[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7188 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 7188

To amend the Truth in Lending Act to establish certain advertising and 
disclosure requirements with respect to tax refund anticipation loans, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 27, 2008

  Mrs. McCarthy of New York introduced the following bill; which was 
            referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To amend the Truth in Lending Act to establish certain advertising and 
disclosure requirements with respect to tax refund anticipation loans, 
                        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 ``Tax Refund Anticipation Loan 
Consumer Protection Act''.

SEC. 2. ADVERTISING AND DISCLOSURE REQUIREMENTS.

    (a) In General.--Section 128 of the Truth in Lending Act (U.S.C. 
1638) is amended by adding at the end the following new subsection:
    ``(e) Advertising and Disclosure Requirements for Tax Refund 
Anticipation Loans.--
            ``(1) Definitions.--
                    ``(A) Income tax refund anticipation loan.--The 
                term `income tax refund anticipation loan' means any 
                short-term extension of credit, whether in cash, 
                through a stored value card, in the form of a down 
                payment or deposit in connection with a transaction to 
                which the consumer is a party, or otherwise, to a 
                consumer in exchange for--
                            ``(i) the sale or assignment of the 
                        consumer's anticipated income tax refund or 
                        rebate to the creditor or the income tax refund 
                        anticipation loan originator; or
                            ``(ii) an arrangement authorized by the 
                        consumer pursuant to which such anticipated 
                        income tax refund or rebate secures, directly 
                        or indirectly, the repayment of such extension 
                        of credit or will be credited against any 
                        balance owed by the consumer on such extension 
                        of credit.
                    ``(B) Income tax refund anticipation loan 
                originator.--The term `income tax refund anticipation 
                loan originator'--
                            ``(i) means any person, including any 
                        income tax return preparer, electronic tax 
                        return filer, or check cashing service, who 
                        engages in income tax refund anticipation loan 
                        origination;
                            ``(ii) includes any person who represents 
                        to the public, through advertising or other 
                        means of communicating or providing information 
                        (including the use of business cards, 
                        stationery, brochures, signs, rate lists, or 
                        other promotional items), that such person can 
                        or will provide or perform any of the 
                        activities described in any clause of 
                        subparagraph (C); and
                            ``(iii) does not include who performs 
                        purely administrative or clerical tasks on 
                        behalf of a person who is described in any 
                        clause (i) or (ii).
                    ``(C) Income tax refund anticipation loan 
                origination.--The term `income tax refund anticipation 
                loan origination' means--
                            ``(i) accepting an income tax refund 
                        anticipation loan application for direct or 
                        indirect compensation or gain, or in the 
                        expectation of direct or indirect compensation 
                        or gain;
                            ``(ii) assisting a consumer in obtaining or 
                        applying to obtain an income tax refund 
                        anticipation loan (whether or not such 
                        assistance is described as a loan to the 
                        consumer) for direct or indirect compensation 
                        or gain, or in the expectation of direct or 
                        indirect compensation or gain; or
                            ``(iii) offering or negotiating terms of an 
                        income tax refund anticipation loan, for direct 
                        or indirect compensation or gain, or in the 
                        expectation of direct or indirect compensation 
                        or gain.
                    ``(D) Income tax return preparer.--The term `income 
                tax return preparer'--
                            ``(i) has the same meaning as in section 
                        7701(a)(36) of the Internal Revenue Code of 
                        1986; and
                            ``(ii) includes any person who prepares for 
                        compensation, or who employs 1 or more persons 
                        to prepare for compensation, any return of tax 
                        imposed under State law.
                    ``(E) Compensation.--For purposes of this title, 
                the term `compensation' when used in connection with 
                the preparation by any person of any return of tax for 
                a consumer, includes any compensation or gain directly 
                or indirectly received by such person for acting as an 
                income tax refund anticipation loan originator for such 
                consumer with regard to such return.
            ``(2) Advertising requirements.--
                    ``(A) Prohibition on confusing refund with loan.--
                An advertisement for an income tax refund anticipation 
                loan may not--
                            ``(i) describe an income tax refund 
                        anticipation loan as a tax refund or rebate; or
                            ``(ii) advertise or solicit tax preparation 
                        services as including the possibility of 
                        obtaining an immediate or rapid income tax 
                        refund or rebate if the immediate or rapid 
                        income tax refund or rebate involves an income 
                        tax refund anticipation loan origination.
                    ``(B) Information required to be provided in ads 
                for income tax refund anticipation loans.--Any 
                advertisement for an income tax refund anticipation 
                loan shall include the following information with 
                respect to such loan:
                            ``(i) Any fees imposed by the originator in 
                        connection with the origination of such loan.
                            ``(ii) The annual percentage rate 
                        applicable with respect to such loan and any 
                        fees imposed by the creditor in connection with 
                        such loan.
                            ``(iii) The name of the creditor, if other 
                        than the originator, with respect to such loan.
            ``(3) Contract and disclosure requirements.--
                    ``(A) Contract requirements.--No income tax refund 
                anticipation loan origination services may be provided 
                by any income tax refund anticipation loan originator 
                for any consumer unless a written and dated contract 
                (for such services) which meets the requirements of 
                subparagraph (B) has been signed by the consumer.
                    ``(B) Disclosure requirements.--No contract 
                referred to in subparagraph (A) meets the requirements 
                of this paragraph unless the following information 
                relating to the income tax refund anticipation loan is 
                included in such contract (in writing) and is verbally 
                communicated to the consumer (regardless of whether any 
                of such information is also required under this chapter 
                to be provided by the creditor to the consumer):
                            ``(i) The purpose and the amount of all 
                        fees associated with the loan that will be 
                        imposed by the originator, the creditor, and 
                        any other person involved in the transaction.
                            ``(ii) The estimated amount of the Federal 
                        or State tax refund.
                            ``(iii) The fact that the consumer will be 
                        responsible for the repayment of the entire 
                        loan amount and all related costs and fees 
                        regardless of whether--
                                    ``(I) the individual receives a 
                                refund;
                                    ``(II) the amount of the actual 
                                refund is greater than or less than the 
                                amount of the estimate of the refund; 
                                or
                                    ``(III) any mistake or 
                                miscalculation was made by the income 
                                tax return preparer in the preparation 
                                of the tax return or in determining the 
                                amount of the refund.
                            ``(iv) The date by which, on average, a 
                        refund could be expected to be received using a 
                        refund direct deposit program if the consumer 
                        filed the return electronically.
                            ``(v) Information on obtaining low- or no-
                        cost income tax preparation, electronic filing 
                        and direct deposit of refund services from 
                        Volunteer Income Tax Assistance Program (VITA) 
                        for low- to moderate-income individuals and 
                        military personnel and their families or Tax 
                        Counseling for the Elderly (TCE), which will 
                        allow the consumer to receive a refund in 
                        usually no more than 10 days.
                            ``(vi) A website and a toll-free telephone 
                        number for locating the nearest Volunteer 
                        Income Tax Assistance Program or Tax Counseling 
                        for the Elderly office.
            ``(4) Enforcement.--Section 130 shall be applied for 
        purposes of this paragraph substituting `income tax refund 
        anticipation loan originator' for `creditor' each place such 
        term appears in such section.''.
    (b) Prompt Model Disclosure Form Publication.--The Board of 
Governors of the Federal Reserve System shall publish model disclosure 
forms for implementation of the amendment made by subsection (a) with 
regard to income tax refund anticipation loans, in accordance with 
section 105 of the Truth in Lending Act, before the end of the 6-month 
period beginning on the date of the enactment of this Act.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply after the end of the 60-day period beginning on the date of the 
enactment of this Act.
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