[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1510 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 1510

To require enhanced disclosure to consumers regarding the consequences 
  of making only minimum required payments in the repayment of credit 
                   card debt, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 13, 2007

 Mr. Price of North Carolina (for himself, Mr. Moran of Virginia, Mr. 
Grijalva, Mr. Fattah, Mr. Ryan of Ohio, Mr. Conyers, Ms. Schwartz, Mr. 
 Etheridge, and Mr. Udall of Colorado) introduced the following bill; 
       which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To require enhanced disclosure to consumers regarding the consequences 
  of making only minimum required payments in the repayment of credit 
                   card debt, 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 ``Credit Card Repayment Act of 2007''.

SEC. 2. ENHANCED CONSUMER DISCLOSURES REGARDING MINIMUM PAYMENTS.

    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:
            ``(13) Minimum payments.--
                    ``(A) In general.--Information regarding repayment 
                of the outstanding balance of the consumer under the 
                account, appearing in conspicuous type on the front of 
                the first page of each such billing statement, and 
                accompanied by an appropriate explanation, containing--
                            ``(i) the words `Minimum Payment Warning: 
                        Making only the minimum payment will increase 
                        the amount of interest that you pay and the 
                        time it will take to repay your outstanding 
                        balance.';
                            ``(ii) the number of years and months 
                        (rounded to the nearest month) that it would 
                        take for the consumer to pay the entire amount 
                        of that balance, if the consumer pays only the 
                        required minimum monthly payments;
                            ``(iii) the total cost to the consumer, 
                        shown as the sum of all principal and interest 
                        payments, and a breakdown of the total costs in 
                        interest and principal, of paying that balance 
                        in full if the consumer pays only the required 
                        minimum monthly payments, and if no further 
                        advances are made;
                            ``(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; and
                            ``(v) a toll-free telephone number at which 
                        the consumer may receive information about 
                        accessing credit counseling and debt management 
                        services.
                    ``(B) Applicable rates.--
                            ``(i) In general.--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.
                            ``(ii) Temporary rates.--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 
                        specifying a subsequent interest rate or 
                        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 shall apply the 
                        adjusted interest rate, as specified in the 
                        contract.
                            ``(iii) Indexed rates.--If the contract 
                        applies a formula that uses an index that 
                        varies over time, the value of such index on 
                        the date on which the disclosure is made shall 
                        be used in the application of the formula.
            ``(C) Adjustments and tolerances.--In prescribing 
        regulations to carry out this paragraph, the Board shall take 
        into account the Board's authority under this title to provide 
        adjustments and tolerances so as to prevent any injustice when 
        a violation of the guidelines is not intentional and results 
        from a bona fide error notwithstanding the maintenance of 
        procedures reasonably adapted to avoid any such error.''.

SEC. 3. ACCESS TO CREDIT COUNSELING AND DEBT MANAGEMENT INFORMATION.

    (a) Guidelines Required.--
            (1) In general.--Not later than 1 year after the date of 
        the enactment of this Act, the Board of Governors of the 
        Federal Reserve System and the Federal Trade Commission 
        (hereafter in this section referred to as the ``Board'' and the 
        ``Commission'', respectively) shall jointly, by rule, 
        regulation, or order, issue guidelines for the establishment 
        and maintenance by creditors of a toll-free telephone number 
        for purposes of the disclosures required under section 
        127(b)(13) of the Truth in Lending Act, as added by this Act.
            (2) Approved agencies.--Guidelines issued under this 
        subsection shall ensure that referrals provided by the toll-
        free number include only those agencies approved by the Board 
        and the Commission as meeting the criteria under this section.
    (b) Criteria.--The Board and the Commission shall only approve a 
nonprofit budget and credit counseling agency for purposes of this 
section that--
            (1) demonstrates that it will provide qualified counselors, 
        maintain adequate provision for safekeeping and payment of 
        client funds, provide adequate counseling with respect to 
        client credit problems, and deal responsibly and effectively 
        with other matters relating to the quality, effectiveness, and 
        financial security of the services it provides;
            (2) at a minimum--
                    (A) is registered as a nonprofit entity under 
                section 501(c) of the Internal Revenue Code of 1986;
                    (B) has a board of directors, the majority of the 
                members of which--
                            (i) are not employed by such agency; and
                            (ii) will not directly or indirectly 
                        benefit financially from the outcome of the 
                        counseling services provided by such agency;
                    (C) if a fee is charged for counseling services, 
                charges a reasonable and fair fee, and provides 
                services without regard to ability to pay the fee;
                    (D) provides for safekeeping and payment of client 
                funds, including an annual audit of the trust accounts 
                and appropriate employee bonding;
                    (E) provides full disclosures to clients, including 
                funding sources, counselor qualifications, possible 
                impact on credit reports, any costs of such program 
                that will be paid by the client, and how such costs 
                will be paid;
                    (F) provides adequate counseling with respect to 
                the credit problems of the client, including an 
                analysis of the current financial condition of the 
                client, factors that caused such financial condition, 
                and how such client can develop a plan to respond to 
                the problems without incurring negative amortization of 
                debt;
                    (G) provides trained counselors who--
                            (i) receive no commissions or bonuses based 
                        on the outcome of the counseling services 
                        provided;
                            (ii) have adequate experience; and
                            (iii) have been adequately trained to 
                        provide counseling services to individuals in 
                        financial difficulty, including the matters 
                        described in subparagraph (F);
                    (H) demonstrates adequate experience and background 
                in providing credit counseling;
                    (I) has adequate financial resources to provide 
                continuing support services for budgeting plans over 
                the life of any repayment plan; and
                    (J) is accredited by an independent, nationally 
                recognized accrediting organization.
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