I 
110TH CONGRESS 
2D SESSION 
H. R. 5280 
To prevent unfair practices in credit card accounts, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 7, 2008 
Mr. LINCOLN DAVIS of Tennessee introduced the following bill; which was 
referred to the Committee on Financial Services 
A BILL 
To prevent unfair practices in credit card accounts, 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 ‘‘Stop Unfair Practices 
in Credit Cards Act of 2007’’. 
SEC. 2. STOP UNFAIR INTEREST RATES AND FEES. 
Section 163 of the Truth in Lending Act (15 U.S.C. 
1666b) is amended— 
(1) by striking the section title and all that fol-
lows through ‘‘If an open’’ and inserting the fol-
lowing: 
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‘‘§ 163. Billing period and finance charges 
‘‘(a) BILLING PERIOD.— 
‘‘(1) FOURTEEN-DAY MINIMUM.—If an open’’; 
(2) by striking ‘‘(B) Subsection (a)’’ and insert-
ing the following: 
‘‘(2) EXCUSABLE CAUSE.—Subsection (a)’’; and 
(3) by adding at the end the following: 
‘‘(b) NO INTEREST CHARGE ON DEBT THAT IS PAID 
ON TIME.—If an open end consumer credit plan provides 
a time period within which an obligor may repay any por-
tion of the credit extended without incurring an interest 
charge, and the obligor repays all or a portion of such 
credit within the specified time period, the creditor may 
not impose or collect an interest charge on the portion of 
the credit that was repaid within the specified time period. 
‘‘(c) NO INTEREST ON DEBT THAT IS PAID ON TIME 
AND IN FULL.—In an open end consumer credit plan, if 
a billing statement requests an obligor to repay within a 
specified time period all of the credit extended under the 
plan and related finance charges, and the obligor pays all 
of the specified amount within the specified time period, 
the creditor may not impose or collect an additional inter-
est charge on the amount that was paid in full and within 
the specified time period. 
‘‘(d) LIMITS ON INTEREST RATE INCREASES.— 
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‘‘(1) IN GENERAL.—With respect to a credit 
card account under an open end consumer credit 
plan, the creditor shall not increase the periodic rate 
of interest applicable to extensions of credit while 
such account remains open, unless— 
‘‘(A) such increase is pursuant to the expi-
ration of an introductory rate which was dis-
closed under section 127(c)(6); 
‘‘(B) such increase is pursuant to the ap-
plication of a variable rate which was disclosed 
under section 127(c)(1)(A)(i)(II); 
‘‘(C) such increase is pursuant to the ap-
plication of a penalty rate which was disclosed 
under subsections (a)(4) and (c)(1)(A)(i) of sec-
tion 127; or 
‘‘(D) the obligor has provided specific writ-
ten consent to such increase at the time such 
increase was proposed. 
‘‘(2) LIMIT ON PENALTY INTEREST RATE.—If 
an obligor fails to repay an extension of credit in ac-
cordance with the terms of a credit card account 
under an open end consumer credit plan, and the 
creditor determines to apply a penalty rate, as de-
scribed in paragraph (1)(C), notwithstanding para-
graph (1)(D), such penalty rate may not, while such 
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account is open, exceed 7 percentage points above 
the interest rate that was in effect with respect to 
such account on the date immediately preceding the 
first such penalty increase for such account. 
‘‘(e) INTEREST RATE INCREASES LIMITED TO FU-
TURE CREDIT EXTENSIONS.—With respect to a credit 
card account under an open end consumer credit plan, if 
the creditor increases the periodic interest rate applicable 
to an extension of credit under the account, such increased 
rate shall apply only to extensions of credit made on and 
after the date of such increase under the account, and any 
extension of credit under such account made before the 
date of such increase shall continue to incur interest at 
the rate that was in effect on the date prior to the date 
of the increase. 
‘‘(f) NO INTEREST CHARGES ON FEES.—With re-
spect to a credit card account under an open end consumer 
credit plan, if the creditor imposes a transaction fee on 
the obligor, including a cash advance fee, late fee, over- 
the-limit fee, or balance transfer fee, the creditor may not 
impose or collect interest with respect to such fee amount. 
‘‘(g) FIXED CREDIT LIMIT.—With respect to each 
credit card account under an open end consumer credit 
plan, the creditor shall offer to the obligor the option of 
obtaining a fixed credit limit that cannot be exceeded, and 
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with respect to which any request for credit in excess of 
such fixed limit must be refused, without exception and 
without imposing an over-the-limit fee or other penalty on 
such obligor. 
‘‘(h) OVER-THE-LIMIT FEE RESTRICTIONS.—With 
respect to a credit card account under an open end con-
sumer credit plan, an over-the-limit fee, as described in 
section 127(c)(1)(B)(iii)— 
‘‘(1) may be imposed on the account only when 
an extension of credit obtained by the obligor causes 
the credit limit on such account to be exceeded, and 
may not be imposed when such credit limit is ex-
ceeded due to a penalty fee, such as a late fee or 
over-the-limit fee, that was added to the account bal-
ance by the creditor; and 
‘‘(2) 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 no addi-
tional over-the-limit fee shall be imposed in a subse-
quent billing cycle with respect to such excess credit, 
unless the obligor has obtained an additional exten-
sion of credit in excess of such credit limit during 
such subsequent cycle. 
‘‘(i) OTHER FEES.— 
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‘‘(1) NO FEE TO PAY A BILLING STATEMENT.— 
With respect to a credit card account under an open 
end consumer credit plan, the creditor may not im-
pose a separate fee to allow the obligor to repay an 
extension of credit or finance charge, whether such 
repayment is made by mail, electronic transfer, tele-
phone authorization, or other means. 
‘‘(2) 
REASONABLE
CURRENCY
EXCHANGE 
FEE.—With respect to a credit card account under 
an open end consumer credit plan, the creditor may 
impose a fee for exchanging United States currency 
with foreign currency in an account transaction, only 
if— 
‘‘(A) such fee reasonably reflects the actual 
costs incurred by the creditor to perform such 
currency exchange; 
‘‘(B) the creditor discloses publicly its 
method for calculating such fee; and 
‘‘(C) the primary Federal regulator of such 
creditor determines that the method for calcu-
lating such fee complies with this paragraph. 
‘‘(j) ANNUAL AUDIT.—The primary Federal regu-
lator of a card issuer shall audit, on at least an annual 
basis, the credit card operations and procedures used by 
such issuer to ensure compliance with this section and sec-
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tion 164, including by reviewing a sample of billing state-
ments to determine when they were mailed and received, 
and by reviewing a sample of credit card accounts to deter-
mine when and how payments and finance charges were 
applied. Such regulator shall promptly require the card 
issuer to take any corrective action needed to comply with 
this section.’’. 
SEC. 3. STOP UNFAIR APPLICATION OF CARD PAYMENTS. 
Section 164 of the Truth in Lending Act (15 U.S.C. 
1666c) is amended— 
(1) by striking the section heading and all that 
follows through ‘‘Payments’’ and inserting the fol-
lowing: 
‘‘§ 164. Prompt and fair crediting of payments 
‘‘(a) IN GENERAL.—Payments’’; and 
(2) by adding at the end the following: 
‘‘(b) APPLICATION OF PAYMENT.—Upon receipt of a 
payment from a cardholder, the card issuer shall— 
‘‘(1) apply the payment first to the card bal-
ance bearing the highest rate of interest, and then 
to each successive balance bearing the next highest 
rate of interest, until the payment is exhausted; and 
‘‘(2) after complying with paragraph (1), apply 
the payment in the most effective way to minimize 
the imposition of any finance charge to the account. 
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‘‘(c) CHANGES BY CARD ISSUER.—If a card issuer 
makes a material change in the mailing address, office, 
or procedures for handling cardholder payments, and such 
change causes a material delay in the crediting of a card-
holder payment made during the 60-day period following 
the date on which such change took effect, the card issuer 
may not impose any late fee or finance charge for a late 
payment on the credit card account to which such payment 
was credited.’’. 
SEC. 4. STOP DECEPTIVE DISCLOSURE. 
Section 127(e) of the Truth in Lending Act (15 
U.S.C. 1637(e)) is amended by adding at the end the fol-
lowing: 
‘‘(3) INTEREST
RATE
LINKED
TO
PRIME 
RATE.—If a credit card solicitation, application, 
agreement, or plan specifies use of a variable inter-
est rate established by reference to a ‘prime rate’, 
‘prime interest rate’, or similar rate or index, the 
referenced rate shall be disclosed and defined as the 
bank prime loan rate posted by a majority of the top 
25 (by assets in domestic offices) United States 
chartered commercial banks, as published by the 
Board of Governors of the Federal Reserve System. 
To avoid an unfair or deceptive act or practice, a 
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card issuer may not use the term ‘prime rate’ to 
refer to any other type of interest rate.’’. 
SEC. 5. DEFINITIONS. 
Section 103 of the Truth in Lending Act (15 U.S.C. 
1602) is amended by adding at the end the following: 
‘‘(cc) PRIMARY FEDERAL REGULATOR.— 
‘‘(1) IN GENERAL.—The term ‘primary Federal 
regulator’, when used with respect to a card issuer 
that is a depository institution, has the same mean-
ing as the term ‘appropriate Federal banking agen-
cy’, under section 3 of the Federal Deposit Insur-
ance Act. 
‘‘(2) AREAS
OF
RESPONSIBILITY.—For each 
card issuer within its regulatory jurisdiction, the pri-
mary Federal regulator shall be responsible for over-
seeing the credit card operations of the card issuer, 
ensuring compliance with the requirements of this 
title, and enforcing the prohibition against unfair or 
deceptive acts or practices.’’. 
SEC. 6. 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)— 
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(A) by striking ‘‘The Board shall’’ and in-
serting the following: 
‘‘(A) IN GENERAL.—The Board shall’’; and 
(B) by adding at the end the following: 
‘‘(B) INFORMATION
TO
BE
INCLUDED.— 
The information under subparagraph (A) shall 
include, as of a date designated by the Board— 
‘‘(i) a list of each type of transaction 
or event for which one or more of the card 
issuers has imposed a separate interest 
rate upon a cardholder, 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 card-
holder, as of the designated date; and 
‘‘(II) the number of cardholders 
to whom each such interest rate was 
applied during the calendar month im-
mediately preceding the designated 
date, and the total amount of interest 
charged to such cardholders at each 
such rate during such month; 
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‘‘(iii) a list of each type of fee that 
one or more of the card issuers has im-
posed upon a cardholder as of the des-
ignated date, including any fee imposed for 
obtaining a cash advance, making a late 
payment, exceeding the credit limit on an 
account, making a balance transfer, or ex-
changing United States dollars for foreign 
currency; 
‘‘(iv) for each type of fee identified 
under clause (iii), the number of card-
holders upon whom the fee was imposed 
during the calendar month immediately 
preceding the designated date, and the 
total amount of fees imposed upon card-
holders during such month; 
‘‘(v) the total number of cardholders 
that incurred any interest charge or any 
fee during the calendar month immediately 
preceding the designated date; and 
‘‘(vi) 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: 
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‘‘(5) REPORT TO THE CONGRESS.—The Board 
shall, on an annual basis, transmit to the Congress 
and make public a report containing an assessment 
by the Board of the profitability of credit card oper-
ations of depository institutions. Such report shall 
include estimates by the Board of the approximate, 
relative percentage of income derived by such oper-
ations from— 
‘‘(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. 7. CONFORMING AMENDMENT. 
Section 8 of the Fair Credit and Charge Card Disclo-
sure Act of 1988 (15 U.S.C. 1637 note) is repealed. 
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SEC. 8. EFFECTIVE DATE. 
This Act and the amendments made by this Act shall 
take effect 180 days after the date of the enactment of 
this Act. 
Æ 
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