[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3259 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 3259

To amend title 11, United States Code, with respect to the priority of 
                    certain high cost credit debts.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 14, 2008

 Mr. Whitehouse (for himself and Mr. Durbin) introduced the following 
    bill; which was read twice and referred to the Committee on the 
                               Judiciary

_______________________________________________________________________

                                 A BILL


 
To amend title 11, United States Code, with respect to the priority of 
                    certain high cost credit debts.

    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 Fairness Act''.

SEC. 2. EFFECTS OF HIGH COST CREDIT ON BANKRUPTCY PROCEEDINGS.

    (a) Definitions.--Section 101 of title 11, United States Code, is 
amended--
            (1) by redesignating paragraph (27B) as paragraph (27C); 
        and
            (2) by inserting after paragraph (27A) the following:
            ``(27B) The term `high cost consumer credit transaction' 
        means an extension of credit by a `creditor' (as defined in 
        section 103 of the Truth in Lending Act (15 U.S.C. 1602(f))), 
        resulting in a consumer debt that has an applicable annual 
        percentage rate (as determined in accordance with section 
        107(a) of the Truth in Lending Act (15 U.S.C. 1606(a)), and 
        including costs and fees incurred in connection with the 
        extension of such credit) that exceeds the lesser of--
                    ``(A) the sum of 15 percent and the yield on United 
                States Treasury securities having a 30-year period of 
                maturity; or
                    ``(B) 36 percent.''.
    (b) Subordination.--Section 510 of title 11, United States Code, is 
amended by adding at the end the following:
    ``(d)(1) For the purpose of distribution under this title, an 
allowed claim arising from a high cost consumer credit transaction 
shall be subordinated to all other claims.
    ``(2) Any lien securing a claim subordinated under paragraph (1) 
shall be transferred to the estate.''.

SEC. 3. EXCLUSION.

    Section 707(b) of title 11, United States Code, is amended by 
adding at the end the following:
    ``(8) Paragraph (2) shall not apply if the debtor's petition 
resulted from a high cost consumer credit transaction.''.
                                 <all>