II 

110TH CONGRESS 

2D SESSION S. 3252 

To amend the Consumer Credit Protection Act, to ban abusive credit practices, enhance consumer disclosures, protect underage consumers, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 10 (legislative day, JULY 9), 2008 

Mr. DODD (for himself, Mr. LEVIN, Mr. MENENDEZ, Mr. REED, Mr. TESTER, 

Mrs. MCCASKILL, Mr. AKAKA, Mr. CASEY, Mr. OBAMA, Mr. KERRY, Mrs. 

CLINTON, Mr. SANDERS, and Mr. WHITEHOUSE) introduced the following 

bill; which was read twice and referred to the Committee on Banking, 

Housing, and Urban Affairs 

A BILL 

To amend the Consumer Credit Protection Act, to ban abusive credit practices, enhance consumer disclosures, protect underage consumers, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Credit Card Accountability Responsibility and Disclosure 

6 Act of 2008’’ or the ‘‘Credit CARD Act of 2008’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 


jbell on PROD1PC69 with BILLS
2 

•S 3252 IS

Sec. 1. Short title; table of contents. 

Sec. 2. Regulatory authority. 

TITLE I—CONSUMER PROTECTION 

Sec. 101. Prior notice of rate increases required. 

Sec. 102. Freeze on interest rate terms and fees on canceled cards. 

Sec. 103. Limits on fees and interest charges. 

Sec. 104. Consumer right to reject card before notice is provided of open account. 

Sec. 105. Use of terms clarified. 

Sec. 106. Application of card payments. 

Sec. 107. Length of billing period. 

Sec. 108. Prohibition on universal default and unilateral changes to cardholder 

agreements. 

Sec. 109. Enhanced penalties. 

Sec. 110. Enhanced oversight. 

Sec. 111. Clerical amendments. 

TITLE II—ENHANCED CONSUMER DISCLOSURES 

Sec. 201. Payoff timing disclosures. 

Sec. 202. Requirements relating to late payment deadlines and penalties. 

Sec. 203. Renewal disclosures. 

TITLE III—PROTECTION OF YOUNG CONSUMERS 

Sec. 301. Extensions of credit to underage consumers. 

Sec. 302. Restrictions on certain affinity cards. 

Sec. 303. Protection of young consumers from prescreened credit offers. 

TITLE IV—FEDERAL AGENCY COORDINATION 

Sec. 401. Inclusion of all Federal banking agencies. 

TITLE V—MISCELLANEOUS PROVISIONS 

Sec. 501. Study and report. 

Sec. 502. Credit Card Safety Rating System Commission. 

1 SEC. 2. REGULATORY AUTHORITY. 

2 The Board of Governors of the Federal Reserve Sys3 tem (in this Act referred to as the ‘‘Board’’) may issue 

4 such rules and publish such model forms as it considers 

5 necessary to carry out this Act and the amendments made 

6 by this Act. 


jbell on PROD1PC69 with BILLS
3 

•S 3252 IS

1 TITLE I—CONSUMER 

2 PROTECTION 

3 SEC. 101. PRIOR NOTICE OF RATE INCREASES REQUIRED. 

4 Section 127 of the Truth in Lending Act (15 U.S.C. 

5 1637) is amended by adding at the end the following: 

6 ‘‘(i) ADVANCE NOTICE OF INCREASE IN INTEREST

7 RATE REQUIRED.— 

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

9 card account under an open end consumer credit 

10 plan, no increase in any annual percentage rate 

11 (other than an increase due to the expiration of any 

12 introductory percentage rate, or due solely to a 

13 change in another rate of interest to which such rate 

14 is indexed)— 

15 ‘‘(A) may take effect before the beginning 

16 of the billing cycle which begins not earlier than 

17 45 days after the date on which the obligor re18 ceives notice of such increase; or 

19 ‘‘(B) may apply to any outstanding balance 

20 of credit under such plan, as of the effective 

21 date of the increase required under subpara22 graph (A). 

23 ‘‘(2) NOTICE OF RIGHT TO CANCEL.—The no24 tice referred to in paragraph (1) shall be made in a 

25 clear and conspicuous manner, and shall contain a 


jbell on PROD1PC69 with BILLS
4 

•S 3252 IS

1 brief statement of the right of the obligor to cancel 

2 the account before the effective date of the in3 crease.’’. 

4 SEC. 102. FREEZE ON INTEREST RATE TERMS AND FEES ON 

5 CANCELED CARDS. 

6 Section 127 of the Truth in Lending Act (15 U.S.C. 

7 1637) is amended by adding at the end the following: 

8 ‘‘(j) FREEZE ON INTEREST RATE TERMS AND FEES

9 ON CANCELED CARDS.— 

10 ‘‘(1) IN GENERAL.—If an obligor under an open 

11 end consumer credit plan closes or cancels a credit 

12 card account, the repayment of the outstanding bal13 ance after the cancellation shall be subject to all 

14 terms and conditions in effect for the obligor imme15 diately before the card was closed or cancelled, in16 cluding the annual percentage rate and the min17 imum payment terms in effect immediately prior to 

18 such closure or cancellation. 

19 ‘‘(2) RULE OF CONSTRUCTION.—Closure or 

20 cancellation of an account by the obligor shall not 

21 constitute a default under an existing cardholder 

22 agreement, and shall not trigger an obligation to im23 mediately repay the obligation in full.’’. 


jbell on PROD1PC69 with BILLS
5 

•S 3252 IS

1 SEC. 103. LIMITS ON FEES AND INTEREST CHARGES. 

2 Section 127 of the Truth in Lending Act (15 U.S.C. 

3 1637) is amended by adding at the end the following: 

4 ‘‘(k) PROHIBITION ON PENALTIES FOR ON-TIME

5 PAYMENTS.—If an open end consumer credit plan pro6 vides a time period within which an obligor may repay any 

7 portion of the credit extended without incurring an inter8 est charge, and the obligor repays all or a portion of such 

9 credit within the specified time period, the creditor may 

10 not impose or collect an interest charge on the portion of 

11 the credit that was repaid within the specified time period. 

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

13 OVER-THE-LIMIT TRANSACTIONS IF FEES ARE IM14 POSED.— 

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

16 card account under an open end consumer credit 

17 plan under which an over-the-limit-fee may be im18 posed by the creditor for any extension of credit in 

19 excess of the amount of credit authorized to be ex20 tended under such account, the consumer may elect 

21 to prohibit the creditor from completing any over22 the-limit transaction that will result in a fee or con23 stitute a default under the credit agreement, by noti24 fying the creditor of such election in accordance with 

25 paragraph (2). 


jbell on PROD1PC69 with BILLS
6 

•S 3252 IS

1 ‘‘(2) NOTIFICATION BY CONSUMER.—A con2 sumer 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 elec10 tion by a consumer under paragraph (1) shall be ef11 fective beginning 3 business days after the date on 

12 which the consumer notifies the creditor in accord13 ance with paragraph (2), and shall remain effective 

14 until the consumer revokes the election. 

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

16 that maintains credit card accounts under an open 

17 end consumer credit plan shall establish and main18 tain a notification system, including a toll-free tele19 phone number, Internet address, and Worldwide 

20 Web site, which permits any consumer whose credit 

21 card account is maintained by the creditor to notify 

22 the creditor of an election under this subsection, in 

23 accordance with paragraph (2). 

24 ‘‘(5) ANNUAL NOTICE TO CONSUMERS OF

25 AVAILABILITY OF ELECTION.—In the case of any 


jbell on PROD1PC69 with BILLS
7 

•S 3252 IS

1 credit card account under an open end consumer 

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

3 clear and conspicuous language, of the availability of 

4 an election by the consumer under this paragraph as 

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

6 amount of indebtedness, and the method for pro7 viding such election— 

8 ‘‘(A) in the periodic statement required 

9 under subsection (b) with respect to such ac10 count 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

16 ELECTION.—If a consumer has made an election 

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

18 imposed on the account for any reason that has 

19 caused the outstanding balance in the account to ex20 ceed the credit limit. 

21 ‘‘(m) OVER-THE-LIMIT FEE RESTRICTIONS.—With 

22 respect to a credit card account under an open end con23 sumer credit plan, an over-the-limit fee, as described in 

24 subsection (c)(1)(B)(iii)— 


jbell on PROD1PC69 with BILLS
8 

•S 3252 IS

1 ‘‘(1) may be imposed on the account only when 

2 an extension of credit obtained by the obligor causes 

3 the credit limit on such account to be exceeded, and 

4 may not be imposed when such credit limit is ex5 ceeded due to a fee or interest charge; and 

6 ‘‘(2) may be imposed only once during a billing 

7 cycle if, on the last day of such billing cycle, the 

8 credit limit on the account is exceeded, and may not 

9 be imposed in a subsequent billing cycle with respect 

10 to such excess credit, unless the obligor has obtained 

11 an additional extension of credit in excess of such 

12 credit limit during such subsequent cycle. 

13 ‘‘(n) NO INTEREST CHARGES ON FEES.—With re14 spect to a credit card account under an open end consumer 

15 credit plan, if the creditor imposes a transaction fee on 

16 the obligor, including a cash advance fee, late fee, over17 the-limit fee, or balance transfer fee, the creditor may not 

18 impose or collect interest with respect to such fee amount. 

19 ‘‘(o) LIMITS ON CERTAIN FEES.— 

20 ‘‘(1) NO FEE TO PAY A BILLING STATEMENT.— 

21 With respect to a credit card account under an open 

22 end consumer credit plan, the creditor may not im23 pose a separate fee to allow the obligor to repay an 

24 extension of credit or finance charge, whether such 


jbell on PROD1PC69 with BILLS
9 

•S 3252 IS

1 repayment is made by mail, electronic transfer, tele2 phone authorization, or other means. 

3 ‘‘(2) REASONABLE FEES FOR VIOLATIONS.— 

4 The amount of any fee or charge that a card issuer 

5 may impose in connection with any omission with re6 spect to, or violation of, the cardholder agreement, 

7 including any late payment fee, over the limit fee, 

8 increase in the applicable annual percentage rate, or 

9 any similar fee or charge, shall be reasonably related 

10 to the cost to the card issuer of such omission or 

11 violation. 

12 ‘‘(3) REASONABLE CURRENCY EXCHANGE

13 FEE.—With respect to a credit card account under 

14 an open end consumer credit plan, the creditor may 

15 impose a fee for exchanging United States currency 

16 with foreign currency in an account transaction, only 

17 if— 

18 ‘‘(A) such fee reasonably reflects the costs 

19 incurred by the creditor to perform such cur20 rency exchange; 

21 ‘‘(B) the creditor discloses publicly its 

22 method for calculating such fee; and 

23 ‘‘(C) the primary Federal regulator of such 

24 creditor determines that the method for calcu25 lating such fee complies with this paragraph.’’. 


jbell on PROD1PC69 with BILLS
10 

•S 3252 IS

1 SEC. 104. CONSUMER RIGHT TO REJECT CARD BEFORE NO2 TICE IS PROVIDED OF OPEN ACCOUNT. 

3 Section 127 of the Truth in Lending Act (15 U.S.C. 

4 1637) is amended by adding at the end the following: 

5 ‘‘(p) CONSUMER RIGHT TO REJECT CARD BEFORE

6 NOTICE OF NEW ACCOUNT IS PROVIDED TO CONSUMER

7 REPORTING AGENCY.—A creditor may not furnish any in8 formation to a consumer reporting agency (as defined in 

9 section 603) concerning a newly opened credit card ac10 count under an open end consumer credit plan until the 

11 credit card has been used or activated by the consumer.’’. 

12 SEC. 105. USE OF TERMS CLARIFIED. 

13 Section 127 of the Truth in Lending Act (15 U.S.C. 

14 1637) is amended by adding at the end the following: 

15 ‘‘(q) USE OF TERMS.—The following requirements 

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

17 account under any open end consumer credit plan: 

18 ‘‘(1) FIXED RATE.—The term ‘fixed’, when ap19 pearing in conjunction with a reference to the an20 nual percentage rate or interest rate applicable with 

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

22 to an annual percentage rate or interest rate that 

23 will not change or vary for any reason over the pe24 riod specified clearly and conspicuously in the terms 

25 of the account. 


jbell on PROD1PC69 with BILLS
11 

•S 3252 IS

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

2 when appearing in any agreement or contract for 

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

4 bank prime rate published in the Federal Reserve 

5 Statistical Release on selected interest rates (daily or 

6 weekly), and commonly referred to as the ‘H.15 re7 lease’ (or any successor publication).’’. 

8 SEC. 106. APPLICATION OF CARD PAYMENTS. 

9 Section 164 of the Truth in Lending Act (15 U.S.C. 

10 1666c) is amended— 

11 (1) by striking the section heading and all that 

12 follows through ‘‘Payments’’ and inserting the fol13 lowing: 

14 ‘‘§ 164. Prompt and fair crediting of payments 

15 ‘‘(a) IN GENERAL.—Payments’’; 

16 (2) by inserting ‘‘, by 5:00 p.m. on the date on 

17 which such payment is due,’’ after ‘‘in readily identi18 fiable form’’; 

19 (3) by striking ‘‘manner, location, and time’’ 

20 and inserting ‘‘manner, and location’’; and 

21 (4) by adding at the end the following: 

22 ‘‘(b) APPLICATION OF PAYMENTS.—Upon receipt of 

23 a payment from a cardholder, the card issuer shall— 

24 ‘‘(1) apply the payment first to the card bal25 ance bearing the highest rate of interest, and then 


jbell on PROD1PC69 with BILLS
12 

•S 3252 IS

1 to each successive balance bearing the next highest 

2 rate of interest, until the payment is exhausted; and 

3 ‘‘(2) after complying with paragraph (1), apply 

4 the payment in a way that minimizes the amount of 

5 any finance charge to the account. 

6 ‘‘(c) CHANGES BY CARD ISSUER.—If a card issuer 

7 makes a material change in the mailing address, office, 

8 or procedures for handling cardholder payments, and such 

9 change causes a material delay in the crediting of a card10 holder payment made during the 60-day period following 

11 the date on which such change took effect, the card issuer 

12 may not impose any late fee or finance charge for a late 

13 payment on the credit card account to which such payment 

14 was credited. 

15 ‘‘(d) PRESUMPTION OF TIMELY PAYMENT.—Any evi16 dence provided by a consumer in the form of a receipt 

17 from the United States Postal Service or other common 

18 carrier indicating that a payment on a credit card account 

19 was sent to the card issuer not less than 7 days before 

20 the due date contained in the periodic statement for such 

21 payment shall create a presumption that such payment 

22 was made by the due date, which may be rebutted by the 

23 creditor for fraud or dishonesty on the part of the con24 sumer with respect to the mailing date.’’. 


jbell on PROD1PC69 with BILLS
13 

•S 3252 IS

1 SEC. 107. LENGTH OF BILLING PERIOD. 

2 Section 163(a) of the Truth in Lending Act (15 

3 U.S.C. 1668(a)) is amended by striking ‘‘mailed at least 

4 fourteen days prior’’ and inserting ‘‘mailed at least 21 

5 days prior’’. 

6 SEC. 108. PROHIBITION ON UNIVERSAL DEFAULT AND UNI7 LATERAL CHANGES TO CARDHOLDER AGREE8 MENTS. 

9 (a) IN GENERAL.—Chapter 4 of the Truth in Lend10 ing Act (15 U.S.C. 1666 et seq.) is amended— 

11 (1) by redesignating section 171 as section 173; 

12 and 

13 (2) by inserting after section 170 the following: 

14 ‘‘SEC. 171. LIMITS ON INTEREST RATE INCREASES. 

15 ‘‘(a) IN GENERAL.—No card issuer may increase any 

16 annual percentage rate, fee, or finance charge applicable 

17 to a credit card account under an open end consumer cred18 it plan, or terminate early a lower introductory rate, fee, 

19 or charge, except as permitted under this section. 

20 ‘‘(b) EXCEPTIONS.—The limitation under subsection 

21 (a) shall not apply to— 

22 ‘‘(1) an increase due to the scheduled expiration 

23 of an introductory term; 

24 ‘‘(2) an increase in a variable annual percent25 age rate, fee, or finance charge in accordance with 


jbell on PROD1PC69 with BILLS
14 

•S 3252 IS

1 a credit card agreement that provides for changes 

2 according to an index or formula; 

3 ‘‘(3) an increase due to a specific, material ac4 tion or omission of a consumer in violation of an 

5 agreement that is directly related to such account 

6 and that is specified in the contract or agreement as 

7 grounds for an increase, except that— 

8 ‘‘(A) the creditor may not take into ac9 count information not directly related to the ac10 count, including adverse information concerning 

11 the consumer, information in any consumer re12 port, or changes in the credit score of the con13 sumer; and 

14 ‘‘(B) an increase described in this para15 graph shall terminate not later than 6 months 

16 after the date on which it is imposed, if the 

17 consumer commits no further violations; or 

18 ‘‘(4) a change that takes effect upon renewal of 

19 the card in accordance with section 172. 

20 ‘‘(c) MA P TO LOWER RATE.— 

21 ‘‘(1) IN GENERAL.—A card issuer that in22 creases an annual percentage rate, fee, or finance 

23 charge pursuant to subsection (b)(3) shall include, 

24 together with the notice of such increase under secVerDate Aug 31 2005 00:37 Jul 12, 2008 Jkt 069200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S3252.IS S3252

jbell on PROD1PC69 with BILLS
15 

•S 3252 IS

1 tion 127(i), a statement, provided in a clear and 

2 conspicuous manner— 

3 ‘‘(A) of the discrete, specific action or 

4 omission of the consumer on which the increase 

5 was based; and 

6 ‘‘(B) that the increase will terminate in 6 

7 months if the consumer does not commit fur8 ther violations. 

9 ‘‘(2) BOARD AUTHORITY.—The Board may, by 

10 rule, provide for exceptions to the requirements of 

11 subsection (b)(3)(B), if the Board determines that 

12 there are other appropriate factors that creditors 

13 may consider in determining the appropriate annual 

14 percentage rate for particular consumers. 

15 ‘‘SEC. 172. UNILATERAL CHANGES IN CREDIT CARD AGREE16 MENT PROHIBITED. 

17 ‘‘A card issuer may not amend or change the terms 

18 of a credit card contract or agreement under an open end 

19 consumer credit plan, until after the date on which the 

20 credit card will expire if not renewed.’’. 

21 (b) CLERICAL AMENDMENT.—The table of sections 

22 for chapter 4 of the Truth in Lending Act is amended 

23 by striking the item relating to section 171 and inserting 

24 the following: 

‘‘171. Universal defaults prohibited. 

‘‘172. Unilateral changes in credit card agreement prohibited. 

‘‘173. Applicability of State laws.’’. 


jbell on PROD1PC69 with BILLS
16 

•S 3252 IS

1 SEC. 109. ENHANCED PENALTIES. 

2 Section 130(a)(2)(A) of the Truth in Lending Act 

3 (15 U.S.C. 1640(a)(2)(A)) is amended by striking ‘‘or (iii) 

4 in the’’ and inserting the following: ‘‘(iii) in the case of 

5 an individual action relating to an open end consumer 

6 credit plan that is not secured by real property or a dwell7 ing, twice the amount of any finance charge in connection 

8 with the transaction, with a minimum of $500 and a max9 imum of $5,000, or such higher amount as may be appro10 priate in the case of an established pattern or practice of 

11 such failures; or (iv) in the’’. 

12 SEC. 110. ENHANCED OVERSIGHT. 

13 (a) IN GENERAL.—Section 127 of the Truth in Lend14 ing Act (15 U.S.C. 1637) is amended by adding at the 

15 end the following: 

16 ‘‘(s) EVALUATION OF CREDIT CARD POLICIES AND

17 PROCEDURES.— 

18 ‘‘(1) IN GENERAL.—In connection with its ex19 amination of a credit card issuer under its super20 vision, each agency referred to in paragraphs (1), 

21 (2), and (3) of section 108(a) shall conduct, as ap22 propriate, an evaluation of the credit card policies 

23 and procedures used by such card issuer to ensure 

24 compliance with this section and sections 163, 164, 

25 171, and 172. Such agency shall promptly require 


jbell on PROD1PC69 with BILLS
17 

•S 3252 IS

1 the card issuer to take any corrective action needed 

2 to address any violations of any such section. 

3 ‘‘(2) ANNUAL REPORTS TO CONGRESS.—Each 

4 year, each agency referred to in subsections (a) and 

5 (c) of section 108 shall submit a report to Congress 

6 concerning the administration of its functions under 

7 this section, including such recommendations as the 

8 agency deems necessary or appropriate. Each such 

9 report shall include an assessment of the extent to 

10 which compliance with the requirements of this sec11 tion is being achieved and a summary of the enforce12 ment actions taken by the agency assigned adminis13 trative enforcement responsibilities under sub14 sections (a) and (c) of section 108.’’. 

15 (b) STRENGTHENED CREDIT CARD INFORMATION

16 COLLECTION.—Section 136(b) of the Truth in Lending 

17 Act (15 U.S.C. 1646(b)) is amended— 

18 (1) in paragraph (1)— 

19 (A) by striking ‘‘The Board shall’’ and in20 serting the following: 

21 ‘‘(A) IN GENERAL.—The Board shall’’; and 

22 (B) by adding at the end the following: 

23 ‘‘(B) INFORMATION TO BE INCLUDED.— 

24 The information under subparagraph (A) shall 

25 include, as of a date designated by the Board— 


jbell on PROD1PC69 with BILLS
18 

•S 3252 IS

1 ‘‘(i) a list of each type of transaction 

2 or event for which one or more of the card 

3 issuers has imposed a separate interest 

4 rate upon a cardholder, including pur5 chases, cash advances, and balance trans6 fers; 

7 ‘‘(ii) for each type of transaction or 

8 event identified under clause (i)— 

9 ‘‘(I) each distinct interest rate 

10 charged by the card issuer to a card11 holder, as of the designated date; 

12 ‘‘(II) the number of cardholders 

13 to whom each such interest rate was 

14 applied during the calendar month im15 mediately preceding the designated 

16 date, and the total amount of interest 

17 charged to such cardholders at each 

18 such rate during such month; 

19 ‘‘(III) the number of cardholders 

20 who are paying the stated default an21 nual percentage rate applicable in 

22 cases in which the account is past due 

23 or the account holder is otherwise in 

24 violation of the terms of the account 

25 agreement; and 


jbell on PROD1PC69 with BILLS
19 

•S 3252 IS

1 ‘‘(IV) the number of cardholders 

2 who are paying above such stated de3 fault annual percentage rate; 

4 ‘‘(iii) a list of each type of fee that 

5 one or more of the card issuers has im6 posed upon a cardholder as of the des7 ignated date, including any fee imposed for 

8 obtaining a cash advance, making a late 

9 payment, exceeding the credit limit on an 

10 account, making a balance transfer, or ex11 changing United States dollars for foreign 

12 currency; 

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

14 under clause (iii), the number of card15 holders upon whom the fee was imposed 

16 during the calendar month immediately 

17 preceding the designated date, and the 

18 total amount of fees imposed upon card19 holders during such month; 

20 ‘‘(v) the total number of cardholders 

21 that incurred any interest charge or any 

22 fee during the calendar month immediately 

23 preceding the designated date; and 


jbell on PROD1PC69 with BILLS
20 

•S 3252 IS

1 ‘‘(vi) any other information related to 

2 interest rates, fees, or other charges that 

3 the Board deems of interest.’’; and 

4 (2) by adding at the end the following: 

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

6 on an annual basis, transmit to Congress and make 

7 public a report containing an assessment by the 

8 Board of the profitability of credit card operations 

9 of depository institutions. Such report shall include 

10 estimates by the Board of the approximate, relative 

11 percentage of income derived by such operations 

12 from— 

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

14 cardholders, including separate estimates for— 

15 ‘‘(i) interest with an annual percent16 age rate of less than 25 percent; and 

17 ‘‘(ii) interest with an annual percent18 age rate equal to or greater than 25 per19 cent; 

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.’’. 


jbell on PROD1PC69 with BILLS
21 

•S 3252 IS

1 SEC. 111. CLERICAL AMENDMENTS. 

2 Section 103(i) of the Truth in Lending Act (15 

3 U.S.C. 1602(i)) is amended— 

4 (1) by striking ‘‘term’’ and all that follows 

5 through ‘‘means’’ and inserting the following: 

6 ‘‘terms ‘open end credit plan’ and ‘open end con7 sumer credit plan’ mean’’; and 

8 (2) in the second sentence, by inserting ‘‘or 

9 open end consumer credit plan’’ after ‘‘credit plan’’ 

10 each place that term appears. 

11 TITLE II—ENHANCED 

12 CONSUMER DISCLOSURES 

13 SEC. 201. PAYOFF TIMING DISCLOSURES. 

14 (a) IN GENERAL.—Section 127(b)(11) of the Truth 

15 in Lending Act (15 U.S.C. 1637(b)(11)) is amended to 

16 read as follows: 

17 ‘‘(11)(A) A written statement in the following 

18 form: ‘Minimum Payment Warning: Making only the 

19 minimum payment will increase the interest rate you 

20 pay and the time it takes to repay your balance.’. 

21 ‘‘(B) Repayment information that would apply 

22 to the outstanding balance of the consumer under 

23 the credit plan, including— 

24 ‘‘(i) the number of months (rounded to the 

25 nearest month) that it would take to pay the 

26 entire amount of that balance, if the consumer 


jbell on PROD1PC69 with BILLS
22 

•S 3252 IS

1 pays only the required minimum monthly pay2 ments and if no further advances are made; 

3 ‘‘(ii) the total cost to the consumer, includ4 ing interest and principal payments, of paying 

5 that balance in full, if the consumer pays only 

6 the required minimum monthly payments and if 

7 no further advances are made; and 

8 ‘‘(iii) the monthly payment amount that 

9 would be required for the consumer to eliminate 

10 the outstanding balance in 36 months, if no 

11 further advances are made, and the total cost 

12 to the consumer, including interest and prin13 cipal payments, of paying that balance in full if 

14 the consumer pays the balance over 36 months. 

15 ‘‘(C)(i) Subject to clause (ii), in making the dis16 closures under subparagraph (B), the creditor shall 

17 apply the interest rate or rates in effect on the date 

18 on which the disclosure is made until the date on 

19 which the balance would be paid in full. 

20 ‘‘(ii) If the interest rate in effect on the date on 

21 which the disclosure is made is a temporary rate 

22 that will change under a contractual provision apply23 ing an index or formula for subsequent interest rate 

24 adjustment, the creditor shall apply the interest rate 

25 in effect on the date on which the disclosure is made 


jbell on PROD1PC69 with BILLS
23 

•S 3252 IS

1 for as long as that interest rate will apply under 

2 that contractual provision, and then apply an inter3 est rate based on the index or formula in effect on 

4 the applicable billing date. 

5 ‘‘(D) All of the information described in sub6 paragraph (B) shall— 

7 ‘‘(i) be disclosed in the form and manner 

8 which the Board shall prescribe, by regulation, 

9 and in a manner that avoids duplication; and 

10 ‘‘(ii) be placed in a conspicuous and promi11 nent location on the billing statement, in type12 face that is at least as large as the largest type 

13 on the statement. 

14 ‘‘(E) In the regulations prescribed under sub15 paragraph (D), the Board shall require that the dis16 closure of such information shall be in the form of 

17 a table that— 

18 ‘‘(i) contains clear and concise headings for 

19 each item of such information; and 

20 ‘‘(ii) provides a clear and concise form 

21 stating each item of information required to be 

22 disclosed under each such heading. 

23 ‘‘(F) In prescribing the form of the table under 

24 subparagraph (E), the Board shall require that— 


jbell on PROD1PC69 with BILLS
24 

•S 3252 IS

1 ‘‘(i) all of the information in the table, and 

2 not just a reference to the table, be placed on 

3 the billing statement, as required by this para4 graph; and 

5 ‘‘(ii) the items required to be included in 

6 the table shall be listed in the order in which 

7 such items are set forth in subparagraph (B). 

8 ‘‘(G) In prescribing the form of the table under 

9 subparagraph (D), the Board shall employ termi10 nology which is different than the terminology which 

11 is employed in subparagraph (B), if such termi12 nology is more easily understood and conveys sub13 stantially the same meaning.’’. 

14 (b) CIVIL LIABILITY.—Section 130(a) of the Truth 

15 in Lending Act (15 U.S.C. 1640(a)) is amended, in the 

16 undesignated paragraph following paragraph (4), by strik17 ing the second sentence and inserting the following: ‘‘In 

18 connection with the disclosures referred to in subsections 

19 (a) and (b) of section 127, a creditor shall have a liability 

20 determined under paragraph (2) only for failing to comply 

21 with the requirements of section 125, 127(a), or any of 

22 paragraphs (4) through (13) of section 127(b), or for fail23 ing to comply with disclosure requirements under State 

24 law for any term or item that the Board has determined 

25 to be substantially the same in meaning under section 


jbell on PROD1PC69 with BILLS
25 

•S 3252 IS

1 111(a)(2) as any of the terms or items referred to in sec2 tion 127(a), or any of paragraphs (4) through (13) of sec3 tion 127(b).’’. 

4 SEC. 202. REQUIREMENTS RELATING TO LATE PAYMENT 

5 DEADLINES AND PENALTIES. 

6 Section 127(b)(12) of the Truth in Lending Act (15 

7 U.S.C. 1637(b)(12)) is amended to read as follows: 

8 ‘‘(12) REQUIREMENTS RELATING TO LATE PAY9 MENT DEADLINES AND PENALTIES.— 

10 ‘‘(A) LATE PAYMENT DEADLINE AND

11 POSTMARK DATE REQUIRED TO BE DIS12 CLOSED.—In the case of a credit card account 

13 under an open end consumer credit plan under 

14 which a late fee or charge may be imposed due 

15 to the failure of the obligor to make payment 

16 on or before the due date for such payment, the 

17 periodic statement required under subsection 

18 (b) with respect to the account shall include, in 

19 a conspicuous location on the billing state20 ment— 

21 ‘‘(i) the date on which the payment is 

22 due or, if different, the date on which a 

23 late payment fee will be charged, together 

24 with the amount of the fee or charge to be 


jbell on PROD1PC69 with BILLS
26 

•S 3252 IS

1 imposed if payment is made after that 

2 date; and 

3 ‘‘(ii) the date by which the payment 

4 must be postmarked, if paid by mail, in 

5 order to avoid the imposition of a late pay6 ment fee with respect to the payment, and 

7 a statement to that effect. 

8 ‘‘(B) DISCLOSURE OF INCREASE IN INTER9 EST RATES FOR LATE PAYMENTS.—If 1 or 

10 more late payments under an open end con11 sumer credit plan may result in an increase in 

12 the annual percentage rate applicable to the ac13 count, the statement required under subsection 

14 (b) with respect to the account shall include 

15 conspicuous notice of such fact, together with 

16 the applicable penalty annual percentage rate, 

17 in close proximity to the disclosure required 

18 under subparagraph (A) of the date on which 

19 payment is due under the terms of the account. 

20 ‘‘(C) REQUIREMENTS RELATING TO POST21 MARK DATE.— 

22 ‘‘(i) IN GENERAL.—The date included 

23 in a periodic statement pursuant to sub24 paragraph (A)(ii) with regard to the post25 mark on a payment shall allow, in accordVerDate Aug 31 2005 00:37 Jul 12, 2008 Jkt 069200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S3252.IS S3252

jbell on PROD1PC69 with BILLS
27 

•S 3252 IS

1 ance with regulations prescribed by the 

2 Board under clause (ii), a reasonable time 

3 for the consumer to make the payment and 

4 a reasonable time for the delivery of the 

5 payment by the due date. 

6 ‘‘(ii) BOARD REGULATIONS.—The 

7 Board shall prescribe guidelines for deter8 mining a reasonable period of time for 

9 making a payment and delivery of a pay10 ment for purposes of clause (i), after con11 sultation with the Postmaster General of 

12 the United States and representatives of 

13 consumer and trade organizations. 

14 ‘‘(D) PAYMENTS AT LOCAL BRANCHES.—If 

15 the creditor, in the case of a credit card account 

16 referred to in subparagraph (A), is a financial 

17 institution which maintains branches or offices 

18 at which payments on any such account are ac19 cepted from the obligor in person, the date on 

20 which the obligor makes a payment on the ac21 count at such branch or office shall be consid22 ered to be the date on which the payment is 

23 made for purposes of determining whether a 

24 late fee or charge may be imposed due to the 


jbell on PROD1PC69 with BILLS
28 

•S 3252 IS

1 failure of the obligor to make payment on or 

2 before the due date for such payment.’’. 

3 SEC. 203. RENEWAL DISCLOSURES. 

4 Section 127(d) of the Truth in Lending Act (15 

5 U.S.C. 1637(d)) is amended— 

6 (1) by striking paragraph (2); 

7 (2) by redesignating paragraph (3) as para8 graph (2); and 

9 (3) in paragraph (1), by striking ‘‘Except as 

10 provided in paragraph (2), a card issuer’’ and insert11 ing the following: ‘‘A card issuer that has changed 

12 or amended any term of the account since the last 

13 renewal or’’. 

14 TITLE III—PROTECTION OF 

15 YOUNG CONSUMERS 

16 SEC. 301. EXTENSIONS OF CREDIT TO UNDERAGE CON17 SUMERS. 

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

19 U.S.C. 1637(c)) is amended by adding at the end the fol20 lowing: 

21 ‘‘(8) APPLICATIONS FROM UNDERAGE CON22 SUMERS.— 

23 ‘‘(A) PROHIBITION ON ISSUANCE.—No 

24 credit card may be issued to, or open end con25 sumer credit plan established by or on behalf 


jbell on PROD1PC69 with BILLS
29 

•S 3252 IS

1 of, a consumer who has not attained the age of 

2 21, unless the consumer has submitted a writ3 ten application to the card issuer that meets the 

4 requirements of subparagraph (B). 

5 ‘‘(B) APPLICATION REQUIREMENTS.—An 

6 application to open a credit card account by an 

7 individual who has not attained the age of 21 

8 as of the date of submission of the application 

9 shall require— 

10 ‘‘(i) the signature of the parent, legal 

11 guardian, or any other individual over the 

12 age of 21 having a means to repay debts 

13 incurred by the consumer in connection 

14 with the account, indicating joint liability 

15 for debts incurred by the consumer in con16 nection with the account before the con17 sumer has attained the age of 21; 

18 ‘‘(ii) submission by the consumer of 

19 financial information indicating an inde20 pendent means of repaying any obligation 

21 arising from the proposed extension of 

22 credit in connection with the account; or 

23 ‘‘(iii) completion of a certified finan24 cial literacy or financial education course 

25 designed for young consumers. 


jbell on PROD1PC69 with BILLS
30 

•S 3252 IS

1 ‘‘(C) CERTIFIED FINANCIAL LITERACY OR

2 EDUCATION COURSES FOR YOUNG CON3 SUMERS.— 

4 ‘‘(i) IN GENERAL.—The Secretary of 

5 the Treasury, acting through the Office of 

6 Financial Literacy and Education (in this 

7 subparagraph referred to as ‘OFE’), shall 

8 make and publish a list of all courses and 

9 programs that have been certified for fi10 nancial literacy or financial education pur11 poses appropriate for young consumers. 

12 When developing the certification criteria 

13 the OFE shall take into account the course 

14 or program’s— 

15 ‘‘(I) proven track record in pro16 ducing changed consumer behavior; 

17 and 

18 ‘‘(II) use of practices or curricula 

19 that have been shown to change con20 sumer behavior. 

21 ‘‘(ii) EXPLICIT ELIGIBILITY.—Courses 

22 taken that are offered or required by col23 leges, universities, and high schools may be 

24 certified by the OFE for purposes of this 

25 subparagraph, as well as other programs 


jbell on PROD1PC69 with BILLS
31 

•S 3252 IS

1 and courses. The OFE shall make an ef2 fort to provide certification to all types of 

3 programs and courses, including those that 

4 are conducted by nonprofit, faith-based, or 

5 for-profit institutions and State and local 

6 governments. 

7 ‘‘(iii) SELECT PROGRAMS.—From 

8 among those courses or programs that are 

9 certified by the OFE under this subpara10 graph, the OFE may designate a select 

11 number of programs or courses that 

12 produce results that are far better than 

13 those produced by other certified programs 

14 as ‘highly certified’.’’. 

15 SEC. 302. RESTRICTIONS ON CERTAIN AFFINITY CARDS. 

16 Section 127 of the Truth in Lending Act (15 U.S.C. 

17 1637), as amended by this Act, is amended by adding at 

18 the end the following: 

19 ‘‘(t) RESTRICTIONS ON ISSUANCE OF AFFINITY

20 CARDS TO STUDENTS.—No credit card account under an 

21 open end consumer credit plan may be established by an 

22 individual who has not attained the age of 21 as of the 

23 date of submission of the application pursuant to any di24 rect or indirect agreement relating to affinity cards, as 

25 defined by the Board, between the creditor and an instituVerDate Aug 31 2005 00:37 Jul 12, 2008 Jkt 069200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S3252.IS S3252

jbell on PROD1PC69 with BILLS
32 

•S 3252 IS

1 tion of higher education, as defined in section 101(a) of 

2 the Higher Education Act of 1965 (20 U.S.C. 1001(a)), 

3 unless the requirements of subsection (c)(8) are met with 

4 respect to the obligor.’’. 

5 SEC. 303. PROTECTION OF YOUNG CONSUMERS FROM 

6 PRESCREENED CREDIT OFFERS. 

7 (a) IN GENERAL.—Section 604(c)(1)(B) of the Fair 

8 Credit Reporting Act (15 U.S.C. 1681b(c)(1)(B)) is 

9 amended— 

10 (1) in clause (ii), by striking ‘‘and’’ at the end; 

11 and 

12 (2) in clause (iii), by striking the period at the 

13 end and inserting the following: ‘‘; and 

14 ‘‘(iv) the consumer report indicates that 

15 the consumer is age 21 or older, except that a 

16 consumer who is at least 18 years of age may 

17 elect, in accordance with subsection (e)(7), to 

18 authorize the consumer reporting agency to in19 clude the name and address of the consumer in 

20 any list of names provided by the agency pursu21 ant to this paragraph.’’. 

22 (b) OPT-IN FOR YOUNG CONSUMERS.—Section 

23 604(e) of the Fair Credit Reporting Act (15 U.S.C. 

24 1681b(e)) is amended— 


jbell on PROD1PC69 with BILLS
33 

•S 3252 IS

1 (1) by striking the subsection heading and in2 serting the following: 

3 ‘‘(e) ELECTION OF CONSUMERS REGARDING

4 LISTS.—’’; and 

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

6 ‘‘(7) OPT-IN FOR UNDERAGE CONSUMERS.— 

7 ‘‘(A) IN GENERAL.—A consumer who is at 

8 least 18 years of age, but has not attained his 

9 or her 21st birthday, may elect to have the 

10 name and address of the consumer included in 

11 any list provided by a consumer reporting agen12 cy under subsection (c)(1)(B) in connection 

13 with a credit or insurance transaction that is 

14 not initiated by the consumer by notifying the 

15 agency in accordance with subparagraph (B) 

16 that the consumer consents to the use of a con17 sumer report relating to the consumer in con18 nection with any credit or insurance transaction 

19 that is not initiated by the consumer. 

20 ‘‘(B) MANNER OF NOTIFICATION.—An 

21 election by a consumer described in subpara22 graph (A) shall be in writing, using a signed 

23 notice of election form issued or made available 

24 electronically by the consumer reporting agency 


jbell on PROD1PC69 with BILLS
34 

•S 3252 IS

1 at the request of the consumer for purposes of 

2 this paragraph. 

3 ‘‘(C) EFFECTIVENESS OF ELECTION.—An 

4 election by a consumer under subparagraph (A) 

5 to be included in a list provided by a consumer 

6 reporting agency— 

7 ‘‘(i) shall be effective until the earlier 

8 of— 

9 ‘‘(I) the 21st birthday of the con10 sumer; or 

11 ‘‘(II) the date on which the con12 sumer notifies the agency, through the 

13 notification system established by the 

14 agency under paragraph (5), that the 

15 election is no longer effective; and 

16 ‘‘(ii) shall be effective with respect to 

17 each affiliate of the agency. 

18 ‘‘(D) RULE OF CONSTRUCTION.—An elec19 tion by a consumer under subparagraph (A) to 

20 be included in a list provided by a consumer re21 porting agency may not be construed to limit 

22 the applicability of this subsection to any per23 son age 21 or older, and the consumer may 

24 elect to be excluded from any such list after the 

25 attainment of his or her 21st birthday in the 


jbell on PROD1PC69 with BILLS
35 

•S 3252 IS

1 manner otherwise provided under this sub2 section.’’. 

3 TITLE IV—FEDERAL AGENCY 

4 COORDINATION 

5 SEC. 401. INCLUSION OF ALL FEDERAL BANKING AGEN6 CIES. 

7 (a) IN GENERAL.—Section 18(f)(1) of the Federal 

8 Trade Commission Act (15 U.S.C. 57a(f)(1)) is amended 

9 in the second sentence— 

10 (1) by striking ‘‘The Board of Governors of the 

11 Federal Reserve System (with respect to banks) and 

12 the Federal Home Loan Bank Board (with respect 

13 to savings and loan institutions described in para14 graph (3)) and the National Credit Union Adminis15 tration Board (with respect to Federal credit unions 

16 described in paragraph (4))’’ and inserting ‘‘Each 

17 appropriate Federal banking agency’’; and 

18 (2) by inserting ‘‘in consultation with the Com19 mission’’ after ‘‘shall prescribe regulations’’. 

20 (b) FTC CONCURRENT RULEMAKING.—Section 

21 18(f)(1) of the Federal Trade Commission Act (15 U.S.C. 

22 57a(f)(1)) is amended by inserting after the second sen23 tence the following: ‘‘Notwithstanding any other provision 

24 of this section, whenever such agencies commence such a 

25 rulemaking proceeding, the Commission, with respect to 


jbell on PROD1PC69 with BILLS
36 

•S 3252 IS

1 the entities within its jurisdiction under this Act, may 

2 commence a rulemaking proceeding and prescribe regula3 tions in accordance with section 553 of title 5, United 

4 States Code. The Commission, the Federal banking agen5 cies, and the National Credit Union Administration Board 

6 shall consult and coordinate with each other so that the 

7 regulations prescribed by each such agency are consistent 

8 with and comparable to the regulations prescribed by each 

9 other such agency, to the extent practicable.’’. 

10 (c) PRESERVATION OF STATE LAW.—Section 

11 18(f)(6) of the Federal Trade Commission Act (15 U.S.C. 

12 57a(f)(6)) is amended to read as follows: 

13 ‘‘(6) Notwithstanding any other provision of 

14 this subsection or any other provision of law, regula15 tions promulgated under this subsection shall be 

16 considered supplemental to State laws governing un17 fair and deceptive acts and practices, and may not 

18 be construed to preempt any provision of State law 

19 that provides equal or greater protections.’’. 

20 (d) GAO STUDY AND REPORT.—Not later than 18 

21 months after the date of enactment of this Act, the Comp22 troller General shall transmit to Congress a report on the 

23 status of regulations of the Federal banking agencies and 

24 the National Credit Union Administration regarding unVerDate Aug 31 2005 00:37 Jul 12, 2008 Jkt 069200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S3252.IS S3252

jbell on PROD1PC69 with BILLS
37 

•S 3252 IS

1 fair and deceptive acts or practices by depository institu2 tions and Federal credit unions. 

3 (e) TECHNICAL AND CONFORMING AMENDMENTS.— 

4 Section 18(f) of the Federal Trade Commission Act (15 

5 U.S.C. 57a(f)) is amended— 

6 (1) in the subsection heading, by striking 

7 ‘‘BOARD’’ and all that follows through ‘‘ADMINIS8 TRATION’’ and inserting ‘‘APPROPRIATE FEDERAL

9 BANKING AGENCIES’’ 

10 (2) in paragraph (1), in the first sentence— 

11 (A) by striking ‘‘banks or savings and loan 

12 institutions described in paragraph (3), each 

13 agency specified in paragraph (2) or (3) of this 

14 subsection shall establish’’ and inserting ‘‘de15 pository institutions or Federal credit unions, 

16 each appropriate Federal banking agency shall 

17 establish’’; and 

18 (B) by striking ‘‘banks or savings and loan 

19 institutions described in paragraph (3), subject 

20 to its jurisdiction’’ and inserting ‘‘the deposi21 tory institutions or Federal credit unions sub22 ject to the jurisdiction of such appropriate Fed23 eral banking agency’’; 

24 (3) in paragraph (1), in the final sentence— 


jbell on PROD1PC69 with BILLS
38 

•S 3252 IS

1 (A) by striking ‘‘each such Board’’ and in2 serting ‘‘each such appropriate Federal banking 

3 agency’’; 

4 (B) by striking ‘‘banks or savings and loan 

5 institutions described in paragraph (3), or Fed6 eral credit unions described in paragraph (4), 

7 as the case may be,’’ each place that term ap8 pears and inserting ‘‘depository institutions or 

9 Federal credit unions subject to the jurisdiction 

10 of such appropriate Federal banking agency’’; 

11 (C) by striking ‘‘(A) any such Board’’ and 

12 inserting ‘‘(A) any such appropriate Federal 

13 banking agency’’; and 

14 (D) by striking ‘‘with respect to banks, 

15 savings and loan institutions’’ and inserting 

16 ‘‘with respect to depository institutions’’; 

17 (4) in paragraph (2)(C), by inserting ‘‘than’’ 

18 after ‘‘(other’’; 

19 (5) in paragraph (3), by inserting ‘‘by the Di20 rector of the Office of Thrift Supervision’’ before the 

21 period at the end; 

22 (6) in paragraph (4), by inserting ‘‘by the Na23 tional Credit Union Administration’’ before the pe24 riod at the end; 


jbell on PROD1PC69 with BILLS
39 

•S 3252 IS

1 (7) in paragraph (6), by striking ‘‘the Board of 

2 Governors of the Federal Reserve System’’ and in3 serting ‘‘any Federal banking agency or the National 

4 Credit Union Administration Board’’; and 

5 (8) by adding at the end the following new 

6 paragraph: 

7 ‘‘(8) For purposes of this subsection— 

8 ‘‘(A) the term ‘appropriate Federal bank9 ing agency’ has the same meaning as in section 

10 3 of the Federal Deposit Insurance Act, and in11 cludes the National Credit Union Administra12 tion Board with respect to Federal credit 

13 unions; 

14 ‘‘(B) the terms ‘depository institution’ and 

15 ‘Federal banking agency’ have the same mean16 ings as in section 3 of the Federal Deposit In17 surance Act (12 U.S.C. 1813); and 

18 ‘‘(C) the term ‘Federal credit union’ has 

19 the same meaning as in section 101 of the Fed20 eral Credit Union Act (12 U.S.C. 1752).’’. 

21 TITLE V—MISCELLANEOUS 

22 PROVISIONS 

23 SEC. 501. STUDY AND REPORT. 

24 (a) STUDY REQUIRED.—The Comptroller General (in 

25 this section referred to as the ‘‘Comptroller’’) shall conVerDate Aug 31 2005 00:37 Jul 12, 2008 Jkt 069200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S3252.IS S3252

jbell on PROD1PC69 with BILLS
40 

•S 3252 IS

1 duct a study on interchange fees and their effects on con2 sumers and merchants. The Comptroller shall review— 

3 (1) the extent to which interchange fees are re4 quired to be disclosed to consumers and merchants, 

5 and how such fees are overseen by the Federal bank6 ing agencies or other regulators; 

7 (2) the ways in which the interchange system 

8 affects the ability of merchants of varying size to ne9 gotiate pricing with card associations and banks; 

10 (3) the costs and factors incorporated into 

11 interchange fees, such as advertising, bonus miles, 

12 and rewards, how such costs and factors vary among 

13 cards; and 

14 (4) the consequences of the undisclosed nature 

15 of interchange fees on merchants and consumers 

16 with regard to prices charged for goods and services. 

17 (b) REPORT REQUIRED.—Not later than 180 days 

18 after the date of enactment of this Act, the Comptroller 

19 shall submit a report to the Committee on Banking, Hous20 ing, and Urban Affairs of the Senate and the Committee 

21 on Financial Services of the House of Representatives con22 taining a detailed summary of the findings and conclu23 sions of the study required by this section, together with 

24 such recommendations for legislative or administrative ac25 tions as may be appropriate. 


jbell on PROD1PC69 with BILLS
41 

•S 3252 IS

1 SEC. 502. CREDIT CARD SAFETY RATING SYSTEM COMMIS2 SION STUDY. 

3 (a) DEFINITION.—In this section, the term ‘‘safety’’ 

4 refers to the amount of risk to cardholders that results 

5 from credit card practices and terms in credit card agree6 ments that are either not well understood by consumers, 

7 or are not easily understood, or could have an adverse fi8 nancial effect on consumers, other than interest rates, 

9 periodic fees, or rewards. 

10 (b) ESTABLISHMENT OF SAFETY RATING SYSTEM.— 

11 The Comptroller General of the United States (in this sec12 tion referred to as the ‘‘Comptroller’’) shall establish an 

13 entity to be known as the ‘‘Credit Card Safety Rating Sys14 tem Commission’’ (in this section referred to as the ‘‘Com15 mission’’). 

16 (c) DUTIES.—The duties of the Commission shall 

17 be— 

18 (1) to determine if a rating system to allow 

19 cardholders to quickly assess the level of safety of 

20 credit card agreements would be beneficial to con21 sumers; 

22 (2) to assess the impact on credit card trans23 parency and consumer safety of various rating sys24 tem policy options, including— 

25 (A) the use of a 5-star rating system to re26 flect the relative safety of card terms, marVerDate Aug 31 2005 00:37 Jul 12, 2008 Jkt 069200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S3252.IS S3252

jbell on PROD1PC69 with BILLS
42 

•S 3252 IS

1 keting and customer service practices, and 

2 product features; 

3 (B) making the use of the system manda4 tory for all cards; 

5 (C) requiring a graphic display of rating 

6 on all marketing material, applications, billing 

7 statements, and agreements associated with 

8 that credit card, as well as on the back of each 

9 such credit card; 

10 (D) requiring an annual review of the safe11 ty rating system, to determine whether the 

12 point system is effectively aiding consumers and 

13 encouraging transparent competition and fair14 ness to consumers; and 

15 (E) requiring consumer access to ratings 

16 through public website and other outreach pro17 grams 

18 (3) if it is deemed beneficial, to make rec19 ommendations to Congress concerning how such a 

20 system should be devised; 

21 (4) to study the effects of such system on the 

22 availability and affordability of credit and the impli23 cations of changes in credit availability and afford24 ability in the United States and in the general mar25 ket for credit services due to the rating system; and 


jbell on PROD1PC69 with BILLS
43 

•S 3252 IS

1 (5) by not later than March 1 of the second 

2 year after the date of enactment of this Act, to sub3 mit a report to Congress containing detailed results 

4 and recommendations, including how to create such 

5 system, if creating such system is recommended. 

6 (d) MEMBERSHIP.— 

7 (1) NUMBER AND APPOINTMENT.—The Com8 mission shall be composed of 15 members appointed 

9 by the Comptroller, in accordance with this section. 

10 (2) QUALIFICATIONS.— 

11 (A) IN GENERAL.—The membership of the 

12 Commission, subject to subparagraph (B), shall 

13 include individuals— 

14 (i) who have achieved national rec15 ognition for their expertise in credit cards, 

16 debt management, economics, credit avail17 ability, consumer protection, and other 

18 credit card related issues and fields; and 

19 (ii) who provide a mix of different 

20 professions, a broad geographic representa21 tion, and a balance between urban and 

22 rural representatives. 

23 (B) MAKEUP OF COMMISSION.—The Com24 mission shall be comprised of— 


jbell on PROD1PC69 with BILLS
44 

•S 3252 IS

1 (i) 4 representatives from consumer 

2 groups; 

3 (ii) 4 representatives from credit card 

4 issuers or banks; 

5 (iii) 7 representatives from nonprofit 

6 research entities or nonpartisan experts in 

7 banking and credit cards; and 

8 (iv) not fewer than 1 of the members 

9 described in clauses (i) through (iii) who 

10 represents each of— 

11 (I) the elderly; 

12 (II) economically disadvantaged 

13 consumers; 

14 (III) racial or ethnic minorities; 

15 and 

16 (IV) students and minors. 

17 (C) ETHICS DISCLOSURES.—The Comp18 troller shall establish a system for public disclo19 sure by members of the Commission of financial 

20 and other potential conflicts of interest relating 

21 to such members. Members of the Commission 

22 shall be treated in the same manner as employ23 ees of Congress whose pay is disbursed by the 

24 Secretary of the Senate for purposes of title I 


jbell on PROD1PC69 with BILLS
45 

•S 3252 IS

1 of the Ethics in Government Act of 1978 (Pub2 lic Law 95–521). 

3 (3) CHAIRPERSON; VICE CHAIRPERSON.—The 

4 Comptroller shall designate a member of the Com5 mission, at the time of appointment of the member 

6 as Chairperson and a member as Vice Chairperson 

7 for that term of appointment, except that in the case 

8 of vacancy in the position of Chairperson or Vice 

9 Chairperson of the Commission, the Comptroller 

10 may designate another member for the remainder of 

11 the term of that member. 

12 (4) TERMS.—Members of the Commission shall 

13 be appointed for the life of the Commission. Any va14 cancies shall not affect the power and duties of the 

15 Commission but shall be filled in the same manner 

16 as the original appointment. 

17 (5) COMPENSATION.— 

18 (A) MEMBERS.—While serving on the busi19 ness of the Commission (including travel time), 

20 a member of the Commission shall be entitled 

21 to compensation at the per diem equivalent of 

22 the rate provided for level IV of the Executive 

23 Schedule under section 5315 of title 5, United 

24 States Code, and while so serving away from 

25 home and the regular place of business of the 


jbell on PROD1PC69 with BILLS
46 

•S 3252 IS

1 member, the member may be allowed travel ex2 penses, as authorized by the Chairperson. 

3 (B) OTHER EMPLOYEES.—For purposes of 

4 pay (other than pay of members of the Commis5 sion) and employment benefits, rights, and 

6 privileges, all employees of the Commission 

7 shall be treated as if they were employees of the 

8 United States Senate. 

9 (6) MEETINGS.—The Commission shall meet at 

10 the call of the Chairperson. 

11 (e) DIRECTOR AND STAFF; EXPERTS AND CONSULT12 ANTS.—Subject to such review as the Comptroller deter13 mines necessary to assure the efficient administration of 

14 the Commission, the Commission may— 

15 (1) employ and fix the compensation of an Ex16 ecutive Director (subject to the approval of the 

17 Comptroller General) and such other personnel as 

18 may be necessary to carry out its duties (without re19 gard to the provisions of title 5, United States Code, 

20 governing appointments in the competitive service); 

21 (2) seek such assistance and support as may be 

22 required in the performance of its duties from ap23 propriate Federal departments and agencies; 

24 (3) enter into contracts or make other arrange25 ments, as may be necessary for the conduct of the 


jbell on PROD1PC69 with BILLS
47 

•S 3252 IS

1 work of the Commission (without regard to section 

2 3709 of the Revised Statutes of the United States 

3 (41 U.S.C. 5)); 

4 (4) make advance, progress, and other pay5 ments which relate to the work of the Commission; 

6 (5) provide transportation and subsistence for 

7 persons serving without compensation; and 

8 (6) prescribe such rules and regulations as it 

9 determines necessary with respect to the internal or10 ganization and operation of the Commission. 

11 (f) POWERS.— 

12 (1) OBTAINING OFFICIAL DATA.—The Commis13 sion may secure directly from any department or 

14 agency of the United States information necessary 

15 to enable it to carry out this section. Upon request 

16 of the Chairperson, the head of that department or 

17 agency shall furnish that information to the Com18 mission on an agreed upon schedule. 

19 (2) DATA COLLECTION.—In order to carry out 

20 its functions, the Commission shall— 

21 (A) utilize existing information, both pub22 lished and unpublished, where possible, collected 

23 and assessed either by its own staff or under 

24 other arrangements made in accordance with 

25 this section; 


jbell on PROD1PC69 with BILLS
48 

•S 3252 IS

1 (B) carry out, or award grants or con2 tracts for, original research and experimen3 tation, where existing information is inad4 equate; and 

5 (C) adopt procedures allowing any inter6 ested party to submit information for the Com7 mission’s use in making reports and rec8 ommendations. 

9 (3) ACCESS OF GAO INFORMATION.—The 

10 Comptroller shall have unrestricted access to all de11 liberations, records, and nonproprietary data of the 

12 Commission, immediately upon request. 

13 (4) PERIODIC AUDIT.—The Commission shall 

14 be subject to periodic audit by the Comptroller. 

15 (g) ADMINISTRATIVE AND SUPPORT SERVICES.—The 

16 Comptroller shall provide such administrative and support 

17 services to the Commission as may be necessary to carry 

18 out this section. 

19 (h) AUTHORIZATION OF APPROPRIATIONS.—There 

20 are authorized to be appropriated to the Commission such 

21 sums as may be necessary to carry out this section. 

Æ 


jbell on PROD1PC69 with BILLS