[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1576 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1576

 To amend the Truth in Lending Act to prohibit the distribution of any 
    negotiable check or other instrument with any solicitation to a 
  consumer by a creditor to open an account under any consumer credit 
 plan or to engage in any other credit transaction which is subject to 
                   such Act, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 27, 1999

 Mr. Hinchey 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 prohibit the distribution of any 
    negotiable check or other instrument with any solicitation to a 
  consumer by a creditor to open an account under any consumer credit 
 plan or to engage in any other credit transaction which is subject to 
                   such Act, 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 ``Unsolicited Loan Consumer Protection 
Act''.

SEC. 2. UNSOLICITED CHECKS PROHIBITED.

    (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 new 
section:

``SEC. 140. SOLICITATIONS FOR CONSUMER LOANS.

    ``(a) In General.--No consumer credit which is otherwise subject to 
this title may be extended by any creditor through the use of a check 
or other negotiable instrument which has been sent by the creditor to 
the consumer in connection with a solicitation by the creditor for such 
extension of credit, unless the consumer has submitted an application 
for, or otherwise requested, such extension of credit before receiving 
the check or instrument.
    ``(b) Consumer Not Liable for Any Unsolicited Check Unless the 
Consumer Actually Receives and Negotiates Such Check.--
            ``(1) In general.--If any creditor violates subsection (a) 
        and includes an unsolicited check or other negotiable 
        instrument in a solicitation to a consumer for an extension of 
        credit which the consumer has not applied for or requested, the 
        consumer shall not be liable for the amount of any such check 
        or other instrument unless the consumer actually receives and 
        negotiates such check or instrument.''.
            ``(2) Burden on creditor.--Notwithstanding any rule of 
        evidence or other provision of law--
                    ``(A) the issuance of a check or other negotiable 
                instrument by a creditor in violation of subsection (a) 
                creates a rebuttable presumption that such check or 
                instrument was not received or negotiated by the 
                consumer to whom it was issued; and
                    ``(B) the burden of proof, in any action by a 
                creditor to enforce liability of the consumer for the 
                amount of any such check or instrument, shall be upon 
                the creditor to show that such check or instrument was 
                received by the consumer and was negotiated by the 
                consumer with the knowledge that such negotiation was 
                creating a liability for such amount.
            ``(3) Information on liability created in violation of 
        subsection (a) may not be reported to or received by any 
        consumer reporting agency.--No information on any liability 
        alleged by a creditor to have been established through the 
        issuance of a check or other negotiable instrument in violation 
        of subsection (a) may be reported to or received by any credit 
        reporting agency (as defined in section 603 of the Fair Credit 
        Reporting Act) or included in any consumer credit report under 
        such Act.''.
    (b) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act is amended by adding at the end the following new 
item:

``140. Solicitations for consumer loans.''.
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