H.R.458 - Military Personnel Financial Services Protection Act109th Congress (2005-2006)
|Sponsor:||Rep. Davis, Geoff [R-KY-4] (Introduced 02/01/2005)|
|Committees:||House - Financial Services | Senate - Banking, Housing, and Urban Affairs|
|Committee Reports:||H. Rept. 109-40|
|Latest Action:||06/28/2005 Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (All Actions)|
|Roll Call Votes:||There has been 1 roll call vote|
|Notes:||For further action, see S.418, which became Public Law 109-290 on 9/29/2006.|
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Referred in Senate (06/28/2005)
[Congressional Bills 109th Congress] [From the U.S. Government Printing Office] [H.R. 458 Referred in Senate (RFS)] 1st Session H. R. 458 _______________________________________________________________________ IN THE SENATE OF THE UNITED STATES June 28, 2005 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs _______________________________________________________________________ AN ACT To prevent the sale of abusive insurance and investment products to military personnel, 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; TABLE OF CONTENTS. (a) Short Title.--This Act may be cited as the ``Military Personnel Financial Services Protection Act''. (b) Table of Contents.--The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. TITLE I--INSURANCE AND INVESTMENT PRODUCTS Sec. 101. Congressional findings. Sec. 102. Prohibition on future sales of periodic payment plans. Sec. 103. Method of maintaining broker/dealer registration, disciplinary, and other data. Sec. 104. Filing depositories for investment advisers. Sec. 105. State insurance and securities jurisdiction on military installations. Sec. 106. Required development of military personnel protection standards regarding insurance sales. Sec. 107. Required disclosures regarding life insurance. Sec. 108. Improving life insurance product standards. Sec. 109. Required reporting of disciplined insurance producers. Sec. 110. Reporting barred persons engaging in financial services activities. Sec. 111. Sense of Congress. Sec. 112. Definitions. TITLE II--LENDING TO ARMED FORCES PERSONNEL Sec. 201. Requirements applicable to certain loans to military servicemembers. TITLE I--INSURANCE AND INVESTMENT PRODUCTS SEC. 101. CONGRESSIONAL FINDINGS. The Congress finds the following: (1) Our military personnel perform great sacrifices in protecting our Nation in the War on Terror and promoting democracy abroad. (2) Our brave men and women in uniform deserve to be offered first-rate financial products in order to provide for their families and to save and invest for retirement. (3) Our military personnel are being offered high-cost securities and life insurance products by some financial services companies engaging in abusive and misleading sales practices. (4) One securities product being offered to our service members, the contractual plan, has largely disappeared from the civilian market since the 1980s due to its excessive sales charges and the emergence of low-cost products. A 50-percent sales commission is typically assessed against the first year of contributions made under a contractual plan, even though the average commission on other securities products such as mutual funds is less than 6 percent on each sale. (5) The excessive sales charge of the contractual plan makes it susceptible to abusive and misleading sales practices. (6) Certain life insurance products being offered to our service members are being improperly marketed as investment products. These products provide very low death benefits for very high premiums that are front-loaded in the first few years, making them completely inappropriate for most military personnel. (7) Regulation of these securities and life insurance products and their sale on military bases has been clearly inadequate and requires Congressional legislation to address. SEC. 102. PROHIBITION ON FUTURE SALES OF PERIODIC PAYMENT PLANS. (a) Amendment.--Section 27 of the Investment Company Act of 1940 (15 U.S.C. 80a-27) is amended by adding at the end the following new subsection: ``(j) Termination of Sales.-- ``(1) Termination.--Effective 30 days after the date of enactment of the Military Personnel Financial Services Protection Act, it shall be unlawful, subject to subsection (i)-- ``(A) for any registered investment company to issue any periodic payment plan certificate; or ``(B) for such company, or any depositor of or underwriter for any such company, or any other person, to sell such a certificate. ``(2) No invalidation of existing certificates.--Paragraph (1) shall not be construed to alter, invalidate, or otherwise affect any rights or obligations, including rights of redemption, under any periodic payment plan certificate issued and sold before 30 days after such date of enactment.''. (b) Technical Amendment.--Section 27(i)(2)(B) of such Act is amended by striking ``section 26(e)'' each place it appears and inserting ``section 26(f)''. (c) Report on Refunds, Sales Practices, and Revenues From Periodic Payment Plans.--Within 6 months after the date of enactment of this Act, the Securities and Exchange Commission shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, a report describing-- (1) any measures taken by a broker or dealer registered with the Securities and Exchange Commission pursuant to section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)) to voluntarily refund payments made by military service members on any periodic payment plan certificate, and the amounts of such refunds; (2) after such consultation with the Secretary of Defense as the Commission considers appropriate, the sales practices of such brokers or dealers on military installations over the past 5 years and any legislative or regulatory recommendations to improve such practices; and (3) the revenues generated by such brokers or dealers in the sales of periodic payment plan certificates over the past 5 years and what products such brokers or dealers market to replace the revenue generated from the sales of periodic payment plan certificates prohibited under subsection (a) of this section. SEC. 103. METHOD OF MAINTAINING BROKER/DEALER REGISTRATION, DISCIPLINARY, AND OTHER DATA. Subsection (i) of section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3(i)) is amended to read as follows: ``(i) Obligation to Maintain Registration, Disciplinary, and Other Data.-- ``(1) Maintenance of system to respond to inquiries.--A registered securities association shall-- ``(A) establish and maintain a system for collecting and retaining registration information; ``(B) establish and maintain a toll-free telephone listing, and a readily accessible electronic or other process, to receive and promptly respond to inquiries regarding-- ``(i) registration information on its members and their associated persons; and ``(ii) registration information on the members and their associated persons of any registered national securities exchange that uses the system described in subparagraph (A) for the registration of its members and their associated persons; and ``(C) adopt rules governing the process for making inquiries and the type, scope, and presentation of information to be provided in response to such inquiries in consultation with any registered national securities exchange providing information pursuant to subparagraph (B)(ii). ``(2) Recovery of costs.--Such an association may charge persons making inquiries, other than individual investors, reasonable fees for responses to such inquiries. ``(3) Process for disputed information.--Such an association shall adopt rules establishing an administrative process for disputing the accuracy of information provided in response to inquiries under this subsection in consultation with any registered national securities exchange providing information pursuant to paragraph (1)(B)(ii). ``(4) Limitation of liability.--Such an association, or an exchange reporting information to such an association, shall not have any liability to any person for any actions taken or omitted in good faith under this subsection. ``(5) Definition.--For purposes of this subsection, the term `registration information' means the information reported in connection with the registration or licensing of brokers and dealers and their associated persons, including disciplinary actions, regulatory, judicial, and arbitration proceedings, and other information required by law, or exchange or association rule, and the source and status of such information.''. SEC. 104. FILING DEPOSITORIES FOR INVESTMENT ADVISERS. (a) Amendment.--Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-4) is amended-- (1) by striking ``Every investment'' and inserting the following: ``(a) In General.--Every investment''; and (2) by adding at the end the following: ``(b) Filing Depositories.--The Commission may, by rule, require an investment adviser-- ``(1) to file with the Commission any fee, application, report, or notice required to be filed by this title or the rules issued under this title through any entity designated by the Commission for that purpose; and ``(2) to pay the reasonable costs associated with such filing and the establishment and maintenance of the systems required by subsection (c). ``(c) Access to Disciplinary and Other Information.-- ``(1) Maintenance of system to respond to inquiries.--The Commission shall require the entity designated by the Commission under subsection (b)(1) to establish and maintain a toll-free telephone listing, or a readily accessible electronic or other process, to receive and promptly respond to inquiries regarding information (including disciplinary actions, regulatory, judicial, and arbitration proceedings, and other information required by law or rule to be reported) involving investment advisers and persons associated with investment advisers. Such information shall include information on an investment adviser (and the persons associated with that adviser) whether the investment adviser is registered with the Commission under section 203 or regulated solely by a State as described in section 203A. ``(2) Recovery of costs.--An entity designated by the Commission under subsection (b)(1) may charge persons making inquiries, other than individual investors, reasonable fees for responses to inquiries made under paragraph (1). ``(3) Limitation on liability.--An entity designated by the Commission under subsection (b)(1) shall not have any liability to any person for any actions taken or omitted in good faith under this subsection.''. (b) Conforming Amendments.-- (1) Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3a) is amended-- (A) by striking subsection (d); and (B) by redesignating subsection (e) as subsection (d). (2) Section 306 of the National Securities Markets Improvement Act of 1996 (15 U.S.C. 80b-10, note; Public Law 104-290; 110 Stat. 3439) is repealed. SEC. 105. STATE INSURANCE AND SECURITIES JURISDICTION ON MILITARY INSTALLATIONS. (a) Clarification of Jurisdiction.--Any law, regulation, or order of a State with respect to regulating the business of insurance or the offer or sale (or both) of securities shall apply to such activities conducted on Federal land or facilities in the United States and abroad, including military installations, except to the extent that such law, regulation, or order-- (1) directly conflicts with any applicable Federal law, regulation, or authorized directive; or (2) would not apply if such activity were conducted on State land. (b) Primary State Jurisdiction.--To the extent that multiple State laws would otherwise apply pursuant to subsection (a) to an insurance or securities activity of an individual or entity on Federal land or facilities, the State having the primary duty to regulate such activity and whose laws shall apply to such activity in the case of a conflict shall be-- (1) the State within which the Federal land or facility is located; or (2) if the Federal land or facility is located outside of the United States, the State in which-- (A) in the case of an individual engaged in the business of insurance, such individual has been issued a resident license; (B) in the case of an individual engaged in the offer or sale (or both) of securities, such individual is registered or required to be registered to do business or the person solicited by such individual resides; (C) in the case of an entity engaged in the business of insurance, such entity is domiciled; or (D) in the case of an entity engaged in the offer or sale (or both) of securities, such entity is registered or is required to be registered to do business or the person solicited by such entity resides. SEC. 106. REQUIRED DEVELOPMENT OF MILITARY PERSONNEL PROTECTION STANDARDS REGARDING INSURANCE SALES. (a) State Standards.--The Congress intends that-- (1) the States collectively work with the Secretary of Defense to ensure implementation of appropriate standards to protect members of the Armed Forces from dishonest and predatory insurance sales practices while on a military installation of the United States (including installations located outside of the United States); and (2) each State identify its role in promoting the standards described in paragraph (1) in a uniform manner within 12 months after the date of the enactment of this Act. (b) State Report.--It is the sense of the Congress that the NAIC should, after consultation with the Secretary of Defense and within 12 months after the date of the enactment of this Act, conduct a study to determine the extent to which the States have met the requirement of subsection (a) and report such study to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate. SEC. 107. REQUIRED DISCLOSURES REGARDING LIFE INSURANCE. (a) Requirement.--Except as provided in subsection (d), no insurer or producer may sell or solicit, in person, any life insurance product to any member of the Armed Forces on a military installation of the United States unless a disclosure in accordance with this section is provided to such member before the sale of such insurance. (b) Disclosure.--A disclosure in accordance with this section is a written disclosure that-- (1) states that subsidized life insurance may be available to the member of the Armed Forces from the Federal Government; (2) states that the United States Government has in no way sanctioned, recommended, or encouraged the sale of the product being offered; (3) is made in plain and readily understandable language and in a type font at least as large as the font used for the majority of the policy; and (4) with respect to a sale or solicitation on Federal land or facilities located outside of the United States by an individual or entity engaged in the business of insurance, except to the extent otherwise specifically provided by the laws of such State in reference to this Act, lists the address and phone number where consumer complaints are received by the State insurance commissioner for the State in which the individual has been issued a resident license or the entity is domiciled, as applicable. (c) Enforcement.--If it is determined by a State or Federal agency, or in a final court proceeding, that any individual or entity has intentionally failed to provide a disclosure required by this section, such individual or entity shall be prohibited from further engaging in the business of insurance with respect to employees of the Federal Government on Federal land, except-- (1) with respect to existing policies; and (2) to the extent required by the Federal Government pursuant to previous commitments. (d) Exceptions.-- (1) Federal and state insurance activity.--This section shall not apply to insurance activities-- (A) specifically contracted by or through the Federal Government or any State government; or (B) specifically exempted from the applicability of this Act by a Federal or State law, regulation, or order that specifically refers to this paragraph. (2) Uniform state standards.--If a majority of the States have adopted, in materially identical form, a standard setting forth the disclosures required under this section that apply to insurance solicitations and sales to military personnel on military installations of the United States, after the expiration of the 2-year period beginning on such majority adoption, such standard shall apply in lieu of the requirements of this section to all insurance solicitations and sales to military personnel on military installations, with respect to such States, to the extent that such standards do not directly conflict with any applicable authorized Federal regulation or directive. (3) Materially identical form.--For purposes of this subsection, standards adopted by more than one State shall be considered to have materially identical form to the extent that such standards require or prohibit identical conduct with respect to the same activity, notwithstanding that the standards may differ with respect to conduct required or prohibited with respect to other activities. SEC. 108. IMPROVING LIFE INSURANCE PRODUCT STANDARDS. (a) In General.--It is the sense of the Congress that the NAIC should, after consultation with the Secretary of Defense and within 12 months after the date of the enactment of this Act, conduct a study and submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on ways of improving the quality of and sale of life insurance products sold by insurers and producers on military installations of the United States, which may include limiting sales authority to companies and producers that are certified as meeting appropriate best practices procedures or creating standards for products specifically designed for members of the Armed Forces regardless of the sales location. (b) Conditional GAO Report.--If the NAIC does not submit the report to the committees as described in subsection (a), the Comptroller General of the United States shall study any proposals that have been made to improve the quality and sale of life insurance products sold by insurers and producers on military installations of the United States and report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on such proposals within 6 months after the expiration of the period referred to in subsection (a). SEC. 109. REQUIRED REPORTING OF DISCIPLINED INSURANCE PRODUCERS. (a) Reporting by Insurers.--After the expiration of the 2-year period beginning on the date of the enactment of this Act, no insurer may enter into or renew a contractual relationship with a producer that solicits or sells life insurance on military installations of the United States unless the insurer has implemented a system to report, to the State insurance commissioner of the State of the domicile of the insurer and the State of residence of the insurance producer, disciplinary actions taken against the producer with respect to the producer's sales or solicitation of insurance on a military installation of the United States, as follows: (1) Any disciplinary action taken by any government entity that the insurer knows has been taken. (2) Any significant disciplinary action taken by the insurer. (b) Reporting by States.--It is the sense of the Congress that within 2 years after the date of the enactment of this Act, the States should collectively implement a system to-- (1) receive reports of disciplinary actions taken against insurance producers by insurers or government entities with respect to the producers' sale or solicitation of insurance on a military installation; and (2) disseminate such information to all other States and to the Secretary of Defense. SEC. 110. REPORTING BARRED PERSONS ENGAGING IN FINANCIAL SERVICES ACTIVITIES. (a) Establishment.--The Secretary of Defense shall maintain a list of the name, address, and other appropriate information of persons engaged in financial services activities that have been barred, banned, or otherwise limited in any manner that is not generally applicable to all such type of persons, from any or all military installations of the United States or from patronage by military members. (b) Notice and Access.--The Secretary shall ensure that-- (1) the appropriate Federal and State agencies responsible for any financial services regulation are promptly notified upon the inclusion or removal of a person under such agencies' jurisdiction; and (2) the list is kept current and easily accessible-- (A) for use by such agencies; and (B) for purposes of enforcing or considering any such bar, ban, or limitation by the appropriate Federal personnel, including commanders of military installations. (c) Regulations.-- (1) In general.--The Secretary shall issue regulations in accordance with this subsection to provide for the establishment and maintenance of the list under this section, including appropriate due process considerations. (2) Timing.-- (A) Proposed regulations.--Not later than the expiration of the 60-day period beginning on the date of the enactment of this Act, the Secretary shall prepare and submit to the appropriate Committees a copy of the regulations under this subsection that are proposed to be published for comment. The Secretary may not publish such regulations for comment in the Federal Register until the expiration of the 15-day period beginning upon such submission to the appropriate Committees. (B) Final regulations.--Not later than 90 days after the date of the enactment of this Act, the Secretary shall submit to the appropriate Committees a copy of the regulations under this section to be published as final. (C) Effective date.--Such regulations shall become effective upon the expiration of the 30-day period beginning upon such submission to the appropriate Committees. (3) Definition.--For the purposes of this section, the term ``appropriate Committees'' means-- (A) the Committee on Financial Services and the Committee on Armed Services of the House of Representatives; and (B) the Committee on Banking, Housing, and Urban Affairs and the Committee on Armed Services of the Senate. SEC. 111. SENSE OF CONGRESS. It is the sense of the Congress that the Federal and State agencies responsible for insurance and securities regulation should provide advice to the appropriate Federal entities to consider-- (1) significantly increasing the life insurance coverage made available through the Federal Government to members of the Armed Forces; (2) implementing appropriate procedures to encourage members of the Armed Forces to improve their financial literacy and obtain objective financial counseling before purchasing additional life insurance coverage or investments beyond those provided by the Federal Government; and (3) improving the benefits and matching contributions provided under the Thrift Savings Plan to members of the Armed Forces. SEC. 112. DEFINITIONS. For purposes of this Act, the following definitions shall apply: (1) Entity.--The term ``entity'' includes insurers. (2) Individual.--The term ``individual'' includes insurance agents and producers. (3) NAIC.--The term ``NAIC'' means the National Association of Insurance Commissioners. (4) State insurance commissioner.--The term ``State insurance commissioner'' means, with respect to a State, the officer, agency, or other entity of the State that has primary regulatory authority over the business of insurance and over any person engaged in the business of insurance, to the extent of such business activities, in such State. TITLE II--LENDING TO ARMED FORCES PERSONNEL SEC. 201. REQUIREMENTS APPLICABLE TO CERTAIN LOANS TO MILITARY SERVICEMEMBERS. (a) Definitions.--For purposes of this section, the following definitions shall apply: (1) Military lender.-- (A) In general.--The term ``military lender'' means-- (i) a person engaged in the business of extending consumer credit that-- (I) targets customers who are active duty members of the Armed Forces; or (II) knows or has reason to know that more than 10 percent of the person's customers for consumer credit products are active duty members of the Armed Forces; and (ii) any assignee of such person with respect to any credit extended to any such customer. (B) Exception.--The term ``military lender'' does not include any insured depository institution, except as provided in paragraph (3)(B). (C) Treatment of each office as lender.--In the case of any person engaged in the business of extending consumer credit from more than 1 office or at more than 1 location, each office or location at which credit is offered or extended or a credit transaction is consummated shall be treated as a separate person for purposes of this section. (2) Covered loan.--The term ``covered loan''-- (A) means any extension of credit to an active duty member of the Armed Forces by a military lender that has an annual percentage rate that exceeds by more than 5 percentage points the average annual percentage rate for 24-month personal loans, as published by the Board of Governors of the Federal Reserve System for the most recent calendar quarter preceding the quarter in which such extension of credit is made; and (B) does not include any extension of credit on margin on securities by a broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 to the extent such extension of credit complies with the rules and regulations of the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission, and any applicable self-regulatory organization relating to credit on margin on securities. (3) Insured depository institution.-- (A) In general.--The term ``insured depository institution''-- (i) has the meaning given such term in section 3 of the Federal Deposit Insurance Act; and (ii) includes any insured credit union (as defined in section 101(7) of the Federal Credit Union Act). (B) Exclusion.--For purposes of this section, the term ``insured depository institution'' does not include an insured depository institution in any circumstance in which-- (i) such depository institution is extending credit pursuant to a contractual relationship with a third-party agent; and (ii) such agent would be a military lender, under this section, if the agent made the same loan as a principal. (4) Active duty member of the armed forces.--The term ``active duty member of the Armed Forces'' means any member of the Armed Forces who is on active duty (as defined in section 101(d)(1) of title 10, United States Code) under a call or order that does not specify a period of 30 days or less. (5) Targets customers.--For purposes of paragraph (1)(A)(i)(I), the term ``targets customers'' means to, directly or indirectly, solicit, or engage in other promotional activities explicitly directed at, members of the Armed Forces for the purpose of securing business from the recipients of such solicitations or promotions. (6) Annual percentage rate.--The term ``annual percentage rate'' has the same meaning as in section 107 of the Truth in Lending Act, as implemented by regulations of the Board of Governors of the Federal Reserve System. (b) Protection of Military Servicemembers.--Any military lender who makes a loan to an active duty member of the Armed Forces (other than a loan described in paragraph (2)(B)) may not, with respect to such loan-- (1) garnish any military salary or wages, or accept any assignment of or institute any allotment of any military salary or wages, to secure payment of the loan, unless any such allotment or assignment is voluntary and may be cancelled at any time by the borrower; (2) contact, or threaten to contact, the borrower's commanding officer or any other person in the borrower's military chain of command in an effort to collect on such loan; (3) include any provision in the loan agreement, or in any other instrument or agreement made in connection with such loan, that purports to-- (A) waive any rights of the borrower under any Federal or State law, including this section and the Servicemembers Civil Relief Act (50 U.S.C. App. 501 et seq.); or (B) provide the consent of the borrower for any action prohibited under paragraph (1); (4) at any time, use oral or written representations, or use any symbols, that suggest, give the appearance, or provide reasonable cause to believe that any component of the Armed Forces, the Department of Defense, or any federal entity sponsors or endorses the military lender, any agent of the lender, or any good, service, commodity, or credit that is sold, provided, or extended by the military lender (unless expressly authorized in writing by such entity); or (5) if such loan is a covered loan, enter into the loan without disclosing, prior to consummation of the transaction and in conspicuous form, the following notice: ``Notice to military servicemembers: ``You are not required to complete this agreement merely because you have received these disclosures or even if you have signed an application for an extension of credit. If you obtain this credit to repay other loans, you may get into serious financial difficulties if you use this credit to pay off old debts and then replace them with other new debts. Before you complete this agreement, you should consider applying for credit through other organizations or entities. Interest-free loans or grants may be available from the Army, Air Force, or Navy-Marine Corps Relief Society, the United Service Organizations, or another base or military service organization for military personnel seeking short-term credit in response to a family or other emergency. ``This extension of credit is not sponsored or endorsed by any component of the Armed Forces, the Department of Defense, or any Federal entity. ``Your lender may not garnish your salary or wages, or accept any assignment of or institute an allotment of your salary or wages, to secure repayment of the debt, unless any such allotment or assignment is voluntary and may be cancelled by you at any time. Your lender may not contact your commanding officer or anyone in your chain of command in an effort to collect on the loan. ``You and your dependents may have additional rights and protections under Federal and State law with respect to this loan, including the Servicemembers Civil Relief Act, which you cannot waive and which the lender may not ask or require you to waive.''. (c) Rule of Construction.--No provision of this section shall be construed as-- (1) authorizing any person that is not a military lender to engage in any activity that is prohibited for military lenders under this section; (2) creating any inference that any activity described in subsection (b) is a lawful activity for any person or would be a lawful activity for a military lender but for this section; or (3) creating any inference that any right or protection provided for consumers under any Federal or State law can be waived by any consumer. (d) Enforcement.--The provisions of this section shall be enforced under section 917 of the Consumer Credit Protection Act, in the manner provided in such section. For the purposes of any enforcement under such section 917, any violation of a provision or requirement of this section shall be treated as a violation of a provision or requirement of title IX of such Act. (e) Circumvention Prohibited.--The Federal Trade Commission shall, with respect to entities and activities under its jurisdiction, prescribe regulations to become effective not later than 90 days after the date of the enactment of this Act to prevent a military lender from taking any action in connection with any loan made to an active duty member of the Armed Forces to structure a loan transaction, by structuring any loan as an open-end credit plan (as defined in section 103 of the Truth in Lending Act), dividing any loan into separate transactions, using a lower temporary or introductory rate of interest to lower the overall annual percentage rate applicable for any loan, or any similar action, for the purpose of avoiding designation as a covered loan for purposes of this section or otherwise circumventing or evading any requirement of this title. Passed the House of Representatives June 28, 2005. Attest: JEFF TRANDAHL, Clerk.