II 111th CONGRESS 1st Session S. 165 IN THE SENATE OF THE UNITED STATES January 7, 2009 Mr. Kohl (for himself and Mr. Durbin) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Truth in Lending Act, to prevent credit card issuers from taking unfair advantage of college students and their parents, and for other purposes.

1.

Short title

This Act may be cited as the Student Credit Card Protection Act of 2009.

2.

Issuance of credit cards to certain college students

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)

Provisions Applicable With Regard to the Issuance of Credit Cards to Full-Time, Traditional-Aged College Students

(1)

Definitions

For purposes of this section, the following definitions shall apply: (A)

College student credit card account defined

For purposes of this subsection, the term college student credit card account means a credit card account under an open end consumer credit plan established or maintained for or on behalf of any college student. (B)

College student

The term college student means an individual— (i)who is a full-time student attending an institution of higher education; and (ii)who has not yet attained the age of 21. (C)

Institution of higher education

The term institution of higher education has the same meaning as in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)). (2)

Maximum amount limitation as a percentage of gross income

Unless a parent, legal guardian, or spouse of a college student assumes joint liability for debts incurred by the student in connection with a college student credit card account— (A)no creditor shall grant a college student a credit card account where the credit limit for that account exceeds, during a full calendar year, the greater of— (i)20 percent of the annual gross income of the student; or (ii)$500; and (B)no creditor shall grant a student a credit card account, if the credit limit for that credit card account, combined with the credit limits of any other credit card accounts held by the student, would exceed 30 percent of the annual gross income of the student in the most recently completed calendar year. (3)

Parental approval required to increase credit lines for accounts for which parent is jointly liable

No increase may be made in the amount of credit authorized to be extended under a college student credit card account for which a parent, legal guardian, or spouse of the consumer has assumed joint liability for debts incurred by the consumer in connection with the account, before the consumer attains the age of 21, with respect to such consumer, unless the parent, guardian, or spouse of the consumer, as applicable, approves in writing, and assumes joint liability for, such increase. (4)

Income verification

For purposes of this subsection, a creditor shall require adequate proof of income, income history, and credit history, subject to the rules of the Board, before any college student credit card account may be opened by or on behalf of a student. (5)

Prohibition on more than 1 credit card account for any college student

No creditor may open a credit card account for, or issue any credit card to, any college student who— (A)has no verifiable annual gross income; and (B)already maintains a credit card account under an open end consumer credit plan with that creditor, or any affiliate thereof. (6)

Exemption authority

The Board may, by rule, provide for exemptions to the provisions of this subsection, as deemed necessary or appropriate by the Board, consistent with the purposes of this subsection. .

3.

Regulations required

Not later than 180 days after the date of enactment of this Act, the Board of Governors of the Federal Reserve System shall issue such rules as may be necessary to carry out section 127(i) of the Truth in Lending Act, as added by this Act.