH RESPECT TO OVER-THE20 LIMIT TRANSACTIONS. 

21 Section 127B of the Truth in Lending Act is amend22 ed by inserting after subsection (j) (as added by section 

23 3(g)) the following new subsections: 


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

2 OVER-THE-LIMIT TRANSACTIONS IF FEES ARE IM3 POSED.— 

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

5 card account under an open end consumer credit 

6 plan under which an over-the-limit-fee may be im7 posed by the creditor for any extension of credit in 

8 excess of the amount of credit authorized to be ex9 tended under such account, the consumer may elect 

10 to prohibit the creditor, with respect to such ac11 count, from completing any transaction involving the 

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

13 excess of the amount of credit authorized by noti14 fying the creditor of such election in accordance with 

15 paragraph (2). 

16 ‘‘(2) NOTIFICATION BY CONSUMER.—A con17 sumer shall notify a creditor under paragraph (1)— 

18 ‘‘(A) through the notification system main19 tained by the creditor under paragraph (4); or 

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

21 notice of election, by mail or electronic commu22 nication, on a form issued by the creditor for 

23 purposes of this subparagraph. 

24 ‘‘(3) EFFECTIVENESS OF ELECTION.—An elec25 tion by a consumer under paragraph (1) shall be efVerDate Aug 31 2005 05:56 Oct 03, 2008 Jkt 079200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H5244.RFS H5244

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1 fective beginning 3 business days after the creditor 

2 receives notice from the consumer in accordance 

3 with paragraph (2) and shall remain effective until 

4 the consumer revokes the election. 

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

6 that maintains credit card accounts under an open 

7 end consumer credit plan shall establish and main8 tain a notification system, including a toll-free tele9 phone number, Internet address, and Worldwide 

10 Web site, which permits any consumer whose credit 

11 card account is maintained by the creditor to notify 

12 the creditor of an election under this subsection in 

13 accordance with paragraph (2). 

14 ‘‘(5) ANNUAL NOTICE TO CONSUMERS OF

15 AVAILABILITY OF ELECTION.—In the case of any 

16 credit card account under an open end consumer 

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

18 clear and conspicuous language, of the availability of 

19 an election by the consumer under this paragraph as 

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

21 amount of indebtedness, and the method for pro22 viding such notice— 

23 ‘‘(A) in the periodic statement required 

24 under subsection (b) with respect to such ac25 count at least once each calendar year; and 


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

2 includes a notice of the imposition of an over3 the-limit fee during the period covered by the 

4 statement. 

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

6 ELECTION.—If a consumer has made an election 

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

8 imposed on the account for any reason that has 

9 caused the outstanding balance in the account to ex10 ceed the credit limit. 

11 ‘‘(7) REGULATIONS.— 

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

13 regulations allowing for the completion of over14 the-limit transactions that for operational rea15 sons exceed the credit limit by a de minimis 

16 amount, even where the cardholder has made 

17 an election under paragraph (1). 

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

19 The regulations prescribed under subparagraph 

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

21 or any rate increase based on the permitted 

22 over-the-limit transactions. 

23 ‘‘(l) OVER-THE-LIMIT FEE RESTRICTIONS.—With re24 spect to a credit card account under an open end consumer 

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


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

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

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

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

5 cycles, unless the consumer has obtained an additional ex6 tension of credit in excess of such credit limit during any 

7 such subsequent cycle or the consumer reduces the out8 standing balance below the credit limit as of the end of 

9 such billing cycle. 

10 ‘‘(m) OVER-THE-LIMIT FEES PROHIBITED IN CON11 JUNCTION WITH CERTAIN CREDIT HOLDS.—Notwith12 standing subsection (l), an over-the-limit fee may not be 

13 imposed if the credit limit was exceeded due to a hold un14 less the actual amount of the transaction for which the 

15 hold was placed would have resulted in the consumer ex16 ceeding the credit limit.’’. 

17 SEC. 5. STRENGTHEN CREDIT CARD INFORMATION COL18 LECTION. 

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

20 U.S.C. 1646(b)) is amended— 

21 (1) in paragraph (1)— 

22 (A) by striking ‘‘COLLECTION RE23 QUIRED.—The Board shall’’ and inserting 

24 ‘‘COLLECTION REQUIRED.— 

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


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

2 subparagraph: 

3 ‘‘(B) INFORMATION TO BE INCLUDED.— 

4 The information under subparagraph (A) shall 

5 include, for the relevant semiannual period, the 

6 following information with respect each creditor 

7 in connection with any consumer credit card ac8 count: 

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

10 or event during the semiannual period for 

11 which 1 or more creditors has imposed a 

12 separate interest rate upon a consumer 

13 credit card accountholder, including pur14 chases, cash advances, and balance trans15 fers. 

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

17 event identified under clause (i)— 

18 ‘‘(I) each distinct interest rate 

19 charged by the card issuer to a con20 sumer credit card accountholder dur21 ing the semiannual period ; and 

22 ‘‘(II) the number of cardholders 

23 to whom each such interest rate was 

24 applied during the last calendar 

25 month of the semiannual period, and 


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1 the total amount of interest charged 

2 to such accountholders at each such 

3 rate during such month. 

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

5 or more of the creditors has imposed upon 

6 a consumer credit card accountholder dur7 ing the semiannual period, including any 

8 fee imposed for obtaining a cash advance, 

9 making a late payment, exceeding the cred10 it limit on an account, making a balance 

11 transfer, or exchanging United States dol12 lars for foreign currency. 

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

14 under clause (iii), the number of 

15 accountholders upon whom the fee was im16 posed during each calendar month of the 

17 semiannual period, and the total amount of 

18 fees imposed upon cardholders during such 

19 month. 

20 ‘‘(v) The total number of consumer 

21 credit card accountholders that incurred 

22 any finance charge or any other fee during 

23 the semiannual period. 

24 ‘‘(vi) The total number of consumer 

25 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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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 1-year 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 6-month period beginning on 

14 the date of the enactment of this Act, except that it is 

15 the sense of the Congress that no provision of this Act 

16 should impede the promulgation of regulations in final 

17 form under laws in effect on the day before such date of 

18 enactment and that such regulations should be prescribed 

19 in final form on or before December 31, 2008, and should 

20 apply to credit card transactions under any open end con21 sumer credit plan after the end of the 30-day period beginVerDate Aug 31 2005 05:56 Oct 03, 2008 Jkt 079200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\H5244.RFS H5244

jbell on PROD1PC69 with BILLS
26 

HR 5244 RFS 

1 ning on the date such regulations are prescribed in final 

2 form. 

Passed the House of Representatives September 23, 

2008. 

Attest: LORRAINE C. MILLER, 

Clerk. 


jbell on PROD1PC69 with BILLS