441
‘‘(A) the interest on the portion of the credit 
extension that is greater than the fair market 
value of the dwelling is not tax deductible for 
Federal income tax purposes; and 
‘‘(B) the consumer should consult a tax ad-
viser for further information regarding the de-
ductibility of interest and charges.’’. 
(b) NON-OPEN END CREDIT EXTENSIONS.—
(1) CREDIT APPLICATIONS.—Section 128 of the 
Truth in Lending Act (15 U.S.C. 1638) is amended—
(A) in subsection (a), by adding at the end 
the following: 
‘‘(15) In the case of a consumer credit trans-
action that is secured by the principal dwelling of the 
consumer, in which the extension of credit may exceed 
the fair market value of the dwelling, a clear and con-
spicuous statement that—
‘‘(A) the interest on the portion of the credit 
extension that is greater than the fair market 
value of the dwelling is not tax deductible for 
Federal income tax purposes; and 
‘‘(B) the consumer should consult a tax ad-
viser for further information regarding the de-
ductibility of interest and charges.’’; and
442
(B) in subsection (b), by adding at the end 
the following: 
‘‘(3) In the case of a credit transaction described in 
paragraph (15) of subsection (a), disclosures required by 
that paragraph shall be made to the consumer at the time 
of application for such extension of credit.’’. 
(2) CREDIT ADVERTISEMENTS.—Section 144 of 
the Truth in Lending Act (15 U.S.C. 1664) is amend-
ed by adding at the end the following: 
‘‘(e) Each advertisement to which this section applies 
that relates to a consumer credit transaction that is secured 
by the principal dwelling of a consumer in which the exten-
sion of credit may exceed the fair market value of the dwell-
ing, and which advertisement is disseminated in paper 
form to the public or through the Internet, as opposed to 
by radio or television, shall clearly and conspicuously state 
that—
‘‘(1) the interest on the portion of the credit ex-
tension that is greater than the fair market value of 
the dwelling is not tax deductible for Federal income 
tax purposes; and 
‘‘(2) the consumer should consult a tax adviser 
for further information regarding the deductibility of 
interest and charges.’’. 
(c) REGULATORY IMPLEMENTATION.—
443
(1) IN GENERAL.—The Board shall promulgate 
regulations implementing the amendments made by 
this section.
(2) EFFECTIVE DATE.—Regulations issued under 
paragraph (1) shall not take effect until the later of— 
(A) 12 months after the date of enactment 
of this Act; or 
(B) 12 months after the date of publication 
of such final regulations by the Board. 
SEC. 1303. DISCLOSURES RELATED TO ‘‘INTRODUCTORY 
RATES’’. 
(a) INTRODUCTORY
RATE
DISCLOSURES.—Section 
127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is 
amended by adding at the end the following: 
‘‘(6) ADDITIONAL NOTICE CONCERNING ‘INTRO-
DUCTORY RATES’.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), an application or solicitation 
to open a credit card account and all pro-
motional materials accompanying such applica-
tion or solicitation for which a disclosure is re-
quired under paragraph (1), and that offers a 
temporary annual percentage rate of interest, 
shall—
444
‘‘(i) use the term ‘introductory’ in im-
mediate proximity to each listing of the 
temporary annual percentage rate applica-
ble to such account, which term shall ap-
pear clearly and conspicuously; 
‘‘(ii) if the annual percentage rate of 
interest that will apply after the end of the 
temporary rate period will be a fixed rate, 
state in a clear and conspicuous manner in 
a prominent location closely proximate to 
the first listing of the temporary annual 
percentage rate (other than a listing of the 
temporary annual percentage rate in the 
tabular format described in section 122(c)), 
the time period in which the introductory 
period will end and the annual percentage 
rate that will apply after the end of the in-
troductory period; and 
‘‘(iii) if the annual percentage rate 
that will apply after the end of the tem-
porary rate period will vary in accordance 
with an index, state in a clear and con-
spicuous manner in a prominent location 
closely proximate to the first listing of the 
temporary annual percentage rate (other
445
than a listing in the tabular format pre-
scribed by section 122(c)), the time period 
in which the introductory period will end 
and the rate that will apply after that, 
based on an annual percentage rate that 
was in effect within 60 days before the date 
of mailing the application or solicitation. 
‘‘(B) EXCEPTION.—Clauses (ii) and (iii) of 
subparagraph (A) do not apply with respect to 
any listing of a temporary annual percentage 
rate on an envelope or other enclosure in which 
an application or solicitation to open a credit 
card account is mailed. 
‘‘(C) 
CONDITIONS
FOR
INTRODUCTORY 
RATES.—An application or solicitation to open a 
credit card account for which a disclosure is re-
quired under paragraph (1), and that offers a 
temporary annual percentage rate of interest 
shall, if that rate of interest is revocable under 
any circumstance or upon any event, clearly and 
conspicuously disclose, in a prominent manner 
on or with such application or solicitation—
‘‘(i) a general description of the cir-
cumstances that may result in the revoca-
446
tion of the temporary annual percentage 
rate; and 
‘‘(ii) if the annual percentage rate that 
will apply upon the revocation of the tem-
porary annual percentage rate—
‘‘(I) will be a fixed rate, the an-
nual percentage rate that will apply 
upon the revocation of the temporary 
annual percentage rate; or 
‘‘(II) will vary in accordance with 
an index, the rate that will apply after 
the temporary rate, based on an an-
nual percentage rate that was in effect 
within 60 days before the date of mail-
ing the application or solicitation. 
‘‘(D) DEFINITIONS.—In this paragraph—
‘‘(i) the terms ‘temporary annual per-
centage rate of interest’ and ‘temporary an-
nual percentage rate’ mean any rate of in-
terest applicable to a credit card account for 
an introductory period of less than 1 year, 
if that rate is less than an annual percent-
age rate that was in effect within 60 days 
before the date of mailing the application or 
solicitation; and
447
‘‘(ii) the term ‘introductory period’ 
means the maximum time period for which 
the temporary annual percentage rate may 
be applicable. 
‘‘(E) RELATION TO OTHER DISCLOSURE RE-
QUIREMENTS.—Nothing in this paragraph may 
be construed to supersede subsection (a) of sec-
tion 122, or any disclosure required by para-
graph (1) or any other provision of this sub-
section.’’. 
(b) REGULATORY IMPLEMENTATION.—
(1) IN GENERAL.—The Board shall promulgate 
regulations implementing the requirements of section 
127(c)(6) of the Truth in Lending Act, as added by 
this section. 
(2) EFFECTIVE DATE.—Section 127(c)(6) of the 
Truth in Lending Act, as added by this section, and 
regulations issued under paragraph (1) of this sub-
section shall not take effect until the later of—
(A) 12 months after the date of enactment 
of this Act; or 
(B) 12 months after the date of publication 
of such final regulations by the Board.
448
SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS. 
(a) INTERNET-BASED SOLICITATIONS.—Section 127(c) 
of the Truth in Lending Act (15 U.S.C. 1637(c)) is amended 
by adding at the end the following: 
‘‘(7) INTERNET-BASED SOLICITATIONS.—
‘‘(A) IN GENERAL.—In any solicitation to 
open a credit card account for any person under 
an open end consumer credit plan using the 
Internet or other interactive computer service, 
the person making the solicitation shall clearly 
and conspicuously disclose—
‘‘(i) the information described in sub-
paragraphs (A) and (B) of paragraph (1); 
and 
‘‘(ii) the information described in 
paragraph (6). 
‘‘(B) FORM OF DISCLOSURE.—The disclo-
sures required by subparagraph (A) shall be—
‘‘(i) readily accessible to consumers in 
close proximity to the solicitation to open a 
credit card account; and 
‘‘(ii) updated regularly to reflect the 
current policies, terms, and fee amounts ap-
plicable to the credit card account. 
‘‘(C) DEFINITIONS.—For purposes of this 
paragraph—
449
‘‘(i) the term ‘Internet’ means the 
international computer network of both 
Federal 
and 
non-Federal 
interoperable 
packet switched data networks; and 
‘‘(ii) the term ‘interactive computer 
service’ means any information service, sys-
tem, or access software provider that pro-
vides or enables computer access by multiple 
users to a computer server, including spe-
cifically a service or system that provides 
access to the Internet and such systems op-
erated or services offered by libraries or edu-
cational institutions.’’. 
(b) REGULATORY IMPLEMENTATION.—
(1) IN GENERAL.—The Board shall promulgate 
regulations implementing the requirements of section 
127(c)(7) of the Truth in Lending Act, as added by 
this section. 
(2) EFFECTIVE DATE.—The amendment made by 
subsection (a) and the regulations issued under para-
graph (1) of this subsection shall not take effect until 
the later of—
(A) 12 months after the date of enactment 
of this Act; or
450
(B) 12 months after the date of publication 
of such final regulations by the Board. 
SEC. 1305. DISCLOSURES RELATED TO LATE PAYMENT 
DEADLINES AND PENALTIES. 
(a) DISCLOSURES RELATED TO LATE PAYMENT DEAD-
LINES AND PENALTIES.—Section 127(b) of the Truth in 
Lending Act (15 U.S.C. 1637(b)) is amended by adding at 
the end the following: 
‘‘(12) If a late payment fee is to be imposed due 
to the failure of the obligor to make payment on or 
before a required payment due date, the following 
shall be stated clearly and conspicuously on the bill-
ing statement: 
‘‘(A) The date on which that payment is 
due or, if different, the earliest date on which a 
late payment fee may be charged. 
‘‘(B) The amount of the late payment fee to 
be imposed if payment is made after such date.’’. 
(b) REGULATORY IMPLEMENTATION.—
(1) IN GENERAL.—The Board shall promulgate 
regulations implementing the requirements of section 
127(b)(12) of the Truth in Lending Act, as added by 
this section. 
(2) EFFECTIVE DATE.—The amendment made by 
subsection (a) and regulations issued under para-
451
graph (1) of this subsection shall not take effect until 
the later of—
(A) 12 months after the date of enactment 
of this Act; or 
(B) 12 months after the date of publication 
of such final regulations by the Board. 
SEC. 1306. PROHIBITION ON CERTAIN ACTIONS FOR FAIL-
URE TO INCUR FINANCE CHARGES. 
(a) PROHIBITION ON CERTAIN ACTIONS FOR FAILURE 
TO INCUR FINANCE CHARGES.—Section 127 of the Truth 
in Lending Act (15 U.S.C. 1637) is amended by adding 
at the end the following: 
‘‘(h) PROHIBITION ON CERTAIN ACTIONS FOR FAILURE 
TO INCUR FINANCE CHARGES.—A creditor of an account 
under an open end consumer credit plan may not terminate 
an account prior to its expiration date solely because the 
consumer has not incurred finance charges on the account. 
Nothing in this subsection shall prohibit a creditor from 
terminating an account for inactivity in 3 or more consecu-
tive months.’’. 
(b) REGULATORY IMPLEMENTATION.—
(1) IN GENERAL.—The Board shall promulgate 
regulations implementing the requirements of section 
127(h) of the Truth in Lending Act, as added by this 
section.
452
(2) EFFECTIVE DATE.—The amendment made by 
subsection (a) and regulations issued under para-
graph (1) of this subsection shall not take effect until 
the later of—
(A) 12 months after the date of enactment 
of this Act; or 
(B) 12 months after the date of publication 
of such final regulations by the Board. 
SEC. 1307. DUAL USE DEBIT CARD. 
(a) REPORT.—The Board may conduct a study of, and 
present to Congress a report containing its analysis of, con-
sumer protections under existing law to limit the liability 
of consumers for unauthorized use of a debit card or similar 
access device. Such report, if submitted, shall include rec-
ommendations for legislative initiatives, if any, of the 
Board, based on its findings. 
(b) CONSIDERATIONS.—In preparing a report under 
subsection (a), the Board may include—
(1) the extent to which section 909 of the Elec-
tronic Fund Transfer Act (15 U.S.C. 1693g), as in ef-
fect at the time of the report, and the implementing 
regulations promulgated by the Board to carry out 
that section provide adequate unauthorized use liabil-
ity protection for consumers;
453
(2) the extent to which any voluntary industry 
rules have enhanced or may enhance the level of pro-
tection afforded consumers in connection with such 
unauthorized use liability; and 
(3) whether amendments to the Electronic Fund 
Transfer Act (15 U.S.C. 1693 et seq.), or revisions to 
regulations promulgated by the Board to carry out 
that Act, are necessary to further address adequate 
protection for consumers concerning unauthorized use 
liability. 
SEC. 1308. STUDY OF BANKRUPTCY IMPACT OF CREDIT EX-
TENDED TO DEPENDENT STUDENTS. 
(a) STUDY.—
(1) IN GENERAL.—The Board shall conduct a 
study regarding the impact that the extension of cred-
it described in paragraph (2) has on the rate of cases 
filed under title 11 of the United States Code. 
(2) EXTENSION OF CREDIT.—The extension of 
credit described in this paragraph is the extension of 
credit to individuals who are—
(A) claimed as dependents for purposes of 
the Internal Revenue Code of 1986; and 
(B) enrolled within 1 year of successfully 
completing all required secondary education re-
454
quirements and on a full-time basis, in postsec-
ondary educational institutions. 
(b) REPORT.—Not later than 1 year after the date of 
enactment of this Act, the Board shall submit to the Senate 
and the House of Representatives a report summarizing the 
results of the study conducted under subsection (a). 
SEC. 1309. CLARIFICATION OF CLEAR AND CONSPICUOUS. 
(a) REGULATIONS.—Not later than 6 months after the 
date of enactment of this Act, the Board, in consultation 
with the other Federal banking agencies (as defined in sec-
tion 3 of the Federal Deposit Insurance Act), the National 
Credit Union Administration Board, and the Federal 
Trade Commission, shall promulgate regulations to provide 
guidance regarding the meaning of the term ‘‘clear and con-
spicuous’’, as used in subparagraphs (A), (B), and (C) of 
section 127(b)(11) and clauses (ii) and (iii) of section 
127(c)(6)(A) of the Truth in Lending Act. 
(b) EXAMPLES.—Regulations promulgated under sub-
section (a) shall include examples of clear and conspicuous 
model disclosures for the purposes of disclosures required 
by the provisions of the Truth in Lending Act referred to 
in subsection (a). 
(c) STANDARDS.—In promulgating regulations under 
this section, the Board shall ensure that the clear and con-
spicuous standard required for disclosures made under the
455
provisions of the Truth in Lending Act referred to in sub-
section (a) can be implemented in a manner which results 
in disclosures which are reasonably understandable and de-
signed to call attention to the nature and significance of 
the information in the notice. 
TITLE XIV—GENERAL EFFECTIVE 
DATE; 
APPLICATION 
OF 
AMENDMENTS 
SEC. 1401. EFFECTIVE DATE; APPLICATION OF AMEND-
MENTS. 
(a) EFFECTIVE DATE.—Except as otherwise provided 
in this Act, this Act and the amendments made by this Act 
shall take effect 180 days after the date of enactment of this 
Act. 
(b) APPLICATION OF AMENDMENTS.—
(1) IN GENERAL.—Except as otherwise provided 
in this Act and paragraph (2), the amendments made 
by this Act shall not apply with respect to cases com-
menced under title 11, United States Code, before the 
effective date of this Act. 
(2) CERTAIN LIMITATIONS APPLICABLE TO DEBT-
ORS.—The amendments made by sections 308, 322, 
and 330 shall apply with respect to cases commenced 
under title 11, United States Code, on or after the 
date of the enactment of this Act.
Union Calendar No. 27
108TH CONGRESS 
1ST SESSION 
H. R. 975
[Report No. 108–40, Part I] 
A BILL 
To amend title 11 of the United States Code, and 
for other purposes. 
MARCH 18, 2003
Reported from the Committee on the Judiciary with an 
amendment 
MARCH 18, 2003
Referral to the Committee on Financial Services extended 
for a period ending not later than March 18, 2003
MARCH 18, 2003
Committee on Financial Services discharged; committed 
to the Committee of the Whole House on the State of 
the Union and ordered to be printed