I 
118TH CONGRESS 
2D SESSION 
H. R. 8338 
To regulate small-dollar, short-term credit products, to protect the privacy 
of lenders, and to improve the unfair, deceptive, or abusive acts or 
practices authority of the Bureau of Consumer Financial Protection, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 10, 2024 
Mrs. KIM of California introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To regulate small-dollar, short-term credit products, to pro-
tect the privacy of lenders, and to improve the unfair, 
deceptive, or abusive acts or practices authority of the 
Bureau of Consumer Financial Protection, 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; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Clarity in Lending Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
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Sec. 1. Short title; table of contents. 
TITLE I—SMALL-DOLLAR CREDIT PRODUCTS 
Sec. 101. Safe harbor for small-dollar credit products. 
TITLE II—RECTIFYING UNDEFINED DESCRIPTIONS OF ABUSIVE 
ACTS AND PRACTICES 
Sec. 201. Mitigating factors in assessing civil penalties. 
Sec. 202. Rulemaking relating to unfair, deceptive or abusive acts or practices. 
Sec. 203. Authority to declare an act unlawful based on discrimination or serv-
ice as government contractor. 
Sec. 204. Clarifying the abusive standard for the Bureau of Consumer Finan-
cial Protection. 
Sec. 205. Notice and opportunity to cure. 
Sec. 206. Abusive, unfair, or deceptive acts or practices enforcement actions. 
Sec. 207. Look-back provisions for the Bureau of Consumer Financial Protec-
tion. 
TITLE III—SMALL LENDERS EXEMPT FROM NEW DATA AND 
EXCESSIVE REPORTING 
Sec. 301. Small business loan data collection. 
TITLE IV—BANK LOAN PRIVACY 
Sec. 401. Rulemaking requirement. 
TITLE I—SMALL-DOLLAR 
CREDIT PRODUCTS 
SEC. 101. SAFE HARBOR FOR SMALL-DOLLAR CREDIT 
PRODUCTS. 
(a) IN GENERAL.—The Truth in Lending Act (15 
U.S.C. 1601 et seq.) is amended by inserting after section 
109 the following: 
‘‘§ 110. Safe harbor for small-dollar credit products 
‘‘(a) IN GENERAL.—If a covered entity complies with 
the requirements set forth in subsections (b), (c), and (e) 
with respect to the offering of a small-dollar product to 
a consumer, such covered entity shall not be liable in con-
nection with such offering of a small-dollar product, for— 
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‘‘(1) any civil money penalties from any en-
forcement action brought by the Bureau, the appro-
priate Federal banking agency, or the National 
Credit Union Administration for a violation of this 
title; or 
‘‘(2) any damages or other monetary relief 
through a private right of action brought under this 
title. 
‘‘(b) PRODUCT STRUCTURE REQUIREMENTS.— 
‘‘(1) IN
THE
CASE
OF
AN
INSTALLMENT 
LOAN.—If a small-dollar credit product is structured 
by a covered entity as an installment loan— 
‘‘(A) the repayment term shall be more 
than 45 days; 
‘‘(B) payments shall be fully amortized 
across more than one payment; 
‘‘(C) rollovers into new small-dollar credit 
products shall be prohibited; and 
‘‘(D) the covered entity may not issue any 
small-dollar credit product to a consumer if 
such consumer has a small-dollar credit product 
open with such covered entity at the time such 
consumer applies for a small-dollar credit prod-
uct. 
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‘‘(2) IN THE CASE OF A LINE OF CREDIT.—If 
a small-dollar credit product is structured by a cov-
ered entity as a line of credit— 
‘‘(A) the repayment term for each draw 
shall be more than 45 days unless a single pay-
ment is used and the draw is not more than 10 
percent of the lesser of $3,500 or 20 percent of 
the total amount of a consumer’s average 
monthly direct deposits during the preceding six 
months; and 
‘‘(B) payments for each draw shall be fully 
amortized across more than one payment, ex-
cept in the case of any single-payment loans. 
‘‘(3) RULES OF CONSTRUCTION.— 
‘‘(A) IN GENERAL.—Nothing in this sub-
section may be construed to prohibit the Bu-
reau, a Federal banking agency, or the National 
Credit Union Administration from issuing a 
cease-and-desist order or restitution order 
under this title against a covered entity. 
‘‘(B) ENFORCEMENT
OF
OTHER
STAT-
UTES.—Nothing in this subsection may be con-
strued to prohibit the Bureau, a Federal bank-
ing agency, or the National Credit Union Ad-
ministration from enforcing any provision of 
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law not contained within this title against a 
covered entity. 
‘‘(c) UNDERWRITING REQUIREMENTS.—When con-
sidering whether to offer a small-dollar credit product to 
a specific consumer, a covered entity— 
‘‘(1) shall use sound underwriting processes; 
and 
‘‘(2) may analyze internal or external data 
sources, including consumer deposit account activity, 
to assess the creditworthiness of a consumer. 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this title 
may be construed to prohibit a covered entity from offer-
ing a small-dollar product that does not comply with the 
safe harbor requirements set forth under this section. 
‘‘(e) ADDITIONAL
LIMITATIONS
AND
REQUIRE-
MENTS.— 
‘‘(1) BALLOON
PAYMENTS.—No payment re-
quired in association with a small-dollar credit prod-
uct offered by a covered entity may be greater than 
double the amount of any other payment required in 
association with such product. 
‘‘(2) DISCLOSURES.—Each covered entity that 
offers a small-dollar credit product shall comply with 
all disclosure requirements set forth by this title. 
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‘‘(3) PENALTIES AND FEES.—A covered entity 
may not impose any prepayment penalty, overdraft 
fee, or nonsufficient funds fee in connection with a 
small-dollar credit product. 
‘‘(4) TRANSFER OF AMOUNTS.—Amounts made 
available to a consumer through a small-dollar credit 
product offered by a covered entity shall be dis-
bursed to the account of such consumer by such cov-
ered entity not later than 5 days after the approval 
of the consumer for the small-dollar credit product. 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) COVERED ENTITY.—The term ‘covered en-
tity’ means— 
‘‘(A) an insured depository institution; 
‘‘(B) an insured credit union; 
‘‘(C) a third-party with whom an insured 
depository institution has contracted for prod-
ucts or services related to origination, servicing, 
or administrative management of a small-dollar 
credit product; or 
‘‘(D) a third-party with whom an insured 
credit union has contracted for products or 
services related to origination, servicing, or ad-
ministrative management of a small-dollar cred-
it product. 
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‘‘(2) FEDERAL
BANKING
AGENCY
DEFINI-
TIONS.—The terms ‘appropriate Federal banking 
agency’ and ‘Federal banking agency’ have the 
meaning given those terms, respectively, in section 3 
of the Federal Deposit Insurance Act. 
‘‘(3) INSURED CREDIT UNION.—The term ‘in-
sured credit union’ has the meaning given the term 
in section 101 of the Federal Credit Union Act. 
‘‘(4) INSURED DEPOSITORY INSTITUTION.—The 
term ‘insured depository institution’ has the mean-
ing given the term in section 3 of the Federal De-
posit Insurance Act. 
‘‘(5) SMALL-DOLLAR
CREDIT
PRODUCT.—The 
term ‘small-dollar product’ means a loan or line of 
credit with a value of $3,500 or less.’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
for chapter 1 of the Truth in Lending Act is amended 
by striking the item relating to section 110 and inserting 
the following: 
‘‘110. Safe harbor for Small-dollar credit products.’’. 
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TITLE 
II—RECTIFYING 
UNDE-
FINED 
DESCRIPTIONS 
OF 
ABUSIVE 
ACTS 
AND 
PRAC-
TICES 
SEC. 201. MITIGATING FACTORS IN ASSESSING CIVIL PEN-
ALTIES. 
Section 1055(c) of the Consumer Financial Protec-
tion Act of 2010 (12 U.S.C. 5565(c)) is amended by add-
ing at the end the following: 
‘‘(6) RULEMAKING.—The Bureau shall, not 
later than 180 days after the date of the enactment 
of this paragraph, issue a rule that establishes poli-
cies and procedures relating to the imposition of civil 
monetary penalties sought under this subsection, in-
cluding the application of the mitigating factors de-
scribed in paragraph (3).’’. 
SEC. 202. RULEMAKING RELATING TO UNFAIR, DECEPTIVE 
OR ABUSIVE ACTS OR PRACTICES. 
(a) IN GENERAL.—Section 1031 of the Consumer Fi-
nancial Protection Act of 2010 (12 U.S.C. 5531) is 
amended by striking subsection (b) and inserting the fol-
lowing: 
‘‘(b) RULEMAKING.— 
‘‘(1) IN GENERAL.—The Bureau may prescribe 
rules applicable to a covered person or service pro-
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vider identifying as unlawful unfair, deceptive, or 
abusive acts or practices in connection with any 
transaction with a consumer for a consumer finan-
cial product or service, or the offering of a consumer 
financial product or service. Rules under this section 
may include requirements for the purpose of pre-
venting such acts or practices. 
‘‘(2) COST-BENEFIT
ANALYSIS
REQUIRED.— 
Any final rule issued by the Bureau relating to abu-
sive, unfair, or deceptive acts or practices shall in-
clude a cost-benefit analysis. 
‘‘(3) DEFINITION OF ABUSIVE ACT OR PRAC-
TICE.—The Bureau shall, not later than 180 days 
after the date of the enactment of this subsection, 
issue a rule that defines the term ‘abusive act or 
practice’ for the purposes of this section.’’. 
(b) OPPORTUNITY FOR COMMENT.—The Bureau of 
Consumer Financial Protection shall, not later than 180 
days after the date of the enactment of this subsection, 
allow the public to submit comments with respect to any 
confusion about how the Bureau of Consumer Financial 
Protection uses its authority with respect to unfair, decep-
tive, or abusive acts or practices. 
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SEC. 203. AUTHORITY TO DECLARE AN ACT UNLAWFUL 
BASED ON DISCRIMINATION OR SERVICE AS 
GOVERNMENT CONTRACTOR. 
Section 1031 of the Consumer Financial Protection 
Act of 2010 (12 U.S.C. 5531) is amended by adding at 
the end the following: 
‘‘(h) AUTHORITY TO DECLARE AN ACT UNLAWFUL 
BASED ON DISCRIMINATION OR SERVICE AS GOVERN-
MENT CONTRACTOR.—The Bureau may not interpret the 
authority of the Bureau relating to unfair, deceptive, or 
abusive acts and practices to include— 
‘‘(1) discriminatory practices; or 
‘‘(2) acts or practices by a covered person per-
forming the acts or practices pursuant to and in 
compliance with a contract with a Federal agency 
(as defined under section 701(b) of title 5, United 
States Code).’’. 
SEC. 204. CLARIFYING THE ABUSIVE STANDARD FOR THE 
BUREAU OF CONSUMER FINANCIAL PROTEC-
TION. 
Section 1031 of the Consumer Financial Protection 
Act of 2010 (12 U.S.C. 5531) is amended— 
(1) by redesignating subsections (e) and (f) as 
subsections (f) and (g); and 
(2) by striking subsection (d) and inserting the 
following: 
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‘‘(d) ABUSIVE.— 
‘‘(1) IN GENERAL.—The Bureau shall have no 
authority to declare an act or practice of a covered 
person abusive in connection with the provision of a 
consumer financial product or service, unless the act 
or practice— 
‘‘(A) intentionally and materially interferes 
with the ability of a consumer to understand a 
term or condition of a consumer financial prod-
uct or service; or 
‘‘(B) takes unreasonable advantage of— 
‘‘(i) a lack of understanding by the 
consumer with respect to the possible im-
pact, material risks, costs, or conditions of 
the product or service, or the likelihood of 
the risks, costs, or conditions of the prod-
uct or service negatively affecting the con-
sumer; and 
‘‘(ii) the reasonable reliance the con-
sumer places on an affirmative action or 
representation of such covered person to 
induce such consumer to rely on such ac-
tion or representation. 
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‘‘(2) ABUSIVE
ACTIONS.—An act or practice 
shall not be considered abusive if the act or prac-
tice— 
‘‘(A) is also unfair or deceptive; or 
‘‘(B) is otherwise prohibited by Federal 
consumer financial law. 
‘‘(e) GOOD-FAITH EFFORT TO COMPLY.— 
‘‘(1) IN GENERAL.—The Bureau may not seek 
monetary relief from a covered person under this 
section unless the covered person has not established 
by a preponderance of the evidence that they made 
a good-faith effort to comply. 
‘‘(2) AUTHORITY
TO
SEEK
LEGAL
OR
EQUI-
TABLE
REMEDIES.—The limitation described in 
paragraph (1) shall not restrict the authority of the 
Bureau to seek legal or equitable remedies, such as 
damages and restitution, to redress an identifiable 
consumer injury caused by the abusive acts or prac-
tices of such covered person.’’. 
SEC. 205. NOTICE AND OPPORTUNITY TO CURE. 
Section 1031 of the Consumer Financial Protection 
Act of 2010 (12 U.S.C. 5531), as amended by section 403, 
is further amended by adding at the end the following: 
‘‘(i) NOTICE AND OPPORTUNITY TO CURE.— 
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SEC. 206. ABUSIVE, UNFAIR, OR DECEPTIVE ACTS OR PRAC-
TICES ENFORCEMENT ACTIONS. 
(a) ACTIONS UNDER SECTION 1031.—Section 1031 
of the Consumer Financial Protection Act of 2010 (12 
U.S.C. 5531), as amended by section 405, is further 
amended by adding at the end the following: 
‘‘(j) UNFAIR, DECEPTIVE, OR ABUSIVE ACTS
OR 
PRACTICES ENFORCEMENT ACTIONS.—Enforcement ac-
tions brought by the Bureau under this section shall be 
brought in— 
‘‘(1) the United States district court located 
where the covered person has its headquarters loca-
tion; or 
‘‘(2) the United States District Court for the 
District of Columbia. 
‘‘(k) ENFORCEMENT ACTIONS.— 
‘‘(1) IN GENERAL.—If the Bureau brings an 
enforcement action under this section, the Bureau 
shall state with particularity the circumstances that 
the Bureau alleges constitute a violation of this sec-
tion. 
‘‘(2) ALTERNATIVE
CLAIMS.—If the Bureau 
brings an enforcement action under this section— 
‘‘(A) claiming that an activity is unfair or 
deceptive, the Bureau may not claim in the al-
ternative that the activity is abusive; and 
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‘‘(B) claiming that an activity is abusive, 
the Bureau may not claim in the alternative 
that the activity is unfair or deceptive.’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
in section 1(b) of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act is amended by inserting after 
the item relating to section 1058 the following: 
‘‘Sec. 1059. Unfair, deceptive, or abusive acts or practices enforcement ac-
tions.’’. 
SEC. 207. LOOK-BACK PROVISIONS FOR THE BUREAU OF 
CONSUMER FINANCIAL PROTECTION. 
(a) IN GENERAL.—Subtitle B of title X of the Con-
sumer Financial Protection Act of 2010 (12 U.S.C. 5511 
et seq.) is amended by adding at the end the following 
new section: 
‘‘SEC. 1029B. EXAMINATION PERIOD LIMITATIONS. 
‘‘(a) IN GENERAL.—When enforcing Federal con-
sumer financial laws, the Bureau may not seek a civil 
money penalty for any violation that occurred prior to the 
most recent assignment of a consumer compliance rating 
that had not been identified in writing as a material find-
ing or supervisory concern at the time the rating was as-
signed. 
‘‘(b) EXCEPTION IN CASES OF FRAUD OR A MATE-
RIAL MISREPRESENTATION.—Subsection (a) shall not 
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apply to a violation that involved fraud or a material mis-
representation. 
‘‘(c) RULE OF CONSTRUCTION.—The limitation de-
scribed in subsection (a) may not be construed to restrict 
the ability of the Bureau to seek other forms of legal or 
equitable relief available under subparagraphs (A) through 
(G) of section 1055(a)(2).’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
in section 1(b) of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act is amended by inserting after 
the item relating to section 1029 the following: 
‘‘Sec. 1029B. Examination period limitations,’’. 
TITLE III—SMALL LENDERS EX-
EMPT FROM NEW DATA AND 
EXCESSIVE REPORTING 
SEC. 301. SMALL BUSINESS LOAN DATA COLLECTION. 
Section 704B of the Equal Credit Opportunity Act 
(15 U.S.C. 1691c–2) is amended— 
(1) in subsection (g), by adding at the end the 
following: 
‘‘(4) COMPLIANCE.— 
‘‘(A) IN GENERAL.—With respect to any 
rules or guidance issued under this subsection 
on or after the date of the enactment of this 
paragraph, the Bureau shall provide a financial 
institution a 3-year period to comply with such 
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rule or guidance, regardless of the date on 
which such financial institution began its oper-
ations. 
‘‘(B) SAFE HARBOR.—With respect to any 
rules or guidance issued under this subsection 
on or after the date of the enactment of this 
paragraph, beginning on the date after the last 
day of the 3-year period described in subpara-
graph (A), the Bureau shall provide a 2-year 
safe harbor to financial institutions during 
which each such financial institution is required 
to comply with the rule or guidance but not 
subject to any penalties for failure to comply.’’; 
and 
(2) in subsection (h)— 
(A) by striking paragraph (1) and insert-
ing the following: 
‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi-
nancial institution’ means— 
‘‘(A) any partnership, company, corpora-
tion, association (incorporated or unincor-
porated), trust, estate, cooperative organization, 
or other entity that engages in any financial ac-
tivity; and 
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‘‘(B) in each of the two calendar years pre-
ceding the first day of the safe harbor period 
described in subsection (g)(4)(B), originated 
not less than 500 credit transactions for small 
businesses.’’; and 
(B) by striking paragraph (2) and insert-
ing the following: 
‘‘(2) SMALL BUSINESS.—The term ‘small busi-
ness’ means any entity with gross annual revenues 
of $1,000,000 or less in the most recently completed 
fiscal year preceding the first day of the safe harbor 
period described in subsection (g)(4)(B).’’. 
TITLE IV—BANK LOAN PRIVACY 
SEC. 401. RULEMAKING REQUIREMENT. 
Section 704B(e)(4) of the Equal Credit Opportunity 
Act (15 U.S.C. 1691c–2(e)(4)) is amended— 
(1) by striking ‘‘The Bureau may,’’ and insert-
ing: 
‘‘(A) IN
GENERAL.—The Bureau may,’’; 
and 
(2) by adding at the end the following: 
‘‘(B) RULEMAKING
REQUIREMENT.—The 
Bureau shall, before deleting or modifying data 
under this paragraph issue, through advance 
notice and comment, a rule that includes a de-
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scription of what modifications and deletions 
the Bureau intends to make to the data and 
how such modifications and deletions will ad-
vance a privacy interest.’’. 
Æ 
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