[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 582 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 582

To amend the Truth in Lending Act to protect consumers from usury, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 12, 2009

Mr. Sanders (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 protect consumers from usury, 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 ``Interest Rate Reduction Act''.

SEC. 2. NATIONAL CONSUMER CREDIT USURY RATE.

    Section 107 of the Truth in Lending Act (15 U.S.C. 1606) is amended 
by adding at the end the following new subsection:
    ``(f) National Consumer Credit Usury Rate.--
            ``(1) Limitation established.--Notwithstanding subsection 
        (a) or any other provision of law, but except as provided in 
        paragraph (2), the annual percentage rate applicable to any 
        extension of credit may not exceed 15 percent on unpaid 
        balances, inclusive of all finance charges. Any fees that are 
        not considered finance charges under section 106(a) may not be 
        used to evade the limitations of this paragraph, and the total 
        sum of such fees may not exceed the total amount of finance 
        charges assessed.
            ``(2) Exceptions.--
                    ``(A) Board authority.--The Board may establish, 
                after consultation with the appropriate committees of 
                Congress, the Secretary of the Treasury, and any other 
                interested Federal financial institution regulatory 
                agency, an annual percentage rate of interest ceiling 
                exceeding the 15 percent annual rate under paragraph 
                (1) for periods of not to exceed 18 months, upon a 
                determination that--
                            ``(i) money market interest rates have 
                        risen over the preceding 6-month period; and
                            ``(ii) prevailing interest rate levels 
                        threaten the safety and soundness of individual 
                        lenders, as evidenced by adverse trends in 
                        liquidity, capital, earnings, and growth.
                    ``(B) Treatment of credit unions.--The limitation 
                in paragraph (1) does not apply with respect to any 
                extension of credit by an insured credit union, as that 
                term is defined in section 101 of the Federal Credit 
                Union Act (12 U.S.C. 1752).
            ``(3) Penalties for charging higher rates.--
                    ``(A) Violation.--The taking, receiving, reserving, 
                or charging of an annual percentage rate or fee greater 
                than that permitted by paragraph (1), when knowingly 
                done, shall be deemed a violation of this title, and a 
                forfeiture of the entire interest which the note, bill, 
                or other evidence of the obligation carries with it, or 
                which has been agreed to be paid thereon.
                    ``(B) Refund of interest amounts.--If an annual 
                percentage rate or fee greater than that permitted 
                under paragraph (1) has been paid, the person by whom 
                it has been paid, or the legal representative thereof, 
                may, by bringing an action not later than 2 years after 
                the date on which the usurious collection was last 
                made, recover back from the lender in an action in the 
                nature of an action of debt, the entire amount of 
                interest, finance charges, or fees paid.
            ``(4) Civil liability.--Any creditor who violates this 
        subsection shall be subject to the provisions of section 
        130.''.

SEC. 3. CIVIL LIABILITY CONFORMING AMENDMENT.

    Section 130(a) of the Truth in Lending Act (15 U.S.C. 1640(a)) is 
amended by inserting ``section 107(f),'' before ``this chapter''.
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