Limitations established

(a)

In general

Section 127 of the Truth in Lending Act (U.S.C. 1637) is amended by inserting after subsection (r) (as added by the Credit CARD Act of 2009) the following new subsection:

(s)

Limitations on fees and other actions

(1)

Prohibition on certain fees

A creditor may not impose any of the following on any credit card account under an open-end consumer credit plan: (A)Any fee directly or indirectly related to the failure of the consumer to use the credit card to obtain an extension of credit during any period. (B)Any fee directly or indirectly related to the failure of the consumer to carry an outstanding balance from any billing cycle to another. (C)Any fee directly or indirectly related to the failure of the consumer to obtain a minimum amount of credit under such account during any specified period. (2)

No-effect cancellation of account upon introduction of annual fee

(A)

In general

If, in the case of a credit card account under an open-end consumer credit plan which did not require the payment of an annual fee under the terms of such plan at the time the account was first opened, a creditor imposes an annual fee at any time after such account is opened, the consumer may— (i)cancel such account within 45 days of receiving notice of such fee imposition; and (ii)pay any outstanding balance on the account at the time of cancellation in accordance with the terms in effect at the time of such cancellation. (B)

No adverse effects

No creditor may take any action with respect to any consumer who cancels a credit card account in accordance with subparagraph (A), as a direct or indirect result of such cancellation, which would have any adverse effect on such consumer and such consumer's ability to obtain credit under a credit card account under an open-end consumer credit plan. (3)

Reasonable annual fees

(A)

In general

The amount of any annual fee that a card issuer may impose with respect to a credit card account under an open-end consumer credit plan, shall be reasonable. (B)

Rulemaking required

The Board, in consultation with the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision, and the National Credit Union Administration Board, shall issue final rules not later than 6 months after the date of enactment of this section, to establish standards for assessing whether the amount of any annual fee is reasonable. (C)

Considerations

In issuing rules required by this section, the Board shall consider— (i)the purported reason the creditor is instituting an annual fee; (ii)if the credit card account had an annual fee at the opening of the account; and (iii)such other factors as the Board may deem necessary or appropriate.

(b)

Limitation on adverse effects of cancellation on credit score

Section 609 of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended by adding at the end the following new subsection:

(h)

Limitation on adverse effects of cancellation on credit score

No consumer reporting agency or other person who develops a credit score (as defined in subsection (f)(2)) for any consumer may take any action with respect to, or make any determination based on, the cancellation by the consumer of a credit card account under an open-end consumer credit plan in accordance with section 127(s)(2) which would result in the development or distribution of a credit score for such consumer which is lower than a credit score that would result for such consumer without taking into account such cancellation.