Short title

This Act may be cited as the

Consumer Credit Card Protection Act of 2005

Prohibit universal defaults on credit card accounts

Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following new subsection:

(i)

Universal defaults prohibited

(1)

In general

No creditor may use any adverse information concerning any consumer, including any information in any consumer report (as defined in section 603) or any change in the credit score of the consumer, as the basis for increasing any annual percentage rate of interest applicable to a credit card account of the consumer under an open end consumer credit plan, or to remove or increase any introductory annual percentage rate of interest applicable to such account, for reasons other than actions or omissions of the consumer that are directly related to such account. (2)

Notice to consumer

The limitation under paragraph (1) on the use of adverse information by a credit card issuer shall be clearly and conspicuously described to the consumer by the credit card issuer in any disclosure or statement required under subsection (a) or (b).

Box disclosure of payment period for minimum payments on credit card balance

Section 127(b) of the Truth in Lending Act (15 U.S.C. 1637(b)) is amended by adding at the end the following new paragraph:

(12)

Minimum payment terms

(A)

In general

In a clear and conspicuous manner, repayment information applicable with respect to any outstanding balance on the account, including the following expressed in a tabular format and in close proximity: (i)The required minimum monthly payment on that balance, represented as both a dollar figure and a percentage of the outstanding balance. (ii)The number of months (rounded to the nearest month) that it would take to pay the entire amount of the current outstanding balance if— (I)the consumer pays only the required minimum monthly payments (as in effect at the time such statement is issued); and (II)no further advances or extensions of credit are made with respect to such account. (B)

Applicable terms

(i)

Applicable apr

Subject to clause (ii), in making any determination required for purposes of the disclosures under subparagraph (A), the creditor shall apply any applicable annual percentage rate of interest in effect on the date on which the disclosure is made, taking into account the different rates that may be applicable with respect to different portions of the outstanding balance, without regard to whether any such rate is a fixed rate or a variable rate. (ii)

Introductory rate

If the annual percentage rate of interest in effect on the date on which the disclosure is made is a temporary or introductory rate that will change pursuant to a contractual provision applying an index or formula for subsequent interest rate adjustment, the creditor shall apply— (I)the annual percentage rate of interest in effect on the date on which the disclosure is made, in making a determination for the balance of the introductory or temporary period, and (II)an annual percentage rate of interest, based on an index, formula, or contractual provision that is, or but for the temporary or introductory rate referred to in subclause (I) would be, in effect as of the date on which the disclosure is made, in making a determination for the remainder of the amortization period.

Advanced notice required before increasing rates or fees on credit card accounts

Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by inserting after subsection (i) (as added by section 2 of this Act) the following new subsection:

(j)

Advance notice of increase in any interest rate and imposition of any fee required

(1)

Interest rates

In the case of any credit card account under an open end consumer credit plan, no increase in any annual percentage rate of interest (other than an increase due to the expiration of any introductory percentage rate of interest) applicable to such account, or any portion of any outstanding balance on such account— (A)may take effect before the beginning of the billing cycle which begins not less than— (i)30 days after the obligor receives a specific notice of such increase in accordance with paragraph (3), in the case of any change in any such annual percentage rate that is due solely to a change in another rate of interest to which such rate is indexed; or (ii)60 days after the obligor receives a specific notice of such increase in accordance with paragraph (3), in the case of any change in any such annual percentage rate that is not described in clause (i); and (B)may, in the case of any change in any such annual percentage rate that is not described in subparagraph (A)(i), apply to any outstanding balance of credit under such plan as of the date of the notice of the increase required under subparagraph (A). (2)

Fees

In the case of any credit card account under an open end consumer credit plan, no fee, including any annual fee, late payment fee, or over-the-limit fee, may be imposed on such account before the end of the 30-day period beginning on the date the obligor receives a specific notice of the imposition of such fee in accordance with paragraph (3). (3)

Notice requirements

(A)

In general

Any notice required under this subsection shall be mailed (or e-mailed, if the consumer has requested to receive such notices electronically) to the obligor separately from any statement or other notice and without any advertising or other disclosures. (B)

Fee explanation

In the case of any notice pursuant to paragraph (2), the notice shall include an explanation of how, when, and why a fee will be imposed and what options the obligor may have for addressing the imposition of the fee or any reason for such imposition, including the prevention of any future imposition of such fee.