[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 891 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 891

To amend the Truth in Lending Act with respect to extensions of credit 
                   to consumers under the age of 21.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 15, 2001

   Mr. Dodd 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 with respect to extensions of credit 
                   to consumers under the age of 21.

    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 ``Underage Consumer Credit Protection 
Act of 2001''.

SEC. 2. EXTENSIONS OF CREDIT TO UNDERAGE CONSUMERS.

    Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is 
amended by adding at the end the following:
            ``(6) Applications from underage consumers.--
                    ``(A) Prohibition on issuance.--No credit card may 
                be issued to, or open end credit plan established on 
                behalf of, a consumer who has not attained the age of 
                21, unless the consumer has submitted a written 
                application to the card issuer that meets the 
                requirements of subparagraph (B).
                    ``(B) Application requirements.--An application to 
                open a credit card account by an individual who has not 
                attained the age of 21 as of the date of submission of 
                the application shall require--
                            ``(i) the signature of the parent, legal 
                        guardian, or spouse of the consumer, or any 
                        other individual having a means to repay debts 
                        incurred by the consumer in connection with the 
                        account, indicating joint liability for debts 
                        incurred by the consumer in connection with the 
                        account before the consumer has attained the 
                        age of 21;
                            ``(ii) submission by the consumer of 
                        financial information indicating an independent 
                        means of repaying any obligation arising from 
                        the proposed extension of credit in connection 
                        with the account; or
                            ``(iii) proof by the consumer that the 
                        consumer has completed a credit counseling 
                        course of instruction by a nonprofit budget and 
                        credit counseling agency approved by the Board 
                        for such purpose.
                    ``(C) Minimum requirements for counseling 
                agencies.--To be approved by the Board under 
                subparagraph (B)(iii), a credit counseling agency 
                shall, at a minimum--
                            ``(i) be a nonprofit budget and credit 
                        counseling agency, the majority of the board of 
                        directors of which--
                                    ``(I) is not employed by the 
                                agency; and
                                    ``(II) will not directly or 
                                indirectly benefit financially from the 
                                outcome of a credit counseling session;
                            ``(ii) if a fee is charged for counseling 
                        services, charge a reasonable fee, and provide 
                        services without regard to ability to pay the 
                        fee; and
                            ``(iii) provide trained counselors who 
                        receive no commissions or bonuses based on 
                        referrals, and demonstrate adequate experience 
                        and background in providing credit 
                        counseling.''.

SEC. 3. REGULATORY AUTHORITY.

    The Board of Governors of the Federal Reserve System may issue such 
rules or publish such model forms as it considers necessary to carry 
out section 127(c)(6) of the Truth in Lending Act, as added by this 
Act.
                                 <all>