I 
113TH CONGRESS 
2D SESSION 
H. R. 5130 
To amend the Truth in Lending Act to establish a national usury rate 
for consumer credit transactions. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 17, 2014 
Mr. CARTWRIGHT (for himself, Ms. CLARK of Massachusetts, Mr. CLAY, Mr. 
CLYBURN, Mr. CUMMINGS, Mr. DANNY K. DAVIS of Illinois, Mr. DOG-
GETT, Ms. EDWARDS, Mr. ELLISON, Mr. FATTAH, Ms. JACKSON LEE, 
Ms. EDDIE BERNICE JOHNSON of Texas, Mr. GEORGE MILLER of Cali-
fornia, Ms. PINGREE of Maine, Mr. RANGEL, Ms. TSONGAS, Ms. 
MICHELLE LUJAN GRISHAM of New Mexico, and Mr. COHEN) introduced 
the following bill; which was referred to the Committee on Financial Serv-
ices 
A BILL 
To amend the Truth in Lending Act to establish a national 
usury rate for consumer credit transactions. 
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 ‘‘Protecting Consumers 
from Unreasonable Credit Rates Act of 2014’’. 
SEC. 2. FINDINGS. 
Congress finds that— 
VerDate Mar 15 2010 
02:17 Jul 22, 2014
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5130.IH
H5130
tjames on DSK5VPTVN1PROD with BILLS
(1) attempts have been made to prohibit usu-
rious interest rates in America since colonial times; 
(2) at the Federal level, in 2006, Congress en-
acted a Federal 36 percent annualized usury cap for 
servicemembers and their families for covered credit 
products, as defined by the Department of Defense, 
which curbed payday, car title, and tax refund lend-
ing around military bases; 
(3) notwithstanding such attempts to curb 
predatory lending, high-cost lending persists in all 
50 States due to loopholes in State laws, safe harbor 
laws for specific forms of credit, and the exportation 
of unregulated interest rates permitted by preemp-
tion; 
(4) due to the lack of a comprehensive Federal 
usury cap, consumers annually pay approximately 
$23,700,000,000 for high-cost overdraft loans, as 
much as $8,100,000,000 for storefront and online 
payday loans, and additional amounts in unreported 
revenues from bank direct deposit advance loans and 
high-cost online installment loans; 
(5) cash-strapped consumers pay on average 
400 percent annual interest for payday loans, 300 
percent annual interest for car title loans, up to 
VerDate Mar 15 2010 
02:17 Jul 22, 2014
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5130.IH
H5130
tjames on DSK5VPTVN1PROD with BILLS
3,500 percent for bank overdraft loans, and triple- 
digit rates for online installment loans; 
(6) a national maximum interest rate that in-
cludes all forms of fees and closes all loopholes is 
necessary to eliminate such predatory lending; and 
(7) alternatives to predatory lending that en-
courage small dollar loans with minimal or no fees, 
installment payment schedules, and affordable re-
payment periods should be encouraged. 
SEC. 3. NATIONAL MAXIMUM INTEREST RATE. 
Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended— 
(1) by adding at the end the following: 
‘‘SEC. 140B. MAXIMUM RATES OF INTEREST. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, no creditor may make an extension of credit 
to a consumer with respect to which the fee and interest 
rate, as defined in subsection (b), exceeds 36 percent. 
‘‘(b) FEE AND INTEREST RATE DEFINED.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the fee and interest rate includes all charges 
payable, directly or indirectly, incident to, ancillary 
to, or as a condition of the extension of credit, in-
cluding— 
VerDate Mar 15 2010 
02:17 Jul 22, 2014
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5130.IH
H5130
tjames on DSK5VPTVN1PROD with BILLS
‘‘(A) any payment compensating a creditor 
or prospective creditor for— 
‘‘(i) an extension of credit or making 
available a line of credit, such as fees con-
nected with credit extension or availability 
such as numerical periodic rates, annual 
fees, cash advance fees, and membership 
fees; or 
‘‘(ii) any fees for default or breach by 
a borrower of a condition upon which cred-
it was extended, such as late fees, creditor- 
imposed not sufficient funds fees charged 
when a borrower tenders payment on a 
debt with a check drawn on insufficient 
funds, overdraft fees, and over limit fees; 
‘‘(B) all fees which constitute a finance 
charge, as defined by rules of the Bureau in ac-
cordance with this title; 
‘‘(C) credit insurance premiums, whether 
optional or required; and 
‘‘(D) all charges and costs for ancillary 
products sold in connection with or incidental to 
the credit transaction. 
‘‘(2) TOLERANCES.— 
VerDate Mar 15 2010 
02:17 Jul 22, 2014
Jkt 039200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5130.IH
H5130
tjames on DSK5VPTVN1PROD with BILLS
‘‘(A) IN
GENERAL.—With respect to a 
credit obligation that is payable in at least 3 
fully amortizing installments over at least 90 
days, the term ‘fee and interest rate’ does not 
include— 
‘‘(i) application or participation fees 
that in total do not exceed the greater of 
$30 or, if there is a limit to the credit line, 
5 percent of the credit limit, up to $120, 
if— 
‘‘(I) such fees are excludable 
from the finance charge pursuant to 
section 106 and regulations issued 
thereunder; 
‘‘(II) such fees cover all credit 
extended or renewed by the creditor 
for 12 months; and 
‘‘(III) the minimum amount of 
credit extended or available on a cred-
it line is equal to $300 or more; 
‘‘(ii) a late fee charged as authorized 
by State law and by the agreement that 
does not exceed either $20 per late pay-
ment or $20 per month; or 
VerDate Mar 15 2010 
02:17 Jul 22, 2014
Jkt 039200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5130.IH
H5130
tjames on DSK5VPTVN1PROD with BILLS
‘‘(iii) a creditor-imposed not sufficient 
funds fee charged when a borrower tenders 
payment on a debt with a check drawn on 
insufficient funds that does not exceed 
$15. 
‘‘(B) ADJUSTMENTS
FOR
INFLATION.— 
The Bureau may adjust the amounts of the tol-
erances established under this paragraph for in-
flation over time, consistent with the primary 
goals of protecting consumers and ensuring 
that the 36 percent fee and interest rate limita-
tion is not circumvented. 
‘‘(c) CALCULATIONS.— 
‘‘(1) OPEN END CREDIT PLANS.—For an open 
end credit plan— 
‘‘(A) the fee and interest rate shall be cal-
culated each month, based upon the sum of all 
fees and finance charges described in subsection 
(b) charged by the creditor during the pre-
ceding 1-year period, divided by the average 
daily balance; and 
‘‘(B) if the credit account has been open 
less than 1 year, the fee and interest rate shall 
be calculated based upon the total of all fees 
and finance charges described in subsection 
VerDate Mar 15 2010 
02:17 Jul 22, 2014
Jkt 039200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5130.IH
H5130
tjames on DSK5VPTVN1PROD with BILLS
(b)(1) charged by the creditor since the plan 
was opened, divided by the average daily bal-
ance, and multiplied by the quotient of 12 di-
vided by the number of full months that the 
credit plan has been in existence. 
‘‘(2) OTHER CREDIT PLANS.—For purposes of 
this section, in calculating the fee and interest rate, 
the Bureau shall require the method of calculation 
of annual percentage rate specified in section 
107(a)(1), except that the amount referred to in 
that section 107(a)(1) as the ‘finance charge’ shall 
include all fees, charges, and payments described in 
subsection (b)(1) of this section. 
‘‘(3) ADJUSTMENTS
AUTHORIZED.—The Bu-
reau may make adjustments to the calculations in 
paragraphs (1) and (2), but the primary goals of 
such adjustment shall be to protect consumers and 
to ensure that the 36 percent fee and interest rate 
limitation is not circumvented. 
‘‘(d) DEFINITION OF CREDITOR.—As used in this 
section, the term ‘creditor’ has the same meaning as in 
section 702(e) of the Equal Credit Opportunity Act (15 
U.S.C. 1691a(e)). 
‘‘(e) NO EXEMPTIONS PERMITTED.—The exemption 
authority of the Bureau under section 105 shall not apply 
VerDate Mar 15 2010 
02:17 Jul 22, 2014
Jkt 039200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5130.IH
H5130
tjames on DSK5VPTVN1PROD with BILLS
to the rates established under this section or the disclosure 
requirements under section 127(b)(6). 
‘‘(f) DISCLOSURE OF FEE AND INTEREST RATE FOR 
CREDIT OTHER THAN OPEN END CREDIT PLANS.—In 
addition to the disclosure requirements under section 
127(b)(6), the Bureau may prescribe regulations requiring 
disclosure of the fee and interest rate established under 
this section. 
‘‘(g) RELATION TO STATE LAW.—Nothing in this 
section may be construed to preempt any provision of 
State law that provides greater protection to consumers 
than is provided in this section. 
‘‘(h) CIVIL LIABILITY AND ENFORCEMENT.—In addi-
tion to remedies available to the consumer under section 
130(a), any payment compensating a creditor or prospec-
tive creditor, to the extent that such payment is a trans-
action made in violation of this section, shall be null and 
void, and not enforceable by any party in any court or 
alternative dispute resolution forum, and the creditor or 
any subsequent holder of the obligation shall promptly re-
turn to the consumer any principal, interest, charges, and 
fees, and any security interest associated with such trans-
action. Notwithstanding any statute of limitations or 
repose, a violation of this section may be raised as a mat-
VerDate Mar 15 2010 
02:17 Jul 22, 2014
Jkt 039200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H5130.IH
H5130
tjames on DSK5VPTVN1PROD with BILLS