I 
114TH CONGRESS 
2D SESSION 
H. R. 6423 
To amend the Truth in Lending Act and the Electronic Fund Transfer 
Act to provide justice to victims of fraud. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 1, 2016 
Mr. SHERMAN (for himself, Mr. CONYERS, Mr. CAPUANO, Ms. JUDY CHU of 
California, Mrs. NAPOLITANO, Ms. EDWARDS, Ms. NORTON, Mr. DANNY 
K. DAVIS of Illinois, Mrs. LAWRENCE, Mr. CARTWRIGHT, and Mr. GRI-
JALVA) introduced the following bill; which was referred to the Committee 
on Financial Services 
A BILL 
To amend the Truth in Lending Act and the Electronic 
Fund Transfer Act to provide justice to victims of fraud. 
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 ‘‘Justice for Victims 
of Fraud Act of 2016’’. 
SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) The Bureau of Consumer Financial Protec-
tion found that Wells Fargo management imple-
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mented sales incentives, including an incentive-com-
pensation program, in part to increase the number 
of banking products and services that its employees 
sold to its customers. 
(2) The Bureau of Consumer Financial Protec-
tion found that Wells Fargo employees engaged in 
improper sales practices to satisfy sales goals under 
Wells Fargo’s incentive compensation program, in-
cluding opening as many as 1,534,280 checking ac-
counts and 565,443 credit card accounts using con-
sumers’ information without their knowledge or con-
sent between May 2011 and July 2015. 
(3) Wells Fargo successfully claimed in Jabbari 
v. Wells Fargo that customers had signed away their 
rights to hold Wells Fargo accountable in court for 
claims of fraud because those customers were bound 
to a forced arbitration clause for their legitimate ac-
counts. 
(4) After Wells Fargo publicly entered a settle-
ment with Federal regulators for the opening of 
thousands of unauthorized customer accounts, Wells 
Fargo claimed in Mitchell et. al. v. Wells Fargo et. 
al. that customers’ fraud claims must continue to be 
forced into arbitration. 
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(5) Several courts have determined that despite 
claims of fraud over unauthorized accounts opened 
without customer knowledge or consent, those cus-
tomers are still bound by contracts forcing those 
claims into arbitration based on the courts’ interpre-
tation of the Federal Arbitration Act. 
(6) The Federal Arbitration Act (now codified 
as chapter 1 of title 9, United States Code) was in-
tended to apply to disputes between commercial enti-
ties of generally similar sophistication and bar-
gaining power, but a series of decisions by the Su-
preme Court of the United States have interpreted 
the Federal Arbitration Act as applicable to claims 
of fraud. 
(7) Consumers have no meaningful choice 
whether to submit their claims to arbitration and 
are typically unaware that they have given up their 
rights to file claims in court. 
SEC. 3. ARBITRATION OF CONSUMER DISPUTES RELATED 
TO CREDIT CARD ACCOUNTS. 
Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by adding at the end the fol-
lowing (and the table of contents for such chapter is con-
formed accordingly): 
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‘‘§ 140B. Validity and enforceability 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘covered dispute’ means a dispute 
that is not subject to a final judgment by a court; 
and 
‘‘(2) the term ‘predispute arbitration agree-
ment’ means any agreement between a person and 
a consumer providing for arbitration of any future 
dispute between the parties. 
‘‘(b) VALIDITY AND ENFORCEABILITY.—No predis-
pute arbitration agreement shall be valid or enforceable 
in a covered dispute that is related to a credit card that 
was not issued in response to a request or application for 
that credit card account. 
‘‘(c) APPLICABILITY.—The applicability of this sec-
tion to a predispute arbitration agreement shall be deter-
mined by a State or Federal court of competent jurisdic-
tion.’’. 
SEC. 4. ARBITRATION OF CONSUMER DISPUTES RELATED 
TO COVERED ACCOUNTS. 
The Electronic Fund Transfer Act (15 U.S.C. 1693 
et seq.) is amended by inserting after section 920 (15 
U.S.C. 1693o–2) the following: 
‘‘SEC. 920A. VALIDITY AND ENFORCEABILITY. 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘covered account’— 
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‘‘(A) means a demand deposit, savings de-
posit, or other asset account (other than an oc-
casional or incidental credit balance in an open 
end credit plan as defined in section 103(i)), as 
described in regulations of the Bureau, estab-
lished primarily for personal, family, or house-
hold purposes, including demand accounts, time 
accounts, negotiable order of withdrawal ac-
counts, and share draft accounts; and 
‘‘(B) does not include an account held by 
a financial institution pursuant to a bona fide 
trust agreement; 
‘‘(2) the term ‘covered dispute’ means a dispute 
that is not subject to a final judgment by a court; 
and 
‘‘(3) the term ‘predispute arbitration agree-
ment’ means any agreement between a financial in-
stitution and a consumer providing for arbitration of 
any future dispute between the parties. 
‘‘(b) VALIDITY AND ENFORCEABILITY.—No predis-
pute arbitration agreement shall be valid or enforceable 
in a covered dispute that is related to a covered account 
that was not issued in response to a request or application 
for that covered account. 
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