[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4410 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4410

  To amend the Truth in Lending Act to protect consumers from certain 
    unreasonable practices of credit cards issuers which result in 
  cancellation of credit, higher fees or rates of interest, or other 
 penalties that result in higher or unnecessary costs to card holders 
     who pay credit card balances in full, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 5, 1998

Mr. LaFalce (for himself, Mr. Yates, and Mr. Kennedy of Massachusetts) 
 introduced the following bill; which was referred to the Committee on 
                     Banking and Financial Services

_______________________________________________________________________

                                 A BILL


 
  To amend the Truth in Lending Act to protect consumers from certain 
    unreasonable practices of credit cards issuers which result in 
  cancellation of credit, higher fees or rates of interest, or other 
 penalties that result in higher or unnecessary costs to card holders 
     who pay credit card balances in full, and for other purposes.

    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 ``Credit Card On-Time Payment 
Protection Act of 1998''.

SEC. 2. PENALTIES FOR ON-TIME PAYMENT PROHIBITED.

    Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
by inserting at the end thereof the following new subsection:
    ``(h) Penalties for On-Time Payment Prohibited.--
            ``(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 
        minimum finance charge or impose any other charge or penalty 
        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) Payment due dates.--For purposes of paragraph (1), a 
        creditor shall be deemed to have imposed a prohibited charge or 
        penalty on an account 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 finance charge that 
                        was disclosed to such obligor pursuant to 
                        subsection (c)(1)(A)(iii) of this section; or
                            ``(ii) the actual date by which payment 
                        would otherwise have to be made to avoid 
                        incurring a finance charge if calculated on the 
                        same basis as the date by which or the period 
                        within which any payment must be made to avoid 
                        incurring a finance charge that was disclosed 
                        to such obligor pursuant to subsection 
                        (c)(1)(A)(iii); and
                    ``(B) that has the purpose or effect of inducing 
                the obligor of such plan to transmit payment 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 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. REGULATIONS.

    The Federal Reserve Board, not later than 6 months after the date 
of the enactment of this Act, shall issue final regulations to 
implement the amendments made by this Act.
                                 <all>