I 
109TH CONGRESS 
2D SESSION 
H. R. 5383 
To amend the Consumer Credit Protection Act to ban abusive credit practices, 
enhance consumer disclosures, protect underage consumers, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 11, 2006 
Mr. UDALL of Colorado (for himself, Mr. STUPAK, Mr. RYAN of Ohio, Ms. 
CARSON, Mr. GRIJALVA, Mrs. CHRISTENSEN, and Mr. CASE) introduced 
the following bill; which was referred to the Committee on Financial Serv-
ices 
A BILL 
To amend the Consumer Credit Protection Act to ban abu-
sive credit practices, enhance consumer disclosures, pro-
tect underage consumers, 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. 
This Act may be cited as the ‘‘Credit Card Account-
ability Responsibility and Disclosure Act of 2006’’ or the 
‘‘Credit CARD Act of 2006’’. 
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SEC. 2. REGULATORY AUTHORITY. 
The Board of Governors of the Federal Reserve Sys-
tem may issue such rules or publish such model forms as 
it considers necessary to carry out this Act and the 
amendments made by this Act, in accordance with sections 
105 and 122 of the Truth in Lending Act. 
TITLE 
I—REGULATIONS 
RE-
GARDING 
CERTAIN 
RATES 
AND FEES 
SEC. 101. PRIOR NOTICE OF RATE INCREASES REQUIRED. 
Section 127 of the Truth in Lending Act (15 U.S.C. 
1637) is amended by adding at the end the following: 
‘‘(h) ADVANCE NOTICE OF INCREASE IN INTEREST 
RATE REQUIRED.— 
‘‘(1) IN GENERAL.—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)— 
‘‘(A) may take effect before the beginning 
of the billing cycle which begins not less than 
15 days after the obligor receives notice of such 
increase; or 
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‘‘(B) may apply to any outstanding balance 
of credit under such plan as of the date of the 
notice of the increase required under paragraph 
(1). 
‘‘(2) 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 to cancel the account before the effective 
date of the increase.’’. 
SEC. 102. FREEZE ON INTEREST RATE TERMS AND FEES ON 
CANCELED CARDS. 
Section 127 of the Truth in Lending Act (15 U.S.C. 
1637) is amended by inserting after subsection (h) (as 
added by section 101 of this title) the following new sub-
section: 
‘‘(i) FREEZE ON INTEREST RATE TERMS AND FEES 
ON CANCELED CARDS.—If an obligor referred to in sub-
section (h) closes or cancels a credit card account before 
the beginning of the billing cycle referred to in subsection 
(h)(1)— 
‘‘(1) an annual percentage rate of interest ap-
plicable after the cancellation with respect to the 
outstanding balance on the account as of the date of 
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cancellation may not exceed any annual percentage 
rate of interest applicable with respect to such bal-
ance under the terms and conditions in effect before 
the date of the notice of any increase referred to in 
subsection (h)(1); and 
‘‘(2) the repayment of the outstanding balance 
after the cancellation shall be subject to all other 
terms and conditions applicable with respect to such 
account before the date of the notice of the increase 
referred to in subsection (h).’’. 
SEC. 103. LIMITS ON FINANCE AND INTEREST CHARGES 
FOR ON-TIME PAYMENTS. 
Section 127 of the Truth in Lending Act (15 U.S.C. 
1637) is amended by inserting after subsection (i) (as 
added by section 102 of this title) the following new sub-
section: 
‘‘(j) PROHIBITION
ON PENALTIES
FOR ON-TIME 
PAYMENTS.— 
‘‘(1) PROHIBITION ON FINANCE CHARGES FOR 
ON-TIME PAYMENTS.—In the case of any credit card 
account under an open end credit plan, where no 
other balance is owing on the account, no finance or 
interest charge may be imposed with regard to any 
amount of a new extension of credit that was paid 
on or before the date on which it was due. 
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‘‘(2) PROHIBITION ON CANCELLATION OR ADDI-
TIONAL FEES FOR ON-TIME PAYMENTS OR PAYMENT 
IN FULL.—In the case of any credit card account 
under an open end consumer credit plan, no fee or 
other penalty may be imposed on the consumer in 
connection with the payment in full of an existing 
account balance, or payment of more than the min-
imum required payment of an existing account bal-
ance.’’. 
SEC. 104. PROHIBITION ON OVER-THE-LIMIT FEES FOR 
CREDITOR-APPROVED TRANSACTIONS. 
Section 127 of the Truth in Lending Act (15 U.S.C. 
1637) is amended by inserting after subsection (j) (as 
added by section 103 of this title) the following new sub-
section: 
‘‘(k) 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.’’. 
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TITLE II—ENHANCED 
CONSUMER DISCLOSURES 
SEC. 201. PAYOFF TIMING DISCLOSURES. 
(a) IN GENERAL.—Section 127(b) of the Truth in 
Lending Act (15 U.S.C. 1637(b)) is amended by adding 
at the end the following new paragraph: 
‘‘(12) REPAYMENT INFORMATION.— 
‘‘(A) IN GENERAL.—Repayment informa-
tion that would apply to the outstanding bal-
ance of the consumer under the credit plan, in-
cluding— 
‘‘(i) the outstanding balance in the ac-
count at the beginning of the statement 
period, as required by paragraph (1) of 
this subsection; 
‘‘(ii) the required minimum monthly 
payment on that balance, represented as 
both a dollar figure and as a percentage of 
that balance; 
‘‘(iii) the grace period within which 
payment must be made to avoid additional 
charges, as required by paragraph (9) of 
this subsection; and 
‘‘(iv) the monthly payments amount 
that would be required for the consumer to 
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eliminate the outstanding balance in 36 
months if no further advances are made. 
‘‘(B) APPLICABLE
ANNUAL
PERCENTAGE 
RATE.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), in making the disclosures under sub-
paragraph (A), the creditor shall apply the 
annual percentage rate in effect on the 
date on which the disclosure is made until 
the date on which the balance would be 
paid in full. 
‘‘(ii) EXCEPTION.—If the annual per-
centage rate in effect on the date on which 
the disclosure is made is a temporary rate 
that will change under a contractual provi-
sion applying an index or formula for sub-
sequent interest rate adjustment, the cred-
itor shall apply the rate in effect on the 
date on which the disclosure is made for as 
long as that rate will apply under that con-
tractual provision, and then apply an an-
nual percentage rate based on the index or 
formula in effect on the applicable billing 
date.’’. 
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(b) TABULAR FORMAT REQUIRED
FOR DISCLO-
SURES.—Section 122 of the Truth in Lending Act (15 
U.S.C. 1632) by adding at the end the following new sub-
section: 
‘‘(d) FORMAT REQUIRED
FOR CERTAIN DISCLO-
SURES UNDER SECTION 127(b)(12).— 
‘‘(1) FORM OF DISCLOSURE.—All of the infor-
mation disclosed pursuant to section 127(b)(12)(A) 
shall— 
‘‘(A) be disclosed in the form and manner 
which the Board shall prescribe by regulations 
under this section and in accordance with sec-
tion 105; and 
‘‘(B) be placed in a conspicuous and 
prominent location on the billing statement in 
typeface that is at least as large as the largest 
type on the statement, but in no instance less 
than 12-point in size. 
‘‘(2) TABULAR
FORMAT.—In the regulations 
prescribed under paragraph (1), the Board shall re-
quire that the disclosure of such information shall be 
in the form of a table that— 
‘‘(A) contains clear and concise headings 
for each item of such information; and 
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‘‘(B) provides a clear and concise form 
stating each item of information required to be 
disclosed under each such heading. 
‘‘(3) REQUIREMENTS
REGARDING
LOCATION 
AND ORDER OF TABLE.—In prescribing the form of 
the table under paragraph (2), the Board shall re-
quire that— 
‘‘(A) all of the information in the table, 
and not just a reference to the table, be placed 
on the billing statement, as required by this 
subparagraph; and 
‘‘(B) the items required to be included in 
the table shall be listed in the order in which 
such 
items 
are 
set 
forth 
in 
section 
127(b)(12)(A). 
‘‘(4) BOARD
DISCRETION
IN
PRESCRIBING 
ORDER AND WORDING OF TABLE.—In prescribing 
the form of the table under subparagraph (C), the 
Board may employ terminology which is different 
than the terminology which is employed in subpara-
graph (A), if such terminology is easily understood 
and conveys substantially the same meaning.’’. 
(c) CIVIL LIABILITY.—Section 130(a) of the Truth 
in Lending Act (15 U.S.C. 1640(a)) is amended, in the 
undesignated paragraph following paragraph (4), by strik-
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ing the second sentence and inserting the following: ‘‘In 
connection with the disclosures referred to in subsections 
(a) and (b) of section 127, a creditor shall have a liability 
determined under paragraph (2) only for failing to comply 
with the requirements of section 125, 127(a), or para-
graph (4), (5), (6), (7), (8), (9), (10), or (11) of section 
127(b), or for failing to comply with disclosure require-
ments under State law for any term or item that the 
Board has determined to be substantially the same in 
meaning under section 111(a)(2) as any of the terms or 
items referred to in section 127(a), or paragraph (4), (5), 
(6), (7), (8), (9), (10), (11), or (12) of section 127(b). 
SEC. 202. REQUIREMENTS RELATING TO LATE PAYMENT 
DEADLINES AND PENALTIES. 
Section 127 of the Truth in Lending Act (15 U.S.C. 
1637) is amended by inserting after subsection (k) (as 
added by section 104 of this Act) the following new sub-
section: 
‘‘(l) REQUIREMENTS RELATING TO LATE PAYMENT 
DEADLINES AND PENALTIES.— 
‘‘(1) LATE PAYMENT DEADLINE AND POSTMARK 
DATE REQUIRED TO BE DISCLOSED.—In the case of 
a credit card account under an open end consumer 
credit plan under which a late fee or charge may be 
imposed due to the failure of the obligor to make 
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payment on or before the due date for such pay-
ment, the periodic statement required under sub-
section (b) with respect to the account shall include, 
in a conspicuous location on the billing statement— 
‘‘(A) the date by which the payment must 
be postmarked, if paid by mail, in order to 
avoid the imposition of a late payment fee with 
respect to the payment; and 
‘‘(B) a statement that no late fee may be 
imposed in connection with a payment made by 
mail which was postmarked on or before the 
postmark date. 
‘‘(2) DISCLOSURE OF INCREASE IN INTEREST 
RATES FOR LATE PAYMENTS.—If 1 or more late 
payments under an open end consumer credit plan 
may result in an increase in the annual percentage 
rate the account, the statement required under sub-
section (b) with respect to the account shall include 
conspicuous notice of such fact, together with the 
applicable penalty annual percentage rate, in close 
proximity to the disclosure required in paragraph (1) 
of the date on which payment is due under the 
terms of the account. 
‘‘(3) REQUIREMENTS RELATING TO POSTMARK 
DATE.— 
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‘‘(A) IN GENERAL.—The date included in 
a periodic statement pursuant to paragraph 
(1)(B) with regard to the postmark on a pay-
ment shall allow, in accordance with regulations 
prescribed by the Board under subparagraph 
(B), a reasonable time for the consumer to 
make the payment and a reasonable time for 
the delivery of the payment by the due date. 
‘‘(B) BOARD
REGULATIONS.—The Board 
shall prescribe guidelines for determining a rea-
sonable period of time for making a payment 
and delivery of a payment for purposes of sub-
paragraph (A), after consultation with the Post-
master General and representatives of consumer 
and trade organizations. 
‘‘(4) PAYMENT AT LOCAL BRANCHES.—If the 
creditor, in the case of a credit card account referred 
to in paragraph (1), is a financial institution which 
maintains branches or offices at which payments on 
any such account are accepted from the obliger in 
person, the date on which the obliger makes a pay-
ment on the account at such branch or office shall 
be considered as the date on which the payment is 
made for purposes of determining whether a late fee 
or charge may be imposed due to the failure of the 
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obligor to make payment on or before the due date 
for such payment, to the extent that such payment 
is made before the close of business of the branch 
or office on the business day immediately preceding 
the due date for such payment.’’. 
TITLE III—PROTECTION OF 
YOUNG CONSUMERS 
SEC. 301. EXTENSIONS OF CREDIT TO UNDERAGE CON-
SUMERS. 
Section 127(c) of the Truth in Lending Act (15 
U.S.C. 1637(c)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(8) APPLICATIONS
FROM
UNDERAGE
CON-
SUMERS.— 
‘‘(A) PROHIBITION
ON
ISSUANCE.—No 
credit card may be issued to, or open end credit 
plan established on behalf of, a consumer who 
has not attained the age of 21, unless the con-
sumer has submitted a written application to 
the card issuer that meets the requirements of 
subparagraph (B). 
‘‘(B) APPLICATION
REQUIREMENTS.—An 
application to open a credit card account by an 
individual who has not attained the age of 21 
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as of the date of submission of the application 
shall require— 
‘‘(i) the signature of the parent, legal 
guardian, or spouse of the consumer, or 
any other individual having a means to 
repay debts incurred by the consumer in 
connection with the account, indicating 
joint liability for debts incurred by the con-
sumer in connection with the account be-
fore the consumer has attained the age of 
18; 
‘‘(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; or 
‘‘(iii) proof by the consumer that the 
consumer has completed a credit coun-
seling course of instruction by a nonprofit 
budget and credit counseling agency ap-
proved by the Board for such purpose. 
‘‘(C) MINIMUM REQUIREMENTS FOR COUN-
SELING
AGENCIES.—To be approved by the 
Board under subparagraph (B)(iii), a credit 
counseling agency shall, at a minimum— 
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‘‘(i) be a nonprofit budget and credit 
counseling agency, the majority of the 
board of directors of which— 
‘‘(I) is not employed by the agen-
cy; and 
‘‘(II) will not directly or indi-
rectly benefit financially from the out-
come of a credit counseling session; 
‘‘(ii) if a fee is charged for counseling 
services, charge a reasonable fee, and pro-
vide services without regard to ability to 
pay the fee; and 
‘‘(iii) provide trained counselors who 
receive no commissions or bonuses based 
on referrals, and demonstrate adequate ex-
perience and background in providing cred-
it counseling.’’. 
SEC. 302. ENHANCED PENALTIES. 
Section 130(a)(2)(A) of the Truth in Lending Act 
(15 U.S.C. 1640 (a)(2)(A)(iii)) is amended—— 
(1) by striking ‘‘or (iii) in the’’ and inserting 
the following: 
‘‘(iii) in the case of an individual action relating 
to an open end credit plan that is not secured by 
real property or a dwelling, twice the amount of any 
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finance charge in connection with the transaction, 
with a minimum of $500 and a maximum of $5,000 
or such higher amount as may be appropriate in the 
case of an established pattern or practice of such 
failures; or 
‘‘(iv) in the’’; and. 
(2) in clause (ii), by striking ‘‘this subpara-
graph’’ and inserting ‘‘this clause’’. 
SEC. 303. RESTRICTIONS ON CERTAIN AFFINITY CARDS. 
Section 127 of the Truth in Lending Act (15 U.S.C. 
1637) is amended by inserting after subsection (l) (as 
added by section 202 of this Act) the following new sub-
section: 
‘‘(m) RESTRICTIONS
ON ISSUANCE
OF AFFINITY 
CARDS TO STUDENTS.—No credit card account under an 
open end credit plan may be established by an individual 
who has not attained the age of 18 as of the date of sub-
mission of the application pursuant to any agreement re-
lating to affinity cards, as defined by the Board, between 
the creditor and an institution of higher education (as de-
fined in section 101(a) of the Higher Education Act of 
1965), unless the requirements of section 127(c)(8) are 
met with respect to the obliger.’’. 
Æ 
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