Title: Small Business and Consumer Emergency Credit Act
Policy area: Finance and Financial Sector

Summary:
Small Business and Consumer Emergency Credit Act
This bill applies certain military consumer credit protections to all consumers, tax-exempt charitable organizations, and small businesses for credit extended during the COVID-19 (i.e., coronavirus disease 2019) emergency period. Specifically, the bill caps the interest rate on an extension of consumer credit at 36%.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3560 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 3560

    To amend the Truth in Lending Act to extend the consumer credit 
     protections provided to members of the Armed Forces and their 
    dependents under title 10, United States Code, to all consumers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 22, 2020

  Mr. Van Hollen (for himself and Mr. Brown) introduced the following 
 bill; which was read twice and referred to the Committee on Banking, 
                       Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
    To amend the Truth in Lending Act to extend the consumer credit 
     protections provided to members of the Armed Forces and their 
    dependents under title 10, United States Code, to all consumers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business and Consumer 
Emergency Credit Act''.

SEC. 2. LIMITATIONS ON CONSUMER CREDIT AND MAXIMUM RATES OF INTEREST.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by adding at the end the following:
``Sec. 140B. Limitations on consumer, small business, and nonprofit 
              maximum rates of interest during national emergencies
    ``(a) Definitions.--In this section, the term `consumer credit' 
includes consumer credit and credit extended to--
            ``(1) an organization that is described in section 
        501(c)(3) of the Internal Revenue Code of 1986 and exempt from 
        tax under section 501(a) of such Code; and
            ``(2) a small business concern, as defined in section 3 of 
        the Small Business Act (15 U.S.C. 632).
    ``(b) Application of the Military Lending Act.--
            ``(1) Coronavirus disease 2019 (covid-19) national 
        emergency.--The annual percentage rate of interest described in 
        section 987(b) of title 10, United States Code (commonly 
        referred to as the `Military Lending Act'), shall be applicable 
        under this section for any extension of consumer credit made 
        during the period beginning 1 day after the date of enactment 
        of this section and ending on the date on which the national 
        emergency declared by the President under the National 
        Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the 
        coronavirus disease 2019 (COVID-19) terminates.
            ``(2) Exceptions.--Paragraph (1) shall not apply to credit 
        extended by a Federal credit union, as defined in section 101 
        of the Federal Credit Union Act (12 U.S.C. 1752), subject to 
        the limitation on rate of interest described in section 
        107(5)(A)(vi) of that Act (12 U.S.C. 1757(5)(A)(vi)), as 
        implemented by the National Credit Union Administration Board, 
        or to a State credit union that complies with that limitation.
    ``(c) No Exemptions Permitted.--The exemption authority of the 
Bureau under section 105(f) shall not apply with respect to this 
section.
    ``(d) Calculation of the Annual Percentage Rate for Open End 
Credit.--
            ``(1) In general.--For purposes of this section, the annual 
        percentage rate applicable to an open end credit plan shall be 
        calculated under section 107(a)(2), subject to adjustments to 
        the amount considered a finance charge, as provided in the 
        rules issued by the Secretary of Defense on July 22, 2015, to 
        carry out section 987 of title 10, United States Code.
            ``(2) Exception to finance charge calculation.--
                    ``(A) In general.--Notwithstanding paragraph (1), 
                for consumer credit extended in a credit card account 
                under an open end consumer credit plan, a bona fide fee 
                other than a periodic rate is not a charge required to 
                be included within the finance charge for purposes of 
                this section if the fee, including any fee charged 
                before the account is opened or during the 1-year 
                period beginning on the date on which the account is 
                opened, is assessed in compliance with section 127(n).
                    ``(B) Limitation.--Subparagraph (A) shall not apply 
                to--
                            ``(i) any credit insurance premium or fee, 
                        including any charge for single premium credit 
                        insurance, any fee for a debt cancellation 
                        contract, or any fee for a debt suspension 
                        agreement; or
                            ``(ii) any fee for a credit-related 
                        ancillary product sold in connection with the 
                        credit card account under an open end consumer 
                        credit plan.
    ``(e) Calculation of the Annual Percentage Rate for Closed-End 
Credit.--For purposes of this section, the annual percentage rate 
applicable to credit not under an open end credit plan shall be 
calculated under section 107(a)(1), subject to adjustments to the 
amount considered a finance charge, as provided in the rules issued by 
the Secretary of Defense on July 22, 2015, to carry out section 987 of 
title 10, United States Code.
    ``(f) Relation to State Law.--Nothing in this section may be 
construed to preempt any provision of State law that provides greater 
protection to consumers than is provided under this section.
    ``(g) Penalties and Remedies.--In addition to the penalties and 
remedies in this Act, section 987(f) of title 10, United States Code, 
shall apply to a creditor who extends consumer credit to a consumer in 
violation of this section to the same extent as such section 987(f) 
applies to a creditor who extends consumer credit to a covered member 
or a dependent with respect to a covered member (as those terms are 
defined in such section 987).
    ``(h) Preservation of State Enforcement.--
            ``(1) State attorneys general.--Not later than 3 years 
        after the date on which a violation of this section occurs, the 
        attorney general of a State (or an equivalent official) may 
        bring a civil action in the name of that State--
                    ``(A) in any district court of the United States 
                that is located in that State or in a State court that 
                is located in that State and that has jurisdiction over 
                the defendant; and
                    ``(B) to--
                            ``(i) enforce provisions of this section or 
                        rules issued under this section; and
                            ``(ii) secure remedies under provisions of 
                        this section or remedies otherwise provided 
                        under other law.
            ``(2) State regulators.--Not later than 3 years after the 
        date on which a violation of this section occurs, a State 
        regulator may bring a civil action or initiate another 
        appropriate proceeding to--
                    ``(A) enforce the provisions of this section or 
                regulations issued under this section with respect to 
                any entity that is, or is required to be, State-
                chartered, incorporated, licensed, or otherwise 
                authorized to do business under State law; and
                    ``(B) secure remedies under provisions of this 
                section or remedies otherwise provided under other 
                provisions of law with respect to an entity described 
                in subparagraph (A).
            ``(3) Notice requirement; additional regulations.--
        Subsections (b), (c), and (d) of section 1042 of the Consumer 
        Financial Protection Act of 2010 (12 U.S.C. 5552), shall apply 
        to a civil action or other appropriate proceeding brought or 
        initiated under paragraph (1) or (2) to the same extent as 
        those subsections apply to actions and other administrative and 
        regulatory proceedings described in subsection (a) of such 
        section 1042.''.
    (b) Clerical Amendment.--The table of contents for chapter 2 of the 
Truth in Lending Act is amended by adding at the end the following:

``140B. Limitations on consumer, small business, and nonprofit maximum 
                            rates of interest during national 
                            emergencies.''.
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