I
106TH CONGRESS
1ST SESSION
H. R. 2351
To amend the Truth in Lending Act to prohibit the distribution of any
check or other negotiable instrument as part of a solicitation by a
creditor for an extension of credit, to limit the liability of consumers
in conjunction with such solicitations, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 24, 1999
Mr. LAFALCE (for himself, Mr. WATT of North Carolina, Mr. VENTO, Mr.
FRANK of Massachusetts, Mrs. MALONEY of New York, Mr. GUTIERREZ,
Mr. GEORGE MILLER of California, and Mr. LUTHER) introduced the fol-
lowing bill; which was referred to the Committee on Banking and Finan-
cial Services
A BILL
To amend the Truth in Lending Act to prohibit the distribu-
tion of any check or other negotiable instrument as part
of a solicitation by a creditor for an extension of credit,
to limit the liability of consumers in conjunction with
such solicitations, 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 ‘‘Unsolicited Loan
Check Consumer Protection Act of 1999’’.
SEC. 2. UNSOLICITED LOAN CHECKS PROHIBITED.
(a) IN GENERAL.—Chapter 2 of the Consumer Credit
Protection Act (15 U.S.C. 1631 et seq.) is amended by
adding at the end the following new section:
‘‘SEC. 140. SOLICITATIONS FOR CONSUMER LOANS.
‘‘(a) ‘LIVE’ LOAN CHECKS PROHIBITED.—No con-
sumer credit which is otherwise subject to this title may
be extended by any creditor through the use of a check
or other negotiable instrument which has been sent by the
creditor to the consumer in connection with a solicitation
by the creditor for such extension of credit, unless the con-
sumer has submitted an application for, or otherwise re-
quested, such extension of credit before receiving the check
or instrument.
‘‘(b) CONSUMER NOT LIABLE.—If any creditor in-
cludes a check or other negotiable instrument in a solicita-
tion to a consumer for an extension of credit sent by a
creditor to a consumer in violation of subsection (a)—
‘‘(1) the consumer shall not be liable for the
amount of any such check or other negotiable instru-
ment; and
‘‘(2) no information on any liability of the con-
sumer alleged by the creditor to have been estab-
lished through such check or other negotiable instru-
ment may be reported to or received by any credit
agency (as defined in section 603 of the Fair Credit
Reporting Act) or included in any consumer credit
report under such Act.
‘‘(c) REGULATIONS.—
‘‘(1) REGULATIONS REQUIRED.—
‘‘(A) IN GENERAL.—Before the end of the
6-month period beginning on the date of the en-
actment of the Unsolicited Loan Check Con-
sumer Protection Act of 1999, the Board shall
prescribe final regulations to implement the re-
quirements of this section.
‘‘(B) MODIFICATIONS.—The Board shall
modify and clarify any regulation prescribed
under subparagraph (A) whenever the Board
determines such action to be necessary to pre-
vent any circumvention of the requirements of
this section or to facilitate compliance with such
requirements.
‘‘(2) LIMITATIONS ON ‘LOOK-ALIKE’ CHECKS.—
‘‘(A) REGULATIONS
AUTHORIZED.—The
Board may, if the Board finds that such action
is necessary to prevent confusion by consumers,
prescribe regulations setting forth guidelines for
the use, in a solicitation for an extension of
credit, of certificates, vouchers, or other non-
negotiable instruments that are intended to
have the appearance of a check or other nego-
tiable instrument, but which do not violate sub-
section (a) of this section.
‘‘(B) DISCLOSURES AND OTHER REQUIRE-
MENTS.—Any regulation prescribed under sub-
paragraph (A) shall include such disclosures
and modifications relating to the appearance
and use of certificates, vouchers, or other non-
negotiable instruments in a solicitation for an
extension of credit as the Board determines
necessary or appropriate.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 2 of the Consumer Credit Protection Act is
amended by adding at the end the following new item:
‘‘140. Solicitations for consumer loans.’’.
(c) SCOPE OF APPLICATION.—The requirements of
this Act and the amendments made by this Act shall apply
to solicitations for extensions of credit made to consumers
after the date of enactment of this Act.
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