I

107TH CONGRESS

1ST SESSION H. R. 1058

To amend the Truth in Lending Act to prohibit the distribution of any

check or other negotiable instrument as part of a solicitation by a

creditor for an extension of credit, to limit the liability of consumers

in conjunction with such solicitations, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 15, 2001

Mr. LAFALCE (for himself, Mr. KANJORSKI, Mrs. MALONEY of New York, Mr.

GUTIERREZ, MS. LEE, Mrs. JONES of Ohio, Mr. CAPUANO, Mr. CLAY,

Mr. HINCHEY, and Ms. SCHAKOWSKY) introduced the following bill;

which was referred to the Committee on Financial Services

A BILL

To amend the Truth in Lending Act to prohibit the distribution of any check or other negotiable instrument as part

of a solicitation by a creditor for an extension of credit,

to limit the liability of consumers in conjunction with

such solicitations, 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 ‘‘Unsolicited Loan

5 Check Consumer Protection Act of 2001’’.
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1 SEC. 2. UNSOLICITED LOAN CHECKS PROHIBITED.

2 (a) IN GENERAL.—Chapter 2 of the Consumer Credit

3 Protection Act (15 U.S.C. 1631 et seq.) is amended by

4 adding at the end the following new section:

5 ‘‘SEC. 140. SOLICITATIONS FOR CONSUMER LOANS.

6 ‘‘(a) ‘LIVE’ LOAN CHECKS PROHIBITED.—No con7 sumer credit which is otherwise subject to this title may

8 be extended by any creditor through the use of a check

9 or other negotiable instrument which has been sent by the

10 creditor to the consumer in connection with a solicitation

11 by the creditor for such extension of credit, unless the con12 sumer has submitted an application for, or otherwise re13 quested, such extension of credit before receiving the check

14 or instrument.

15 ‘‘(b) CONSUMER NOT LIABLE.—If any creditor in16 cludes a check or other negotiable instrument in a solicita17 tion to a consumer for an extension of credit sent by a

18 creditor to a consumer in violation of subsection (a)—

19 ‘‘(1) the consumer shall not be liable for the

20 amount of any such check or other negotiable instru21 ment; and

22 ‘‘(2) no information on any liability of the con23 sumer alleged by the creditor to have been estab24 lished through such check or other negotiable instru25 ment may be reported to or received by any credit

26 agency (as defined in section 603 of the Fair Credit
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1 Reporting Act) or included in any consumer credit

2 report under such Act.

3 ‘‘(c) REGULATIONS.—

4 ‘‘(1) REGULATIONS REQUIRED.—

5 ‘‘(A) IN GENERAL.—Before the end of the

6 6-month period beginning on the date of the en7 actment of the Unsolicited Loan Check Con8 sumer Protection Act of 1999, the Board shall

9 prescribe final regulations to implement the re10 quirements of this section.

11 ‘‘(B) MODIFICATIONS.—The Board shall

12 modify and clarify any regulation prescribed

13 under subparagraph (A) whenever the Board

14 determines such action to be necessary to pre15 vent any circumvention of the requirements of

16 this section or to facilitate compliance with such

17 requirements.

18 ‘‘(2) LIMITATIONS ON ‘LOOK-ALIKE’ CHECKS.—

19 ‘‘(A) REGULATIONS AUTHORIZED.—The

20 Board may, if the Board finds that such action

21 is necessary to prevent confusion by consumers,

22 prescribe regulations setting forth guidelines for

23 the use, in a solicitation for an extension of

24 credit, of certificates, vouchers, or other non25 negotiable instruments that are intended to
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1 have the appearance of a check or other nego2 tiable instrument, but which do not violate sub3 section (a) of this section.

4 ‘‘(B) DISCLOSURES AND OTHER REQUIRE5 MENTS.—Any regulation prescribed under sub6 paragraph (A) shall include such disclosures

7 and modifications relating to the appearance

8 and use of certificates, vouchers, or other non9 negotiable instruments in a solicitation for an

10 extension of credit as the Board determines

11 necessary or appropriate.’’.

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

13 for chapter 2 of the Consumer Credit Protection Act is

14 amended by adding at the end the following new item:

‘‘140. Solicitations for consumer loans.’’.

15 (c) SCOPE OF APPLICATION.—The requirements of

16 this Act and the amendments made by this Act shall apply

17 to solicitations for extensions of credit made to consumers

18 after the date of enactment of this Act.

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