[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 5099 Introduced in Senate (IS)]
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117th CONGRESS
2d Session
S. 5099
To amend the Truth in Lending Act to address certain issues relating to
the extension of consumer credit, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 16, 2022
Mr. Merkley (for himself, Mr. Blumenthal, Mr. Booker, Ms. Duckworth,
Mr. Durbin, Mrs. Feinstein, Mrs. Gillibrand, Mr. Heinrich, Mr. Markey,
Mr. Sanders, Ms. Smith, Mr. Van Hollen, and Mr. Wyden) 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 address certain issues relating to
the extension of consumer credit, 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 ``Stopping Abuse and Fraud in
Electronic Lending Act of 2022'' or the ``SAFE Lending Act of 2022''.
SEC. 2. CONSUMER CONTROL OVER BANK ACCOUNTS.
(a) Prohibiting Unauthorized Remotely Created Checks.--Section 905
of the Electronic Fund Transfer Act (15 U.S.C. 1693c) is amended by
adding at the end the following:
``(d) Limitations on Remotely Created Checks.--
``(1) Definition.--In this subsection--
``(A) the term `remotely created check' means a
check, including a paper or electronic check and any
other payment order that the Bureau, by rule,
determines is appropriately covered under this
subsection, that--
``(i) is not created by the financial
institution that holds the customer account
from which the check is to be paid; and
``(ii) does not bear a signature applied,
or purported to be applied, by the person from
whose account the check is to be paid; and
``(B) the term `Federal consumer financial law' has
the meaning given the term in section 1002 of the
Consumer Financial Protection Act of 2010 (12 U.S.C.
5481).
``(2) Limitations.--Subject to the limitations in paragraph
(3) and any additional limitations that the Bureau may
establish, by rule, a remotely created check may only be issued
by a person designated in writing by a consumer, with that
written designation specifically provided by the consumer to
the insured depository institution at which the consumer
maintains the account from which the check is to be drawn.
``(3) Additional limitations.--
``(A) In general.--A designation provided by a
consumer under paragraph (2) may be revoked at any time
by the consumer.
``(B) Consumer financial protection laws.--No
payment order, including a remotely created check, may
be issued by any person in response to the exercise of,
or attempt to exercise, any right by a consumer under--
``(i) any Federal consumer financial law;
or
``(ii) any other provision of any law or
regulation within the jurisdiction of the
Bureau.''.
(b) Consumer Protections for Certain One-Time Electronic Fund
Transfers.--Section 913 of the Electronic Fund Transfer Act (15 U.S.C.
1693k) is amended--
(1) in the matter preceding paragraph (1), by inserting
``(a) In General.--'' before ``No person'';
(2) in subsection (a)(1), as so designated, by striking
``preauthorized electronic fund transfers'' and inserting ``an
electronic fund transfer''; and
(3) by adding at the end the following:
``(b) Treatment for Electronic Fund Transfers in Credit
Extensions.--If a consumer voluntarily agrees to repay an extension of
a small-dollar consumer credit transaction, as defined in section
110(a) of the Truth in Lending Act, by means of an electronic fund
transfer, the electronic fund transfer shall be treated as a
preauthorized electronic fund transfer subject to the protections of
this title.''.
SEC. 3. TRANSPARENCY AND CONSUMER EMPOWERMENT IN SMALL-DOLLAR LENDING.
(a) Small-Dollar Consumer Credit Transactions.--
(1) In general.--The Truth in Lending Act (15 U.S.C. 1601
et seq.) is amended--
(A) by inserting after section 109 (15 U.S.C. 1608)
the following:
``SEC. 110. REGISTRATION REQUIREMENT FOR SMALL-DOLLAR LENDERS.
``(a) Definition.--In this section, the term `small-dollar consumer
credit transaction'--
``(1) means any transaction that extends credit that is--
``(A) made to a consumer in an amount that--
``(i) is not more than--
``(I) $5,000; or
``(II) such greater amount as the
Bureau may, by rule, determine; and
``(ii) shall be adjusted annually to
reflect changes in the Consumer Price Index for
all urban consumers published by the Department
of Labor; and
``(B) extended pursuant to an agreement that is--
``(i)(I) other than an open end credit
plan; and
``(II) payable in 1 or more installments of
less than 12 months (or such longer period as
the Bureau may, by rule, determine);
``(ii) an open end credit plan in which
each advance is fully repayable within a
defined time or in connection with a defined
event, or both; or
``(iii) any other plan as the Bureau
determines, by rule; and
``(2) includes any action that facilitates, brokers,
arranges, or gathers applications for a transaction described
in paragraph (1).
``(b) Registration Requirement.--A person shall register with the
Bureau before issuing credit in a small-dollar consumer credit
transaction.''; and
(B) in section 173 (15 U.S.C. 1666j), by adding at
the end the following:
``(d) Notwithstanding any other provision of this title, any small-
dollar consumer credit transaction, as defined in section 110(a), shall
comply with the laws of the State in which the consumer to which credit
in the transaction is extended resides with respect to annual
percentage rates, interest, fees, charges, and such other similar or
related matters as the Bureau may, by rule, determine if the small-
dollar consumer credit transaction is--
``(1) made--
``(A) over the internet;
``(B) by telephone;
``(C) by facsimile;
``(D) by mail;
``(E) by electronic mail; or
``(F) through another electronic communication; or
``(2) conducted by a national bank.''.
(2) Technical and conforming amendment.--The table of
sections for chapter 1 of the Truth in Lending Act (15 U.S.C.
1601 et seq.) is amended by inserting after the item relating
to section 109 the following:
``110. Registration requirement for small-dollar lenders.''.
(b) Prohibition on Certain Fees.--Section 915 of the Electronic
Fund Transfer Act (15 U.S.C. 1693l-1) is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following:
``(d) Additional Fees Prohibited.--
``(1) Definition.--In this subsection, the term `prepaid
account' has the meaning given the term by rule of the Bureau.
``(2) Prohibition.--With respect to the use of a prepaid
account by a consumer--
``(A) it shall be unlawful for any person to charge
the consumer a fee for an overdraft with respect to the
prepaid account, including a shortage of funds or a
transaction processed for an amount exceeding the
account balance of the prepaid account;
``(B) any transaction for an amount that exceeds
the account balance of the prepaid account may be
declined, except that the consumer may not be charged a
fee for that purpose; and
``(C) the Bureau may, by rule, prohibit the
charging of any fee so that the Bureau may--
``(i) prevent unfair, deceptive, or abusive
practices; and
``(ii) promote the ability of the consumer
to understand and compare the costs of prepaid
accounts.''.
SEC. 4. RESTRICTIONS ON LEAD GENERATION IN SMALL-DOLLAR CONSUMER CREDIT
TRANSACTIONS.
(a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
1631 et seq.) is amended by adding at the end the following:
``SEC. 140B. RESTRICTIONS ON LEAD GENERATION IN SMALL-DOLLAR CONSUMER
CREDIT TRANSACTIONS.
``(a) Definitions.--In this section--
``(1) the terms `Internet access service' and `Internet
information location tool' have the meanings given those terms
in section 231(e) of the Communications Act of 1934 (47 U.S.C.
231(e));
``(2) the term `sensitive personal financial information'
means a social security number, financial account number, bank
routing number, bank account number, or security or access code
that is immediately necessary to permit access to the financial
account of an individual; and
``(3) the term `small-dollar consumer credit transaction'
has the meaning given the term in section 110(a).
``(b) Identification Information.--Any person facilitating,
brokering, arranging for, or gathering applications for the
distribution of sensitive personal financial information in connection
with a small-dollar consumer credit transaction shall prominently
disclose information by which the person may be contacted or
identified, including for service of process and for identification of
the registrant of any domain name registered or used.
``(c) Prohibition on Lead Generation in Small-Dollar Consumer
Credit Transactions.--No person may facilitate, broker, arrange for, or
gather applications for the distribution of sensitive personal
financial information in connection with a small-dollar consumer credit
transaction unless the person is directly providing the small-dollar
consumer credit to a consumer.
``(d) Rule of Construction.--
``(1) In general.--Nothing in this section may be construed
to limit the authority of the Bureau to further restrict
activities covered by this section.
``(2) Clarification.--For the purposes of this section, it
shall not be considered facilitating the distribution of
sensitive personal financial information in connection with a
small-dollar consumer credit transaction to be engaged solely
in one of the following activities:
``(A) The provision of a telecommunications
service, an Internet access service, or an Internet
information location tool.
``(B) The transmission, storage, retrieval,
hosting, formatting, or translation (or any combination
thereof) of a communication, without selection or
alteration of the content of the communication, except
the deletion of a particular communication or material
made by another person in a manner that is consistent
with section 230(c) of the Communications Act of 1934
(47 U.S.C. 230(c)).''.
(b) Technical and Conforming Amendment.--The table of sections for
chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is
amended by adding at the end the following:
``140B. Restrictions on lead generation in small-dollar consumer credit
transactions.''.
SEC. 5. STUDIES.
(a) Definitions.--In this section--
(1) the term ``appropriate committees of Congress'' means--
(A) the Committee on Banking, Housing, and Urban
Affairs of the Senate;
(B) the Committee on Indian Affairs of the Senate;
(C) the Committee on Financial Services of the
House of Representatives; and
(D) the Committee on Natural Resources of the House
of Representatives; and
(2) the term ``Indian Tribe'' has the meaning given the
term in section 4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 5304).
(b) Study Required.--Not later than 180 days after the date of
enactment of this Act, the Comptroller General of the United States
shall conduct a study regarding--
(1) the availability of capital on reservations of Indian
Tribes; and
(2) the impact that small-dollar consumer credit extended
through internet and non-internet means to members of Indian
Tribes has had on economic opportunity and wealth for members
of Indian Tribes.
(c) Consultation.--In conducting the study required under
subsection (b), the Comptroller General of the United States shall
consult, as appropriate, with--
(1) the Bureau of Consumer Financial Protection;
(2) the Board of Governors of the Federal Reserve System;
(3) the Director of the Bureau of Indian Affairs;
(4) federally recognized Indian Tribes; and
(5) community development financial institutions operating
in Indian lands.
(d) Congressional Consideration.--The Comptroller General of the
United States shall submit to the appropriate committees of Congress
the study required under subsection (b).
SEC. 6. RULEMAKING.
Not later than 1 year after the date of enactment of this Act, the
Bureau of Consumer Financial Protection shall adopt any final rules
that are necessary to implement the provisions of this Act and the
amendments made by this Act.
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