I 
111TH CONGRESS 
1ST SESSION H. R. 2563 
To amend the Truth in Lending Act to establish additional protections for 
consumers with regard to payday loans, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 21, 2009 
Mr. SHULER (for himself, Mr. MINNICK, Mr. HELLER, and Mr. MCHENRY) 
introduced the following bill; which was referred to the Committee on Fi-
nancial Services 
A BILL 
To amend the Truth in Lending Act to establish additional 
protections for consumers with regard to payday loans, 
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 ‘‘Payday Lending Re-
form Act of 2009’’. 
SEC. 2. PAYDAY LENDING REFORM. 
Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 129A 
the following new section: 
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‘‘SEC. 129B. MANDATORY DISCLOSURES FOR EXTENDED RE-
PAYMENT PLANS AND OTHER PROTECTIONS 
FOR CONSUMERS. 
‘‘(a) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) CONSUMER
ACCOUNT.—The term ‘con-
sumer account’ or ‘account’ shall have the meaning 
set forth in section 903 of the Electronic Funds 
Transfer Act (15 U.S.C. 1693a). 
‘‘(2) EXTENDED
REPAYMENT
PLAN; REPAY-
MENT PLAN.—The term ‘extended repayment plan’ 
or ‘repayment plan’ means an installment plan 
under which a consumer who is unable to repay a 
payday loan on the loan due date and who complies 
with applicable requirements established under this 
section may repay the creditor the outstanding bal-
ance of the loan in at least 4 substantially equal 
payments, on or after a date on which the consumer 
receives regular income, without being charged any 
additional interest and fees. 
‘‘(3) INTEREST AND FEES.—The term ‘interest 
and fees’— 
‘‘(A) means all charges payable directly or 
indirectly by the consumer and imposed directly 
or indirectly by the creditor as an incident to or 
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as a condition of the extension of a payday 
loan; and 
‘‘(B) does not include— 
‘‘(i) any reasonable charge for a de-
fault, delinquency, or similar occurrence; 
‘‘(ii) any charge imposed when, if for 
any reason, funds are not made available 
to pay an item or authorization delivered 
to the creditor when presented for pay-
ment, to the extent that the charge does 
not exceed the greater of $35 or the 
amount charged to the creditor by the 
creditor’s financial institution and the 
charge is only imposed once per each item 
or authorization regardless of whether the 
item or authorization is presented for pay-
ment more than once; 
‘‘(iii) a document preparation fee of 
up to $10; and 
‘‘(iv) a loan administrative fee, except 
when a loan is being refinanced, of up to 
5 percent of the original loan principal 
amount. 
‘‘(4) PAYDAY LOAN; LOAN.—The term ‘payday 
loan’ or ‘loan’, for purposes of this section, means a 
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closed end credit transaction, unsecured by any in-
terest in the consumer’s personal property and ex-
cluding any credit card transaction under an open- 
end consumer credit plan, with a term of at least 7 
and not more than 91 days in which the amount fi-
nanced does not exceed $2,000, pursuant to which 
the consumer receives funds from and incurs interest 
or a fee payable to a creditor, and contempora-
neously with the receipt of funds, provides a pay-
ment instrument to the creditor who agrees with the 
consumer not to deposit or present the payment in-
strument for at least 7 days. 
‘‘(5) PAYMENT INSTRUMENT.—The term ‘pay-
ment instrument’ means a check, automated clear-
inghouse debit, or remotely created check, or similar 
payment instrument directing the withdrawal of 
funds from a consumer account. 
‘‘(6) REFINANCING; 
REFINANCE.—The term 
‘refinancing’ or ‘refinance’ means to refinance, 
renew, rollover, amend, or extend a loan beyond its 
original term, by payment of a fee. 
‘‘(b) PROTECTIONS FOR CONSUMERS.— 
‘‘(1) MANDATORY
DISCLOSURES
FOR
PAYDAY 
LOANS.—No creditor may make a payday loan to a 
consumer unless the creditor has first provided the 
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consumer with a copy of a written loan agreement, 
which shall be signed by the consumer and shall in-
clude the following information: 
‘‘(A) A clear and conspicuous description 
of the terms of the loan, in at least 18-point 
bold face type, including the consumer’s pay-
ment obligations under the loan and the total 
cost of all fees and other charges in connection 
with origination of the loan, stated as a dollar 
amount and as either a percentage of the origi-
nal loan principal amount or in the form of the 
corresponding ratio of dollars per hundred dol-
lars. 
‘‘(B) The name, address, and telephone 
number of the creditor making the loan. 
‘‘(C) The following statements, in at least 
18-point bold face type: 
‘‘ ‘WARNING: This loan is not intended to 
meet long-term financial needs. This loan 
should be used only to meet short-term cash 
needs. The cost of this loan may be higher than 
loans offered by other lending institutions. 
‘‘ ‘CREDIT 
COUNSELING 
AVAIL-
ABILITY: You should consider contacting an 
independent, non-profit credit counseling agen-
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cy approved by the National Foundation for 
Credit Counseling (NFCC) or by a state or fed-
eral government agency. You may obtain infor-
mation on how to contact an approved coun-
selor near you by calling NFCC at 1–800–388– 
2227. 
‘‘ ‘NO CRIMINAL PROSECUTION OR 
SECURITY INTEREST: No criminal prosecu-
tion may be commenced against you as a result 
of your non-payment of this loan, and the cred-
itor may not take or attempt to take an interest 
in any of your personal property to secure this 
loan. 
‘‘ ‘NO-COST EXTENDED REPAYMENT 
PLAN: 
‘‘ ‘If you are unable to repay your loan 
when due, you may elect once every 12 months 
to repay your loan to the creditor by using an 
extended repayment plan that will allow you to 
repay your loan in at least 4 substantially equal 
installments as described further below without 
being charged any additional interest and fees, 
to the extent that you repay the loan as agreed 
under the repayment plan. 
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‘‘ ‘To obtain an extended repayment plan, 
you must advise the creditor prior to close of 
business on the last business day before the 
original due date of the loan that you wish to 
enter into an extended repayment plan by re-
turning to the office where you obtained the 
loan or by using whatever other method you 
used to obtain the loan, such as by Internet, 
telephone or fax, and you must promptly sign 
an amendment to your loan agreement reflect-
ing the new payment schedule. 
‘‘ ‘The 12-month period during which you 
may elect to use an extended repayment plan is 
measured from the date that you fully pay off 
all amounts due under 1 extended repayment 
plan until the date that you enter into another 
extended repayment plan. 
‘‘ ‘The creditor must allow you to repay 
your loan balance in at least 4 substantially 
equal installment payments. These installments 
must be due on or after a date on which you 
receive regular income except that there shall 
be at least 13 days between installments, and 
the first installment under the plan shall not be 
due before your next pay date that is at least 
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13 days after you have signed the repayment 
plan amendment. 
‘‘ ‘If you enter into an extended repayment 
plan and then default by failing to meet your 
payment obligations, the creditor may charge 
you a reasonable payment plan fee and may ac-
celerate payment of the balance remaining. 
‘‘ ‘You may prepay the amount due under 
the extended repayment plan at any time with-
out charge or penalty.’. 
‘‘(D) Any other disclosures required by 
Federal law. 
‘‘(2) ADDITIONAL
PUBLIC
DISCLOSURES.—No 
creditor shall make a payday loan to any consumer 
unless the following notices are posted conspicuously 
and in not less than 1-inch bold print in the credi-
tor’s public lending area in each physical location, 
or, if the loan is made using the Internet, fax or 
other means, posted conspicuously on the creditor’s 
public Internet site relating to any such payday loan: 
‘‘ ‘Warning: This loan is not intended to meet 
long-term financial needs. This loan should be used 
only to meet short-term cash needs. The cost of your 
loan may be higher than loans offered by other lend-
ing institutions. 
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