I 112th CONGRESS 2d Session H. R. 4084 IN THE HOUSE OF REPRESENTATIVES February 17, 2012 Mr. Tierney (for himself, Ms. Slaughter, Mr. DeFazio, Mr. George Miller of California, Mr. McGovern, Mr. Jackson of Illinois, Mr. Visclosky, Mr. Kucinich, Mr. Welch, Ms. Kaptur, Ms. Schakowsky, Ms. Hirono, and Mr. Grijalva) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Truth in Lending Act to establish a national usury rate for consumer credit card accounts under open end consumer credit plans, and for other purposes.
1.
Short title
This Act may be cited as the Restoring America’s Commitment to Consumers Act of 2012.
2.
National credit card 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
Except as provided in paragraph (3) and notwithstanding subsection (a) or any other provision of law, the annual percentage rate applicable to any extension of credit under, or any outstanding balance on, any credit card account under an open end consumer credit plan may not exceed 16 percent. (2)
Inclusion of certain fees in determining apr
In determining the annual percentage rate applicable to any extension of credit under, or any outstanding balance on, any credit card account under an open end consumer credit plan for purposes of paragraph (1), any fee compensating a creditor or prospective creditor for opening or maintaining the account or for an extension of credit or making available a line of credit, such as a membership fee, or an annual fee shall be included in the finance charge for purposes of section 107. (3)
Adjustments
(A)
In general
Subject to paragraphs (4) and (6), the Board may make adjustments to the maximum annual percentage rate limitation under paragraph (1) when any such adjustment is in the public interest and economic conditions warrant to the extent the limitation, after the adjustment, continues to fully protect consumers from exploitive and unreasonable lending practices. (B)
Presumption concerning increases
Any increase in the maximum annual percentage rate limitation under paragraph (1) shall be presumed to not be in the public interest unless the Board determines, after opportunity for comment, that severe economic conditions exist to justify an increase in such limitation, taking into account the prevailing bank prime rates, the rates in effect for overnight loans to member banks (as defined in section 3 of the Federal Deposit Insurance Act) and statistical information the Board determines to be relevant. (4)
Notice to the Congress
Upon making any adjustment to the maximum annual percentage rate limitation in effect under paragraph (1), the Board shall promptly submit a notice of such adjustment to the Congress. (5)
Hearing
(A)
In general
After receipt by the House of Representatives of a notice from the Board pursuant to paragraph (4) of an adjustment to the maximum annual percentage rate limitation in effect under paragraph (1), the Committee on Financial Services of the House of Representatives shall promptly conduct a hearing on such adjustment. (B)
Rules of House of Representatives
The provisions of subparagraph (A) are enacted— (i)as an exercise of the rulemaking power of the House of Representatives, and, as such, they shall be considered as part of the rules of the House, and such rules shall supersede any other rule of the House only to the extent that rule is inconsistent therewith; and (ii)with full recognition of the constitutional right of the House to change such rules (so far as relating to the procedure in the House) at any time, in the same manner, and to the same extent as in the case of any other rule of the House. (6)
Delayed effective date of any increase
An increase, in accordance with paragraph (3)(B), in the maximum annual percentage rate limitation under paragraph (1)— (A)may not take effect before the end of the 90-day period beginning on the date the notice to the Congress is submitted by the Board under paragraph (4); and (B)shall cease to be effective as of the date of the enactment of a joint resolution with respect to such increase. (7)
Clarification of congressional intent
(A)
No endorsement of 16 percent credit card rates
No provision of this subsection may be construed as an endorsement by Congress of an interest rate of 16 percent on credit card accounts to which paragraph (1) applies. (B)
Rates most advantageous to the borrower
It is the intention of the Congress in enacting this subsection that— (i)the maximum annual percentage rate limitation under paragraph (1) should merely serve as a ceiling on the annual percentage rate applicable consumer credit cards and few, if any, consumer credit card accounts would ever bear the maximum rate; and (ii)consumer credit card issuers should strive to maintain the rates on consumer credit card accounts that are the most advantageous to borrowers. (8)
Unfair and deceptive act or practice
In the case of any credit card account under an open end consumer credit plan which, as of February 8, 2012, bears an annual percentage rate that is less than 16 percent, any increase in the annual percentage on such account during the period beginning on February 8, 2012, and ending at the end of the 60-day period beginning on the date of the enactment of the Restoring America's Commitment to Consumers Act of 2012 shall be treated by the agency with jurisdiction over the creditor under section 108 as an unfair or deceptive act or practice. (9)
Definition
In this subsection, the term joint resolution means only a joint resolution— (A)which does not have a preamble; (B)the title of which is as follows: Joint resolution relating to the increase in the interest rates on credit card accounts pursuant to section 107(f)(3) of the Truth in Lending Act.; and (C)the sole matter after the resolving clause of which is as follows: That the Congress disapproves of any increase, pursuant to section 107(f)(3) in the maximum annual percentage rate limitation applicable to any extension of credit under, or any outstanding balance on, any credit card account under an open end consumer credit plan, notice of which was transmitted to the Congress on _____ by the Board of Governors of the Federal Reserve System, the blank space being filled with the appropriate date. .
3.
Cap on certain credit card account fees
(a)
In General
Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661 et seq.) is amended by inserting after section 150 (as added by section 109(a) of the Credit Card Accountability Responsibility and Disclosure Act of 2009) the following new section:
151.
Cap on certain credit card account fees
(a)
In General
Except as provided in subsection (b), the amount of any fee that a card issuer may impose with respect to a credit card account under an open end consumer credit plan, including any fee for default or breach by a borrower of a condition upon which credit was extended, such as a late fee, creditor-imposed not sufficient funds fee charged when a borrower tenders payment on a debt with a check drawn on insufficient funds, overdraft fee, and over-the-limit transaction fee, or other charge that a card issuer may impose with respect to a credit card account under an open end consumer credit plan may not exceed $15. (b)
Exception for Fees Taken Into Account Under Section 107(f)(2)
Subsection (a) shall not apply with respect to any fee taken into account pursuant to subsection (f)(2) of section 107.
. (b)
Clerical Amendment
The table of sections for chapter 3 of the Truth in Lending Act is amended by inserting after the item relating to section 150 (as added by section 109(b) of the Credit Card Accountability Responsibility and Disclosure Act of 2009) the following new item: 151. Cap on certain credit card account fees. .
4.
Clarification of coordination with state law
The first sentence of section 111(a)(1) of the Truth in Lending Act (15 U.S.C. 1610(a)(1)) is amended by striking the disclosure of information in connection with.