[Congressional Record Volume 154, Number 154 (Friday, September 26, 2008)]
[Senate]
[Pages S9711-S9715]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN:
  S. 3629. A bill to create a new Consumer Credit Safety Commission, to 
provide individual consumers of credit with better information and 
stronger protections, and to provide sellers of consumer credit with 
more regulatory certainty; to the Committee on Banking, Housing, and 
Urban Affairs.
  Mr. DURBIN. Mr. President, we are in difficult times. The 
administration has informed us that the financial markets stand on the 
brink of collapse and that Congress must act quickly to allow the 
Treasury to intervene in the markets. We must not simply bail out the 
companies whose subprime mortgage practices put us in this situation in 
the first place. Many of us are working to include help for homeowners 
in any stabilization we consider.
  But we must also look beyond the immediate crisis and take steps to 
prevent similar abuses and errors in the future. This crisis started 
when lenders sold too many faulty mortgages to families who had too 
little protection against such practices. Once this immediate crisis 
passes, Congress must act to ensure that this never happens again.
  Our financial system requires a fundamental overhaul, so that the 
needs of American families stand above the interests of Wall Street.
  To start that discussion, today I am introducing the Consumer Credit 
Safety Commission Act. This bill would put a single government agency 
in charge of ensuring that the offering of financial products to 
consumers is responsible, accountable, and transparent.
  This new agency would look out for consumers first, so that the Fed, 
the FDIC, and the rest of the alphabet soup of financial regulators can 
focus more effectively on the safety and soundness of our financial 
system while not letting consumer protection fall by the wayside.
  This agency would be able to move quickly to protect consumers from 
new predatory practices, much faster than Congress ever could. It would 
provide continuous oversight of the financial services market, and hold 
companies accountable when they abuse, deceive, or take advantage of 
the consumers they claim to be helping.
  Let me put it this way, as Harvard professor Elizabeth Warren has 
done: why is it that 1 in 10 toasters do not catch fire in our homes, 
but 1 in 10 home mortgages are failing? The answer is that toasters are 
properly regulated and financial products are not.
  I do not believe that the Government should regulate the freedom out 
of our markets, and I do not believe that we should eliminate prudent 
risk taking.
  On the contrary: moderate, sensible, and targeted regulation creates 
an environment in which the entrepreneurial spirit of America can 
thrive, but without the unnecessary booms and busts of the Wild West.
  The Consumer Credit Safety Commission will add consumer protection to 
the factors lenders must consider in creating and offering financial 
products. It will identify the practices that undermine sound markets 
and put a stop to them before they bring the entire financial market to 
its knees.
  Starting early next year, Congress will try to establish the 
oversight and accountability mechanisms that will foster a dynamic and 
more responsible environment for financial products. This bill provides 
us with a good place to start. I urge my colleagues to join me in 
sponsoring this legislation and working to create an agency that truly 
puts consumers first.
  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. 3629

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Consumer 
     Credit Safety Commission Act of 2008''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Establishment of Commission.
Sec. 5. Authorization of appropriations.
Sec. 6. Objectives and responsibilities.
Sec. 7. Coordination of enforcement.
Sec. 8. Authorities.
Sec. 9. Collaboration with Federal and State entities.
Sec. 10. Procedures and rulemaking.
Sec. 11. Prohibited acts.
Sec. 12. Penalties for violations.
Sec. 13. Reports.
Sec. 14. Effective date.

     SEC. 2. FINDINGS.

       The Congress finds that--

[[Page S9712]]

       (1) the Nation's multi-agency financial services regulatory 
     structure has created a dispersion of regulatory 
     responsibility, which in turn has led to an inadequate focus 
     on protecting consumers from inappropriate consumer credit 
     practices;
       (2) the absence of appropriate oversight has allowed 
     excessively costly or predatory consumer credit products to 
     flourish; and
       (3) the creation of a regulator whose sole focus is the 
     safety of consumer credit products would help address this 
     lack of consumer protection.

     SEC. 3. DEFINITIONS.

       For purposes of this Act--
       (1) the term ``consumer credit'' includes--
       (A) any payment compensating a creditor or prospective 
     creditor, or an agent or affiliate thereof, for an extension 
     of credit or making available a line of credit;
       (B) any fees connected with credit extension or 
     availability, such as numerical periodic rates, late fees, 
     creditor-imposed not sufficient funds fees charged when a 
     borrower tenders payment on a debt with a check drawn on 
     insufficient funds, over limit fees, annual fees, cash 
     advance fees, or membership fees;
       (C) any fees which constitute a finance charge;
       (D) credit insurance premiums;
       (E) all charges and costs for ancillary products sold in 
     connection with or incidental to the credit transaction; and
       (F) any direct or indirect fee, cost, or charge incurred 
     in, in connection with, or ancillary to a consumer payment 
     system, including but not exclusive to merchant discount 
     fees, interchange fees, debit card fees, check-writing fees, 
     automated clearinghouse fees, payment-by-phone fees, internet 
     payment intermediary fees, and remote deposit capture fees;
       (2) the term ``relevant congressional committees'' means 
     the Committee on Banking, Housing, and Urban Affairs and the 
     Subcommittee on Financial Services and General Government of 
     the Committee on Appropriations of the Senate, and the 
     Committee on Financial Services and the Subcommittee on 
     Financial Services and General Government of the Committee on 
     Appropriations of the House of Representatives, and any 
     successor committees as may be constituted;
       (3) the term ``creditor'' has the same meaning as in 
     section 103 of the Truth in Lending Act (15 U.S.C. 1602);
       (4) the term ``finance charge'' has the same meaning as in 
     section 106 of the Truth in Lending Act (15 U.S.C. 1605); and
       (5) the term ``consumer'' means any natural person and any 
     small business concern, as defined in section 3 of the Small 
     Business Act (15 U.S.C. 632).

     SEC. 4. ESTABLISHMENT OF COMMISSION.

       (a) Establishment; Chairperson.--
       (1) In general.--An independent regulatory commission is 
     hereby established, to be known as the ``Consumer Credit 
     Safety Commission'' (in this Act referred to as the 
     ``Commission''), consisting of 5 Commissioners appointed by 
     the President, by and with the advice and consent of the 
     Senate.
       (2) Membership.--In making appointments to the Commission, 
     the President shall consider individuals who, by reason of 
     their background and expertise in areas related to consumer 
     credit, are qualified to serve as members of the Commission.
       (3) Chairperson.--The Chairperson shall be appointed by the 
     President, by and with the advice and consent of the Senate, 
     from among the members of the Commission. An individual may 
     serve as a member of the Commission and as Chairperson at the 
     same time.
       (4) Removal.--Any member of the Commission may be removed 
     by the President for neglect of duty or malfeasance in 
     office, but for no other cause.
       (b) Term; Vacancies.--
       (1) In general.--Except as provided in paragraph (2)--
       (A) the Commissioners first appointed under this section 
     shall be appointed for terms ending 3, 4, 5, 6, and 7 years, 
     respectively, after the date of enactment of this Act, the 
     term of each to be designated by the President at the time of 
     nomination; and
       (B) each of their successors shall be appointed for a term 
     of 5 years from the date of the expiration of the term for 
     which the predecessor was appointed.
       (2) Limitations.--Any Commissioner appointed to fill a 
     vacancy occurring prior to the expiration of the term for 
     which his predecessor was appointed shall be appointed only 
     for the remainder of such term. A Commissioner may continue 
     to serve after the expiration of this term until a successor 
     has taken office, except that such Commissioner may not 
     continue to serve more than 1 year after the date on which 
     the term of that Commissioner would otherwise expire under 
     this subsection.
       (c) Restrictions on Outside Activities.--
       (1) Political affiliation.--Not more than 3 of the 
     Commissioners shall be affiliated with the same political 
     party.
       (2) Conflicts of interest.--No individual may hold the 
     office of Commissioner if that individual--
       (A) is in the employ of, or holding any official relation 
     to, or married to any person engaged in selling or devising 
     consumer credit;
       (B) owns stock or bonds of substantial value in a person so 
     engaged;
       (C) is in any other manner pecuniarily interested in such a 
     person, or in a substantial supplier of such a person; or
       (D) engages in any other business, vocation, or employment.
       (d) Quorum; Seal; Vice Chairperson.--
       (1) Quorum.--No vacancy in the Commission shall impair the 
     right of the remaining Commissioners to exercise all the 
     powers of the Commission, but 3 members of the Commission 
     shall constitute a quorum for the transaction of business, 
     except that if there are only 3 members serving on the 
     Commission because of vacancies in the Commission, 2 members 
     of the Commission shall constitute a quorum for the 
     transaction of business, and if there are only 2 members 
     serving on the Commission because of vacancies in the 
     Commission, 2 members shall constitute a quorum for the 6-
     month period (or the 1-year period, if the 2 members are not 
     affiliated with the same political party) beginning on the 
     date of the vacancy which caused the number of Commission 
     members to decline to 2.
       (2) Seal.--The Commission shall have an official seal of 
     which judicial notice shall be taken.
       (3) Vice chairperson.--The Commission shall annually elect 
     a Vice Chairperson to act in the absence or disability of the 
     Chairperson or in case of a vacancy in the office of the 
     Chairperson.
       (e) Offices.--The Commission shall maintain a principal 
     office and such field offices as it deems necessary, and may 
     meet and exercise any of its powers at any other place.
       (f) Functions of Chairperson; Request for Appropriations.--
       (1) Duties.--The Chairperson of the Commission shall be the 
     principal executive officer of the Commission, and shall 
     exercise all of the executive and administrative functions of 
     the Commission, including functions of the Commission with 
     respect to--
       (A) the appointment and supervision of personnel employed 
     under the Commission (and the Commission shall fix their 
     compensation at a level comparable to that for employees of 
     the Securities and Exchange Commission;
       (B) the distribution of business among personnel appointed 
     and supervised by the Chairperson and among administrative 
     units of the Commission; and
       (C) the use and expenditure of funds.
       (2) Governance.--In carrying out any of the functions of 
     the Chairperson under this subsection, the Chairperson shall 
     be governed by general policies of the Commission and by such 
     regulatory decisions, findings, and determinations as the 
     Commission may, by law, be authorized to make.
       (3) Requests for appropriations.--Requests or estimates for 
     regular, supplemental, or deficiency appropriations on behalf 
     of the Commission may not be submitted by the Chairperson 
     without the prior approval of the Commission.
       (g) Agenda and Priorities; Establishment and Comments.--At 
     least 30 days before the beginning of each fiscal year, the 
     Commission shall establish an agenda for Commission action 
     under its jurisdiction and, to the extent feasible, shall 
     establish priorities for such actions. Before establishing 
     such agenda and priorities, the Commission shall conduct a 
     public hearing on the agenda and priorities, and shall 
     provide reasonable opportunity for the submission of 
     comments.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated for purposes of 
     carrying out this Act such sums as may be necessary.

     SEC. 6. OBJECTIVES AND RESPONSIBILITIES.

       (a) Objectives.--The objectives of the Commission are--
       (1) to minimize unreasonable consumer risk associated with 
     buying and using consumer credit;
       (2) to prevent and eliminate unfair practices that lead 
     consumers to incur unreasonable, inappropriate, or excessive 
     debt, or make it difficult for consumers to escape existing 
     debt, including practices or product features that are 
     abusive, fraudulent, unfair, deceptive, predatory, 
     anticompetitive, or otherwise inconsistent with consumer 
     protection;
       (3) to promote practices that assist and encourage 
     consumers to use credit responsibly, avoid excessive debt, 
     and avoid unnecessary or excessive charges derived from or 
     associated with credit products;
       (4) to ensure that credit history is maintained, reported, 
     and used fairly and accurately;
       (5) to maintain strong privacy protections for consumer 
     credit transactions, credit history, and other personal 
     information associated with the use of consumer credit;
       (6) to collect, investigate, resolve, and inform the public 
     about consumer complaints regarding consumer credit;
       (7) to ensure a fair system of consumer dispute resolution 
     in consumer credit; and
       (8) to take such other steps as are reasonable to protect 
     consumers of credit products.
       (b) Responsibilities.--The Commission shall--
       (1) promulgate consumer credit safety rules that--
       (A) ban abusive, fraudulent, unfair, deceptive, predatory, 
     anticompetitive, or otherwise anti-consumer practices or 
     product features for creditors;
       (B) place reasonable restrictions on consumer credit 
     practices or product features to reduce the likelihood that 
     they may be provided in a manner that is inconsistent with 
     the objectives specified in subsection (a); and
       (C) establish requirements for such clear and adequate 
     warnings or other information,

[[Page S9713]]

     and the form of such warnings or other information, as may be 
     appropriate to advance the objectives specified in subsection 
     (a);
       (2) establish and maintain a best practices guide for all 
     providers of consumer credit;
       (3) conduct such continuing studies and investigations of 
     consumer credit industry practices as it deems necessary;
       (4) award grants or enter into contracts for the conduct of 
     such studies and investigations with any person (including a 
     governmental entity);
       (5) following publication of an advance notice of proposed 
     rulemaking, a notice of proposed rulemaking, or a rule under 
     any rulemaking authority administered by the Commission, 
     assist public and private organizations or groups of consumer 
     credit providers, administratively and technically, in the 
     development of consumer credit safety standards or guidelines 
     that would assist such providers in complying with such rule; 
     and
       (6) establish and operate a consumer credit customer 
     hotline which consumers can call to register complaints and 
     receive information on how to combat anti-consumer consumer 
     credit.

     SEC. 7. COORDINATION OF ENFORCEMENT.

       (a) In General.--Notwithstanding any concurrent or similar 
     authority of any other agency, the Commission shall enforce 
     the requirements of this Act.
       (b) Rule of Construction.--The authority granted to the 
     Commission to make and enforce rules under this Act shall not 
     be construed to impair the authority of any other Federal 
     agency to make and enforce rules under any other provision of 
     law, provided that any portion of any rule promulgated by any 
     other such agency that conflicts with a rule promulgated by 
     the Commission and that is less protective of consumers than 
     the rule promulgated by the Commission shall be superseded by 
     the stronger rule promulgated by the Commission, to the 
     extent of the conflict. Any portion of any rule promulgated 
     by any other such agency that is not superseded by a rule 
     promulgated by the Commission shall remain in force without 
     regard to this Act.
       (c) Agency Authority.--Any agency designated in subsection 
     (d) may exercise, for the purpose of enforcing compliance 
     with any requirement imposed under this Act, any authority 
     conferred on such agency by any other Act.
       (d) Designated Agencies.--The agencies designated in this 
     subsection are--
       (1) the Board of Governors of the Federal Reserve System;
       (2) the Federal Deposit Insurance Corporation;
       (3) the Office of the Comptroller of the Currency;
       (4) the Office of Thrift Supervision;
       (5) the National Credit Union Administration;
       (6) the Federal Housing Finance Authority;
       (7) the Federal Housing Administration;
       (8) the Secretary of Housing and Urban Development;
       (9) the Federal Home Loan Bank Board; and
       (10) the Federal Trade Commission.

     SEC. 8. AUTHORITIES.

       (a) Authority To Conduct Hearings or Other Inquiries.--The 
     Commission may, by one or more of its members or by such 
     agents or agency as it may designate, conduct any hearing or 
     other inquiry necessary or appropriate to its functions 
     anywhere in the United States. A Commissioner who 
     participates in such a hearing or other inquiry shall not be 
     disqualified solely by reason of such participation from 
     subsequently participating in a decision of the Commission in 
     the same matter. The Commission shall publish notice of any 
     proposed hearing in the Federal Register, and shall afford a 
     reasonable opportunity for interested persons to present 
     relevant testimony and data.
       (b) Commission Powers; Orders.--The Commission shall have 
     the power--
       (1) to require, by special or general orders, any person to 
     submit in writing such reports and answers to questions as 
     the Commission may prescribe to carry out a specific 
     regulatory or enforcement function of the Commission, and 
     such submission shall be made within such reasonable period 
     and under oath or otherwise as the Commission may determine, 
     and such order shall contain a complete statement of the 
     reasons that the Commission requires the report or answers 
     specified in the order to carry out a specific regulatory or 
     enforcement function of the Commission, and shall be designed 
     to place the least burden on the person subject to the order 
     as is practicable, taking into account the purpose for which 
     the order was issued;
       (2) to administer oaths;
       (3) to require by subpoena the attendance and testimony of 
     witnesses and the production of all documentary evidence 
     relating to the execution of its duties;
       (4) in any proceeding or investigation to order testimony 
     to be taken by deposition before any person who is designated 
     by the Commission and has the power to administer oaths and, 
     in such instances, to compel testimony and the production of 
     evidence in the same manner as authorized under paragraph 
     (3);
       (5) to pay witnesses the same fees and mileage as are paid 
     in like circumstances in the courts of the United States;
       (6) to accept voluntary and uncompensated services relevant 
     to the performance of the Commission's duties, 
     notwithstanding the provisions of section 1342 of title 31, 
     United States Code, and to accept voluntary and uncompensated 
     services (but not gifts) relevant to the performance of the 
     Commission's duties, provided that any such services shall 
     not be from parties that have or are likely to have business 
     before the Commission;
       (7) to--
       (A) initiate, prosecute, defend, intervene in, or appeal 
     (other than to the Supreme Court of the United States), 
     through its own legal representative and in the name of the 
     Commission, any civil action if the Commission makes a 
     written request to the Attorney General of the United States 
     for representation in such civil action and the Attorney 
     General does not within the 45-day period beginning on the 
     date such request was made notify the Commission in writing 
     that the Attorney General will represent the Commission in 
     such civil action; and
       (B) whenever the Commission obtains evidence that any 
     person, partnership, or corporation, either domestic or 
     foreign, has engaged in conduct that may constitute a 
     violation of Federal criminal law, including a violation of 
     section 11 of this Act, transmit such evidence to the 
     Attorney General of the United States, who may institute 
     criminal proceedings under appropriate statutes; and
       (8) to delegate any of its functions or powers, other than 
     the power to issue subpoenas under paragraph (3), to any 
     officer or employee of the Commission.
       (c) Noncompliance With Subpoena or Commission Order; 
     Contempt.--Any United States district court within the 
     jurisdiction of which any inquiry is carried on, may, upon 
     petition by the Commission (subject to subsection (b)(7)) or 
     by the Attorney General of the United States, in case of 
     refusal to obey a subpoena or order of the Commission issued 
     under subsection (b), issue an order requiring compliance 
     therewith. Any failure to obey the order of the court may be 
     punished by the court as a contempt thereof.
       (d) Disclosure of Information.--No person shall be subject 
     to civil liability to any person (other than the Commission 
     or the United States) for disclosing information to the 
     Commission.
       (e) Customer and Revenue Data.--The Commission may by rule 
     require any provider of consumer credit to provide to the 
     Commission such customer and revenue data as may be required 
     to carry out the purposes of this Act.
       (f) Purchase of Consumer Credit by Commission.--For 
     purposes of carrying out this Act, the Commission may 
     purchase any consumer credit, and it may require any provider 
     of consumer credit to sell the service to the Commission at 
     cost.
       (g) Contract Authority.--The Commission is authorized to 
     enter into contracts with governmental entities, private 
     organizations, or individuals for the conduct of activities 
     authorized by this Act.
       (h) Budget Estimates and Requests; Legislative 
     Recommendations; Testimony; Comments on Legislation.--
       (1) Budget copies to congress.--Whenever the Commission 
     submits any budget estimate or request to the President or 
     the Office of Management and Budget, it shall concurrently 
     transmit a copy of that estimate or request to the relevant 
     congressional committees.
       (2) Legislative recommendation.--Whenever the Commission 
     submits any legislative recommendations, or testimony, or 
     comments on legislation to the President or the Office of 
     Management and Budget, it shall concurrently transmit a copy 
     thereof to the relevant congressional committees. No officer 
     or agency of the United States shall have any authority to 
     require the Commission to submit its legislative 
     recommendations, or testimony, or comments on legislation, to 
     any officer or agency of the United States for approval, 
     comments, or review, prior to the submission of such 
     recommendations, testimony, or comments to the relevant 
     congressional committees.

     SEC. 9. COLLABORATION WITH FEDERAL AND STATE ENTITIES.

       (a) Preemption.--Nothing in this Act or any rule 
     promulgated thereunder may be construed to preempt any 
     provision of State law that provides equal or greater 
     protection to consumers than is provided in this Act.
       (b) Programs To Promote Federal-State Cooperation.--The 
     Commission shall establish a program to promote Federal-State 
     cooperation for the purposes of carrying out this Act. In 
     implementing such program, the Commission may--
       (1) accept from any State or local authority engaged in 
     activities relating to consumer credit protection assistance 
     in such functions as data collection, investigation, and 
     educational programs, as well as other assistance in the 
     administration and enforcement of this Act which such States 
     or localities may be able and willing to provide and, if so 
     agreed, may pay in advance or otherwise for the reasonable 
     cost of such assistance; and
       (2) commission any qualified officer or employee of any 
     State or local agency as an officer of the Commission for the 
     purpose of conducting investigations.
       (c) Cooperation of Federal Departments and Agencies.--The 
     Commission may obtain from any Federal department or agency 
     such statistics, data, program reports, and other materials 
     as it may deem necessary to carry out its functions under 
     this Act. Each such department or agency shall cooperate with 
     the Commission and, to the extent permitted by law, furnish 
     such materials to it. The Commission and the heads of other 
     departments and agencies engaged in administering programs 
     related to consumer credit

[[Page S9714]]

     safety shall, to the maximum extent practicable, cooperate 
     and consult in order to ensure fully coordinated efforts.

     SEC. 10. PROCEDURES AND RULEMAKING.

       (a) Commencement of Proceeding; Publication of Prescribed 
     Notice of Proposed Rulemaking; Transmittal of Notice.--A 
     proceeding for the development of a consumer credit safety 
     rule shall be commenced by the publication in the Federal 
     Register of an advance notice of proposed rulemaking which 
     shall--
       (1) identify the objective or objectives specified in 
     section 6(a) for the consumer credit safety rule;
       (2) include a summary of each of the regulatory 
     alternatives under consideration by the Commission;
       (3) include information with respect to any existing 
     voluntary standard known to the Commission which may be 
     relevant to the proceedings, together with a summary of the 
     reasons why the Commission believes preliminarily that such 
     standard does not achieve an objective identified in 
     paragraph (1);
       (4) invite interested persons to submit to the Commission, 
     within such period as the Commission shall specify in the 
     notice (which period shall not be shorter than 30 days or 
     longer than 60 days after the date of publication of the 
     notice), comments with respect to the proposed rulemaking, 
     the regulatory alternatives being considered, and other 
     possible alternatives for achieving the objective or 
     objectives identified in paragraph (1); and
       (5) invite any person (other than the Commission) to submit 
     to the Commission, within such period as the Commission shall 
     specify in the notice (which period shall not be less than 30 
     days after the date of publication of the notice), an 
     existing voluntary standard or a portion of such a standard 
     as a proposed consumer credit safety rule.
       (b) Transmittal to Congress.--The Commission shall transmit 
     such notice within 10 calendar days to the relevant 
     congressional committees.
       (c) Voluntary Standard; Publication as Proposed Rule; 
     Notice of Reliance of Commission on Standard.--If the 
     Commission determines that any standard submitted to it in 
     response to an invitation in a notice published under 
     subsection (a)(5) if promulgated (in whole, in part, or in 
     combination with any other standard submitted to the 
     Commission or any part of such a standard) as a consumer 
     credit safety rule, would achieve the objective or objectives 
     identified in paragraph (1), the Commission may publish such 
     standard, in whole, in part, or in such combination and with 
     nonmaterial modifications, as a proposed consumer credit 
     safety rule.
       (d) Publication of Proposed Rule; Preliminary Regulatory 
     Analysis; Contents.--No consumer credit safety rule may be 
     proposed by the Commission unless, not later than 60 days 
     after the date of publication of the notice required in 
     subsection (a), the Commission publishes in the Federal 
     Register the text of the proposed rule, including any 
     alternatives, which the Commission proposes to promulgate, 
     together with a preliminary regulatory analysis containing--
       (1) a preliminary description of the potential benefits and 
     potential costs of the proposed rule, including any benefits 
     or costs that cannot be quantified in monetary terms, and an 
     identification of those likely to receive the benefits and 
     bear the costs;
       (2) a discussion of the reasons any standard or portion of 
     a standard submitted to the Commission under subsection 
     (a)(5) was not published by the Commission as the proposed 
     rule or part of the proposed rule; and
       (3) a description of any reasonable alternatives to the 
     proposed rule, together with a summary description of their 
     potential costs and benefits, and a brief explanation of why 
     such alternatives should not be published as a proposed rule.
       (e) Transmittal of Notice.--The Commission shall transmit 
     such notice not later than 10 calendar days after the date of 
     publication of the notice to the relevant congressional 
     committees.
       (f) Final Issuance.--Any proposed consumer credit safety 
     rule shall be issued within 12 months after the date of 
     publication of an advance notice of proposed rulemaking under 
     subsection (a) relating to the consumer credit involved, 
     unless the Commission determines that such proposed rule is 
     not a reasonable means of achieving the objective or 
     objectives identified in subsection (a)(1) with respect to 
     such proposed rule or an objective specified in section 6(a), 
     or is not in the public interest. The Commission may extend 
     that 12-month period for good cause. If the Commission 
     extends such period, it shall immediately transmit notice of 
     such extension to the relevant congressional committees. Such 
     notice shall include an explanation of the reasons for such 
     extension, together with an estimate of the date by which the 
     Commission anticipates such rulemaking will be completed. The 
     Commission shall publish a notice of such extension and the 
     information submitted to the Congress in the Federal 
     Register.
       (g) Promulgation of Rule.--
       (1) Timing.--Not later than 60 days after the date of 
     publication under subsection (c) of a proposed consumer 
     credit safety rule, the Commission shall--
       (A) promulgate a consumer credit safety rule, if it makes 
     the findings required under subsection (h); or
       (B) withdraw the applicable notice of proposed rulemaking 
     if it determines that such rule is not--
       (i) a reasonable means of achieving the objective or 
     objectives identified in subsection (a)(1) with respect to 
     such proposed rule or an objective specified in section 6(a); 
     or
       (ii) in the public interest.
       (2) Extension.--The Commission may extend such 60-day 
     period in paragraph (1) for good cause shown (if it publishes 
     its reasons therefor in the Federal Register).
       (3) Title 5.--Consumer credit safety rules shall be 
     promulgated in accordance with section 553 of title 5, United 
     States Code, except that the Commission shall give interested 
     persons an opportunity for the oral presentation of data, 
     views, or arguments, in addition to an opportunity to make 
     written submissions. A transcript shall be kept of any oral 
     presentation.
       (h) Expression of Objective; Consideration of Available 
     Product Data; Needs of Elderly and Handicapped.--
       (1) Objectives.--A consumer credit safety rule shall 
     express in the rule itself the objectives identified in 
     subsection (a)(1) with respect to such rule.
       (2) Considerations.--In promulgating such a rule, the 
     Commission shall--
       (A) consider relevant available data, including the results 
     of investigation activities conducted generally and pursuant 
     to this Act; and
       (B) consider and take into account the special needs of 
     elderly individuals and individuals with disabilities to 
     determine the extent to which such persons may be affected by 
     such rule.
       (i) Findings; Final Regulatory Analysis; Judicial Review of 
     Rule.--
       (1) Findings.--Prior to promulgating a consumer credit 
     safety rule, the Commission shall consider, and shall make 
     appropriate findings for inclusion in such rule with respect 
     to--
       (A) the degree and nature of the benefit to consumer 
     protection that the rule is designed to achieve or promote;
       (B) the approximate number of consumer credit products, or 
     types or classes thereof, subject to such rule;
       (C) the need of the public for the consumer credit product 
     subject to such rule, and the probable effect of such rule 
     upon the utility, cost, or availability of such services to 
     meet such need; and
       (D) any means of achieving the objective of the order while 
     minimizing adverse effects on competition or disruption or 
     dislocation of the provision of consumer credit.
       (2) Regulatory analysis.--The Commission shall not 
     promulgate a consumer credit safety rule, unless it--
       (A) has prepared, on the basis of the findings of the 
     Commission under paragraph (1) and on other information 
     before the Commission, a final regulatory analysis of the 
     rule containing--
       (i) a description of the potential benefits and potential 
     costs of the rule, including costs and benefits that cannot 
     be quantified in monetary terms, and the identification of 
     those likely to receive the benefits and bear the costs;
       (ii) a description of any alternatives to the final rule 
     which were considered by the Commission, together with a 
     brief explanation of the reasons why these alternatives were 
     not chosen; and
       (iii) a summary of any significant issues raised by the 
     comments submitted during the public comment period in 
     response to the preliminary regulatory analysis, and a 
     summary of the assessment by the Commission of such issues;
       (B) finds (and includes such finding in the rule)--
       (i) that the rule (including its effective date) is 
     reasonably appropriate to achieve an objective identified in 
     subsection (a)(1) with respect to such proposed rule or 
     specified in section 6(a);
       (ii) that the promulgation of the rule is in the public 
     interest; and
       (iii) that the benefits expected from the rule bear a 
     reasonable relationship to its costs.
       (3) Publication.--The Commission shall publish its final 
     regulatory analysis with the rule.
       (4) Limit on judicial review.--Any preliminary or final 
     regulatory analysis prepared under subsection (c) or (i)(2) 
     shall not be subject to independent judicial review, except 
     that when an action for judicial review of a rule is 
     instituted, the contents of any such regulatory analysis 
     shall constitute part of the whole rulemaking record of 
     agency action in connection with such review. The provisions 
     of this paragraph shall not be construed to alter the 
     substantive or procedural standards otherwise applicable to 
     judicial review of any action by the Commission.
       (j) Effective Date.--Each consumer credit safety rule shall 
     specify the date on which such rule is to take effect, not to 
     exceed 180 days from the date on which it is issued in final 
     form, unless the Commission finds, for good cause shown, that 
     a later effective date is in the public interest and 
     publishes its reasons for such finding. The effective date of 
     a consumer credit safety rule under this Act shall be set at 
     a date that is at least 30 days after the date of issuance in 
     final form, unless the Commission for good cause shown 
     determines that an earlier effective date is in the public 
     interest. In no case may the effective date be set at a date 
     which is earlier than the date of issuance in final form.
       (k) Amendment or Revocation of Rule.--The Commission may, 
     by rule, amend or revoke any consumer credit safety rule. 
     Such amendment or revocation shall specify the

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     date on which it is to take effect, which shall not exceed 
     180 days from the date on which the amendment or revocation 
     is published, unless the Commission finds for good cause 
     shown that a later effective date is in the public interest 
     and publishes its reasons for such finding. Where an 
     amendment involves a material change in a consumer credit 
     safety rule, subsections (a) through (h) shall apply. In 
     order to revoke a consumer credit safety rule, the Commission 
     shall publish a proposal to revoke such rule in the Federal 
     Register, and allow oral and written presentations in 
     accordance with subsection (d)(2). The Commission may revoke 
     such rule only if it determines that the rule is not a 
     reasonable means of achieving an objective identified in 
     subsection (a)(1) with respect to such proposed rule or an 
     objective specified in subsection 6(a).
       (l) Petition to Initiate Rulemaking.--The Commission shall 
     grant, in whole or in part, or deny any petition under 
     section 553 (e) of title 5, United States Code, requesting 
     the Commission to initiate a rulemaking, within a reasonable 
     time after the date on which such petition is filed. The 
     Commission shall state the reasons for granting or denying 
     such petition.

     SEC. 11. PROHIBITED ACTS.

       It shall be unlawful for any person--
       (1) to advertise for or offer for sale any consumer credit 
     which is not in conformity with an applicable consumer credit 
     safety rule under this Act;
       (2) to advertise for or offer for sale any consumer 
     credit--
       (A) which has been declared a banned product by a rule 
     under this Act;
       (B) in a manner that does not comply with any requirements 
     for the provision of any warnings or other information 
     regarding such credit; or
       (3) to fail or refuse to permit access to or copying of 
     records, or fail or refuse to establish or maintain records, 
     or fail or refuse to make reports or provide information to 
     the Commission as required under this Act or any rule 
     thereunder, other than section 9.

     SEC. 12. PENALTIES FOR VIOLATIONS.

       (a) Criminal Penalties.--
       (1) Knowing and willful violations.--Any person who 
     knowingly and willfully violates section 11 after having 
     received notice of noncompliance from the Commission shall be 
     fined not more than $500,000 or be imprisoned not more than 
     one year, or both.
       (2) Executives and agents.--Any individual director, 
     officer, or agent of a corporation who knowingly and 
     willfully authorizes, orders, or performs any of the acts or 
     practices constituting in whole or in part a violation of 
     section 11, and who has knowledge of notice of noncompliance 
     received by the corporation from the Commission, shall be 
     subject to penalties under this section, without regard to 
     any penalties to which that corporation may be otherwise 
     subject.
       (b) Civil Penalties.--
       (1) In general.--Any person who violates section 11 shall 
     be subject to a civil penalty to be established at the 
     discretion of the Commission. A violation of section 11 shall 
     constitute a separate civil offense with respect to each 
     consumer credit transaction involved.
       (2) Publication of schedule of penalties.--Not later than 
     December 1, 2009, and December 1 of each fifth calendar year 
     thereafter, the Commission shall prescribe and publish in the 
     Federal Register a schedule of maximum authorized penalties 
     that shall apply for violations that occur after January 1 of 
     the year immediately following such publication.
       (3) Relevant factors in determining amount of penalty.--In 
     determining the amount of any penalty to be sought upon 
     commencing an action seeking to assess a penalty for a 
     violation of section 11, the Commission shall consider the 
     nature of the consumer credit product or service, the 
     severity of the unreasonable risk to the consumer, the number 
     of products or services sold or distributed, and the 
     appropriateness of such penalty in relation to the size of 
     the business of the person charged.
       (4) Compromise of penalty; deductions from penalty.--Any 
     civil penalty under this section may be compromised by the 
     Commission. In determining the amount of such penalty or 
     whether it should be remitted or mitigated and in what 
     amount, the Commission shall consider the appropriateness of 
     such penalty to the size of the business of the person 
     charged, the nature of the consumer credit, the severity of 
     the unreasonable risk to the consumer, the occurrence or 
     absence of consumer injury, and the number of offending 
     products or services sold. The amount of such penalty when 
     finally determined, or the amount agreed on compromise, may 
     be deducted from any sums owing by the United States to the 
     person charged.
       (c) Collection and Use of Penalties.--The Commission shall 
     retain ownership over criminal and civil fees collected and 
     shall apply these fees to defray the costs of the 
     Commission's operation or, where appropriate, provide 
     restitution for harmed consumers.

     SEC. 13. REPORTS.

       (a) Reports to the Public.--The Commission shall determine 
     what reports should be produced and distributed to the public 
     on a recurring and ad hoc basis, and shall prepare and 
     publish such reports on a web site that provides free access 
     to the general public.
       (b) Report to President and Congress.--The Commission shall 
     prepare and submit to the President and the relevant 
     congressional committees at the beginning of each regular 
     session of Congress a comprehensive report on the 
     administration of this Act for the preceding fiscal year. 
     Such report shall include--
       (1) a thorough appraisal, including statistical analyses, 
     estimates, and long-term projections, of the incidence and 
     effects of practices associated with the provision of 
     consumer credit that are inconsistent with the objectives 
     specified in section 6(a), with a breakdown, insofar as 
     practicable, among the various sources of injury as the 
     Commission finds appropriate;
       (2) a list of consumer credit safety rules prescribed or in 
     effect during such year;
       (3) an evaluation of the degree of observance of consumer 
     credit safety rules, including a list of enforcement actions, 
     court decisions, and compromises of civil penalties, by 
     location and company name;
       (4) a summary of outstanding problems confronting the 
     administration of this Act in order of priority;
       (5) an analysis and evaluation of public and private 
     consumer credit safety research activities;
       (6) a list, with a brief statement of the issues, of 
     completed or pending judicial actions under this Act;
       (7) the extent to which technical information was 
     disseminated to the scientific and consumer credit 
     communities and consumer information was made available to 
     the public;
       (8) the extent of cooperation between Commission officials 
     and representatives of industry and other interested parties 
     in the implementation of this Act, including a log or summary 
     of meetings held between Commission officials and 
     representatives of industry and other interested parties;
       (9) an appraisal of significant actions of State and local 
     governments relating to the responsibilities of the 
     Commission;
       (10) with respect to voluntary consumer credit safety 
     standards promulgated as consumer safety rules under section 
     10(c), a description of--
       (A) the number of such standards adopted as rules; and
       (B) the nature and number of the consumer credit products 
     and services which are the subject of such adopted rules and 
     the approximate number of consumers affected;
       (11) such recommendations for additional legislation as the 
     Commission deems necessary to carry out the purposes of this 
     Act; and
       (12) the extent of cooperation with and the joint efforts 
     undertaken by the Commission in conjunction with other 
     regulators with whom the Commission shares responsibilities 
     for consumer credit safety.

     SEC. 14. EFFECTIVE DATE.

       This Act shall be effective 120 days after the date of 
     enactment of this Act.
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