I 
110TH CONGRESS 
2D SESSION 
H. R. 6978 
To require the establishment of a credit card safety star rating system 
for the benefit of consumers, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 18, 2008 
Mr. TIERNEY introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To require the establishment of a credit card safety star 
rating system for the benefit of consumers, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Credit Card Safety 
Star Act of 2008’’. 
SEC. 2. FINDINGS. 
Congress finds that— 
(1) competition in the credit card market is se-
verely hindered by a lack of transparency, which re-
sults in inefficient consumer choices; 
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(2) such lack of transparency is largely due to 
confusing terms and overwhelming information for 
consumers; 
(3) the marketplace has not increased competi-
tion based on the merits of credit cards; 
(4) a Government rating system that would use 
market forces by encouraging better transparency 
would increase such competition and assist con-
sumers in making better credit card choices; and 
(5) such a rating system would not preclude ad-
ditional regulation or legislation that may eliminate 
certain practices considered unfair or abusive. 
SEC. 3. TRUTH IN LENDING ACT AMENDMENTS. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by inserting 
after section 127A the following new section: 
‘‘SEC. 127B. CREDIT CARD SAFETY STAR RATING SYSTEM. 
‘‘(a) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) 
AGREEMENT.—The 
term 
‘agreement’ 
means the terms and conditions applicable to an 
open end credit plan offered by an issuer of credit. 
‘‘(2) READING GRADE LEVEL.—Any reference 
to a reading grade level shall be as determined by 
the Board, using available measurements for assess-
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ing such reading levels, including those used by the 
Secretary of Education; 
‘‘(3) SAFETY STAR SYSTEM.—The term ‘Safety 
Star System’ means the credit card safety star rat-
ing system established under this section. 
‘‘(4) MULTIPLE-CYCLE
BILLING.—The term 
‘multiple-cycle billing’ means the practice of calcu-
lating average daily balances over more than 1 bill-
ing cycle. 
‘‘(5) JUNK MAIL.—The term ‘junk mail’ means 
a form of disclosure that does not inform the con-
sumer in a meaningful and significant way about 
changes in the contract, including small type, using 
separate pieces of paper for separate disclosures, 
and mixing disclosure materials with product adver-
tisements. 
‘‘(b) RULEMAKING.— 
‘‘(1) IN GENERAL.—Not later than 12 months 
after the date of enactment of this section, the 
Board shall issue final rules to implement the Safety 
Star System established under this section, to allow 
consumers to quickly and easily compare the levels 
of safety associated with various open end credit 
plan agreements. 
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‘‘(2) CONSULTATION.—The Board shall consult 
with the Comptroller of the Currency in issuing 
rules to implement the Safety Star System. 
‘‘(c) ELEMENTS OF SAFETY STAR SYSTEM.—The 
Safety Star System shall consist of a 5-star system for 
rating the terms and conditions of each open end credit 
plan agreement between a card issuer and a cardholder, 
in accordance with this section. 
‘‘(d) SAFETY STAR RATINGS.— 
‘‘(1) ONE-STAR RATING.—The lowest level of 
safety for an open end credit plan shall be indicated 
by a 1-star rating. 
‘‘(2) FIVE-STAR RATING.—The highest level of 
safety in an open end credit plan shall be indicated 
by a 5-star rating. 
‘‘(e) POINT STRUCTURE
FOR SAFETY STAR SYS-
TEM.— 
‘‘(1) VALUES.—Each variation of a term in an 
agreement shall be worth 1 point or –1 point, as ap-
plicable. 
‘‘(2) STAR SYSTEM.—For purposes of the Safe-
ty Star System— 
‘‘(A) 5-star credit cards are those with 
points totaling 7 points or greater; 
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‘‘(B) 4-star credit cards are those with be-
tween 3 points and 6 points; 
‘‘(C) 3-star credit cards are those with be-
tween –1 point and 2 points; 
‘‘(D) 2-star credit cards are those with be-
tween –6 points and –2 points; and 
‘‘(E) 1-star credit cards are those with –7 
points or fewer. 
‘‘(f) POINT AWARDS.—One point shall be awarded 
for each of the terms in an agreement under which— 
‘‘(1) no binding or nonbinding arbitration 
clause applies; 
‘‘(2) at least 90 days notice is provided to the 
cardholder if the card issuer wants to change the 
terms of the agreement, with the option for the con-
sumer to opt out of the changes, while paying off 
their previous balance according to the original 
terms; 
‘‘(3) changes are disclosed in a manner that 
highlights the differences between the current terms 
and the proposed terms; 
‘‘(4) the original card agreement and all origi-
nal supplementary materials are in 1 document at 1 
time, and, when the card issuer discloses changes to 
the card agreement— 
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‘‘(A) those materials are not in junk mail 
form; and 
‘‘(B) the changes are disclosed conspicu-
ously, together with the next billing cycle state-
ment, before the changes becomes effective; 
‘‘(5) no over-the-limit fees are imposed for the 
transactions approved at the time of transaction by 
the card issuer; 
‘‘(6) no fees are imposed to pay credit card bills 
using any method, including over the phone; 
‘‘(7) the card issuer has in place a system to 
minimize fees to the consumer that is at least as fi-
nancially beneficial to the consumer as a system 
under which payments are applied to principal in a 
manner that divides the payment among the dif-
ferent interest rate balances proportionally; 
‘‘(8) interest is not accrued on new purchases 
between the end of the billing cycle and the due date 
when a balance is outstanding; 
‘‘(9) the card issuer does not use multiple-cycle 
billing; 
‘‘(10) with respect to a subprime, unsecured 
credit plan, fees are below 10 percent of the min-
imum allowed credit balance; 
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‘‘(11) the terms of the agreement are disclosed 
in a form that requires at or below an 8th grade 
reading level; 
‘‘(12) any secondary disclosure materials meant 
to supplement the terms of the agreement are dis-
closed in a form that requires at or below an 8th 
grade reading level; 
‘‘(13) no late fee may be imposed when a pay-
ment is received, whether processed by the issuer or 
not, within 2 days of the payment due date; 
‘‘(14) a copy of the agreement and all supple-
mentary materials are easily available to the card-
holder online; or 
‘‘(15) a substantial positive financial benefit 
would be provided to the consumer, as determined 
by the Board in accordance with subsection (h). 
‘‘(g) NEGATIVE POINTS.—One point shall be sub-
tracted for each of the terms in an agreement under 
which— 
‘‘(1) binding or nonbinding arbitration is re-
quired to resolve disputes; 
‘‘(2) fewer than 30 days notice before the bill-
ing statement for which changes in terms take effect 
are provided to the cardholder when the card issuer 
wants to change the terms of the card agreement 
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(which shall be assumed if notice of such changes is 
undisclosed in the agreement materials); 
‘‘(3) junk mailer disclosures are used to inform 
cardholders of changes in their agreements; 
‘‘(4) over-the-limit fees are imposed more than 
once based on the same transaction; 
‘‘(5) fees are imposed to pay bills by check, over 
the Internet, or by an automated phone system; 
‘‘(6) payment allocations are less financially 
beneficial to the consumer than a system under 
which payments are applied to older balances before 
newer ones; 
‘‘(7) interest is accrued on new purchases be-
tween the end of the billing cycle and the due date 
when a balance is outstanding; 
‘‘(8) the agreement allows for multiple-cycle 
billing; 
‘‘(9) with respect to a subprime, unsecured 
credit plan, the fees to obtain or maintain the card 
amount to more than 50 percent of the minimum al-
lowed credit balance; 
‘‘(10) the terms of the agreement are disclosed 
in a form that requires a reading level that is above 
a 12th grade reading level; 
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‘‘(11) any secondary disclosure materials meant 
to supplement the terms of the agreement are writ-
ten in a form that requires a reading level above the 
12th grade reading level; 
‘‘(12) a late fee may be imposed within 2 days 
of the payment due date; 
‘‘(13) the issuer may unilaterally change the 
terms in the agreement without written consent 
from the consumer, or the issuer may unilaterally 
make adverse changes to the terms in the agreement 
without written consent from the consumer and writ-
ten notice to the consumer of the precise behavior 
that provoked the adverse change; 
‘‘(14) interest rate increases apply to already 
incurred debt; 
‘‘(15) the issuer charges interest on transaction 
fees, including late fees; or 
‘‘(16) there would be a negative financial im-
pact on the interests of the consumer, as determined 
by the Board in accordance with subsection (h). 
‘‘(h) BOARD CONSIDERATIONS.—For purposes of 
subsections (f)(15) and (g)(16), the Board may consider— 
‘‘(1) the level of difficulty in understanding 
terms of the subject agreement by an average con-
sumer; 
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‘‘(2) how such terms will affect consumers who 
are close to the edge of their credit limits; 
‘‘(3) how such terms will affect consumers who 
do not have a good credit score, history, or rating, 
using commonly employed credit measurement meth-
ods (if it creates greater access to credit by reducing 
safety, or by other means); 
‘‘(4) whether such terms create what would ap-
pear to a reasonable consumer to be an arbitrary 
deadline or limit that may frustrate consumers and 
result in excess fees or worse financial outcomes for 
the consumer; 
‘‘(5) whether such terms, or the severity of such 
terms, is not based on the credit risks created by a 
particular consumer behavior, but rather is designed 
to solely increase revenue through lack of trans-
parency; 
‘‘(6) whether any State has sought to limit such 
terms or terms that are similar thereto; 
‘‘(7) whether provisions of State law relating to 
unfair and deceptive practices would prohibit any 
such terms, but for the national bank exclusion from 
non-home State banking laws; 
‘‘(8) whether such terms have an anticompeti-
tive or procompetitive effect on the marketplace; and 
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‘‘(9) such additional terms or concepts that are 
not specified in paragraphs (1) through (8) that the 
Board deems difficult for an average consumer to 
manage, such as terms that are confusing to the 
typical consumer or that create a greater risk of 
negative financial outcomes for the typical consumer, 
and terms that promote transparency or competi-
tion. 
‘‘(i) LIMITATIONS.—For purposes of subsection (h), 
the Board may not consider, with respect to the terms of 
an open end credit plan agreement, the profitability or im-
pact on the success of any particular business model of 
such terms. 
‘‘(j) AUTOMATIC
RATING.—Notwithstanding any 
other provision of this section, or any other provision of 
State or Federal law, any open end credit plan that allows 
the card issuer or a designee thereof to modify the terms 
of the agreement at any time or periodically for unspec-
ified or unstated reasons, or under which other accounts, 
or changes in the credit rating of the consumer by a third 
party, are used as a basis for adverse changes in the 
agreement (including universal default) shall automati-
cally give rise to a 1-star rating for such open end credit 
plan. 
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‘‘(k) NO POINTS
IF TERMS ARE REQUIRED
BY 
LAW.—If a particular term in an agreement becomes re-
quired by law or regulation, no points may be awarded 
under the Safety Star System for that term. 
‘‘(l) PROCEDURES FOR RATINGS.— 
‘‘(1) CERTIFICATION
TO
THE
BOARD.—Each 
issuer of credit under an open end credit plan shall 
certify in writing to the Board, the number of stars 
to be awarded, separately for each of the card 
issuer’s agreements. Each such certification shall 
specify which terms in each agreement are subject to 
the Safety Star System, and how the issuer arrived 
at the star rating for each agreement based on the 
Safety Star System in accordance with paragraph 
(2). 
‘‘(2) SUBMISSIONS
TO
THE
BOARD.—Each 
agreement that is subject to a Safety Star System 
rating shall be submitted electronically to the Board, 
together with a written explanation of whether the 
agreement has or does not have each of the terms 
specified in subsections (f) and (g), before issuing or 
marketing a credit card under that agreement. 
‘‘(3) BOARD VERIFICATION.— 
‘‘(A) IN GENERAL.—The Board shall verify 
that the terms in the submitted agreement and 
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supporting materials (such as examples of fu-
ture disclosures or examples of websites with 
cardholder agreements) comply with the certifi-
cation submitted to the Board by the issuer 
under this subsection, not later than 30 days 
after the date of submission. 
‘‘(B) 
AVOIDING
DUPLICATIVE 
VERIFICATIONS.—A card issuer may certify to 
the Board, in writing, that all agreements that 
it markets include a particular term, or that the 
issuer will use certain practices (with sup-
porting documents, including showing how fu-
ture disclosures will be made) so that the Board 
is required to determine only once, with respect 
to that term or practice, how that term or prac-
tice affects the star ratings of the credit card 
agreements of the issuer. 
‘‘(4) MISREPRESENTATIONS AS VIOLATIONS.— 
Any certification to the Board under this section 
that the issuer knew, or should have known, was 
false or misrepresented to the Board or to a con-
sumer the terms or conditions of a card agreement 
or of a Safety Star System rating under this section 
shall be treated as a violation of this title, and shall 
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be subject to enforcement in accordance with section 
108. 
‘‘(5) MODIFICATIONS BY CARD ISSUERS.— 
‘‘(A) IN GENERAL.—After the first annual 
review by the Board, mentioned in subsection 
(o), before implementing any new term or con-
cept, or new way of approaching a term or con-
cept, with respect to an open end credit plan, 
the card issuer shall submit the new term or 
concept and any supporting materials to the 
Board, other than with respect to an adjust-
ment to the applicable rate of interest in an ex-
isting agreement that clearly specifies that such 
rate would be adjustable and under what condi-
tions such adjustments could occur. 
‘‘(B) DETERMINATION OF THE BOARD.— 
Not later than 30 days after the date of a sub-
mission under subparagraph (A), the Board 
shall complete a review of the effects on safety 
of the subject new concept or term, and shall 
issue a decision on whether it affects the Safety 
Star System rating for the open end credit plan 
that will include the term or concept. 
‘‘(m) DISPLAY OF AND ACCESS TO RATINGS.— 
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‘‘(1) DISPLAY
OF
RATING
REQUIRED.—The 
Safety Star System rating for each credit card shall 
be clearly displayed on all marketing material, appli-
cations, billing statements, and agreements associ-
ated with that credit card, as well as on the back of 
each such credit card, including a brief explanation 
of the system displayed below each rating (other 
than on the back of the credit card). 
‘‘(2) NEW CARDS REQUIRED FOR LOWER RAT-
INGS.—In any case in which the Safety Star System 
rating for a credit card is lowered for any reason, 
the card issuer shall provide new cards to account 
holders displaying the new rating in accordance with 
paragraph (1). 
‘‘(3) GRAPHIC DISPLAY.—The Safety Star Sys-
tem rating for a credit card shall be represented by 
a graphic that demonstrates not only the number of 
stars that the credit card has received, but also the 
number of stars that the card did not receive. 
‘‘(4) DEVELOPMENT
OF
GRAPHIC
BY
THE 
BOARD.—The Board shall determine the graphic and 
description of the Safety Star System for display on 
materials and the back of cards for purposes of this 
section. 
‘‘(n) CONSUMER ACCESS TO RATINGS.— 
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‘‘(1) IN GENERAL.—The Board shall engage in 
an extensive campaign to educate consumers about 
the Safety Star System ratings for credit cards, 
using commonly used and accessible communications 
media. 
‘‘(2) WEBSITE.—Not later than 12 months 
after the date of enactment of this section, the 
Board shall establish and shall maintain a stand- 
alone website— 
‘‘(A) to provide easily understandable, in- 
depth information on the criteria used to assign 
the ratings, as provided in subsections (f) and 
(g); and 
‘‘(B) to include a listing of the Safety Star 
System ratings for each open end consumer 
credit plan, information on how the issuer ar-
rived at that rating, and the number of con-
sumers that have that plan with the issuer. 
‘‘(o) ANNUAL REVIEW BY THE BOARD.— 
‘‘(1) IN GENERAL.—The Board shall conduct a 
thorough annual review (of not longer than 6 
months in duration) of the Safety Star System, to 
determine whether the point system is effectively 
aiding consumers, and shall promptly implement any 
regulatory changes as are necessary to ensure that 
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the System protects consumers and encourages 
transparent competition and fairness to consumers, 
including implementing a system in which terms are 
weighted to distinguish between different levels of 
safety, in accordance with the purposes of this sec-
tion. 
‘‘(2) AVAILABILITY
OF
RESULTS.—Results of 
the review conducted under this subsection shall be 
submitted to Congress, and shall be made available 
to the public. 
‘‘(p) PERIODIC REVIEW OF STANDARDS.—Once every 
2 years, the Board shall determine whether the require-
ments to satisfy 2-star standards and above should be 
raised on the grounds that card issuers have abandoned 
the most unfair practices. In making such determination, 
the Board may not consider the profitability of business 
models, but may consider whether competition in the cred-
it industry will improve consumer protection, and how the 
change in standards will affect such competition.’’. 
(b) CLERICAL AMENDMENT.—The table of section 
for chapter 2 of the Truth in Lending Act is amended 
by inserting after the item relating to section 127A the 
following new item: 
‘‘127B. Credit card safety star rating system.’’. 
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SEC. 4. SAFETY STAR ADVISORY COMMISSION. 
(a) ESTABLISHMENT.—There is established the Cred-
it Card Safety Star Advisory Commission (in this section 
referred to as the ‘‘Commission’’). 
(b) DUTIES.— 
(1) REVIEW
OF
THE
CREDIT
CARD
SAFETY 
STAR SYSTEM AND ANNUAL REPORTS.—The Com-
mission shall— 
(A) review the effectiveness of the credit 
card Safety Star System under this section, in-
cluding the topics described in paragraph (2); 
(B) make recommendations to Congress 
concerning such system; 
(C) study whether it would better protect 
consumers to ban some practices by creditors 
rather than use a rating system for those prac-
tices, including universal default, unilateral 
changes without consumer consent, allowing in-
terest charges on fees, or allowing interest rate 
increases to apply to past debt; and 
(D) by not later than March 1 of each cal-
endar year following the date of the enactment 
of this Act, submit a report to Congress con-
taining the results of such reviews and its rec-
ommendations concerning such system. 
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