I
107TH CONGRESS
1ST SESSION
H. R. 1054
To amend the Truth in Lending Act to expand protections for consumers
by adjusting statutory exemptions and civil penalties to reflect inflation,
to eliminate the Rule of 78s accounting for interest rebates in consumer
credit transactions, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 15, 2001
Mr. LAFALCE (for himself, Mr. GUTIERREZ, Ms. LEE, Mrs. JONES of Ohio,
Mr. CAPUANO, Mr. CLAY, Mr. HINCHEY, and Ms. SCHAKOWSKY) intro-
duced the following bill; which was referred to the Committee on Finan-
cial Services
A BILL
To amend the Truth in Lending Act to expand protections
for consumers by adjusting statutory exemptions and
civil penalties to reflect inflation, to eliminate the Rule
of 78s accounting for interest rebates in consumer credit
transactions, 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 ‘‘Truth in Lending Mod-
ernization Act of 2001’’.
SEC. 2. APPLICABLE CONSUMER CREDIT AND LEASE
TRANSACTIONS.
(a) CREDIT TRANSACTIONS.—Section 104(3) of the
Consumer Credit Protection Act (15 U.S.C. 1603(3)) is
amended by striking ‘‘$25,000’’ and inserting ‘‘$75,000’’.
(b) LEASE TRANSACTIONS.—Section 181(1) of the
Consumer Credit Protection Act (15 U.S.C. 1667(1)) is
amended by striking ‘‘$25,000’’ and inserting ‘‘$75,000’’.
SEC. 3. AMENDMENTS RELATING TO RIGHT OF RESCIS-
SION.
(a) TIMING
OF WAIVER
BY CONSUMER.—Section
125(a) of the Truth in Lending Act (15 U.S.C. 1635(a))
is amended—
(1) by striking ‘‘(a) Except as otherwise pro-
vided’’ and inserting ‘‘(a) RIGHT ESTABLISHED.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) TIMING OF ELECTION OF WAIVER BY CON-
SUMER.—No election by a consumer to waive the
right established under paragraph (1) to rescind a
transaction shall be effective if—
‘‘(A) the waiver was required by the cred-
itor as a condition for the transaction;
SEC. 4. CIVIL LIABILITY.
(a) IN GENERAL.—Section 130(a)(2)(A) of the Con-
sumer Credit Protection Act (15 U.S.C. 1640(a)(2)(A))
is amended—
(1) in clause (ii)—
(A) by striking ‘‘$100’’ and inserting
‘‘$200’’; and
(B) by striking ‘‘$1,000’’ and inserting
‘‘$5,000’’; and
(2) in clause (iii), by striking ‘‘$2,000’’ and in-
serting ‘‘$10,000’’.
(b) MAXIMUM AMOUNT.—Section 130(a)(2)(B) (15
U.S.C. 1640(a)(2)(B)) is amended by striking ‘‘lesser of
$500,000 or 1 percentum of the net worth of the creditor’’
and inserting ‘‘the greater of—
‘‘(i) the amount determined by multi-
plying the maximum amount of liability
under subparagraph (A) for such failure to
comply in an individual action by the num-
ber of members in the certified class; or
‘‘(ii) the amount equal to 2 percent of
the net worth of the creditor.’’.
SEC. 5. USE OF RULE OF 78s PROHIBITED.
Section 933(b) of the Housing and Community De-
velopment Act of 1992 (15 U.S.C. 1615(b)) is amended—
(1) by striking ‘‘of a term exceeding 61
months’’; and
(2) by striking ‘‘September 30, 1993’’ and in-
serting ‘‘September 30, 1999’’.
SEC. 6. ACCESS TO COURT PROVISION.
(a) IN GENERAL.—Section 130(i) of the Truth in
Lending Act (15 U.S.C. 1640(i)) is amended to read as
follows:
‘‘(i) AVAILABILITY OF STATUTORY REMEDIES.—
‘‘(1) IN GENERAL.—No provision of any agree-
ment or contract between a consumer and any cred-
itor which requires binding arbitration or any other
nonjudicial procedure to resolve any controversy or
settle any claim arising out of such contract or any
transaction covered by the contract, or the refusal to
perform the whole or any part of the transaction,
shall be enforceable to the extent that the construc-
tion or application of such provision with respect to
such controversy, claim, or refusal would deny the
consumer the right to bring any action under this
section or any other provision of this title for any li-
ability of the creditor to the consumer under this
title.
‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1)
shall not be construed as creating any inference that
any provision of any contract or agreement described
in such paragraph could be construed so as to deny
any consumer the right to bring an action under this
title absent this subsection.’’.
SEC. 7. REGULATIONS.
Before the end of the 6-month period beginning on
the date of the enactment of this Act, the Board of Gov-
ernors of the Federal Reserve System shall issue regula-
tions in final form to implement the amendments made
by this Act.
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