vides a written notice to the consumer at least 45 days 
before the increase takes effect which fully describes the 
changes in the annual percentage rate, in a complete and 
conspicuous manner, and the extent to which such in-
crease would apply to an existing balance.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after the item relat-
ing to section 127A the following new item: 
‘‘127B. Additional requirements for credit card accounts under an open end con-
sumer credit plan.’’. 
SEC. 3. ADDITIONAL PROVISIONS REGARDING ACCOUNT 
FEATURES, TERMS, AND PRICING. 
(a) DOUBLE CYCLE BILLING PROHIBITED.—Section 
127B of the Truth in Lending Act is amended by inserting 
after subsection (c) (as added by section 2(c)) the fol-
lowing new subsection: 
‘‘(d) DOUBLE CYCLE BILLING.— 
‘‘(1) IN GENERAL.—No finance charge may be 
imposed by a creditor with respect to any balance on 
a credit card account under an open end consumer 
credit plan that is based on balances for days in bill-
ing cycles preceding the most recent billing cycle. 
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 
apply so as to prohibit a creditor from— 
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‘‘(A) charging a consumer for deferred in-
terest even though that interest may have ac-
crued over multiple billing cycles; or 
‘‘(B) adjusting finance charges following 
resolution of a billing error dispute.’’. 
(b) LIMITATIONS RELATING TO ACCOUNT BALANCES 
ATTRIBUTABLE ONLY TO ACCRUED INTEREST.—Section 
127B is amended by inserting after subsection (d) (as 
added by subsection (a)) the following new subsection: 
‘‘(e) LIMITATIONS RELATING
TO ACCOUNT BAL-
ANCES ATTRIBUTABLE ONLY TO ACCRUED INTEREST.— 
‘‘(1) IN GENERAL.—If the outstanding balance 
on a credit card account under an open end con-
sumer credit plan at the end of a billing period rep-
resents an amount attributable only to interest ac-
crued during the preceding billing period on an out-
standing balance that was fully repaid during the 
preceding billing period— 
‘‘(A) no fee may be imposed or collected in 
connection with such balance attributable only 
to interest before such end of the billing period; 
and 
‘‘(B) any failure to make timely repay-
ments of the balance attributable only to inter-
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est before such end of the billing period shall 
not constitute a default on the account. 
Such balance remains a legally binding debt obliga-
tion. 
‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 
shall not be construed as affecting— 
‘‘(A) the consumer’s obligation to pay any 
accrued interest on a credit card account under 
an open end consumer credit plan; or 
‘‘(B) the accrual of interest on the out-
standing balance on any such account in ac-
cordance with the terms of the account and this 
title.’’. 
(c) ACCESS TO PAYOFF BALANCE INFORMATION.— 
Section 127B of the Truth in Lending Act is amended 
by inserting after subsection (e) (as added by subsection 
(b)) the following new subsection: 
‘‘(f) PAYOFF BALANCE INFORMATION.—Each peri-
odic statement provided by a creditor to a consumer with 
respect to a credit card account under an open end con-
sumer credit plan shall contain the telephone number, 
Internet address, and website at which the consumer may 
request the payoff balance on the account.’’. 
(d) CONSUMER RIGHT TO REJECT CARD BEFORE 
NOTICE IS PROVIDED OF OPEN ACCOUNT.—Section 127B 
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of the Truth in Lending Act is amended by inserting after 
subsection (g) (as added by subsection (c)) the following 
new subsection: 
‘‘(g) CONSUMER RIGHT TO REJECT CARD BEFORE 
NOTICE OF NEW ACCOUNT IS PROVIDED TO CONSUMER 
REPORTING AGENCY.— 
‘‘(1) IN GENERAL.—A creditor may not furnish 
any information to a consumer reporting agency (as 
defined in section 603) concerning the establishment 
of a newly opened credit card account under an open 
end consumer credit plan until the credit card has 
been used or activated by the consumer. 
‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 
shall not be construed as prohibiting a creditor from 
furnishing information about any application for a 
credit card account under an open end consumer 
credit plan or any inquiry about any such account 
to a consumer reporting agency (as so defined).’’. 
(e) USE OF TERMS CLARIFIED.—Section 127B of the 
Truth in Lending Act is amended by inserting after sub-
section (g) (as added by subsection (d)) the following new 
subsection: 
‘‘(h) USE OF TERMS.—The following requirements 
shall apply with respect to the terms of any credit card 
account under any open end consumer credit plan: 
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‘‘(1) ‘FIXED’ RATE.—The term ‘fixed’, when 
appearing in conjunction with a reference to the an-
nual percentage rate or interest rate applicable with 
respect to such account, may only be used to refer 
to an annual percentage rate or interest rate that 
will not change or vary for any reason over the pe-
riod clearly and conspicuously specified in the terms 
of the account. 
‘‘(2) PRIME
RATE.—The term ‘prime rate’, 
when appearing in any agreement or contract for 
any such account, may only be used to refer to the 
bank prime rate published in the Federal Reserve 
Statistical Release on selected interest rates (daily or 
weekly), and commonly referred to as the H.15 re-
lease (or any successor publication). 
‘‘(3) DUE DATE.— 
‘‘(A) IN GENERAL.—Each periodic state-
ment for any such account shall contain a date 
by which the next periodic payment on the ac-
count must be made to avoid a late fee or be 
considered a late payment, and any payment re-
ceived by 5 p.m., local time at the location spec-
ified by the creditor for the receipt of payment, 
on such date shall be treated as a timely pay-
ment for all purposes. 
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‘‘(B) CERTAIN ELECTRONIC FUND TRANS-
FERS.—Any payment with respect to any such 
account made by a consumer online to the 
website of the credit card issuer or by telephone 
directly to the credit card issuer before 5 p.m., 
local time at the location specified by the cred-
itor for the receipt of payment, on any business 
day shall be credited to the consumer’s account 
that business day. 
‘‘(C) PRESUMPTION
OF
TIMELY
PAY-
MENT.—Any evidence provided by a consumer 
in the form of a receipt from the United States 
Postal Service or other common carrier indi-
cating that a payment on a credit card account 
was sent to the issuer not less than 7 days be-
fore the due date contained in the periodic 
statement under subparagraph (A) for such 
payment shall create a presumption that such 
payment was made by the due date, which may 
be rebutted by the creditor for fraud or dishon-
esty on the part of the consumer with respect 
to the mailing date.’’. 
(f) PRO RATA PAYMENT ALLOCATIONS.—Section 
127B of the Truth in Lending Act is amended by inserting 
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account under an open end consumer credit 
plan the current terms of which allow the con-
sumer to receive the benefit of a promotional 
rate or deferred interest plan, amounts paid in 
excess of the required minimum payment shall 
be allocated to the promotional rate balance or 
the deferred interest balance only if other bal-
ances have been fully paid. 
‘‘(B) EXCEPTION FOR DEFERRED INTER-
EST
BALANCES.—Notwithstanding 
subpara-
graph (A), a creditor may allocate the entire 
amount paid by the consumer in excess of the 
required minimum periodic payment to a bal-
ance on which interest is deferred during the 2 
billing cycles immediately preceding the expira-
tion of the period during which interest is de-
ferred. 
‘‘(4) PROHIBITION ON RESTRICTED GRACE PE-
RIODS UNDER CERTAIN CIRCUMSTANCES.—If, with 
respect to any credit card account under an open 
end consumer credit, a creditor offers a time period 
in which to repay credit extended without incurring 
finance charges to cardholders who pay the balance 
in full, the creditor may not deny a consumer who 
takes advantage of a promotional rate balance or de-
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ferred interest rate balance offer with respect to 
such an account any such time period for repaying 
credit without incurring finance charges.’’. 
(g) TIMELY
PROVISION
OF
PERIODIC
STATE-
MENTS.—Section 127B of the Truth in Lending Act is 
amended by inserting after subsection (i) (as added by 
subsection (f)) the following new subsection: 
‘‘(j) TIMELY
PROVISION
OF
PERIODIC
STATE-
MENTS.—Each periodic statement with respect to a credit 
card account under an open end consumer credit plan 
shall be sent by the creditor to the consumer not less than 
25 calendar days before the due date identified in such 
statement for the next payment on the outstanding bal-
ance on such account, and section 163(a) shall be applied 
with respect to any such account by substituting ‘25’ for 
‘fourteen’.’’. 
SEC. 4. CONSUMER CHOICE WITH RESPECT TO OVER-THE- 
LIMIT TRANSACTIONS. 
Section 127B of the Truth in Lending Act is amend-
ed by inserting after subsection (j) (as added by section 
3(g)) the following new subsections: 
‘‘(k) OPT-OUT OF CREDITOR AUTHORIZATION OF 
OVER-THE-LIMIT
TRANSACTIONS
IF
FEES
ARE
IM-
POSED.— 
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‘‘(1) IN GENERAL.—In the case of any credit 
card account under an open end consumer credit 
plan under which an over-the-limit-fee may be im-
posed by the creditor for any extension of credit in 
excess of the amount of credit authorized to be ex-
tended under such account, the consumer may elect 
to prohibit the creditor, with respect to such ac-
count, from completing any transaction involving the 
extension of credit, with respect to such account, in 
excess of the amount of credit authorized by noti-
fying the creditor of such election in accordance with 
paragraph (2). 
‘‘(2) NOTIFICATION
BY
CONSUMER.—A con-
sumer shall notify a creditor under paragraph (1)— 
‘‘(A) through the notification system main-
tained by the creditor under paragraph (4); or 
‘‘(B) by submitting to the creditor a signed 
notice of election, by mail or electronic commu-
nication, on a form issued by the creditor for 
purposes of this subparagraph. 
‘‘(3) EFFECTIVENESS OF ELECTION.—An elec-
tion by a consumer under paragraph (1) shall be ef-
fective beginning 3 business days after the creditor 
receives notice from the consumer in accordance 
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with paragraph (2) and shall remain effective until 
the consumer revokes the election. 
‘‘(4) NOTIFICATION
SYSTEM.—Each creditor 
that maintains credit card accounts under an open 
end consumer credit plan shall establish and main-
tain a notification system, including a toll-free tele-
phone number, Internet address, and website, which 
permits any consumer whose credit card account is 
maintained by the creditor to notify the creditor of 
an election under this subsection in accordance with 
paragraph (2). 
‘‘(5) ANNUAL
NOTICE
TO
CONSUMERS
OF 
AVAILABILITY OF ELECTION.—In the case of any 
credit card account under an open end consumer 
credit plan, the creditor shall include a notice, in 
clear and conspicuous language, of the availability of 
an election by the consumer under this paragraph as 
a means of avoiding over-the limit fees and a higher 
amount of indebtedness, and the method for pro-
viding such notice— 
‘‘(A) in the periodic statement required 
under subsection (b) with respect to such ac-
count at least once each calendar year; and 
‘‘(B) in any such periodic statement which 
includes a notice of the imposition of an over- 
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the-limit fee during the period covered by the 
statement. 
‘‘(6) NO
FEES
IF
CONSUMER
HAS
MADE
AN 
ELECTION.—If a consumer has made an election 
under paragraph (1), no over-the-limit fee may be 
imposed on the account for any reason that has 
caused the outstanding balance in the account to ex-
ceed the credit limit. 
‘‘(7) REGULATIONS.— 
‘‘(A) IN GENERAL.—The Board shall issue 
regulations allowing for the completion of over- 
the-limit transactions that for operational rea-
sons exceed the credit limit by a de minimis 
amount, even where the cardholder has made 
an election under paragraph (1). 
‘‘(B) SUBJECT TO NO FEE LIMITATION.— 
The regulations prescribed under subparagraph 
(A) shall not allow for the imposition of any fee 
or any rate increase based on the permitted 
over-the-limit transactions. 
‘‘(l) OVER-THE-LIMIT FEE RESTRICTIONS.—With re-
spect to a credit card account under an open end consumer 
credit plan, an over-the-limit fee may be imposed only once 
during a billing cycle if, on the last day of such billing 
cycle, the credit limit on the account is exceeded, and an 
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over-the-limit fee, with respect to such excess credit, may 
be imposed only once in each of the 2 subsequent billing 
cycles, unless the consumer has obtained an additional ex-
tension of credit in excess of such credit limit during any 
such subsequent cycle or the consumer reduces the out-
standing balance below the credit limit as of the end of 
such billing cycle. 
‘‘(m) OVER-THE-LIMIT FEES PROHIBITED IN CON-
JUNCTION WITH CERTAIN CREDIT HOLDS.—Notwith-
standing subsection (l), an over-the-limit fee may not be 
imposed if the credit limit was exceeded due to a hold un-
less the actual amount of the transaction for which the 
hold was placed would have resulted in the consumer ex-
ceeding the credit limit.’’. 
SEC. 5. STRENGTHEN CREDIT CARD INFORMATION COL-
LECTION. 
Section 136(b) of the Truth in Lending Act (15 
U.S.C. 1646(b)) is amended— 
(1) in paragraph (1)— 
(A) 
by 
striking 
‘‘COLLECTION
RE-
QUIRED.—The Board shall’’ and inserting 
‘‘COLLECTION REQUIRED.— 
‘‘(A) IN GENERAL.—The Board shall’’. 
(B) by adding at the end the following new 
subparagraph: 
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‘‘(B) INFORMATION
TO
BE
INCLUDED.— 
The information under subparagraph (A) shall 
include, for the relevant semiannual period, the 
following information with respect each creditor 
in connection with any consumer credit card ac-
count: 
‘‘(i) A list of each type of transaction 
or event during the semiannual period for 
which 1 or more creditors has imposed a 
separate interest rate upon a consumer 
credit card accountholder, including pur-
chases, cash advances, and balance trans-
fers. 
‘‘(ii) For each type of transaction or 
event identified under clause (i)— 
‘‘(I) each distinct interest rate 
charged by the card issuer to a con-
sumer credit card accountholder dur-
ing the semiannual period; and 
‘‘(II) the number of cardholders 
to whom each such interest rate was 
applied during the last calendar 
month of the semiannual period, and 
the total amount of interest charged 
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to such accountholders at each such 
rate during such month. 
‘‘(iii) A list of each type of fee that 1 
or more of the creditors has imposed upon 
a consumer credit card accountholder dur-
ing the semiannual period, including any 
fee imposed for obtaining a cash advance, 
making a late payment, exceeding the cred-
it limit on an account, making a balance 
transfer, or exchanging United States dol-
lars for foreign currency. 
‘‘(iv) For each type of fee identified 
under 
clause 
(iii), 
the 
number 
of 
accountholders upon whom the fee was im-
posed during each calendar month of the 
semiannual period, and the total amount of 
fees imposed upon cardholders during such 
month. 
‘‘(v) The total number of consumer 
credit card accountholders that incurred 
any finance charge or any other fee during 
the semiannual period. 
‘‘(vi) The total number of consumer 
credit card accounts maintained by each 
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creditor as of the end of the semiannual 
period. 
‘‘(vii) The total number and value of 
cash advances made during the semiannual 
period under a consumer credit card ac-
count. 
‘‘(viii) The total number and value of 
purchases involving or constituting con-
sumer credit card transactions during the 
semiannual period. 
‘‘(ix) The total number and amount of 
repayments on outstanding balances on 
consumer credit card accounts in each 
month of the semiannual period. 
‘‘(x) The percentage of all consumer 
credit card accountholders (with respect to 
any creditor) who— 
‘‘(I) incurred a finance charge in 
each month of the semiannual period 
on any portion of an outstanding bal-
ance on which a finance charge had 
not previously been incurred; and 
‘‘(II) incurred any such finance 
charge at any time during the semi-
annual period. 
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‘‘(xi) The total number and amount of 
balances accruing finance charges during 
the semiannual period. 
‘‘(xii) The total number and amount 
of the outstanding balances on consumer 
credit card accounts as of the end of such 
semiannual period. 
‘‘(xiii) Total credit limits in effect on 
consumer credit card accounts as of the 
end of such semiannual period and the 
amount by which such credit limits exceed 
the credit limits in effect as of the begin-
ning of such period. 
‘‘(xiv) Any other information related 
to interest rates, fees, or other charges 
that the Board deems of interest.’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(5) REPORT TO CONGRESS.—The Board shall, 
on an annual basis, transmit to Congress and make 
public a report containing estimates by the Board of 
the approximate, relative percentage of income de-
rived by the credit card operations of depository in-
stitutions from— 
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‘‘(A) the imposition of interest rates on 
cardholders, including separate estimates for— 
‘‘(i) interest with an annual percent-
age rate of less than 25 percent; and 
‘‘(ii) interest with an annual percent-
age rate equal to or greater than 25 per-
cent; 
‘‘(B) the imposition of fees on cardholders; 
‘‘(C) the imposition of fees on merchants; 
and 
‘‘(D) any other material source of income, 
while specifying the nature of that income.’’. 
SEC. 6. STANDARDS APPLICABLE TO INITIAL ISSUANCE OF 
SUBPRIME OR ‘‘FEE HARVESTER’’ CARDS. 
Section 127B of the Truth in Lending Act is amend-
ed by inserting after subsection (m) (as added by section 
4) the following new subsection: 
‘‘(n) STANDARDS APPLICABLE TO INITIAL ISSUANCE 
OF SUBPRIME OR ‘FEE HARVESTER’ CARDS.— 
‘‘(1) IN GENERAL.—In the case of any credit 
card account under an open end consumer credit 
plan the terms of which require the payment of fees 
(other than late fees or over-the-limit fees) by the 
consumer in the first year the account is opened in 
an amount in excess of 25 percent of the total 
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amount of credit authorized under the account, no 
payment of any fees (other than late fees or over- 
the-limit fees) may be made from the credit made 
available by the card. 
‘‘(2) RULE OF CONSTRUCTION.—No provision 
of this subsection may be construed as authorizing 
any imposition or payment of advance fees otherwise 
prohibited by any provision of law.’’. 
SEC. 7. EXTENSIONS OF CREDIT TO UNDERAGE CON-
SUMERS. 
Section 127(c) of the Truth in Lending Act (15 
U.S.C. 1637(c)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(8) EXTENSIONS
OF
CREDIT
TO
UNDERAGE 
CONSUMERS.— 
‘‘(A) IN GENERAL.—No credit card may be 
knowingly issued to, or open end credit plan es-
tablished on behalf of, a consumer who has not 
attained the age of 18, unless the consumer is 
emancipated under applicable State law. 
‘‘(B) RULE OF CONSTRUCTION.—For the 
purposes of determining the age of an appli-
cant, the submission of a signed application by 
a consumer stating that the consumer is over 
18 shall be considered sufficient proof of age.’’. 
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SEC. 8. EFFECTIVE DATE. 
(a) IN GENERAL.—The amendments made by this 
Act shall apply to all credit card accounts under open end 
consumer credit plans as of the end of the 3-month period 
beginning on the date of the enactment of this Act. 
(b) REGULATIONS.—The Board of Governors of the 
Federal Reserve System, in consultation with the Comp-
troller of the Currency, the Director of the Office of Thrift 
Supervision, the Federal Deposit Insurance Corporation, 
the National Credit Union Administration Board, and the 
Federal Trade Commission, shall prescribe regulations, in 
final form, implementing the amendments made by this 
Act before the end of the 3-month period referred to in 
subsection (a). 
Æ 
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