[Congressional Record Volume 154, Number 115 (Monday, July 14, 2008)]
[Senate]
[Page S6652]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. WHITEHOUSE (for himself and Mr. Durbin):
  S. 3259. A bill to amend title 11, United States Code, with respect 
to the priority of certain high cost credit debts; to the Committee on 
the Judiciary.
  Mr. WHITEHOUSE. Mr. President, I ask unanimous consent that the text 
of the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3259

       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 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) Subordination.--Section 510 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(d)(1) For the purpose of distribution under this title, 
     an allowed claim arising from a high cost consumer credit 
     transaction shall be subordinated to all other claims.
       ``(2) Any lien securing a claim subordinated under 
     paragraph (1) shall be transferred to the estate.''.

     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 if the debtor's 
     petition resulted from a high cost consumer credit 
     transaction.''.

                          ____________________