IB 

Union Calendar No. 554 

110TH CONGRESS 

2D SESSION H. R. 5244 

[Report No. 110–857] 

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 

FEBRUARY 7, 2008 

Mrs. MALONEY of New York (for herself, Mr. FRANK of Massachusetts, Ms. 

WATERS, Mr. GUTIERREZ, Mr. LYNCH, Mr. ELLISON, Mr. COHEN, Mr. 

FATTAH, Mr. HINCHEY, Mr. LANGEVIN, Mr. NADLER, Ms. SHEA-PORTER, Ms. SOLIS, Mr. WELCH of Vermont, Mr. WYNN, Mr. GONZALEZ, 

Mr. DEFAZIO, Mr. TAYLOR, Mr. OBEY, Ms. HIRONO, Mrs. BOYDA of 

Kansas, Ms. WASSERMAN SCHULTZ, Mr. UDALL of Colorado, Mr. DINGELL, Ms. CORRINE BROWN of Florida, Mr. THOMPSON of Mississippi, 

Mr. HASTINGS of Florida, Ms. CLARKE, Mr. JACKSON of Illinois, Mr. 

DAVIS of Illinois, Mrs. GILLIBRAND, Ms. EDDIE BERNICE JOHNSON of 

Texas, Ms. WATSON, Mr. ARCURI, Mr. ENGEL, Mr. TIERNEY, Mr. VAN

HOLLEN, Mr. GEORGE MILLER of California, Mr. MORAN of Virginia, 

Mr. WEINER, Mr. ABERCROMBIE, Ms. SCHAKOWSKY, Mr. SHAYS, Mr. 

SERRANO, Mr. DOGGETT, and Mr. LINCOLN DAVIS of Tennessee) introduced the following bill; which was referred to the Committee on Financial Services 

SEPTEMBER 16, 2008 

Additional sponsors: Mr. DELAHUNT, Ms. DELAURO, Mr. RAHALL, Mr. 

BLUMENAUER, Mr. ACKERMAN, Mr. MCGOVERN, Mr. HALL of New 

York, Mr. FILNER, Mr. MCNULTY, Mr. GRIJALVA, Mr. PAYNE, Mr. 

MCDERMOTT, Mr. REYES, Mr. WALZ of Minnesota, Mr. BECERRA, Mr. 

CHANDLER, Mr. CONYERS, Ms. MCCOLLUM of Minnesota, Mr. WU, Mr. 

RODRIGUEZ, Mr. KENNEDY, Mr. CLAY, Ms. WOOLSEY, Mr. BAIRD, Mr. 

CUMMINGS, Mr. SIRES, Mr. BERMAN, Mr. STARK, Mr. HARE, Ms. 

SLAUGHTER, Mr. CAPUANO, Mr. MILLER of North Carolina, Ms. ZOE

LOFGREN of California, Mr. FARR, Ms. JACKSON-LEE of Texas, Mr. 

RYAN of Ohio, Mr. LEWIS of Georgia, Mr. HONDA, Ms. SUTTON, Mr. 

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SARBANES, Ms. ROYBAL-ALLARD, Ms. BALDWIN, Ms. ESHOO, Mr. ROTHMAN, Mr. KILDEE, Ms. LORETTA SANCHEZ of California, Mr. ISRAEL, 

Mr. KAGEN, Mr. BRALEY of Iowa, Mr. MEEK of Florida, Mr. ORTIZ, 

Mrs. LOWEY, Mr. JEFFERSON, Mr. BISHOP of Georgia, Mr. GENE

GREEN of Texas, Mr. YARMUTH, Mr. WAXMAN, Mr. CARNAHAN, Mr. 

JOHNSON of Georgia, Mr. STUPAK, Ms. TSONGAS, Mr. COURTNEY, Mr. 

ALLEN, Mr. LEVIN, Mr. ANDREWS, Ms. GIFFORDS, Mr. WATT, Mr. 

BACA, Mr. KANJORSKI, Mr. HINOJOSA, Mr. CLEAVER, Mr. MCNERNEY, 

Mr. AL GREEN of Texas, Mr. BARROW, Mr. MARSHALL, Mr. MARKEY, 

Mr. SHERMAN, Mr. LIPINSKI, Mr. BUTTERFIELD, Ms. KILPATRICK, Mrs. 

CAPPS, Mrs. NAPOLITANO, Ms. NORTON, Mr. BOSWELL, Ms. LEE, Ms. 

KAPTUR, Mr. HIGGINS, Mr. OLVER, Mr. JONES of North Carolina, Ms. 

MATSUI, Mr. PASCRELL, Mr. PALLONE, Mr. MURTHA, Mr. INSLEE, Mr. 

BRADY of Pennsylvania, Mr. CARSON, Mr. SPEIER, Mr. HOLT, Mr. 

TOWNS, Ms. LINDA T. SA ́NCHEZ of California, Mr. CUELLAR, Mr. RANGEL, Mrs. JONES of Ohio, Mr. FALEOMAVAEGA, Ms. BERKLEY, Mr. 

LOEBSACK, Mr. COOPER, Ms. BORDALLO, Mr. KUCINICH, and Mr. NEAL

of Massachusetts 

SEPTEMBER 16, 2008 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on February 7, 2008] 

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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Credit Cardholders’ Bill 

5 of Rights Act of 2008’’. 

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

2 (a) RETROACTIVE RATE INCREASES AND UNIVERSAL

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

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

5 section 127A the following new section: 

6 ‘‘§ 127B. Additional requirements for credit card ac7 counts under an open end consumer cred8 it plan 

9 ‘‘(a) RETROACTIVE RATE INCREASES AND UNIVERSAL

10 DEFAULT LIMITED.— 

11 ‘‘(1) IN GENERAL.—Except as provided in sub12 section (b), no creditor may increase any annual per13 centage rate of interest applicable to the existing bal14 ance on a credit card account of the consumer under 

15 an open end consumer credit plan. 

16 ‘‘(2) EXISTING BALANCE DEFINED.—For pur17 poses of this subsection and subsections (b) and (c), 

18 the term ‘existing balance’ means the amount owed on 

19 a consumer credit card account as of the end of the 

20 fourteenth day after the creditor provides notice of an 

21 increase in the annual percentage rate in accordance 

22 with subsection (c). 

23 ‘‘(3) TREATMENT OF EXISTING BALANCES FOL24 LOWING RATE INCREASE.—If a creditor increases any 

25 annual percentage rate of interest applicable to credit 

26 card account of a consumer under an open end conmstockstill on PROD1PC66 with BILLS

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1 sumer credit plan and there is an existing balance in 

2 the account to which such increase may not apply, the 

3 creditor shall allow the consumer to repay the existing 

4 balance using a method provided by the creditor 

5 which is at least as beneficial to the consumer as 1 

6 of the following methods: 

7 ‘‘(A) An amortization period for the exist8 ing balance of at least 5 years starting from the 

9 date on which the increased annual percentage 

10 rate went into effect. 

11 ‘‘(B) The percentage of the existing balance 

12 that was included in the required minimum 

13 periodic payment before the rate increase cannot 

14 be more than doubled. 

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

16 ‘‘(A) a creditor increases any annual per17 centage rate of interest applicable on a credit 

18 card account of the consumer under an open end 

19 consumer credit plan; and 

20 ‘‘(B) the creditor is prohibited by this sec21 tion from applying the increased rate to an ex22 isting balance, 

23 the creditor may not assess any fee or charge based 

24 solely on the existing balance.’’. 

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1 (b) EXCEPTIONS TO THE AMENDMENT MADE BY SUB2 SECTION (a).—Section 127B of the Truth in Lending Act 

3 is amended by inserting after subsection (a) (as added by 

4 subsection (a)) the following new subsection: 

5 ‘‘(b) EXCEPTIONS.— 

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

7 annual percentage rate of interest applicable to the 

8 existing balance on a credit card account of the con9 sumer under an open end consumer credit plan only 

10 under the following circumstances: 

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

12 due solely to the operation of an index that is 

13 not under the creditor’s control and is available 

14 to the general public. 

15 ‘‘(B) EXPIRATION OR LOSS OF PRO16 MOTIONAL RATE.—The increase is due solely 

17 to— 

18 ‘‘(i) the expiration of a promotional 

19 rate; or 

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

21 a reason specified in the account agreement 

22 (e.g., late payment). 

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

24 DAY GRACE PERIOD AFTER DUE DATE.—The in25 crease is due solely to the fact that the conmstockstill on PROD1PC66 with BILLS

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1 sumer’s minimum payment has not been received 

2 within 30 days after the due date for such min3 imum payment. 

4 ‘‘(2) LIMITATION ON INCREASES DUE TO LOSS OF

5 PROMOTIONAL RATE.—Notwithstanding paragraph 

6 (1)(B)(ii), the annual percentage rate in effect after 

7 the increase permitted under such subsection due to 

8 the loss of a promotional rate may not exceed the an9 nual percentage rate that would have applied under 

10 the terms of the agreement after the expiration of the 

11 promotional rate.’’. 

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

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

14 after subsection (b) (as added by subsection (b)) the fol15 lowing new subsection: 

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

17 case of any credit card account under an open end con18 sumer credit plan, no increase in any annual percentage 

19 rate of interest may take effect unless the creditor provides 

20 a written notice to the consumer at least 45 days before 

21 the increase takes effect which fully describes the changes 

22 in the annual percentage rate, in a complete and con23 spicuous manner, and the extent to which such increase 

24 would apply to an existing balance.’’. 

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1 (d) CLERICAL AMENDMENT.—The table of sections for 

2 chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et 

3 seq.) is amended by inserting after the item relating to sec4 tion 127A the following new item: 

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

5 SEC. 3. ADDITIONAL PROVISIONS REGARDING ACCOUNT 

6 FEATURES, TERMS, AND PRICING. 

7 (a) DOUBLE CYCLE BILLING PROHIBITED.—Section 

8 127B of the Truth in Lending Act is amended by inserting 

9 after subsection (c) (as added by section 2(c)) the following 

10 new subsection: 

11 ‘‘(d) DOUBLE CYCLE BILLING.— 

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

13 imposed by a creditor with respect to any balance on 

14 a credit card account under an open end consumer 

15 credit plan that is based on balances for days in bill16 ing cycles preceding the most recent billing cycle. 

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

18 apply so as to prohibit a creditor from— 

19 ‘‘(A) charging a consumer for deferred in20 terest even though that interest may have ac21 crued over multiple billing cycles; or 

22 ‘‘(B) adjusting finance charges following 

23 resolution of a billing error dispute.’’. 

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1 (b) LIMITATIONS RELATING TO ACCOUNT BALANCES

2 ATTRIBUTABLE ONLY TO ACCRUED INTEREST.—Section 

3 127B is amended by inserting after subsection (d) (as added 

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

5 ‘‘(e) LIMITATIONS RELATING TO ACCOUNT BALANCES

6 ATTRIBUTABLE ONLY TO ACCRUED INTEREST.— 

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

8 on a credit card account under an open end consumer 

9 credit plan at the end of a billing period represents 

10 an amount attributable only to interest accrued dur11 ing the preceding billing period on an outstanding 

12 balance that was fully repaid during the preceding 

13 billing period— 

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

15 connection with such balance attributable only to 

16 interest before such end of the billing period; and 

17 ‘‘(B) any failure to make timely repay18 ments of the balance attributable only to interest 

19 before such end of the billing period shall not 

20 constitute a default on the account. 

21 Such balance remains a legally binding debt obliga22 tion. 

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

24 shall not be construed as affecting— 

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

2 accrued interest on a credit card account under 

3 an open end consumer credit plan; or 

4 ‘‘(B) the accrual of interest on the out5 standing balance on any such account in accord6 ance with the terms of the account and this 

7 title.’’. 

8 (c) ACCESS TO PAYOFF BALANCE INFORMATION.—Sec9 tion 127B of the Truth in Lending Act is amended by in10 serting after subsection (e) (as added by subsection (b)) the 

11 following new subsection: 

12 ‘‘(f) PAYOFF BALANCE INFORMATION.—Each periodic 

13 statement provided by a creditor to a consumer with respect 

14 to a credit card account under an open end consumer credit 

15 plan shall contain the telephone number, Internet address, 

16 and Worldwide Web site at which the consumer may request 

17 the payoff balance on the account.’’. 

18 (d) CONSUMER RIGHT TO REJECT CARD BEFORE NO19 TICE IS PROVIDED OF OPEN ACCOUNT.—Section 127B of 

20 the Truth in Lending Act is amended by inserting after 

21 subsection (g) (as added by subsection (c)) the following new 

22 subsection: 

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

24 NOTICE OF NEW ACCOUNT IS PROVIDED TO CONSUMER RE25 PORTING AGENCY.— 

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

2 any information to a consumer reporting agency (as 

3 defined in section 603) concerning the establishment 

4 of a newly opened credit card account under an open 

5 end consumer credit plan until the credit card has 

6 been used or activated by the consumer. 

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

8 shall not be construed as prohibiting a creditor from 

9 furnishing information about any application for 

10 credit card account under an open end consumer 

11 credit plan or any inquiry about any such account 

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

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

14 Truth in Lending Act is amended by inserting after sub15 section (g) (as added by subsection (d)) the following new 

16 subsection: 

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

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

19 account under any open end consumer credit plan: 

20 ‘‘(1) ‘FIXED’ RATE.—The term ‘fixed’, when ap21 pearing in conjunction with a reference to the annual 

22 percentage rate or interest rate applicable with re23 spect to such account, may only be used to refer to an 

24 annual percentage rate or interest rate that will not 

25 change or vary for any reason over the period clearly 

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1 and conspicuously specified in the terms of the ac2 count. 

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

4 appearing in any agreement or contract for any such 

5 account, may only be used to refer to the bank prime 

6 rate published in the Federal Reserve Statistical Re7 lease on selected interest rates (daily or weekly), and 

8 commonly referred to as the H.15 release (or any suc9 cessor publication). 

10 ‘‘(3) DUE DATE.— 

11 ‘‘(A) IN GENERAL.—Each periodic state12 ment for any such account shall contain a date 

13 by which the next periodic payment on the ac14 count must be made to avoid a late fee or be con15 sidered a late payment, and any payment re16 ceived by 5 p.m., local time at the location speci17 fied by the creditor for the receipt of payment, 

18 on such date shall be treated as a timely pay19 ment for all purposes. 

20 ‘‘(B) CERTAIN ELECTRONIC FUND TRANS21 FERS.—Any payment with respect to any such 

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

23 site of the credit card issuer or by telephone di24 rectly to the credit card issuer before 5 p.m., 

25 local time at the location specified by the credmstockstill on PROD1PC66 with BILLS

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1 itor for the receipt of payment, on any business 

2 day shall be credited to the consumer’s account 

3 that business day. 

4 ‘‘(C) PRESUMPTION OF TIMELY PAYMENT.— 

5 Any evidence provided by a consumer in the 

6 form of a receipt from the United States Postal 

7 Service or other common carrier indicating that 

8 a payment on a credit card account was sent to 

9 the issuer not less than 7 days before the due 

10 date contained in the periodic statement under 

11 subparagraph (A) for such payment shall create 

12 a presumption that such payment was made by 

13 the due date, which may be rebutted by the cred14 itor for fraud or dishonesty on the part of the 

15 consumer with respect to the mailing date.’’. 

16 (f) PRO RATA PAYMENT ALLOCATIONS.—Section 127B 

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

18 subsection (h) (as added by subsection (e)) the following new 

19 subsection: 

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

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

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

23 card account under an open end consumer credit plan 

24 accrues interest at 2 or more different annual per25 centage rates, the total amount of each periodic paymstockstill on PROD1PC66 with BILLS

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1 ment made on such account shall be allocated by the 

2 creditor between or among the outstanding balances 

3 at each such annual percentage rate in the same pro4 portion as each such balance bears to the total out5 standing balance on the account. 

6 ‘‘(2) ALLOCATION TO HIGHER RATE.—Notwith7 standing paragraph (1), a creditor may elect, in any 

8 case described in such paragraph, to allocate more 

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

10 of the outstanding balance that bears a higher annual 

11 percentage rate than another portion of such out12 standing balance. 

13 ‘‘(3) SPECIAL RULES FOR ACCOUNTS WITH PRO14 MOTIONAL RATE BALANCES OR DEFERRED INTEREST

15 BALANCES.— 

16 ‘‘(A) IN GENERAL.—Notwithstanding para17 graph (1) or (2), in the case of a credit card ac18 count under an open end consumer credit plan 

19 the current terms of which allow the consumer to 

20 receive the benefit of a promotional rate or de21 ferred interest plan, amounts paid in excess of 

22 the required minimum payment shall be allo23 cated to the promotional rate balance or the de24 ferred interest balance only if other balances 

25 have been fully paid. 

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1 ‘‘(B) EXCEPTION FOR DEFERRED INTEREST

2 BALANCES.—Notwithstanding subparagraph (A), 

3 a creditor may allocate the entire amount paid 

4 by the consumer in excess of the required min5 imum periodic payment to a balance on which 

6 interest is deferred during the 2 billing cycles 

7 immediately preceding the expiration of the pe8 riod during which interest is deferred. 

9 ‘‘(4) PROHIBITION ON RESTRICTED GRACE PERI10 ODS UNDER CERTAIN CIRCUMSTANCES.—If, with re11 spect to any credit card account under an open end 

12 consumer credit, a creditor offers a time period in 

13 which to repay credit extended without incurring fi14 nance charges to cardholders who pay the balance in 

15 full, the creditor may not deny a consumer who takes 

16 advantage of a promotional rate balance or deferred 

17 interest rate balance offer with respect to such an ac18 count any such time period for repaying credit with19 out incurring finance charges.’’. 

20 (g) TIMELY PROVISION OF PERIODIC STATEMENTS.— 

21 Section 127B of the Truth in Lending Act is amended by 

22 inserting after subsection (i) (as added by subsection (f)) 

23 the following new subsection: 

24 ‘‘(j) TIMELY PROVISION OF PERIODIC STATEMENTS.— 

25 Each periodic statement with respect to a credit card acmstockstill on PROD1PC66 with BILLS

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1 count under an open end consumer credit plan shall be sent 

2 by the creditor to the consumer not less than 25 calendar 

3 days before the due date identified in such statement for 

4 the next payment on the outstanding balance on such ac5 count, and section 163(a) shall be applied with respect to 

6 any such account by substituting ‘25’ for ‘fourteen’.’’. 

7 SEC. 4. CONSUMER CHOICE WITH RESPECT TO OVER-THE8 LIMIT TRANSACTIONS. 

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

10 by inserting after subsection (j) (as added by section 3(g)) 

11 the following new subsections: 

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

13 OVER-THE-LIMIT TRANSACTIONS IF FEES ARE IMPOSED.— 

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

15 card account under an open end consumer credit plan 

16 under which an over-the-limit-fee may be imposed by 

17 the creditor for any extension of credit in excess of the 

18 amount of credit authorized to be extended under such 

19 account, the consumer may elect to prohibit the cred20 itor, with respect to such account, from completing 

21 any transaction involving the extension of credit, 

22 with respect to such account, in excess of the amount 

23 of credit authorized by notifying the creditor of such 

24 election in accordance with paragraph (2). 

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1 ‘‘(2) NOTIFICATION BY CONSUMER.—A consumer 

2 shall notify a creditor under paragraph (1)— 

3 ‘‘(A) through the notification system main4 tained by the creditor under paragraph (4); or 

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

6 notice of election, by mail or electronic commu7 nication, on a form issued by the creditor for 

8 purposes of this subparagraph. 

9 ‘‘(3) EFFECTIVENESS OF ELECTION.—An election 

10 by a consumer under paragraph (1) shall be effective 

11 beginning 3 business days after the creditor receives 

12 notice from the consumer in accordance with para13 graph (2) and shall remain effective until the con14 sumer revokes the election. 

15 ‘‘(4) NOTIFICATION SYSTEM.—Each creditor that 

16 maintains credit card accounts under an open end 

17 consumer credit plan shall establish and maintain a 

18 notification system, including a toll-free telephone 

19 number, Internet address, and Worldwide Web site, 

20 which permits any consumer whose credit card ac21 count is maintained by the creditor to notify the cred22 itor of an election under this subsection in accordance 

23 with paragraph (2). 

24 ‘‘(5) ANNUAL NOTICE TO CONSUMERS OF AVAIL25 ABILITY OF ELECTION.—In the case of any credit card 

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1 account under an open end consumer credit plan, the 

2 creditor shall include a notice, in clear and con3 spicuous language, of the availability of an election 

4 by the consumer under this paragraph as a means of 

5 avoiding over-the limit fees and a higher amount of 

6 indebtedness, and the method for providing such no7 tice— 

8 ‘‘(A) in the periodic statement required 

9 under subsection (b) with respect to such account 

10 at least once each calendar year; and 

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

12 includes a notice of the imposition of an over13 the-limit fee during the period covered by the 

14 statement. 

15 ‘‘(6) NO FEES IF CONSUMER HAS MADE AN ELEC16 TION.—If a consumer has made an election under 

17 paragraph (1), no over-the-limit fee may be imposed 

18 on the account for any reason that has caused the out19 standing balance in the account to exceed the credit 

20 limit. 

21 ‘‘(7) REGULATIONS.— 

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

23 regulations allowing for the completion of over24 the-limit transactions that for operational rea25 sons exceed the credit limit by a de minimis 

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1 amount, even where the cardholder has made an 

2 election under paragraph (1). 

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

4 The regulations prescribed under subparagraph 

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

6 or any rate increase based on the permitted over7 the-limit transactions. 

8 ‘‘(l) OVER-THE-LIMIT FEE RESTRICTIONS.—With re9 spect to a credit card account under an open end consumer 

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

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

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

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

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

15 cycles, unless the consumer has obtained an additional ex16 tension of credit in excess of such credit limit during any 

17 such subsequent cycle or the consumer reduces the out18 standing balance below the credit limit as of the end of such 

19 billing cycle. 

20 ‘‘(m) OVER-THE-LIMIT FEES PROHIBITED IN CON21 JUNCTION WITH CERTAIN CREDIT HOLDS.—Notwith22 standing subsection (l), an over-the-limit fee may not be im23 posed if the credit limit was exceeded due to a hold unless 

24 the actual amount of the transaction for which the hold was 

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1 placed would have resulted in the consumer exceeding the 

2 credit limit.’’. 

3 SEC. 5. STRENGTHEN CREDIT CARD INFORMATION COLLEC4 TION. 

5 Section 136(b) of the Truth in Lending Act (15 U.S.C. 

6 1646(b)) is amended— 

7 (1) in paragraph (1)— 

8 (A) by striking ‘‘COLLECTION REQUIRED.— 

9 The Board shall’’ and inserting ‘‘COLLECTION

10 REQUIRED.— 

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

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

13 subparagraph: 

14 ‘‘(B) INFORMATION TO BE INCLUDED.—The 

15 information under subparagraph (A) shall in16 clude, for the relevant semiannual period, the fol17 lowing information with respect each creditor in 

18 connection with any consumer credit card ac19 count: 

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

21 or event during the semiannual period for 

22 which 1 or more creditors has imposed a 

23 separate interest rate upon a consumer 

24 credit card accountholder, including purmstockstill on PROD1PC66 with BILLS

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1 chases, cash advances, and balance trans2 fers. 

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

4 event identified under clause (i)— 

5 ‘‘(I) each distinct interest rate 

6 charged by the card issuer to a con7 sumer credit card accountholder during 

8 the semiannual period ; and 

9 ‘‘(II) the number of cardholders to 

10 whom each such interest rate was ap11 plied during the last calendar month of 

12 the semiannual period, and the total 

13 amount of interest charged to such 

14 accountholders at each such rate dur15 ing such month. 

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

17 or more of the creditors has imposed upon 

18 a consumer credit card accountholder dur19 ing the semiannual period, including any 

20 fee imposed for obtaining a cash advance, 

21 making a late payment, exceeding the credit 

22 limit on an account, making a balance 

23 transfer, or exchanging United States dol24 lars for foreign currency. 

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

2 under clause (iii), the number of 

3 accountholders upon whom the fee was im4 posed during each calendar month of the 

5 semiannual period, and the total amount of 

6 fees imposed upon cardholders during such 

7 month. 

8 ‘‘(v) The total number of consumer 

9 credit card accountholders that incurred 

10 any finance charge or any other fee during 

11 the semiannual period. 

12 ‘‘(vi) The total number of consumer 

13 credit card accounts maintained by each 

14 creditor as of the end of the semiannual pe15 riod. 

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

17 cash advances made during the semiannual 

18 period under a consumer credit card ac19 count. 

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

21 purchases involving or constituting con22 sumer credit card transactions during the 

23 semiannual period. 

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

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1 sumer credit card accounts in each month of 

2 the semiannual period. 

3 ‘‘(x) The percentage of all consumer 

4 credit card accountholders (with respect to 

5 any creditor) who— 

6 ‘‘(I) incurred a finance charge in 

7 each month of the semiannual period 

8 on any portion of an outstanding bal9 ance on which a finance charge had 

10 not previously been incurred; and 

11 ‘‘(II) incurred any such finance 

12 charge at any time during the semi13 annual period. 

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

15 balances accruing finance charges during 

16 the semiannual period. 

17 ‘‘(xii) The total number and amount of 

18 the outstanding balances on consumer credit 

19 card accounts as of the end of such semi20 annual period. 

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

22 consumer credit card accounts as of the end 

23 of such semiannual period and the amount 

24 by which such credit limits exceed the credit 

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1 limits in effect as of the beginning of such 

2 period. 

3 ‘‘(xiv) Any other information related to 

4 interest rates, fees, or other charges that the 

5 Board deems of interest.’’; and 

6 (2) by adding at the end the following new para7 graph: 

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

9 on an annual basis, transmit to Congress and make 

10 public a report containing estimates by the Board of 

11 the approximate, relative percentage of income de12 rived by the credit card operations of depository insti13 tutions from— 

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

15 cardholders, including separate estimates for— 

16 ‘‘(i) interest with an annual percent17 age rate of less than 25 percent; and 

18 ‘‘(ii) interest with an annual percent19 age rate equal to or greater than 25 percent; 

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

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

22 and 

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

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

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1 SEC. 6. STANDARDS APPLICABLE TO INITIAL ISSUANCE OF 

2 SUBPRIME OR ‘‘FEE HARVESTER’’ CARDS. 

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

4 by inserting after subsection (m) (as added by section 4) 

5 the following new subsection: 

6 ‘‘(n) STANDARDS APPLICABLE TO INITIAL ISSUANCE

7 OF SUBPRIME OR ‘FEE HARVESTER’ CARDS.— 

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

9 card account under an open end consumer credit plan 

10 the terms of which require the payment of fees (other 

11 than late fees or over-the-limit fees) by the consumer 

12 in the first year the account is opened in an amount 

13 in excess of 25 percent of the total amount of credit 

14 authorized under the account, no payment of any fees 

15 (other than late fees or over-the-limit fees) may be 

16 made from the credit made available by the card. 

17 ‘‘(2) RULE OF CONSTRUCTION.—No provision of 

18 this subsection may be construed as authorizing any 

19 imposition or payment of advance fees otherwise pro20 hibited by any provision of law.’’. 

21 SEC. 7. EXTENSIONS OF CREDIT TO UNDERAGE CON22 SUMERS. 

23 Section 127(c) of the Truth in Lending Act (15 U.S.C. 

24 1637(c)) is amended by adding at the end the following new 

25 paragraph: 

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•HR 5244 RH

1 ‘‘(8) EXTENSIONS OF CREDIT TO UNDERAGE CON2 SUMERS.— 

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

4 knowingly issued to, or open end credit plan es5 tablished on behalf of, a consumer who has not 

6 attained the age of 18, unless the consumer is 

7 emancipated under applicable State law. 

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

9 purposes of determining the age of an applicant, 

10 the submission of a signed application by a con11 sumer stating that the consumer is over 18 shall 

12 be considered sufficient proof of age.’’. 

13 SEC. 8. EFFECTIVE DATE. 

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

15 shall apply to all credit card accounts under open end con16 sumer credit plans as of the end of the 1-year period begin17 ning on the date of the enactment of this Act. 

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

19 Federal Reserve System, in consultation with the Comp20 troller of the Currency, the Director of the Office of Thrift 

21 Supervision, the Federal Deposit Insurance Corporation, 

22 the National Credit Union Administration Board, and the 

23 Federal Trade Commission, shall prescribe regulations, in 

24 final form, implementing the amendments made by this Act 

25 before the end of the 6-month period beginning on the date 

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1 of the enactment of this Act, except that it is the sense of 

2 the Congress that no provision of this Act should impede 

3 the promulgation of regulations in final form under laws 

4 in effect on the day before such date of enactment and that 

5 such regulations should be prescribed in final form on or 

6 before December 31, 2008, and should apply to credit card 

7 transactions under any open end consumer credit plan after 

8 the end of the 30-day period beginning on the date such 

9 regulations are prescribed in final form. 

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Union Calendar No. 554 

110TH CONGRESS 

2D SESSION H. R. 5244 

[Report No. 110–857] 

A BILL 

To amend the Truth in Lending Act to establish 

credit plan, and for other purposes. tension of credit under an open end consumer fair and transparent practices relating to the exSEPTEMBER 16, 2008 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 

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