[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 257 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 257

   To amend title 11, United States Code, to disallow certain claims 
     resulting from high cost credit debts, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 15, 2009

 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, to disallow certain claims 
     resulting from high cost credit debts, 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 ``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, at any time while the 
        credit is outstanding, 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) Disallowance of Claims.--Section 502 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(l) Notwithstanding subsections (a) and (b) of this section, the 
court shall disallow any claim arising from a high cost consumer credit 
transaction for the purpose of distribution under this title.''.

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 in the case of a debtor who has 
any debts arising from a high cost consumer credit transaction.''.
                                 <all>