[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3914 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 3914

 To amend the Truth in Lending Act to prevent credit card issuers from 
   advertising and offering one type of credit card and then issuing 
    another type of credit card without the informed consent of the 
                   consumer, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 14, 2000

 Mr. Menendez 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 prevent credit card issuers from 
   advertising and offering one type of credit card and then issuing 
    another type of credit card without the informed consent of the 
                   consumer, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
    This Act may be cited as the ``Fairness in Credit Card Applications 
Act of 2000''.

SEC. 2. FAIRNESS IN CREDIT AND CHARGE CARD APPLICATIONS.

    (a) In General.--Section 127(c)(1) of the Truth in Lending Act (15 
U.S.C. 1637(c)(1)) is amended by adding at the end the following new 
subparagraphs:
                    ``(C) Election of minimum amount of credit limit.--
                If a credit card account established pursuant to an 
                application or solicitation to which subparagraph (A) 
                applies would be subject to a maximum dollar amount 
                limitation on the amount of the credit which is 
                authorized to be extended with respect to such account 
                (hereafter in this subparagraph referred to as the 
                `credit limit'), the following provisions shall apply:
                            ``(i) The application or solicitation shall 
                        disclose to the consumer that--
                                    ``(I) a credit limit will or may be 
                                applicable with respect to such 
                                account; and
                                    ``(II) the consumer has the right 
                                to state the lowest amount of the 
                                credit limit which such consumer is 
                                willing to accept if the credit card 
                                account is established.
                            ``(ii) A completed application or 
                        solicitation submitted by a consumer may not be 
                        processed by a credit card issuer unless the 
                        application or solicitation contains--
                                    ``(I) an explicit statement by the 
                                consumer, in the format prescribed by 
                                the Board pursuant to section 
                                122(c)(3), of the lowest amount of any 
                                credit limit that the consumer is 
                                willing to accept; or
                                    ``(II) an explicit positive 
                                statement by the consumer that the 
                                consumer has no preference with regard 
                                to the amount of a credit limit.
                            ``(iii) If a credit card issuer is 
                        unwilling to open a credit card account with a 
                        credit limit equal to or greater than an amount 
                        indicated by the consumer as the lowest amount 
                        the consumer is willing to accept, the credit 
                        card issuer may not issue a credit card on the 
                        basis of such application or solicitation.
                    ``(D) Different type, designation, or brand of 
                credit card and different terms and conditions.--If an 
                application or solicitation to which subparagraph (A) 
                applies may result in the issuance to a consumer of a 
                different type, designation, or brand of credit card 
                (such as a ``Classic card'', ``Gold card'', or 
                ``Platinum card'') than the type, designation, or brand 
                of credit card to which such application or 
                solicitation relates, or the issuance of a card subject 
                to different terms or conditions (such as a different 
                rate of interest, annual fee, or other fees) than the 
                terms and conditions described in the application or 
                solicitation, the following provisions shall apply:
                            ``(i) The application or solicitation shall 
                        disclose to the consumer that--
                                    ``(I) the submission of the 
                                application or solicitation may result 
                                in the issuance to the consumer of a 
                                different type, designation, or brand 
                                of credit card than the type, 
                                designation, or brand of credit card to 
                                which such application or solicitation 
                                relates or a credit card subject to 
                                different terms and conditions than the 
                                terms and conditions disclosed in such 
                                application or solicitation; and
                                    ``(II) the consumer has the right 
                                to state whether or not the consumer is 
                                willing to accept such other credit 
                                card.
                            ``(ii) The application or solicitation 
                        shall contain (for each type, designation, or 
                        brand of credit card which could be issued on 
                        the basis of the submission of such application 
                        or solicitation and the full range of terms and 
                        conditions to which such card may be subject) 
                        all the information and disclosures which would 
                        be required under this subsection and 
                        subsection (e) (in the format required under 
                        section 122(c)) if the application or 
                        disclosure relates to such other type, 
                        designation, or brand of credit card;
                            ``(iii) A completed application or 
                        solicitation submitted by a consumer may not be 
                        processed by a credit card issuer unless the 
                        application or solicitation contains an 
                        explicit statement by the consumer, in the 
                        format prescribed by the Board pursuant to 
                        section 122(c)(3), that the consumer is or is 
                        not willing to accept a different type, 
                        designation, or brand of credit card than the 
                        type, designation, or brand of credit card or a 
                        credit card subject to different terms and 
                        conditions to which such application or 
                        solicitation relates; and
                            ``(iv) If a credit card issuer is unwilling 
                        to issue a credit card of the type, 
                        designation, or brand of credit card to which 
                        an application or solicitation relates or a 
                        credit card subject to the same terms and 
                        conditions as such credit card and the consumer 
                        has indicated that the consumer is not willing 
                        to accept a different type, designation, or 
                        brand of credit card or a credit card with 
                        different terms and conditions, the credit card 
                        issuer may not issue a credit card on the basis 
                        of such application or solicitation.''.
    (b) Disclosures in Telephone Solicitations.--Section 127(c)(2) of 
the Truth in Lending Act (15 U.S.C. 1637(c)(2)) is amended by adding at 
the end the following new subparagraph:
                    ``(C) Additional disclosures and consumer 
                responses.--
                            ``(i) In general.--In the case of a 
                        telephone solicitation to open a credit card 
                        account for any person under an open end 
                        consumer credit plan, the person making the 
                        solicitation shall orally disclose, to the 
                        extent applicable, the information described in 
                        paragraph (1)(C)(i) and clauses (i) and (ii) of 
                        paragraph (1)(D) with regard to such 
                        solicitation.
                            ``(ii) Consumer responses.--If a person 
                        making a telephone solicitation described in 
                        clause (i) is required to orally disclose 
                        information pursuant to such clause, clauses 
                        (ii) and (iii) of paragraph (1)(C) and clauses 
                        (iii) and (iv) of paragraph (1)(D), as the case 
                        may be, shall apply with regard to such 
                        solicitation.''.
    (c) Disclosures in Applications and Solicitations by Other Means.--
Section 127(c)(3) of the Truth in Lending Act (15 U.S.C. 1637(c)(3)) is 
amended--
            (1) in subparagraph (A)--
                    (A) by inserting ``, including publications or 
                websites on the worldwide web or other distribution 
                networks,'' after ``publications''; and
                    (B) by inserting ``and the requirements of 
                subparagraph (F)'' before the period at the end; and
            (2) by adding at the end the following new subparagraph:
                    ``(F) Additional disclosures and consumer 
                responses.--
                            ``(i) In general.--An application or 
                        solicitation described in subparagraph (A) 
                        meets the requirements of this subparagraph if 
                        the application or solicitation contains, to 
                        the extent applicable, the information 
                        described in paragraph (1)(C)(i) and clauses 
                        (i) and (ii) of paragraph (1)(D) with regard to 
                        such application or solicitation.
                            ``(ii) Consumer responses.--If an 
                        application or solicitation described in 
                        subparagraph (A) is required to contain 
                        information pursuant to clause (i) of this 
                        subparagraph, clauses (ii) and (iii) of 
                        paragraph (1)(C) and clauses (iii) and (iv) of 
                        paragraph (1)(D), as the case may be, shall 
                        apply with regard to such application or 
                        solicitation.''.
    (d) Disclosures in Applications and Solicitations for Charge 
Cards.--Section 127(c)(4) of the Truth in Lending Act (15 U.S.C. 
1637(c)(4)) is amended by adding at the end the following new 
subparagraph:
                    ``(F) Full disclosure requirements.--In the case of 
                any application or solicitation for a charge card to 
                which subparagraph (A), (C), or (D) applies, the 
                requirements of paragraph (1)(D) shall apply to such 
                application or solicitation in the same manner and to 
                the same extent that such subparagraphs of paragraph 
                (1) apply to credit card applications and 
                solicitations.''.
    (e) Format of Disclosures.--
            (1) In general.--Section 122(c)(1) of the Truth in Lending 
        Act (15 U.S.C. 1632(c)) is amended in the matter preceding 
        subparagraph (A)--
                    (A) by inserting ``(1)(C)(i), (1)(D)(i),'' after 
                ``(1)(A),'';
                    (B) by inserting ``(3)(F)'' after 
                ``(3)(B)(i)(I),'';
                    (C) by striking ``and'' after ``(4)(A),''; and
                    (D) by inserting ``, and (4)(F)'' after 
                ``(4)(C)(i)(I)''.
            (2) Requirements relating to format for disclosures of 
        consumer options and consumer responses.--Section 122(c) of the 
        Truth in Lending Act (15 U.S.C. 1632(c)) is amended by adding 
        at the end the following new paragraph:
            ``(3) Format for disclosure of consumer options and 
        consumer responses.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                the regulations prescribed under paragraph (1), the 
                Board shall prescribe the format for any consumer 
                response pursuant to--
                            ``(i) subparagraph (C)(ii) or (D)(iii) of 
                        paragraph (1) of section 127(c), in connection 
                        with any application or solicitation to which 
                        paragraph (1), (2), or (3) of such section 
                        applies; or
                            ``(ii) subparagraph (F) of section 
                        127(c)(4), in connection with any application 
                        or solicitation to which subparagraph (A), (C), 
                        or (D) of such section applies.
                    ``(B) Specified statement.--The regulations shall 
                require the following statement to be included in each 
                application or solicitation to which subparagraph 
                (D)(iii) of paragraph (1) or paragraph (4)(F) of 
                section 127(c) applies: `If your application for a 
                __________ card is denied, you may be considered, at 
                your option, for a __________ card which has a 
                different set of terms and conditions, as described in 
                the enclosed document. Would you like to be considered 
                for this different card? Yes ____. No ____.'''.
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