[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 641 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 641

 To amend the Truth in Lending Act to provide for enhanced information 
  regarding credit card balance payment terms and conditions, and to 
  provide for enhanced reporting of credit card solicitations to the 
 Board of Governors of the Federal Reserve System and to Congress, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 17, 1999

  Mr. Sarbanes (for himself, Mr. Durbin, Mr. Dodd, and Mr. Feingold) 
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 provide for enhanced information 
  regarding credit card balance payment terms and conditions, and to 
  provide for enhanced reporting of credit card solicitations to the 
 Board of Governors of the Federal Reserve System and to Congress, 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 ``Consumer Credit Act of 1999''.

SEC. 2. ENHANCED DISCLOSURES UNDER AN OPEN END CONSUMER CREDIT PLAN.

    (a) Repayment Terms.--Section 127(b) of the Truth in Lending Act 
(15 U.S.C. 1637(b)) is amended by adding at the end the following:
            ``(11)(A) Repayment information that would apply to the 
        outstanding balance of the consumer under the credit plan, 
        including--
                    ``(i) the required minimum monthly payment on that 
                balance, represented as both a dollar figure and as a 
                percentage of that balance;
                    ``(ii) the number of months (rounded to the nearest 
                month) that it would take to pay the entire amount of 
                that balance, if the consumer pays only the required 
                minimum monthly payments and if no further advances are 
                made;
                    ``(iii) the total cost to the consumer, including 
                interest and principal payments, of paying that balance 
                in full, if the consumer pays only the required minimum 
                monthly payments and if no further advances are made; 
                and
                    ``(iv) the monthly payment amount that would be 
                required for the consumer to eliminate the outstanding 
                balance in 36 months if no further advances are made.
            ``(B)(i) Subject to clause (ii), in making the disclosures 
        under subparagraph (A) the creditor shall apply the interest 
        rate in effect on the date on which the disclosure is made 
        until the date on which the balance would be paid in full.
            ``(ii) If the interest rate in effect on the date on which 
        the disclosure is made is a temporary rate that will change 
        under a contractual provision applying an index or formula for 
        subsequent interest rate adjustment, the creditor shall apply 
        the interest rate in effect on the date on which the disclosure 
        is made for as long as that interest rate will apply under that 
        contractual provision, and then apply an interest rate based on 
        the index or formula in effect on the applicable billing 
        date.''.
    (b) Publication of Model Forms.--Not later than 180 days after the 
date of enactment of this Act, the Board of Governors of the Federal 
Reserve System shall publish model disclosure forms in accordance with 
section 105 of the Truth in Lending Act for the purpose of compliance 
with section 127(b)(11) of the Truth in Lending Act, as added by this 
section.

SEC. 3. CREDIT CARD SECURITY INTERESTS UNDER AN OPEN END CONSUMER 
              CREDIT PLAN.

    (a) In General.--Section 127 of the Truth in Lending Act (15 U.S.C. 
1637) is amended by adding at the end the following:
    ``(h) Security Interests Created Under an Open End Consumer Credit 
Plan.--During the period of an open end consumer credit plan, if the 
creditor of that plan obtains a security interest in personal property 
purchased using that credit plan, the creditor shall provide to the 
consumer, at the time of purchase, a written statement setting forth in 
a clear, conspicuous, and easy to read format the following 
information:
            ``(1) The property in which the creditor will receive a 
        security interest.
            ``(2) The nature of the security interest taken.
            ``(3) The method or methods of enforcement of that security 
        interest available to the creditor in the event of nonpayment 
        of the plan balance.
            ``(4) The method in which payments made on the credit plan 
        balance will be credited against the security interest taken on 
        the property.
            ``(5) The following statement: `This property is subject to 
        a security agreement. You must not dispose of the property 
        purchased in any way, including by gift, until the balance on 
this account is fully paid.'''.
    (b) Publication of Model Forms.--Not later than 180 days after the 
date of enactment of this Act, the Board of Governors of the Federal 
Reserve System shall publish model disclosure forms in accordance with 
section 105 of the Truth in Lending Act for the purpose of compliance 
with section 127(h) of the Truth in Lending Act, as added by this 
section.

SEC. 4. STATISTICS TO BE REPORTED TO BOARD OF GOVERNORS OF FEDERAL 
              RESERVE SYSTEM AND TO CONGRESS.

    Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
by adding at the end the following:
    ``(i) Reports to the Board and to Congress.--
            ``(1) Reports to the board.--Any creditor making advances 
        under an open end credit plan shall, using model forms 
        developed and published by the Board, annually submit to the 
        Board a report, which shall include--
                    ``(A) the total number of open end credit plan 
                solicitations made to consumers;
                    ``(B) the total amount of credit (in dollars) 
                offered to consumers;
                    ``(C) a statement of the average interest rates 
                offered to all borrowers in each of the previous 2 
                years;
                    ``(D) the total amount of credit granted and the 
                average interest rate granted to persons under the age 
                of 25; and
                    ``(E) the total amount of debt written off 
                voluntarily and due to a bankruptcy discharge in each 
                of the 2 years preceding the date on which the report 
                is submitted.
            ``(2) Reports to congress.--The Board shall annually 
        compile the information collected under paragraph (1) and 
        submit to the Committees on the Judiciary of the House of 
        Representatives and the Senate, the Committee on Banking, 
        Housing, and Urban Affairs of the Senate, and the Committee on 
        Banking and Financial Services of the House of Representatives, 
        a report, which shall include--
                    ``(A) aggregate data described subparagraphs (A) 
                through (E) of paragraph (1) for all creditors; and
                    ``(B) individual data described in paragraph (1)(A) 
                for each of the top 50 creditors.''.

SEC. 5. CIVIL LIABILITY.

    Section 130(a) of the Truth in Lending Act (15 U.S.C. 1640(a)) is 
amended, in the undesignated paragraph following paragraph (4), by 
striking the second sentence and inserting the following: ``In 
connection with the disclosures referred to in subsections (a), (b), 
and (h) of section 127, a creditor shall have a liability determined 
under paragraph (2) only for failing to comply with the requirements of 
section 125, 127(a), paragraph (4), (5), (6), (7), (8), (9), (10), or 
(11) of section 127(b), or section 127(h), or for failing to comply 
with disclosure requirements under State law for any term or item that 
the Board has determined to be substantially the same in meaning under 
section 111(a)(2) as any of the terms or items referred to in section 
127(a), paragraph (4), (5), (6), (7), (8), (9), (10), or (11) of 
section 127(b), or section 127(h).''.

SEC. 6. TREATMENT UNDER BANKRUPTCY LAW.

    (a) Exceptions to Discharge.--Section 523(a) of title 11, United 
States Code, is amended by adding at the end the following:
        ``The exception under subparagraphs (A) and (C) of paragraph 
        (2) shall not apply to any claim made by a creditor who has 
        failed to make the disclosures required under section 127(h) of 
        the Truth in Lending Act in connection with such claim, unless 
        a creditor required to make such disclosures files with the 
        court, within 90 days of the date of order for relief, a proof 
        of claim accompanied by a copy of such disclosures that is 
        signed and dated by the debtor.''.
    (b) Reaffirmation.--Section 524(c) of title 11, United States Code, 
is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(7) in a case concerning a creditor obligated to make the 
        disclosures required under section 127(h) of the Truth in 
        Lending Act, the agreement contains a copy of such disclosures 
        that is signed and dated by the debtor.''.
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