Credit Card Consumer Protection Act of 1999

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Card Consumer Protection Act 
of 1999''.

SEC. 2. FEES FOR ON-TIME PAYMENTS PROHIBITED.

    Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
by adding at the end the following new subsection:
    ``(h) Fees for On-Time Payments Prohibited.--
            ``(1) In general.--In the case of any credit card account 
        under an open-end consumer credit plan, no minimum finance 
        charge for any period (including any annual period), and no fee 
        in lieu of a minimum finance charge, may be imposed with regard 
        to such account or credit extended 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) 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 consumer 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 respect to any 
                credit extended under such account during such annual 
                period at the annual percentage rate disclosed to the 
                consumer in accordance with this title for the period 
                of time any such credit is outstanding.''.

SEC. 3. 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 2 of this Act) 
the following new subsection:
    ``(i) Freeze on Interest Rate Terms and Fees on Canceled Cards.--
            ``(1) Advance notice of increase in interest 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 solely 
        to a change in another rate of interest to which such rate is 
        indexed) applicable to any outstanding 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 
        accountholder receives notice of such increase.
            ``(2) Increase not effective for canceled accounts.--If an 
        accountholder referred to in paragraph (1) cancels the credit 
        card account before the beginning of the billing cycle referred 
        to in such paragraph and surrenders all unexpired credit cards 
        issued in connection with such account--
                    ``(A) an annual percentage rate of interest 
                applicable after the cancellation with respect to the 
                outstanding balance on such account as of the date of 
                cancellation may not exceed any annual 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 referred to in such 
                paragraph.
            ``(3) Notice of right to cancel.--The notice referred to in 
        paragraph (1) with respect to an increase in annual percentage 
        rate of interest shall contain a brief description of the right 
of the consumer--
                    ``(A) to cancel the account before the effective 
                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 cancellation.''.

SEC. 4. DISCLOSURE OF FEES AND INTEREST RATES ON CREDIT ADVANCES 
              THROUGH THE USE OF 3D PARTY CHECKS.

    Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
by inserting after subsection (i) (as added by section 3 of this Act) 
the following new subsection:
    ``(j) Fees and Interest Rates on Credit Advances Through the Use of 
3d 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 accountholder with any negotiable or transferable 
        instrument for use in making an extension of credit to the 
        accountholder for the purpose of making a transfer to a 3d 
        party, unless the creditor has fully satisfied the notice 
        requirements of paragraph (2) with respect to such instrument.
            ``(2) Notice requirements.--A creditor meets the notice 
        requirements of this paragraph with respect to an instrument 
        referred to in paragraph (1) if the creditor provides, to an 
        accountholder 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 interest 
                applicable in determining the finance charge for any 
                such extension of credit.''.

SEC. 5. PROHIBITION ON OVER-THE-LIMIT FEES IN 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 4 of this Act) 
the following new subsection:
    ``(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 fee on the accountholder 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. 6. PROHIBITION ON 2-CYCLE BILLING.

    Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
by inserting after subsection (k) (as added by section 5 of this Act) 
the following new subsection:
    ``(l) Prohibition on 2-Cycle Billing.--In the case of any credit 
card account under an open-end consumer credit plan, if the creditor 
provides, with regard to any new extension of credit under such 
account, a period during which such extension of credit may be repaid 
without incurring a finance charge for such extension of credit, no 
finance charge may subsequently be imposed for such period with regard 
to any unpaid balance (as of the end of such period) of such extension 
of credit.''.

SEC. 7. DISCLOSURES RELATED TO ``TEASER RATES''.

    Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is 
amended--
          (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Additional notice concerning `teaser rates'.--
                    ``(A) In general.--If any application or 
                solicitation for a credit card for which a disclosure 
                is required under this subsection offers, for an 
                introductory period of less than 1 year, an annual 
                percentage rate of interest which--
                            ``(i) is less than the annual percentage 
                        rate of interest which will apply after the end 
                        of such introductory period; or
                            ``(ii) in the case of an annual percentage 
                        rate which varies in accordance with an index, 
                        which is less than the current annual 
                        percentage rate under the index which will 
                        apply after the end of such period,
                the application or solicitation shall contain the 
                disclosure contained in subparagraph (B) or (C), as the 
                case may be.
                    ``(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 solicitation 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 annual 
                percentage rate will apply after (insert date) and will 
                be (insert percentage 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 application or solicitation 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 
                annual percentage rate will be determined 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 
                percentage rate).''.
                    ``(D) Form of disclosure.--The disclosure 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. 8. DISCLOSURES RELATING TO THE DATES PAYMENTS ARE DUE.

    Section 127(b)(9) of the Truth in Lending Act (15 U.S.C. 
1637(b)(9)) is amended by striking ``The date by which or the period 
(if any) within which, payment must be made to avoid additional finance 
charges,'' and inserting ``In a prominent place on the face of the 
statement, the date of the last full business day on which payment may 
be received before the imposition of late fees or additional finance 
charges (without regard to whether payment may be received on a 
subsequent nonbusiness day or during a portion of a subsequent business 
day before any such fee or charge is imposed) and a conspicuous notice 
that the failure to remit payment in sufficient time for the payment to 
be processed by such date may result in substantial late fees or 
additional finance charges,''.

SEC. 9. PROHIBITION ON MINIMUM PAYMENT AMOUNTS THAT RESULT IN NEGATIVE 
              AMORTIZATION.

    Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
by inserting after subsection (l) (as added by section 6 of this Act) 
the following new subsection:
    ``(m) Prohibition on Minimum Payment Amounts That Result in 
Negative Amortization.--
            ``(1) In general.--In the case of any credit card account 
        under an open-end consumer credit plan, the minimum amount of 
        any periodic payment required to be made on any outstanding 
        balance may not be less than the finance charge applicable with 
        respect to such outstanding balance for such period.
            ``(2) Disclosures required in case of low amortization 
        rate.--If, in the case of any credit card account under an 
        open-end consumer credit plan, the minimum amount of any 
        periodic payment required to be made on any outstanding balance 
        reduces the outstanding balance by less than 2 percent of such 
        balance, after payment of any finance charge and fees imposed 
        for such period, the periodic statement required under 
        subsection (b) with respect to such account shall include a 
        conspicuous notice in a prominent place on the statement of--
                    ``(A) the fact that the outstanding balance will be 
                reduced by less than 2 percent if the consumer only 
                pays the minimum amount; and
                    ``(B) the period of time which would be required to 
                pay off the outstanding balance if the consumer paid 
                only the minimum amount of each periodic payment 
                required until such balance is fully repaid.
            ``(3) Exception under exigent circumstances.--In addition 
        to any other authority of the Board under this title to 
        prescribe regulations, the Board may prescribe regulations 
        which permit exceptions to the application of paragraph (1) 
        with respect to any consumer who requests a creditor to agree 
        to a payment deferral plan for a limited period of time due to 
        loss of employment, illness, or incapacity, or such other 
        exigent circumstances the Board may describe in such 
        regulations.''.

Summary: Credit Card Consumer Protection Act of 1999- Amends the Truth in Lending Act to: (1) prohibit fee assessment against a credit card account under an open-end consumer credit plan solely on the basis of on-time payments; (2) require advance notice of any interest rate increase for a credit card account, and of the consumer's right to cancel such account before the effective date of that increase; and (3) prohibit post-cancellation increases in interest rates and fees on the outstanding balance of any canceled cards. 
Mandates disclosure to a credit card account holder of the fees and interest rates imposed upon credit advances through the use of third party checks. 
Proscribes over-the-limit fees in creditor-approved transactions, and two-cycle billing. 
Prescribes additional notice requirements governing: (1) introductory rates to identify the fixed and variable interest rate which will apply following the introductory period; (2) last payment date and payment processing date before imposition of late fees; and (3) the period of time required to pay off the outstanding balance if only the minimum payment is forwarded.