[Congressional Record Volume 148, Number 130 (Monday, October 7, 2002)]
[House]
[Pages H7027-H7028]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               TRUTH IN LENDING INFLATION ADJUSTMENT ACT

  Mr. BACHUS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 5507) to amend the Truth in Lending Act to adjust the exempt 
transactions amount for inflation.
  The Clerk read as follows:

                               H.R. 5507

       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 ``Truth in Lending Inflation 
     Adjustment Act''.

     SEC. 2. AMOUNTS OF EXEMPT TRANSACTIONS ADJUSTED FOR 
                   INFLATION.

       (a) Credit Transactions Other Than Mortgages.--Section 
     104(3) of the Truth in Lending Act (15 U.S.C. 1603(4)) is 
     amended by striking ``$25,000'' and inserting ``$75,000''.
       (b) Consumer Leases.--Section 181(1) of the Truth in 
     Lending Act (15 U.S.C. 1667(1)) is amended by striking 
     ``$25,000'' and inserting ``$75,000''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Alabama (Mr. Bachus) and the gentleman from Texas (Mr. Bentsen) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Alabama (Mr. Bachus).


                             General Leave

  Mr. BACHUS. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and insert extraneous material into the Record on this legislation.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Alabama?
  There was no objection.
  Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
  I rise in strong support of H.R. 5507, the Truth in Lending Inflation 
Adjustment Act. This bill makes a very modest change in the Truth in 
Lending Act.
  This legislation adjusts for inflation the dollar threshold for 
transactions that are exempt from the Truth in Lending Act. The Truth 
in Lending Act offers great protection to consumers and, under the 
current law, merchants need not comply with the Truth in Lending Act 
for credit and leasing transactions when the amount financed exceeds 
$25,000. Congress set this dollar amount at $25,000 in 1968, and in the 
last 34 years inflation has eroded the effectiveness of the Truth in 
Lending Act. This bill corrects that problem and ensures that the Truth 
in Lending Act will once again apply to most consumer credit and 
leasing transactions by raising that to $75,000.
  This bill will not result in significant new costs to financial 
institutions and merchants because most financial institutions and 
merchants voluntarily comply with the requirements of the Truth in 
Lending Act even for transactions above the current threshold of 
$25,000.
  Let me commend the gentleman from New York (Mr. LaFalce), Member of 
the other party, for his sponsorship of this legislation.
  I do want to again commend, as with the previous legislation, these 
two consumer protection items or pieces of legislation had broad 
bipartisan support, once again, just a demonstration of what this 
Congress can do when it puts aside its differences and works together 
in a bipartisan way.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1145

  Mr. BENTSEN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, let me say at the outset that I am standing in for the 
gentleman from New York (Mr. LaFalce), who is traveling in his district 
and could not get back here in time this morning for this bill. I have 
a statement that I will put into the Record that actually is a 
statement he would have made had he been here at this time.
  Mr. Speaker, I rise in support of H.R. 5507, a bill to update and 
enhance an important consumer protection. In 1968, Congress enacted the 
Truth in Lending Act to ensure that consumers receive accurate and 
meaningful disclosure of the cost of consumer credit. Such disclosures 
enable American consumers to compare credit terms and make informed 
credit decisions.
  Prior to 1968, consumers had no easy way to determine the true cost 
of their credit transactions, nor did they have a basis for comparing 
the various creditors in the marketplace. TILA addressed this problem 
by providing a standardized finance cost calculation, the annual 
percentage rate, or APR, and by requiring creditors to provide clear 
and accurate disclosures of all credit terms and costs. Over the past 
30 years, however, key statutory protections and remedies stated in 
1968 dollars have not been updated to reflect inflation and to provide 
comparable protections in today's dollars.
  The bill we are considering today, H.R. 5507, though modest in scope, 
provides the first update of an important section of TILA in 34 years. 
This is clearly an overdue change in the law.
  TILA protections apply to all credit transactions secured by home 
equity and other non-business consumer loans or leases under $25,000. 
In 1968, this $25,000 limit on unsecured credit and lease transactions 
was considered more than adequate to ensure that most automobile, 
credit card, and personal loan transactions would be covered.
  This is clearly not the case today. It is now quite common for many 
non-mortgage credit transactions to exceed $25,000. H.R. 5507 ensures 
that TILA protections will continue to apply to most consumer credit 
and lease transactions by raising the statutory exemption from $25,000 
to $75,000. By doing so, we are providing updated protections to 
consumers that will ensure that a broad range of transactions are 
covered by TILA.
  Though I welcome the overdue change provided for in H.R. 5507, I 
would have preferred that the agreement we reached with my Republican 
colleagues on the Committee on Financial Services to schedule this bill 
would have also included other provisions from the broader TILA 
modernization bill, H.R. 1054, introduced by our colleague, the 
gentleman from New York (Mr. LaFalce), the ranking member of the 
committee.
  This comprehensive bill, which he introduced at the outset of the 
107th Congress and is known as the Truth in Lending Modernization Act 
of 2001, amends TILA to restore important consumer protections that 
have been weakened by inflation. It also ensures that consumers benefit 
from advances in accounting technology and strengthens TILA's civil 
liability and rescission remedies.
  But I am, nonetheless, very pleased that we were able to agree on 
bringing up H.R. 5507 to the House today, along with H.R. 163, a bill 
to amend the Fair Debt Collection Practices Act, and H.R. 4005, to make 
the District of Columbia and the U.S. Territories part of the ongoing 
commemorative quarters program.
  Mr. Speaker, I urge support for this long overdue legislation.
  Mr. Speaker, I yield back the balance of my time.
  Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, simply let me close by sort of reminiscing. If you think 
back to 1968, 1968 you could actually buy a two-bedroom home in the 
community I was raised in, a modest home, but you could buy a two-
bedroom home in that community, for $25,000. Today, you

[[Page H7028]]

would be hard placed to buy that for $50,000 or even $75,000.
  So this act that we do pass today and hopefully the Senate will take 
up and pass will extend those protections, which many lenders are 
presently voluntarily complying with. But the ones that are not are the 
ones we worry about.
  I want to commend, again, the gentleman from New York (Mr. LaFalce) 
and the gentleman from Texas (Mr. Bentsen). The gentleman from Ohio 
(Chairman Oxley), chairman of the Committee on Financial Services, and 
I both support this legislation. It is part of a package of three bills 
that will move through the House today: this bill; the Mortgage 
Servicing Clarification Act, which the gentleman from California (Mr. 
Royce) sponsored and we have just disposed of; and H.R. 4005, the 
District of Columbia and United States Territories Circulation Quarter 
Dollar Program Act, which will extend that program to the District of 
Columbia and the Territories.
  On behalf of the gentleman from Ohio (Mr. Oxley) and myself, I urge 
my colleagues to support all three of these bills.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Upton). The question is on the motion 
offered by the gentleman from Alabama (Mr. Bachus) that the House 
suspend the rules and pass the bill, H.R. 5507.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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