I
106TH CONGRESS
1ST SESSION
H. R. 1276
To amend the Truth in Lending Act to protect consumers from certain
unreasonable practices of creditors which result in higher fees or rates
of interest for credit cardholders, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 24, 1999
Ms. ROYBAL-ALLARD (for herself, Mr. LUTHER, Mr. SHOWS, Mr. GREEN of
Texas, Mr. PASTOR, Mr. BROWN of California, Ms. LEE, Mr. STARK, Mr.
DAVIS of Illinois, Mr. FILNER, Mr. DIXON, Mr. OLVER, Mr. GEORGE
MILLER of California, Mr. HINCHEY, and Ms. WOOLSEY) introduced the
following bill; which was referred to the Committee on Banking and Fi-
nancial Services
A BILL
To amend the Truth in Lending Act to protect consumers
from certain unreasonable practices of creditors which
result in higher fees or rates of interest for credit card-
holders, 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 Consumer
Protection Act of 1999’’.
SEC. 2. FEES FOR ON-TIME PAYMENTS PROHIBITED.
Section 127 of the Truth in Lending Act (15 U.S.C.
1637) is amended by adding at the end the following new
subsection:
‘‘(h) FEES FOR ON-TIME PAYMENTS PROHIBITED.—
‘‘(1) IN GENERAL.—In the case of any credit
card account under an open-end consumer credit
plan, no minimum finance charge for any period (in-
cluding any annual period), and no fee in lieu of a
minimum finance charge, may be imposed with re-
gard to such account or credit extended under such
account solely on the basis that any credit extended
has been repaid in full before the end of any grace
period applicable with respect to the extension of
credit.
‘‘(2) SCOPE OF APPLICATION.—Paragraph (1)
shall not be construed as—
‘‘(A) prohibiting the imposition of any flat
annual fee which may be imposed on the con-
sumer in advance of any annual period to cover
the cost of maintaining a credit card account
during such annual period without regard to
whether any credit is actually extended under
such account during such period; or
‘‘(B) otherwise affecting the imposition of
the actual finance charge applicable with re-
spect to any credit extended under such account
during such annual period at the annual per-
centage rate disclosed to the consumer in ac-
cordance with this title for the period of time
any such credit is outstanding.’’.
SEC. 3. FREEZE ON INTEREST RATE TERMS AND FEES ON
CANCELED CARDS.
Section 127 of the Truth in Lending Act (15 U.S.C.
1637) is amended by inserting after subsection (h) (as
added by section 2 of this Act) the following new sub-
section:
‘‘(i) FREEZE ON INTEREST RATE TERMS AND FEES
ON CANCELED CARDS.—
‘‘(1) ADVANCE NOTICE OF INCREASE IN INTER-
EST RATE REQUIRED.—In the case of any credit
card account under an open-end consumer credit
plan, no increase in any annual percentage rate of
interest (other than an increase due solely to a
change in another rate of interest to which such rate
is indexed) applicable to any outstanding balance of
credit under such plan may take effect before the be-
ginning of the billing cycle which begins not less
than 15 days after the accountholder receives notice
of such increase.
‘‘(2) INCREASE NOT EFFECTIVE FOR CANCELED
ACCOUNTS.—If an accountholder referred to in para-
graph (1) cancels the credit card account before the
beginning of the billing cycle referred to in such
paragraph and surrenders all unexpired credit cards
issued in connection with such account—
‘‘(A) an annual percentage rate of interest
applicable after the cancellation with respect to
the outstanding balance on such account as of
the date of cancellation may not exceed any an-
nual percentage rate of interest applicable with
respect to such balance under the terms and
conditions in effect before the increase referred
to in paragraph (1); and
‘‘(B) the repayment of such outstanding
balance after the cancellation shall be subject to
all other terms and conditions applicable with
respect to such account before the increase re-
ferred to in such paragraph.
‘‘(3) NOTICE OF RIGHT TO CANCEL.—The no-
tice referred to in paragraph (1) with respect to an
increase in annual percentage rate of interest shall
contain a brief description of the right of the
consumer—
‘‘(A) to cancel the account before the effec-
tive date of the increase; and
‘‘(B) after such cancellation, to pay any
balance outstanding on such account at the
time of cancellation in accordance with the
terms and conditions in effect before the can-
cellation.’’.
SEC. 4. DISCLOSURE OF FEES AND INTEREST RATES ON
CREDIT ADVANCES THROUGH THE USE OF 3d
PARTY CHECKS.
Section 127 of the Truth in Lending Act (15 U.S.C.
1637) is amended by inserting after subsection (i) (as
added by section 3 of this Act) the following new sub-
section:
‘‘(j) FEES AND INTEREST RATES ON CREDIT AD-
VANCES THROUGH THE USE OF 3d PARTY CHECKS.—
‘‘(1) IN GENERAL.—In the case of any credit
card account under an open-end consumer credit
plan, a creditor may not provide the accountholder
with any negotiable or transferable instrument for
use in making an extension of credit to the
accountholder for the purpose of making a transfer
to a 3d party, unless the creditor has fully satisfied
the notice requirements of paragraph (2) with re-
spect to such instrument.
‘‘(2) 
NOTICE
REQUIREMENTS.—A 
creditor
meets the notice requirements of this paragraph
with respect to an instrument referred to in para-
graph 
(1) 
if 
the 
creditor 
provides, 
to 
an
accountholder at the same time any such instrument
is provided, a notice which prominently and specifi-
cally describes—
‘‘(A) the amount of any transaction fee
which may be imposed for making an extension
of credit through the use of such instrument,
including the exact percentage rate to be used
in determining such amount if the amount of
the transaction fee is expressed as a percentage
of the amount of the credit extended; and
‘‘(B) any annual percentage rate of inter-
est applicable in determining the finance charge
for any such extension of credit.’’.
SEC. 5. PROHIBITION ON OVER-THE-LIMIT FEES IN CRED-
ITOR-APPROVED TRANSACTIONS.
Section 127 of the Truth in Lending Act (15 U.S.C.
1637) is amended by inserting after subsection (j) (as
added by section 4 of this Act) the following new sub-
section:
‘‘(k) LIMITATION
ON IMPOSITION
OF OVER-THE-
LIMIT FEES.—In the case of any credit card account
under an open-end consumer credit plan, a creditor may
not impose any fee on the accountholder for any extension
of credit in excess of the amount of credit authorized to
be extended with respect to such account if the extension
of credit is made in connection with a credit transaction
which the creditor approves in advance or at the time of
the transaction.’’.
SEC. 6. PROHIBITION ON 2-CYCLE BILLING.
Section 127 of the Truth in Lending Act (15 U.S.C.
1637) is amended by inserting after subsection (k) (as
added by section 5 of this Act) the following new sub-
section:
‘‘(l) PROHIBITION
ON 2-CYCLE BILLING.—In the
case of any credit card account under an open-end con-
sumer credit plan, if the creditor provides, with regard to
any new extension of credit under such account, a period
during which such extension of credit may be repaid with-
out incurring a finance charge for such extension of credit,
no finance charge may subsequently be imposed for such
period with regard to any unpaid balance (as of the end
of such period) of such extension of credit.’’.
SEC. 7. DISCLOSURES RELATED TO ‘‘TEASER RATES’’.
Section 127(c) of the Truth in Lending Act (15
U.S.C. 1637(c)) is amended—
(1) by redesignating paragraph (5) as paragraph
(6); and
(2) by inserting after paragraph (4) the fol-
lowing new paragraph:
‘‘(5) ADDITIONAL NOTICE CONCERNING ‘TEAS-
ER RATES’.—
‘‘(A) IN GENERAL.—If any application or
solicitation for a credit card for which a disclo-
sure is required under this subsection offers, for
an introductory period of less than 1 year, an
annual percentage rate of interest which—
‘‘(i) is less than the annual percentage
rate of interest which will apply after the
end of such introductory period; or
‘‘(ii) in the case of an annual percent-
age rate which varies in accordance with
an index, which is less than the current
annual percentage rate under the index
which will apply after the end of such pe-
riod,
the application or solicitation shall contain the
disclosure contained in subparagraph (B) or
(C), as the case may be.
‘‘(B) 
FIXED
ANNUAL
PERCENTAGE
RATE.—If the annual percentage rate which will