‘‘(B) 
FIXED
ANNUAL
PERCENTAGE
RATE.—If the annual percentage rate which will
apply after the end of the introductory period
will be a fixed rate, the application or solicita-
tion shall include the following disclosure: ‘The
annual percentage rate of interest applicable
during the introductory period is not the annual
percentage rate which will apply after the end
of the introductory period. The permanent an-
nual percentage rate will apply after [insert ap-
plicable date] and will be [insert applicable per-
centage rate].’.
‘‘(C) VARIABLE
ANNUAL
PERCENTAGE
RATE.—If the annual percentage rate which will
apply after the end of the introductory period
will vary in accordance with an index, the appli-
cation or solicitation shall include the following
disclosure: ‘The annual percentage rate of inter-
est applicable during the introductory period is
not the annual percentage rate which will apply
after the end of the introductory period. The
permanent annual percentage rate will be deter-
mined by an index and will apply after (insert
date). If the index which will apply after such
date were applied to your account today, the
annual percentage rate would be [insert applica-
ble percentage rate].’.
‘‘(D) CONDITIONS
FOR
INTRODUCTORY
RATES.—If the annual percentage rate of inter-
est which will apply during the introductory pe-
riod described in subparagraph (A) is revocable
or otherwise conditioned upon any action by the
obligor, including any failure by the obligor to
pay the minimum payment amount or finance
charge or to make any payment by the stated
monthly payment due date, the application or
solicitation shall include the following disclo-
sures:
‘‘(i) the conditions that the obligor
must meet to retain the annual percentage
rate of interest during the introductory pe-
riod; and
‘‘(ii) the annual percentage rate of in-
terest that will apply as a result of the fail-
ure of the obligor to meet such conditions.
‘‘(E) FORM OF DISCLOSURE.—The disclo-
sures required under this paragraph shall be
made in a clear and conspicuous manner in a
form at least as prominent as the disclosure of
the annual percentage rate of interest which
will apply during the introductory period.’’.
SEC. 6. LIMIT ON INACTIVITY FEES.
Section 127 (15 U.S.C. 1637) is amended by adding
at the end the following new subsection:
‘‘(h) LIMIT ON INACTIVITY FEES.—In the case of any
credit card account under an open-end consumer credit
plan, a creditor may not impose a fee based on inactivity
for the account during any period in which no advances
have been made, if the obligor maintains any outstanding
balance and is charged a finance charge applicable to such
balance.’’.
SEC. 7. ISSUANCE OF CREDIT CARDS TO UNDERAGE CON-
SUMERS.
Section 127(c) (15 U.S.C. 1637(c)) is amended—
(1) by redesignating paragraph (7) (as so re-
designated by section 5 of this Act) as paragraph
(8); and
(2) by inserting after paragraph (6) (as added
by section 5 of this Act) the following new para-
graph:
‘‘(7) APPLICATIONS FROM UNDERAGE CONSUM-
ERS.—
‘‘(A) PROHIBITION
ON
ISSUANCE.—No
credit card may be issued to, or open end credit
plan established on behalf of, any consumer
who has not attained the age of 21, except in
response to a written request or application to
the card issuer that meets the requirements of
subparagraph (B).
‘‘(B) APPLICATION
REQUIREMENTS.—An
application to open a credit card account by a
consumer who has not reached the age of 21 as
of the date of submission of the application
shall require—
‘‘(i) the signature of the parent or
guardian of the consumer indicating joint
liability for debts incurred by the consumer
in connection with the account before the
consumer has reached the age of 21; or
‘‘(ii) submission by the consumer of
financial information indicating an inde-
pendent means of repaying any obligation
arising from the proposed extension of
credit in connection with the account.’’.
SEC. 8. PENALTIES FOR ON-TIME PAYMENT PROHIBITED.
Section 127 (15 U.S.C. 1637) is amended by insert-
ing after subsection (h) (as added by section 6 of this Act)
the following new subsection:
‘‘(i) PENALTIES FOR ON-TIME PAYMENT PROHIB-
ITED.—
‘‘(1) IN GENERAL.—In the case of any credit
card account under an open-end consumer credit
plan, no creditor may cancel an account, impose a
minimum finance charge for any period (including
any annual period), impose any fee in lieu of a mini-
mum finance charge, or impose any other charge or
penalty with regard to such account or credit ex-
tended under such account solely on the basis that
any credit extended has been repaid in full before
the end of any grace period applicable with respect
to the extension of credit.
‘‘(2) PAYMENT DUE DATES.—For purposes of
paragraph (1), a creditor shall be deemed to have
imposed a prohibited charge or penalty on an ac-
count under an open end consumer credit plan if the
creditor regularly transmits to the obligor of such
plan a statement for a billing cycle in which credit
has been extended under such plan that includes a
payment due date as required by subsection (b)(9)
of this section—
‘‘(A) that is different from and in advance
of—
‘‘(i) the date by which payment must
be made for any credit extended under
such credit plan to avoid incurring a fi-
nance change that was disclosed to such
obligor 
pursuant 
to 
subsection
(c)(1)(A)(iii) of this section; or
‘‘(ii) the actual date by which pay-
ment would otherwise have to be made to
avoid incurring a finance charge if cal-
culated on the same basis as the date by
which or the period within which any pay-
ment must be made to avoid incurring a fi-
nance charge that was disclosed to such
obligor 
pursuant 
to 
subsection
(c)(1)(A)(iii); and
‘‘(B) that has the purpose or effect of in-
ducing the obligor of such plan to transmit pay-
ment to the creditor earlier than what otherwise
would be required to avoid incurring a finance
charge.
‘‘(3) SCOPE OF APPLICATION.—Paragraph (1)
shall not be construed as—
‘‘(A) prohibiting the imposition of any flat
annual fee which may be imposed on the con-
sumer in advance of any annual period to cover
the cost of maintaining a credit card account
during such annual period without regard to
whether any credit is actually extended under
such account during such period; or
‘‘(B) otherwise affecting the imposition of
the actual finance charge applicable with re-
spect to any credit extended under such account
during such annual period at the annual per-
centage rate disclosed to the consumer in ac-
cordance with this title for the period of time
any such credit is outstanding.’’.
SEC. 9. FREEZE ON INTEREST RATE TERMS AND FEES ON
CANCELED CARDS.
Section 127 (15 U.S.C. 1637) is amended by insert-
ing after subsection (i) (as added by section 8 of this Act)
the following new subsection:
‘‘(j) FREEZE ON INTEREST RATE TERMS AND FEES
ON CANCELED CARDS.—
‘‘(1) ADVANCE NOTICE OF INCREASE IN INTER-
EST RATE REQUIRED.—In the case of any credit
card account under an open-end consumer credit
plan, no increase in any annual percentage rate of
interest (other than an increase due to the expira-
tion of any introductory percentage rate of interest
or due solely to a change in another rate of interest
to which such rate is indexed) applicable to any out-
standing balance of credit under such plan may take
effect before the beginning of the billing cycle which
begins not less than 15 days after the obligor re-
ceives notice of such increase.
‘‘(2) INCREASE NOT EFFECTIVE FOR CANCELED
ACCOUNTS.—If an obligor referred to in paragraph
(1) cancels the credit card account before the begin-
ning of the billing cycle referred to in such
paragraph—
‘‘(A) an annual percentage rate of interest
applicable after the cancellation with respect to
such outstanding balance on such account as of
the date of cancellation may not exceed any an-
nual percentage rate of interest applicable with
respect to such balance under the terms and
conditions in effect before the increase referred
to in paragraph (1); and
‘‘(B) the repayment of such outstanding
balance after the cancellation shall be subject to
all other terms and conditions applicable with
respect to such account before the increase re-
ferred to in such paragraph.
‘‘(3) NOTICE OF RIGHT TO CANCEL.—The no-
tice referred to in paragraph (1) with respect to an
increase in any annual percentage rate of interest
shall be made in a clear and conspicuous manner
and shall contain a brief statement of the right of
the obligor—
‘‘(A) to cancel the account before the effec-
tive date of the increase; and
‘‘(B) after such cancellation, to pay any
balance outstanding on such account at the
time of cancellation in accordance with the
terms and conditions in effect before the can-
cellation.’’.
SEC. 10. DISCLOSURE OF INTEREST RATES AND FEES ON
CREDIT ADVANCES THROUGH THIRD-PARTY
CHECKS.
Section 127 (15 U.S.C. 1637) is amended by insert-
ing after subsection (j) (as added by section 9 of this Act)
the following new subsection:
‘‘(k) FEES AND INTEREST RATES ON CREDIT AD-
VANCES
THROUGH
THE
USE
OF
THIRD-PARTY
CHECKS.—
‘‘(1) IN GENERAL.—In the case of any credit
card account under an open-end consumer credit
plan, a creditor may not provide the obligor with any
negotiable or transferable instrument for use in
making an extension of credit to the obligor for the
purpose of making a transfer to a third party, unless
the creditor has fully satisfied the notice require-
ments of paragraph (2) with respect to such instru-
ment.
‘‘(2) 
NOTICE
REQUIREMENTS.—A 
creditor
meets the notice requirements of this paragraph
with respect to an instrument referred to in para-
graph (1) if the creditor provides to an obligor, at
the same time any such instrument is provided, a
notice which prominently and specifically describes—
‘‘(A) the amount of any transaction fee
which may be imposed for making an extension
of credit through the use of such instrument,
including the exact percentage rate to be used
in determining such amount if the amount of
the transaction fee is expressed as a percentage
of the amount of the credit extended; and
‘‘(B) any annual percentage rate of inter-
est applicable in determining the finance charge
for any such extension of credit, if different
from the finance charge applicable to other ex-
tensions of credit under such account.’’.
SEC. 11. PROHIBITION ON OVER-THE-LIMIT FEES FOR
CREDITOR-APPROVED TRANSACTIONS.
Section 127 (15 U.S.C. 1637) is amended by insert-
ing after subsection (k) (as added by section 10 of this
Act) the following new subsection:
‘‘(l) LIMITATION
ON IMPOSITION
OF OVER-THE-
LIMIT FEES.—In the case of any credit card account
under an open-end consumer credit plan, a creditor may
not impose any fees on the obligor for any extension of
credit in excess of the amount of credit authorized to be
extended with respect to such account if the extension of
credit is made in connection with a credit transaction
which the creditor approves in advance or at the time of
the transaction.’’.
SEC. 12. UNSOLICITED DUAL-PURPOSE CARDS.
Section 132 (15 U.S.C. 1642) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘No’’ in the first sentence; and
(2) by adding at the end the following new sub-
section:
‘‘(b) CERTAIN CARDS INCLUDED.—For purposes of
this section, the term ‘credit card’ includes any dual pur-
pose or multifunction card, including a stored-value card,
debit card, check card, check guarantee card, or purchase-
price discount card, that is connected with an open end
credit plan and can be used, either on issuance or upon
later activation, to obtain credit directly or indirectly.’’.
SEC. 13. CIVIL LIABILITY.
Section 130(a) (15 U.S.C. 1640(a)) is amended in
the undesignated paragraph following paragraph (4)—
(1) by striking ‘‘or’’ after ‘‘(9)’’ in the second
sentence;
(2) by inserting after ‘‘(10)’’ in the second sen-
tence the following: ‘‘, (11) or (12)’’; and
(3) by striking the third sentence.
SEC. 14. 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. The Board of Governors of the Federal Re-
serve System shall also issue such staff commentary or
publish such model disclosure statements and forms as the
Board considers necessary to carry out the intent of the
amendments made by this Act, to implement any initiative
to prevent the circumvention of the amendments made by
this Act, and to facilitate compliance with the require-
ments in the amendments.
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