‘‘ ‘Credit Counseling Availability: You should 
consider contacting an independent, non-profit credit 
counseling agency approved by the National Founda-
tion for Credit Counseling (NFCC) or by a state or 
federal government agency. You may obtain infor-
mation on how to contact an approved counselor 
near you by calling the NFCC at 1–800–388–2227. 
‘‘ ‘No Criminal Prosecution Or Security Inter-
est: No criminal prosecution may be commenced 
against you as a result of your non-payment of this 
loan, and we may not take or attempt to take an in-
terest in any of your personal property to secure this 
loan. 
‘‘ ‘Interest-Free Extended Repayment Plan: If 
you are unable to repay your loan as agreed, we are 
required by federal law to allow you to enter into an 
extended repayment plan, at least once every 12 
months, that will allow you to repay the loan in at 
least 4 substantially equal installments without 
being charged any additional interest or fees as long 
as you notify us of your desire to enter into such a 
plan prior to close of business on the last business 
day before the original due date of the loan.’. 
‘‘(3) 
MANDATORY
EXTENDED
REPAYMENT 
PLAN.—No creditor may make a payday loan to any 
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consumer unless the creditor offers the consumer an 
extended repayment plan that meets the following 
requirements: 
‘‘(A) The extended repayment plan is of-
fered at least once in any 12-month period, if 
the consumer advises the creditor prior to the 
close of business on the last business day before 
the original due date of the loan that the con-
sumer is unable to repay the loan as agreed and 
wants to enter into an extended repayment 
plan. 
‘‘(B) To qualify for such an extended re-
payment plan, the consumer may be required to 
return to the office where the consumer ob-
tained the loan or use whatever method (e.g., 
Internet, telephone or facsimile) the consumer 
used to obtain the loan, and the consumer shall 
promptly sign an amendment to the loan agree-
ment reflecting the new repayment schedule. 
For creditors operating over the Internet, the 
creditor also must obtain authorization to origi-
nate recurring debits to the consumer’s account 
in accordance with the new repayment schedule 
and in compliance with the authorization re-
quirements for preauthorized transfers set forth 
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under the Electronic Funds Transfer Act and 
Regulation E of the Board. 
‘‘(C) The creditor shall allow the consumer 
to repay the consumer’s loan balance in at least 
4 substantially equal installments generally due 
coinciding with the consumer’s periodic pay 
dates, but there shall be at least 13 days be-
tween installments, and the first installment 
under the plan shall not be due before the con-
sumer’s next pay date that is at least 13 days 
after the repayment plan amendment is signed 
by the consumer. 
‘‘(D) The creditor may extend the length 
of time between installments. 
‘‘(E) The creditor may, with each payment 
under the plan by a consumer, provide for the 
return of the consumer’s prior held payment in-
strument and require a new payment instru-
ment for the remaining balance under the plan. 
Alternatively, the creditor may require the con-
sumer at the time the consumer enters into the 
extended payment plan to provide multiple pay-
ment instruments, 1 for each of the scheduled 
payments in the amount of those payments. For 
purposes of this subparagraph the term ‘pay-
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hsrobinson on PROD1PC76 with BILLS
ment instrument’ does not include an auto-
mated clearinghouse debit. 
‘‘(F) The consumer may prepay the 
amount due under the extended repayment plan 
at any time without charge or penalty. 
‘‘(G) The consumer may not be charged 
additional interest and fees; however, if the con-
sumer fails to meet such payment obligations, 
the creditor may charge a repayment plan fee 
and may accelerate repayment of the balance 
remaining. 
‘‘(4) ADDITIONAL
PROTECTIONS
FOR
CON-
SUMERS.—It shall be unlawful for a creditor to— 
‘‘(A) require a consumer to pay more than 
the following authorized charges, each of which 
a creditor may charge and collect in connection 
with a payday loan: 
‘‘(i) interest and fees of 20 cents for 
every dollar of the original loan principal 
amount; 
‘‘(ii) a loan administrative fee of 5 
percent of the original loan principal 
amount; and 
‘‘(iii) a document preparation fee of 
$10; 
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hsrobinson on PROD1PC76 with BILLS
‘‘(B) in connection with a refinancing, re-
quire a consumer to pay more than interest and 
fees of 20 cents for every dollar of the refi-
nanced amount, or to require a consumer to 
pay any loan administrative fee or document 
preparation fee; 
‘‘(C) threaten or seek to have the con-
sumer prosecuted criminally to collect the loan; 
‘‘(D) take or attempt to take an interest in 
any of the consumer’s personal property to se-
cure the loan; 
‘‘(E) file or initiate a legal proceeding of 
any kind, including a lawsuit or arbitration, 
against a consumer to collect on a loan that is 
the subject of an extended repayment plan, or 
construe the loan to be in default unless the 
consumer has failed to repay the loan as agreed 
under the terms of the repayment plan; 
‘‘(F) take any power of attorney; 
‘‘(G) include in the loan documents— 
‘‘(i) a confession of judgment clause; 
‘‘(ii) a waiver of the right to a jury 
trial, if applicable, in any action brought 
by or against a consumer, unless the waiv-
er is included in an arbitration clause al-
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hsrobinson on PROD1PC76 with BILLS
lowed by subparagraph (iii) of this para-
graph; and 
‘‘(iii) a mandatory arbitration clause 
that is oppressive, unfair, unconscionable, 
or substantially in derogation of the rights 
of consumers; 
‘‘(H) make a payday loan to a consumer 
who has an outstanding loan obligation to the 
creditor under an extended repayment plan, or 
for at least 13 days until after the outstanding 
loan obligation to the creditor under any such 
repayment plan is paid in full; 
‘‘(I) make a payday loan with a term of 
less than 7 days; 
‘‘(J) knowingly accept payment in whole or 
in part for any obligation under an extended re-
payment plan based on funds obtained from an-
other payday loan; 
‘‘(K) enter into any agreement with a con-
sumer pursuant to which the consumer seeks or 
purports to waive the consumer’s rights under 
this section or any claim or defense arising out 
of the loan contract; 
‘‘(L) charge or attempt to collect attor-
ney’s fees, court costs, or arbitration costs in-
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made in violation of this section, shall be subject to, 
for each such violation, a civil money penalty not to 
exceed $5,000. 
‘‘(2) PENALTIES
NOT
EXCLUSIVE
OF
OTHER 
PENALTIES.—The remedies and rights provided 
under this section are in addition to and do not pre-
clude any remedy otherwise available under applica-
ble law to the person claiming relief under any such 
provision of law, other than section 130(a). 
‘‘(3) AVAILABILITY
AS
DEFENSE.—Notwith-
standing any statute of limitations or repose, a viola-
tion of this section may be raised as a matter of de-
fense by recoupment or setoff to an action to collect 
any payday loan. 
‘‘(4) CIVIL
LIABILITY.—In determining the 
amount of the award in any class action, no min-
imum recovery as to each member of the class shall 
be applicable, and the total recovery in any class ac-
tion or series of class actions arising out of the same 
failure to comply with the requirements of this sec-
tion by the same creditor shall not be more than the 
lesser of $500,000 or 1 percent of the net worth of 
the creditor. 
‘‘(e) 
INFLATION
ADJUSTMENTS.—The 
dollar 
amounts specified in subsections (a), (b), and (c) shall be 
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adjusted annually on January 1 by the annual percentage 
change in the Consumer Price Index, as reported on June 
of the year preceding such adjustment, but in no event 
may such dollars amounts be adjusted below the amounts 
stated in such subsections, as enacted. 
‘‘(f) REGULATIONS.—The Board of Governors of the 
Federal Reserve System shall prescribe regulations to the 
extent necessary to implement this section. 
‘‘(g) EFFECT ON STATE LAWS.—No provision of this 
section may be construed as preventing a State from regu-
lating a payday loan, except that any State regulation 
shall not significantly interfere with the ability of a payday 
lender to offer a payday loan that meets the consumer pro-
tection standards in this section.’’. 
SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS. 
(a) DISCLOSURES.—Section 128(a)(4) of the Truth 
in Lending Act (15 U.S.C. 1638(a)(4)) is amended— 
(1) by striking ‘‘or’’ after ‘‘does not exceed $5,’’ 
and 
(2) by inserting ‘‘ , or if the loan is subject to 
section 129B and the finance charge is expressed as 
required by section 129B’’ after ‘‘does not exceed 
$7.50’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act is amended 
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by inserting after the item relating to section 129 the fol-
lowing new items: 
‘‘129A. Fiduciary duty of servicers of pooled residential mortgages 
‘‘129B. Mandatory disclosures for extended repayment plans and other protec-
tions for consumers’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this Act shall take effect 1 year from the date of the enact-
ment of this Act and shall apply to all payday loans origi-
nated on or after such date. 
Æ 
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