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111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     111-88

======================================================================
 
             CREDIT CARDHOLDERS' BILL OF RIGHTS ACT OF 2009

                                _______
                                

 April 27, 2009.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Frank of Massachusetts, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 627]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 627) to amend the Truth in Lending Act to 
establish fair and transparent practices relating to the 
extension of credit under an open end consumer credit plan, and 
for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     9
Background and Need for Legislation..............................    10
Hearings.........................................................    13
Committee Consideration..........................................    13
Committee Votes..................................................    13
Committee Oversight Findings.....................................    21
Performance Goals and Objectives.................................    21
New Budget Authority, Entitlement Authority, and Tax Expenditures    21
Committee Cost Estimate..........................................    21
Congressional Budget Office Estimate.............................    21
Federal Mandates Statement.......................................    25
Advisory Committee Statement.....................................    25
Constitutional Authority Statement...............................    25
Applicability to Legislative Branch..............................    25
Earmark Identification...........................................    25
Section-by-Section Analysis of the Legislation...................    25
Changes in Existing Law Made by the Bill, as Reported............    30
Dissenting Views.................................................    40

                               Amendment


    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SEC. 1. SHORT TITLE.

    This Act may be cited as the ``Credit Cardholders' Bill of Rights 
Act of 2009''.

SEC. 2. CREDIT CARDS ON TERMS CONSUMERS CAN REPAY.

    (a) Retroactive Rate Increases and Universal Default Limited.--
Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is 
amended by inserting after section 127A the following new section:

``Sec. 127B. Additional requirements for credit card accounts under an 
                    open end consumer credit plan

    ``(a) Retroactive Rate Increases and Universal Default Limited.--
          ``(1) In general.--Except as provided in subsection (b), no 
        creditor may increase any annual percentage rate of interest 
        applicable to the existing balance on a credit card account of 
        the consumer under an open end consumer credit plan.
          ``(2) Existing balance defined.--For purposes of this 
        subsection and subsections (b) and (c), the term `existing 
        balance' means the amount owed on a consumer credit card 
        account as of the end of the 14th day after the creditor 
        provides notice of an increase in the annual percentage rate in 
        accordance with subsection (c).
          ``(3) Treatment of existing balances following rate 
        increase.--If a creditor increases any annual percentage rate 
        of interest applicable to the credit card account of a consumer 
        under an open end consumer credit plan and there is an existing 
        balance in the account to which such increase may not apply, 
        the creditor shall allow the consumer to repay the existing 
        balance using a method provided by the creditor which is at 
        least as beneficial to the consumer as 1 of the following 
        methods:
                  ``(A) An amortization period for the existing balance 
                of at least 5 years starting from the date on which the 
                increased annual percentage rate went into effect.
                  ``(B) The percentage of the existing balance that was 
                included in the required minimum periodic payment 
                before the rate increase cannot be more than doubled.
          ``(4) Limitation on certain fees.--If--
                  ``(A) a creditor increases any annual percentage rate 
                of interest applicable on a credit card account of the 
                consumer under an open end consumer credit plan; and
                  ``(B) the creditor is prohibited by this section from 
                applying the increased rate to an existing balance,
        the creditor may not assess any fee or charge based solely on 
        the existing balance.''.
    (b) Exceptions to the Amendment Made by Subsection (a).--Section 
127B of the Truth in Lending Act is amended by inserting after 
subsection (a) (as added by subsection (a)) the following new 
subsection:
    ``(b) Exceptions.--
          ``(1) In general.--A creditor may increase any annual 
        percentage rate of interest applicable to the existing balance 
        on a credit card account of the consumer under an open end 
        consumer credit plan only under the following circumstances:
                  ``(A) Change in index.--The increase is due solely to 
                the operation of an index that is not under the 
                creditor's control and is available to the general 
                public.
                  ``(B) Expiration of promotional rate.--The increase 
                is due solely to the expiration of a promotional rate.
                  ``(C) Failure to comply with workout plan.--The 
                increase is due solely to the fact the consumer failed 
                to comply with a negotiated workout plan with the 
                creditor.
                  ``(D) Payment not received during 30-day grace period 
                after due date.--The increase is due solely to the fact 
                that any consumer's minimum payment has not been 
                received within 30 days after the due date for such 
                minimum payment.
          ``(2) Limitation on increases due to failure to comply with 
        workout plan.--Notwithstanding paragraph (1)(C), the annual 
        percentage rate in effect with respect to each category of 
        transactions for a credit card account under an open end 
        consumer credit plan after the increase permitted under such 
        subsection due to the failure of a consumer to comply with a 
        workout plan may not exceed the annual percentage applicable to 
        such category of transactions on the day before the effective 
        date of the workout plan.
          ``(3) Standards required.--The Board shall prescribe, by 
        regulation, standards--
                  ``(A) for entering into any workout plan applicable 
                to any credit card account under an open end consumer 
                credit plan; and
                  ``(B) governing any such workout plan.''.
    (c) Advance Notice of Rate Increases and Significant Contract 
Changes.--Section 127B of the Truth in Lending Act is amended by 
inserting after subsection (b) (as added by subsection (b)) the 
following new subsections:
    ``(c) Advance Notice of Rate Increases.--
          ``(1) In general.--In the case of any credit card account 
        under an open end consumer credit plan, no increase in any 
        annual percentage rate of interest (other than an increase 
        described in subsection (b)(1)(A)) may take effect unless the 
        creditor provides a written notice to the consumer at least 45 
        days before the increase takes effect which fully describes the 
        changes in the annual percentage rate, in a complete and 
        conspicuous manner, and the extent to which such increase would 
        apply to an existing balance.
          ``(2) Limitation on rate increase notices within first 
        year.--Except in the case of an increase described in 
        subparagraph (B), (C), or (D) of subsection (b)(1), no written 
        notice under paragraph (1) of an increase in any annual 
        percentage rate of interest on any credit card account under an 
        open end consumer credit plan (for which notice is required 
        under such paragraph) shall be effective before the end of the 
        1-year period beginning when the account is opened.
    ``(d) Advance Notice of Significant Contract Changes.--In the case 
of any credit card account under an open end consumer credit plan, no 
significant change to the contract (such as any fee) may take effect 
unless the creditor provides a written notice of at least 45 days 
before the change takes effect which fully describes the changes in the 
contract, in a complete and conspicuous manner.''.
    (d) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting 
after the item relating to section 127A the following new item:

``127B. Additional requirements for credit card accounts under an open 
end consumer credit plan.''.

SEC. 3. ADDITIONAL PROVISIONS REGARDING ACCOUNT FEATURES, TERMS, AND 
                    PRICING.

    (a) Double Cycle Billing Prohibited.--Section 127B of the Truth in 
Lending Act is amended by inserting after subsection (d) (as added by 
section 2(c)) the following new subsection:
    ``(e) Double Cycle Billing.--
          ``(1) In general.--No finance charge may be imposed by a 
        creditor with respect to any balance on a credit card account 
        under an open end consumer credit plan that is based on 
        balances for days in billing cycles preceding the most recent 
        billing cycle as a result of the loss of any grace period.
          ``(2) Exceptions.--Paragraph (1) shall not apply so as to 
        prohibit a creditor from--
                  ``(A) adjusting finance charges following the return 
                of a payment for insufficient funds; or
                  ``(B) adjusting finance charges following resolution 
                of a billing error dispute.
          ``(3) Grace period.--For purposes of this subsection, the 
        term `grace period' means, with respect to any credit card 
        account under an open end consumer credit plan, the time 
        period, if any, provided by the creditor within which any 
        credit extended under such credit plan for purchases of goods 
        or services may be repaid by the consumer without incurring a 
        finance charge.''.
    (b) Limitations Relating to Account Balances Attributable Only to 
Accrued Interest.--Section 127B is amended by inserting after 
subsection (e) (as added by subsection (a)) the following new 
subsection:
    ``(f) Limitations Relating to Account Balances Attributable Only to 
Accrued Interest.--
          ``(1) In general.--If the outstanding balance on a credit 
        card account under an open end consumer credit plan at the end 
        of a billing period represents an amount attributable only to 
        interest accrued during the preceding billing period on an 
        outstanding balance that was fully repaid during the preceding 
        billing period--
                  ``(A) no fee may be imposed or collected in 
                connection with such balance attributable only to 
                interest before such end of the billing period; and
                  ``(B) any failure to make timely repayments of the 
                balance attributable only to interest before such end 
                of the billing period shall not constitute a default on 
                the account.
        Such balance remains a legally binding debt obligation.
          ``(2) Rule of construction.--Paragraph (1) shall not be 
        construed as affecting--
                  ``(A) the consumer's obligation to pay any accrued 
                interest on a credit card account under an open end 
                consumer credit plan; or
                  ``(B) the accrual of interest on the outstanding 
                balance on any such account in accordance with the 
                terms of the account and this title.''.
    (c) Access to Payoff Balance Information.--Section 127B of the 
Truth in Lending Act is amended by inserting after subsection (f) (as 
added by subsection (b)) the following new subsection:
    ``(g) Payoff Balance Information.--
          ``(1) In general.--Each periodic statement provided by a 
        creditor to a consumer with respect to a credit card account 
        under an open end consumer credit plan shall contain the toll-
        free telephone number, Internet address, and website at which 
        the consumer may request the payoff balance on the account.
          ``(2) Small issuers.--Notwithstanding paragraph (1), in the 
        case of any credit card issuer which issues fewer than 50,000 
        credit cards in conjunction with credit card accounts under 
        open end consumer credit plans, each periodic statement 
        provided by such a creditor to a consumer with respect to any 
        such credit card account shall contain the toll-free telephone 
        number, Internet address, or website at which the consumer may 
        request the payoff balance on the account.''.
    (d) Consumer Right To Reject Card Before Notice Is Provided of Open 
Account.--Section 127B of the Truth in Lending Act is amended by 
inserting after subsection (g) (as added by subsection (c)) the 
following new subsection:
    ``(h) Consumer Right To Reject Card Before Notice of New Account Is 
Provided to Consumer Reporting Agency.--
          ``(1) In general.--A creditor may not furnish any information 
        to a consumer reporting agency (as defined in section 603) 
        concerning the establishment of a newly opened credit card 
        account under an open end consumer credit plan until the credit 
        card has been used or activated by the consumer.
          ``(2) Rule of construction.--Paragraph (1) shall not be 
        construed as prohibiting a creditor from furnishing information 
        about any application for a credit card account under an open 
        end consumer credit plan or any inquiry about any such account 
        to a consumer reporting agency (as so defined).''.
    (e) Use of Terms Clarified.--Section 127B of the Truth in Lending 
Act is amended by inserting after subsection (h) (as added by 
subsection (d)) the following new subsection:
    ``(i) Use of Terms.--The following requirements shall apply with 
respect to the terms of any credit card account under any open end 
consumer credit plan:
          ``(1) `Fixed' rate.--The term `fixed', when appearing in 
        conjunction with a reference to the annual percentage rate or 
        interest rate applicable with respect to such account, may only 
        be used to refer to an annual percentage rate or interest rate 
        that will not change or vary for any reason over the period 
        clearly and conspicuously specified in the terms of the 
        account.
          ``(2) Prime rate.--The term `prime rate', when appearing in 
        any agreement or contract for any such account, may only be 
        used to refer to the bank prime rate published in the Federal 
        Reserve Statistical Release on selected interest rates (daily 
        or weekly), and commonly referred to as the H.15 release (or 
        any successor publication).
          ``(3) Due date.--
                  ``(A) In general.--Each periodic statement for any 
                such account shall contain a date by which the next 
                periodic payment on the account must be made to avoid a 
                late fee or be considered a late payment, and any 
                payment received by 5 p.m., local time at the location 
                specified by the creditor for the receipt of payment, 
                on such date shall be treated as a timely payment for 
                all purposes.
                  ``(B) Certain electronic fund transfers.--Any payment 
                with respect to any such account made by a consumer 
                online to the website of the credit card issuer or by 
                telephone directly to the credit card issuer before 5 
                p.m., local time at the location specified by the 
                creditor for the receipt of payment, on any business 
                day shall be credited to the consumer's account that 
                business day.
                  ``(C) Presumption of timely payment.--Any evidence 
                provided by a consumer in the form of a receipt from 
                the United States Postal Service or other common 
                carrier indicating that a payment on a credit card 
                account was sent to the issuer not less than 7 days 
                before the due date contained in the periodic statement 
                under subparagraph (A) for such payment shall create a 
                presumption that such payment was made by the due date, 
                which may be rebutted by the creditor for fraud or 
                dishonesty on the part of the consumer with respect to 
                the mailing date.''.
    (f) Payment Allocations.--Section 127B of the Truth in Lending Act 
is amended by inserting after subsection (i) (as added by subsection 
(e)) the following new subsection:
    ``(j) Payment Allocations.--
          ``(1) In general.--If 2 or more different annual percentage 
        rates apply to different portions of an outstanding balance on 
        a credit card account under an open end consumer credit plan, 
        the amount of any periodic payment in excess of the required 
        minimum payment shall be applied using 1 of the following 
        methods:
                  ``(A) High-to-low method.--The excess amount is 
                allocated first to the balance with the highest annual 
                percentage rate and any remaining portion is allocated 
                to any other balance in descending order, based on the 
                applicable annual percentage rate each portion of such 
                balance bears, from the highest such rate to the 
                lowest.
                  ``(B) Pro rata method.--The excess amount is 
                allocated among each of the portions of such balance 
                which bear different rates of interest in the same 
                proportion as each such portion of the outstanding 
                balance bears to the total outstanding balance.
          ``(2) Clarification relating to certain deferred interest 
        arrangements.--A creditor may allocate the entire amount paid 
        by the consumer in excess of the required minimum periodic 
        payment to a balance on which interest is deferred during the 2 
        billing cycles immediately preceding the expiration of the 
        period during which interest is deferred.
          ``(3) Prohibition on restricted grace periods under certain 
        circumstances.--If, with respect to any credit card account 
        under an open end consumer credit plan, a creditor offers a 
        time period in which to repay credit extended without incurring 
        finance charges to cardholders who pay the balance in full, the 
        creditor may not deny a consumer who takes advantage of a 
        promotional rate balance or deferred interest rate balance 
        offer with respect to such an account any such time period for 
        repaying credit without incurring finance charges.''.
    (g) Timely Provision of Periodic Statements.--Section 127B of the 
Truth in Lending Act is amended by inserting after subsection (j) (as 
added by subsection (f)) the following new subsection:
    ``(k) Timely Provision of Periodic Statements.--Each periodic 
statement with respect to a credit card account under an open end 
consumer credit plan shall be sent by the creditor to the consumer not 
less than 21 calendar days before the due date identified in such 
statement for the next payment on the outstanding balance on such 
account, and section 163(a) shall be applied with respect to any such 
account by substituting `21' for `fourteen'.''.
    (h) Due Dates.--Section 127B of the Truth in Lending Act is amended 
by inserting after subsection (k) (as added by subsection (g)) the 
following new subsection:
    ``(l) Due Dates.--If the date established by a creditor as the date 
on which a periodic payment on a credit card account under an open end 
consumer credit plan is due is a day on which mail is either not 
delivered to such creditor or is not accepted by the creditor for 
processing on such day, the creditor may not treat the receipt by the 
creditor of any such periodic payment by mail as of the next business 
day of the creditor as late for any purpose.''.

SEC. 4. CONSUMER CHOICE WITH RESPECT TO OVER-THE-LIMIT TRANSACTIONS.

    Section 127B of the Truth in Lending Act is amended by inserting 
after subsection (l) (as added by section 3(h)) the following new 
subsections:
    ``(m) Opt-Out of Creditor Authorization of Over-the-Limit 
Transactions if Fees Are Imposed.--
          ``(1) In general.--In the case of any credit card account 
        under an open end consumer credit plan under which an over-the-
        limit-fee may be imposed by the creditor for any extension of 
        credit in excess of the amount of credit authorized to be 
        extended under such account, the consumer may elect to prohibit 
        the creditor, with respect to such account, from completing any 
        transaction involving the extension of credit, with respect to 
        such account, in excess of the amount of credit authorized by 
        notifying the creditor of such election in accordance with 
        paragraph (2).
          ``(2) Notification by consumer.--A consumer shall notify a 
        creditor under paragraph (1)--
                  ``(A) through the notification system maintained by 
                the creditor under paragraph (4); or
                  ``(B) by submitting to the creditor a signed notice 
                of election, by mail or electronic communication, on a 
                form issued by the creditor for purposes of this 
                subparagraph.
          ``(3) Effectiveness of election.--An election by a consumer 
        under paragraph (1) shall be effective beginning 3 business 
        days after the creditor receives notice from the consumer in 
        accordance with paragraph (2) and shall remain effective until 
        the consumer revokes the election.
          ``(4) Notification system.--
                  ``(A) In general.--Each creditor that maintains 
                credit card accounts under an open end consumer credit 
                plan shall establish and maintain a notification 
                system, including a toll-free telephone number, 
                Internet address, and website, which permits any 
                consumer whose credit card account is maintained by the 
                creditor to notify the creditor of an election under 
                this subsection in accordance with paragraph (2).
                  ``(B) Small issuers.--Notwithstanding subparagraph 
                (A), any credit card issuer which issues fewer than 
                50,000 credit cards in conjunction with credit card 
                accounts under open end consumer credit plans shall 
                establish and maintain a notification system, which 
                shall include a toll-free telephone number, Internet 
                address, or website, which permits any consumer whose 
                credit card account is maintained by the creditor to 
                notify the creditor of an election under this 
                subsection in accordance with paragraph (2).
          ``(5) Annual notice to consumers of availability of 
        election.--In the case of any credit card account under an open 
        end consumer credit plan, the creditor shall include a notice, 
        in clear and conspicuous language, of the availability of an 
        election by the consumer under this paragraph as a means of 
        avoiding over-the limit fees and a higher amount of 
        indebtedness, and the method for providing such notice--
                  ``(A) on the periodic statement required under 
                section 127(b) with respect to such account at least 
                once each calendar year; and
                  ``(B) on any such periodic statement which includes a 
                notice of the imposition of an over-the-limit fee 
                during the period covered by the statement.
          ``(6) No fees if consumer has made an election.--If a 
        consumer has made an election under paragraph (1), no over-the-
        limit fee may be imposed on the account for any reason that has 
        caused the outstanding balance in the account to exceed the 
        credit limit.
          ``(7) Regulations.--
                  ``(A) In general.--The Board shall issue regulations 
                allowing for the completion of over-the-limit 
                transactions that for operational reasons exceed the 
                credit limit by a de minimis amount, even where the 
                cardholder has made an election under paragraph (1).
                  ``(B) Subject to no fee limitation.--The regulations 
                prescribed under subparagraph (A) shall not allow for 
                the imposition of any fee or any rate increase based on 
                the permitted over-the-limit transactions.
    ``(n) Over-the-Limit Fee Restrictions.--With respect to a credit 
card account under an open end consumer credit plan, an over-the-limit 
fee may be imposed only once during a billing cycle if, on the last day 
of such billing cycle, the credit limit on the account is exceeded, and 
an over-the-limit fee, with respect to such excess credit, may be 
imposed only once in each of the 2 subsequent billing cycles, unless 
the consumer has obtained an additional extension of credit in excess 
of such credit limit during any such subsequent cycle or the consumer 
reduces the outstanding balance below the credit limit as of the end of 
such billing cycle.
    ``(o) Over-the-Limit Fees Prohibited in Conjunction With Certain 
Credit Holds.--Notwithstanding subsection (n), an over-the-limit fee 
may not be imposed if the credit limit was exceeded due to a hold 
unless the actual amount of the transaction for which the hold was 
placed would have resulted in the consumer exceeding the credit 
limit.''.

SEC. 5. STRENGTHEN CREDIT CARD INFORMATION COLLECTION.

    Section 136(b) of the Truth in Lending Act (15 U.S.C. 1646(b)) is 
amended--
          (1) in paragraph (1)--
                  (A) by striking ``Collection required.--The Board 
                shall'' and inserting ``Collection required.--
                  ``(A) In general.--The Board shall''.
                  (B) by adding at the end the following new 
                subparagraph:
                  ``(B) Information to be included.--The information 
                under subparagraph (A) shall include, for the relevant 
                semiannual period, the following information with 
                respect each creditor in connection with any consumer 
                credit card account:
                          ``(i) A list of each type of transaction or 
                        event during the semiannual period for which 1 
                        or more creditors has imposed a separate 
                        interest rate upon a consumer credit card 
                        accountholder, including purchases, cash 
                        advances, and balance transfers.
                          ``(ii) For each type of transaction or event 
                        identified under clause (i)--
                                  ``(I) each distinct interest rate 
                                charged by the card issuer to a 
                                consumer credit card accountholder 
                                during the semiannual period; and
                                  ``(II) the number of cardholders to 
                                whom each such interest rate was 
                                applied during the last calendar month 
                                of the semiannual period, and the total 
                                amount of interest charged to such 
                                accountholders at each such rate during 
                                such month.
                          ``(iii) A list of each type of fee that 1 or 
                        more of the creditors has imposed upon a 
                        consumer credit card accountholder during the 
                        semiannual period, including any fee imposed 
                        for obtaining a cash advance, making a late 
                        payment, exceeding the credit limit on an 
                        account, making a balance transfer, or 
                        exchanging United States dollars for foreign 
                        currency.
                          ``(iv) For each type of fee identified under 
                        clause (iii), the number of accountholders upon 
                        whom the fee was imposed during each calendar 
                        month of the semiannual period, and the total 
                        amount of fees imposed upon cardholders during 
                        such month.
                          ``(v) The total number of consumer credit 
                        card accountholders that incurred any finance 
                        charge or any other fee during the semiannual 
                        period.
                          ``(vi) The total number of consumer credit 
                        card accounts maintained by each creditor as of 
                        the end of the semiannual period.
                          ``(vii) The total number and value of cash 
                        advances made during the semiannual period 
                        under a consumer credit card account.
                          ``(viii) The total number and value of 
                        purchases involving or constituting consumer 
                        credit card transactions during the semiannual 
                        period.
                          ``(ix) The total number and amount of 
                        repayments on outstanding balances on consumer 
                        credit card accounts in each month of the 
                        semiannual period.
                          ``(x) The percentage of all consumer credit 
                        card accountholders (with respect to any 
                        creditor) who--
                                  ``(I) incurred a finance charge in 
                                each month of the semiannual period on 
                                any portion of an outstanding balance 
                                on which a finance charge had not 
                                previously been incurred; and
                                  ``(II) incurred any such finance 
                                charge at any time during the 
                                semiannual period.
                          ``(xi) The total number and amount of 
                        balances accruing finance charges during the 
                        semiannual period.
                          ``(xii) The total number and amount of the 
                        outstanding balances on consumer credit card 
                        accounts as of the end of such semiannual 
                        period.
                          ``(xiii) Total credit limits in effect on 
                        consumer credit card accounts as of the end of 
                        such semiannual period and the amount by which 
                        such credit limits exceed the credit limits in 
                        effect as of the beginning of such period.
                          ``(xiv) Any other information related to 
                        interest rates, fees, or other charges that the 
                        Board deems of interest.''; and
          (2) by adding at the end the following new paragraph:
          ``(5) Report to congress.--The Board shall, on an annual 
        basis, transmit to Congress and make public a report containing 
        estimates by the Board of the approximate, relative percentage 
        of income derived by the credit card operations of depository 
        institutions from--
                  ``(A) the imposition of interest rates on 
                cardholders, including separate estimates for--
                          ``(i) interest with an annual percentage rate 
                        of less than 25 percent; and
                          ``(ii) interest with an annual percentage 
                        rate equal to or greater than 25 percent;
                  ``(B) the imposition of fees on cardholders;
                  ``(C) the imposition of fees on merchants; and
                  ``(D) any other material source of income, while 
                specifying the nature of that income.''.

SEC. 6. STANDARDS APPLICABLE TO INITIAL ISSUANCE OF SUBPRIME OR ``FEE 
                    HARVESTER'' CARDS.

    Section 127B of the Truth in Lending Act is amended by inserting 
after subsection (o) (as added by section 4) the following new 
subsection:
    ``(p) Standards Applicable to Initial Issuance of Subprime or `Fee 
Harvester' Cards.--
          ``(1) In general.--In the case of any credit card account 
        under an open end consumer credit plan the terms of which 
        require the payment of any fee (other than any late fee, any 
        over-the-limit fee, or any fee for a payment returned for 
        insufficient funds) by the consumer in the first year the 
        account is opened in an amount in excess of 25 percent of the 
        total amount of credit authorized under the account when the 
        account is opened, no payment of any fee (other than any late 
        fee, any over-the-limit fee, or any fee for a payment returned 
        for insufficient funds) may be made from the credit made 
        available by the card.
          ``(2) Rule of construction.--No provision of this subsection 
        may be construed as authorizing any imposition or payment of 
        advance fees otherwise prohibited by any provision of law.''.

SEC. 7. EXTENSIONS OF CREDIT TO UNDERAGE CONSUMERS.

    Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is 
amended by adding at the end the following new paragraph:
          ``(8) Extensions of credit to underage consumers.--
                  ``(A) In general.--No credit card may be knowingly 
                issued to, or open end credit plan established on 
                behalf of, a consumer who has not attained the age of 
                18, unless the consumer is emancipated under applicable 
                State law.
                  ``(B) Rule of construction.--For the purposes of 
                determining the age of an applicant, the submission of 
                a signed application by a consumer stating that the 
                consumer is over 18 shall be considered sufficient 
                proof of age.''.

SEC. 8. PROHIBIT FEES FOR PAYMENT ON CREDIT CARD ACCOUNTS BY ELECTRONIC 
                    FUND TRANSFERS.

    (a) In General.--Section 127 of the Truth in Lending Act (15 U.S.C. 
1637) is amended by adding at the end the following new subsection:
    ``(i) Payments by EFT.--In the case of a credit card account under 
an open end consumer credit plan, a creditor may not impose a fee based 
on the manner in which payment on the account is made, including a fee 
for making any such payment by electronic fund transfer (as defined in 
section 903).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to all payments made after the date of the enactment of this Act 
and any fee imposed after such date in contravention of the amendment 
shall be promptly credited to the consumer's account.

SEC. 9. REPORT TO CONGRESS ON REDUCTIONS OF CONSUMER CREDIT CARD LIMITS 
                    BASED ON CERTAIN INFORMATION AS TO EXPERIENCE OR 
                    TRANSACTIONS OF THE CONSUMER.

    (a) Report on Creditor Practices Required.--Before the end of the 
6-month period beginning on the date of the enactment of this Act, the 
Board of Governors of the Federal Reserve System, in consultation with 
the Comptroller of the Currency, the Director of the Office of Thrift 
Supervision, the Federal Deposit Insurance Corporation, the National 
Credit Union Administration Board, and the Federal Trade Commission, 
shall 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 the extent to which, during the 3-year period 
ending on such date of enactment, creditors have reduced credit limits 
or raised interest rates applicable to credit card accounts under open 
end consumer credit plans based on--
          (1) the geographical location where a credit transaction with 
        the consumer takes place or the identity of the merchant 
        involved in the transaction;
          (2) the consumer's credit transactions, including the type of 
        credit transaction, the type of items purchased in such 
        transaction, the price of items purchased in such transaction, 
        any change in the type or price of items purchased in such 
        transactions, and other data pertaining to the consumer's use 
        of such credit card account; and
          (3) the identity of the mortgage creditor which extended or 
        holds the mortgage loan secured by the consumer's primary 
        residence.
    (b) Other Information.--The report required under subsection (a) 
shall also include--
          (1) the number and identity of creditors that have engaged in 
        the practices described in subsection (a);
          (2) the extent to which the practices described in subsection 
        (a) have an adverse impact on minority or low-income consumers;
          (3) any other relevant information regarding such practices; 
        and
          (4) recommendations to the Congress on regulatory or 
        statutory changes that may be needed to restrict or prevent 
        such practices.

SEC. 10. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (c) for the 
period described in such subsection, the amendments made by this Act 
shall apply to all credit card accounts under open end consumer credit 
plans after the earlier of--
          (1) the end of the 12-month period beginning on the date of 
        the enactment of this Act; or
          (2) June 30, 2010.
    (b) Regulations.--Except as provided in subsection (c) for the 
period described in such subsection, the Board of Governors of the 
Federal Reserve System, in consultation with the Comptroller of the 
Currency, the Director of the Office of Thrift Supervision, the Federal 
Deposit Insurance Corporation, the National Credit Union Administration 
Board, and the Federal Trade Commission, shall prescribe regulations, 
in final form, implementing the amendments made by this Act before the 
earlier of--
          (1) the end of the 5-month period beginning on the date of 
        the enactment of this Act; or
          (2) June 1, 2010.
    (c) Interim Effective Period for Advance Notices of Rate 
Increases.--
          (1) In general.--During the period beginning 90 days after 
        the date of the enactment of this Act and ending on the 
        effective date of all the amendments under this Act as 
        determined pursuant to subsection (a), no increase in any 
        annual percentage rate of interest on any credit card account 
        under an open end consumer credit plan (as such terms are 
        defined in the Truth in Lending Act) may take effect unless the 
        creditor provides a written notice to the consumer at least 45 
        days before the increase would otherwise take effect which 
        fully describes the changes in the annual percentage rate, in a 
        complete and conspicuous manner, and the extent to which such 
        increase would apply to an existing balance.
          (2) Exceptions.--A notice shall not be required under 
        paragraph (1) for an increase in an annual percentage rate 
        described in subparagraph (A), (B), or (C) of section 
        127B(b)(1) (as added by section 2).
          (3) Regulations.--The Board of Governors of the Federal 
        Reserve System shall prescribe regulations implementing the 
        amendment referred to in paragraph (1), for purposes of this 
        subsection, before the end of the 60-day period beginning on 
        the date of the enactment of this Act.

                          Purpose and Summary

    H.R. 627, the ``Credit Cardholders' Bill of Rights Act of 
2009,'' prohibits certain unfair and deceptive credit card 
practices and provides consumers with tools to manage their 
credit card debt responsibly. The bill prohibits retroactive 
rate increases on existing balances except under limited 
circumstances, including where the consumer is over 30 days 
late in making payment, and requires creditors to provide 
consumers with a reasonable time to pay off the balance. It 
requires creditors to provide a written notice of any rate 
increase at least 45 days before the increase takes effect, and 
to send periodic statements to consumers no less than 21 days 
before the due date. The bill prohibits double cycle billing 
and requires creditors to allocate payments in excess of the 
minimum to either the highest rate balance first or in a 
proportional manner. The bill limits overlimit fees and bans 
fees on interest-only balances. The bill requires creditors to 
offer cardholders the ability to prevent any overlimit 
transactions on their card. It prohibits creditors from 
knowingly issuing a credit card to a minor who is not 
emancipated. The bill prohibits creditors from reporting the 
issuance of any credit card to a credit bureau until the 
cardholder uses or activates the card. For credit cards on 
which fees in the first year exceed 25 percent of the initial 
credit limit, the bill requires that such fees (except late, 
overlimit, and insufficient fund fees) be paid from a source 
other than the card. The bill also provides for additional data 
collection to enable better oversight and regulation.

                  Background and Need for Legislation

    According to the Federal Reserve, more than 75 percent of 
all U.S. families have a credit card and 44 percent of families 
carry a balance. Credit card debt has increased by 25 percent 
in the last 10 years and reached $963 billion in January 2009. 
The accumulation of large amounts of credit card debt can have 
profound implications on individual consumers and the economy 
more generally. According to the Federal Financial Institutions 
Examination Council, the number of accounts more than 30 days 
late has increased from 3.9 percent in the fourth quarter of 
2006, to 5.6 percent in the fourth quarter of 2008. Similarly, 
the American Bankers Association's ``Consumer Credit 
Delinquency Bulletin,'' consumer credit delinquencies in the 
fourth quarter of 2008 reached their highest level ever at 4.52 
percent. Additionally, bankruptcy filings were up 31 percent in 
calendar year 2008 (following a 40 percent increase in 2007), a 
jump that many analysts attribute to high consumer debt levels.
    Prior to 1990, credit cards had more or less standardized 
rates of around 20 percent, few fees, and they were generally 
offered to persons with high credit standing. In the early 
1990s, credit card issuers began to adopt ``risk-based'' 
pricing, which was intended to employ a variety of factors to 
insure that cardholders were charged rates that reflected the 
default and other risks they pose to creditors. In addition, 
credit card issuers began to charge increased penalty fees for, 
among other things, late payment and over-the-limit 
transactions. Card issuers contend that the new pricing models 
enable them to offer cards to more individuals and charge lower 
interest rates to better credit risks. In contrast, consumer 
advocates allege that weakened underwriting standards are not 
necessarily in the best interest of cardholders, that many 
cards have ``teaser'' rates which are unrealistically low and 
soon increase to a much higher maximum rate, and that fee 
income has grown significantly.
    The increased complexity and the variety of factors used in 
risk-based pricing has drawn growing scrutiny of the conditions 
under which issuers may change a cardholder's interest rate 
under the standardized agreement. Most, if not all, agreements 
allow the issuer to change the interest rate or other terms at 
any time for any reason. Also, many agreements set up a number 
of conditions that are considered ``default'' on the terms of 
the agreement and thus allow significant change to the interest 
rate. These provisions allow the card issuer, after a consumer 
has agreed to the terms of a credit card account and used the 
card to make purchases or obtain cash advances, to rewrite the 
agreement or demand a higher rate of interest, even on funds 
previously advanced. A study by the Pew Charitable Trusts that 
was released in March 2009 found that in the one-year period 
(between 2007 and 2008), credit card issuers used these powers 
to raise interest rates on nearly one quarter of cardholder 
accounts, or approximately 70 million accounts. These practices 
skew the marketplace because the added charges are not 
reflected in the advertised interest rate, which, according to 
Pew, is the key price point consumers look to when selecting 
credit cards. Not only do these practices lead to a lack of 
transparency in the market, the ability to rewrite agreements 
has also allowed issuers to rapidly expand their businesses and 
bill cardholders tens of billions of dollars more per year. 
According to the Pew study, cardholders were assessed at least 
$10 billion in additional interest charges on top of standard 
fees and rates in the one year period reviewed.
    While credit card issuers describe these increases as 
``risk-based'' pricing, consumer advocates argue that the 
increases are disproportionate to the risk represented. For 
example, cardholders who pay one day late can incur the same 
rate raises as cardholders who are months late. A late 
payment--even by one day--is a factor that can raise a 
cardholder's interest rate, often over 30 percent, according to 
consumer studies. Even when the consumer poses an additional 
risk (i.e. frequent late payments), consumer advocates assert 
that accounts should only be ``re-priced'' prospectively. 
Although more than 6,000 companies issue credit cards, the 12 
largest credit card companies control nearly 90 percent of the 
market and all of the major issuers engage in risk-based 
pricing practices developed over the last twenty years; the 
same twenty-year period over which the consumer debt load has 
dramatically increased.
    Card issuers maintain that ``risk-based'' pricing allows 
more consumer choice and keeps interest rates lower. But a 2005 
report by the Government Accountability Office and a 2006 
report by the Board of Governors of the Federal Reserve both 
concluded that there was no empirical support for the 
proposition that ``risk- based'' pricing had led to lower 
rates. In addition, consumer advocates contend that some fees 
and penalty pricing are disproportionate to the risk posed by 
the consumer and are mainly intended to increase fee income. 
According to Cardtrak.com, the average late fee rose to $35 in 
2007, up from less than $13 in 1994. Similarly, average fees 
charged for exceeding a credit limit also rose to $35 a month.
    Retroactive Rate Increases on Pre-existing Balances. One of 
the most controversial common practices is the retroactive 
application of increased interest rates to consumers' pre-
existing balances. According to a 2008 survey by Consumer 
Action, most card issuers (77 percent) reserve the right to 
increase a consumer's interest rate on outstanding and 
prospective balances under ``any time, any reason'' clauses. 
Issuers contend that these clauses are necessary to insure they 
are able to price for risk. In contrast, consumer advocates 
argue that retroactive application is unfair and unjustified. 
Moreover, these advocates dispute whether this practice is 
truly risk-based, in light of the fact that individuals can be 
re-priced through no fault of their own. For instance, many 
consumers who are in good standing with their particular card 
issuer nonetheless can see their interest rates increase if 
there is a change in market conditions. Even when the consumer 
poses an additional risk (i.e. frequent late payments), 
consumer advocates assert that accounts should only be ``re-
priced'' prospectively. Some economists argue that retroactive 
re-pricing on existing balances has an anticompetitive effect 
on the market since consumers can't select cards on this basis 
or avoid the increases.
    A number of other practices can have negative impacts on 
consumers, including, but not limited to:
    Double-Cycle Billing. This practice occurs when a 
cardholder with no previous balance fails to pay the entire 
balance of new purchases by the payment due date, then--on the 
next periodic billing statement--the issuer computes interest 
on the original balance that had been subject to an interest-
free period. For example if you make a $1000 purchase and pay 
off $900 in the first month, you would be charged interest 
calculating your average daily balance over two billing cycles, 
increasing the amount of interest charged to your account.
    Payment Allocation. When a consumer's account consists of 
balances with two or more interest rates, typically all of the 
payments made to the account are applied first to the balance 
with the lowest interest rate, allowing the higher rate balance 
to grow more rapidly. This practice is viewed as unfair because 
it does not provide consumers with the full benefit of lower 
promotional interest rates.
    Late Payment. Consumer advocates allege that many issuers 
fail to promptly credit consumer payments, arbitrarily change 
due dates, provide unreasonably short times for bill payment, 
and otherwise make timely payments by cardholders difficult. 
They argue that this practice is harmful to consumers given the 
often severe consequences for late payments (in the form of 
retroactive interest rate increases, penalty interest rates, 
finance charges, and late fees).

                        REGULATORY DEVELOPMENTS

    In December 2008, the Board of Governors of the Federal 
Reserve System, the Office of Thrift Supervision, and the 
National Credit Union Administration approved a joint final 
rule prohibiting unfair or deceptive acts or practices relating 
to credit cards. The Board took the lead in drafting the rule, 
which is designed to protect consumers from unexpected interest 
charges, including increases in the rate during the first year 
after account opening and increases in the rate charged on pre-
existing credit card balances. These rules become effective on 
July 1, 2010. Among other provisions, the rules include five 
key protections for consumers:
    (1) Banks will be prohibited from increasing the rate on 
preexisting credit card balances during the first year after an 
account opens and only in certain circumstances after the first 
year.
    (2) Banks will be prohibited from imposing interest charges 
using the ``two-cycle'' billing method, which computes interest 
on balances on days in billing cycles preceding the most recent 
cycle.
    (3) Banks will be prohibited from treating a payment as 
late unless they provide a consumer with a reasonable amount of 
time to make payment.
    (4) Banks will be required to give consumers the benefit of 
discounted promotional rates on credit cards by applying 
payments in excess of the minimum either to the outstanding 
balance with the highest APR, or pro rata among the balances.
    (5) Banks will be required to provide 45 days' advance 
notice for changes to significant contract terms, such as fees 
or interest rate increases.
    Simultaneously, the Board adopted final rules to revise the 
disclosures consumers receive in connection with credit card 
accounts and other revolving credit plans to ensure that 
information is provided in a timely manner and in a form that 
is readily understandable. These rules amend Regulation Z 
(Truth in Lending) and conclude a comprehensive review of the 
open-end credit rules. The final rules under Regulation Z 
require changes to the format, timing, and content requirements 
for credit card applications and solicitations and for the 
disclosures that consumers receive throughout the life of an 
open-end account. The effective date for the final rules 
adopted under Regulation Z is also July 1, 2010.

                                Hearings

    The Subcommittee on Financial Institutions and Consumer 
Credit held a hearing on March 19, 2009 entitled, ``H.R. 627, 
the Credit Cardholders' Bill of Rights of 2009; and H.R. 1456, 
the Consumer Overdraft Protection Fair Practices Act of 2009.'' 
The following witnesses testified:
     Ms. Sandra F. Braunstein, Director, Division of 
Consumer and Community Affairs, Board of Governors of the 
Federal Reserve System
     Ms. Montrice Yakimov, Managing Director, 
Compliance and Consumer Protection, Office of Thrift 
Supervision
     Ms. Sheila Albin, Associate General Counsel, 
National Credit Union Administration
     Mr. Kenneth J. Clayton, Senior Vice President/
General Counsel, American Bankers Association Card Policy 
Council
     Ms. Linda Echard, President and CEO ICBA Bancard, 
on behalf of the Independent Community Bankers of America
     Mr. Douglas Fecher, President and CEO, Wright-Patt 
Credit Union, Inc., on behalf of the Credit Union National 
Association
     Mr. Oliver I. Ireland, Partner, Morrison & 
Foerster, LLP, Washington, DC
     Mr. Todd McCracken, President, National Small 
Business Association
     Mr. Ed Mierzwinski, Senior Fellow, Consumer 
Program, U.S. PIRG
     Mr. Travis Plunkett, Legislative Director, 
Consumer Federation of America

                Committee and Subcommittee Consideration

    The Committee on Financial Services met in open session on 
April 22, 2009, and ordered H.R. 627, the Credit Cardholders' 
Bill of Rights Act of 2009, as amended, favorably reported to 
the House by a record vote of 48 yeas and 19 nays. Previously, 
the Subcommittee on Financial Institutions and Consumer Credit 
met in open session on April 1, 2009, to consider H. R. 627 and 
on April 2, 2009, ordered the bill, as amended, forwarded to 
the Full Committee with a favorable recommendation by a voice 
vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Frank to report the bill, as amended, to the 
House with a favorable recommendation was agreed to by a record 
vote of 48 yeas and 19 nays (Record vote no. FC-16). The names 
of Members voting for and against follow.

                                              RECORD VOTE NO. FC-16
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorski..................        X   ........  .........  Mr. Castle.......  ........        X   .........
Ms. Waters.....................        X   ........  .........  Mr. King (NY)....  ........        X   .........
Mrs. Maloney...................        X   ........  .........  Mr. Royce........  ........        X   .........
Mr. Gutierrez..................        X   ........  .........  Mr. Lucas........  ........        X   .........
Ms. Velazquez..................  ........  ........  .........  Mr. Paul.........  ........        X   .........
Mr. Watt.......................        X   ........  .........  Mr. Manzullo.....  ........        X   .........
Mr. Ackerman...................        X   ........  .........  Mr. Jones........        X   ........  .........
Mr. Sherman....................        X   ........  .........  Mrs. Biggert.....        X   ........  .........
Mr. Meeks......................        X   ........  .........  Mr. Miller (CA)..  ........        X   .........
Mr. Moore (KS).................        X   ........  .........  Mrs. Capito......        X   ........  .........
Mr. Capuano....................        X   ........  .........  Mr. Hensarling...  ........        X   .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Garrett (NJ).  ........        X   .........
Mr. Clay.......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mrs. McCarthy..................        X   ........  .........  Mr. Gerlach......        X   ........  .........
Mr. Baca.......................        X   ........  .........  Mr. Neugebauer...  ........        X   .........
Mr. Lynch......................        X   ........  .........  Mr. Price (GA)...  ........        X   .........
Mr. Miller (NC)................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Scott......................        X   ........  .........  Mr. Campbell.....  ........  ........  .........
Mr. Green......................        X   ........  .........  Mr. Putnam.......  ........        X   .........
Mr. Cleaver....................        X   ........  .........  Mrs. Bachmann....  ........        X   .........
Ms. Bean.......................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Ms. Moore (WI).................        X   ........  .........  Mr. McCotter.....        X   ........  .........
Mr. Hodes......................        X   ........  .........  Mr. McCarthy.....  ........        X   .........
Mr. Ellison....................        X   ........  .........  Mr. Posey........        X   ........  .........
Mr. Klein......................        X   ........  .........  Ms. Jenkins......  ........        X   .........
Mr. Wilson.....................        X   ........  .........  Mr. Lee..........        X   ........  .........
Mr. Perlmutter.................        X   ........  .........  Mr. Paulsen......        X   ........  .........
Mr. Donnelly...................        X   ........  .........  Mr. Lance........        X   ........  .........
Mr. Foster.....................        X   ........  .........
Mr. Carson.....................        X   ........  .........
Mr. Speier.....................        X   ........  .........
Mr. Childers...................        X   ........  .........
Mr. Minnick....................        X   ........  .........
Mr. Adler......................        X   ........  .........
Ms. Kilroy.....................        X   ........  .........
Mr. Driehaus...................        X   ........  .........
Ms. Kosmas.....................  ........  ........  .........
Mr. Grayson....................        X   ........  .........
Mr. Himes......................        X   ........  .........
Mr. Peters.....................        X   ........  .........
Mr. Maffei.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    During the consideration of the bill in the Full Committee, 
the following amendments (to the Committee Print showing the 
amendment recommended by the Subcommittee on Financial 
Institutions) were disposed of by record votes. The names of 
Members voting for and against follow:
    An amendment by Mrs. Maloney (and Mr. Maffei), No. 1, 
relating to an interim effective period for advance notices of 
rate increases, was agreed to by a record vote of 40 yeas and 
22 nays (Record vote no. FC-11):

                                              RECORD VOTE NO. FC-11
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorski..................        X   ........  .........  Mr. Castle.......  ........        X   .........
Ms. Waters.....................  ........  ........  .........  Mr. King (NY)....  ........        X   .........
Mrs. Maloney...................        X   ........  .........  Mr. Royce........  ........        X   .........
Mr. Gutierrez..................        X   ........  .........  Mr. Lucas........  ........        X   .........
Ms. Velazquez..................  ........  ........  .........  Mr. Paul.........  ........  ........  .........
Mr. Watt.......................        X   ........  .........  Mr. Manzullo.....        X   ........  .........
Mr. Ackerman...................        X   ........  .........  Mr. Jones........        X   ........  .........
Mr. Sherman....................        X   ........  .........  Mrs. Biggert.....  ........        X   .........
Mr. Meeks......................        X   ........  .........  Mr. Miller (CA)..  ........        X   .........
Mr. Moore (KS).................        X   ........  .........  Mrs. Capito......  ........        X   .........
Mr. Capuano....................        X   ........  .........  Mr. Hensarling...  ........        X   .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Garrett (NJ).  ........        X   .........
Mr. Clay.......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mrs. McCarthy..................        X   ........  .........  Mr. Gerlach......  ........        X   .........
Mr. Baca.......................        X   ........  .........  Mr. Neugebauer...  ........        X   .........
Mr. Lynch......................        X   ........  .........  Mr. Price (GA)...  ........        X   .........
Mr. Miller (NC)................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Scott......................        X   ........  .........  Mr. Campbell.....  ........  ........  .........
Mr. Green......................        X   ........  .........  Mr. Putnam.......  ........        X   .........
Mr. Cleaver....................        X   ........  .........  Mrs. Bachmann....  ........  ........  .........
Ms. Bean.......................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Ms. Moore (WI).................        X   ........  .........  Mr. McCotter.....  ........        X   .........
Mr. Hodes......................        X   ........  .........  Mr. McCarthy.....  ........  ........  .........
Mr. Ellison....................        X   ........  .........  Mr. Posey........        X   ........  .........
Mr. Klein......................        X   ........  .........  Ms. Jenkins......  ........        X   .........
Mr. Wilson.....................        X   ........  .........  Mr. Lee..........  ........        X   .........
Mr. Perlmutter.................        X   ........  .........  Mr. Paulsen......  ........        X   .........
Mr. Donnelly...................        X   ........  .........  Mr. Lance........  ........        X   .........
Mr. Foster.....................        X   ........  .........
Mr. Carson.....................        X   ........  .........
Mr. Speier.....................  ........  ........  .........
Mr. Childers...................        X   ........  .........
Mr. Minnick....................        X   ........  .........
Mr. Adler......................        X   ........  .........
Ms. Kilroy.....................        X   ........  .........
Mr. Driehaus...................        X   ........  .........
Ms. Kosmas.....................  ........  ........  .........
Mr. Grayson....................        X   ........  .........
Mr. Himes......................        X   ........  .........
Mr. Peters.....................        X   ........  .........
Mr. Maffei.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Hensarling, No. 2, relating to 
nonapplicability to certain creditors who make available 
alternative card options, was not agreed to by a record vote of 
22 yeas and 43 nays (Record vote no. FC-12):

                                              RECORD VOTE NO. FC-12
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Mr. Castle.......        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Ms. Velazquez..................  ........  ........  .........  Mr. Paul.........  ........  ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Manzullo.....  ........        X   .........
Mr. Ackerman...................  ........        X   .........  Mr. Jones........  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Campbell.....  ........  ........  .........
Mr. Green......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Posey........  ........        X   .........
Mr. Klein......................  ........        X   .........  Ms. Jenkins......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Lee..........  ........        X   .........
Mr. Perlmutter.................  ........        X   .........  Mr. Paulsen......  ........        X   .........
Mr. Donnelly...................  ........        X   .........  Mr. Lance........        X   ........  .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
Mr. Speier.....................  ........  ........  .........
Mr. Childers...................  ........        X   .........
Mr. Minnick....................  ........        X   .........
Mr. Adler......................  ........        X   .........
Ms. Kilroy.....................  ........        X   .........
Mr. Driehaus...................  ........        X   .........
Ms. Kosmas.....................  ........  ........  .........
Mr. Grayson....................  ........        X   .........
Mr. Himes......................  ........        X   .........
Mr. Peters.....................  ........        X   .........
Mr. Maffei.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Hensarling, No. 3a, including in the 
study the effects of the amendments made by this Act, to the 
amendment offered by Ms. Waters, No. 3, requiring a report to 
Congress on reductions of consumer credit card limits based on 
certain information as to experience or transactions of the 
consumer, was not agreed to by a record vote of 28 yeas and 38 
nays (Record vote no. FC-13):

                                              RECORD VOTE NO. FC-13
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Mr. Castle.......        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Ms. Velazquez..................  ........  ........  .........  Mr. Paul.........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Campbell.....  ........  ........  .........
Mr. Green......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Posey........        X   ........  .........
Mr. Klein......................  ........        X   .........  Ms. Jenkins......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Lee..........        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Paulsen......        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. Lance........        X   ........  .........
Mr. Foster.....................  ........        X
Mr. Carson.....................  ........        X   .........
Mr. Speier.....................  ........  ........  .........
Mr. Childers...................  ........        X   .........
Mr. Minnick....................  ........        X   .........
Mr. Adler......................  ........        X   .........
Ms. Kilroy.....................  ........        X   .........
Mr. Driehaus...................  ........        X   .........
Ms. Kosmas.....................  ........  ........  .........
Mr. Grayson....................  ........        X   .........
Mr. Himes......................  ........        X   .........
Mr. Peters.....................  ........        X   .........
Mr. Maffei.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Price, No. 4, limiting actions for 
damages to individual actions, was not agreed to by a record 
vote of 24 yeas and 43 nays (Record vote no. FC-14):

                                              RECORD VOTE NO. FC-14
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Mr. Castle.......  ........        X   .........
Ms. Waters.....................  ........        X   .........  Mr. King (NY)....  ........        X   .........
Mrs. Maloney...................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Ms. Velazquez..................  ........  ........  .........  Mr. Paul.........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Jones........  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Gerlach......  ........        X   .........
Mr. Baca.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Campbell.....  ........  ........  .........
Mr. Green......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Posey........        X   ........  .........
Mr. Klein......................  ........        X   .........  Ms. Jenkins......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Lee..........        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Paulsen......        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. Lance........        X   ........  .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
Mr. Speier.....................  ........        X   .........
Mr. Childers...................  ........        X   .........
Mr. Minnick....................  ........        X   .........
Mr. Adler......................  ........        X   .........
Ms. Kilroy.....................  ........        X   .........
Mr. Driehaus...................  ........        X   .........
Ms. Kosmas.....................  ........  ........  .........
Mr. Grayson....................  ........        X   .........
Mr. Himes......................  ........        X   .........
Mr. Peters.....................  ........        X   .........
Mr. Maffei.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Hensarling, No. 6, regarding 
transparent advanced notice of a rate increase, was not agreed 
to by a record vote of 28 yeas and 39 nays (Record vote no. FC-
15):

                                              RECORD VOTE NO. FC-15
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Mr. Castle.......        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Ms. Velazquez..................  ........  ........  .........  Mr. Paul.........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Campbell.....  ........  ........  .........
Mr. Green......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Posey........        X   ........  .........
Mr. Klein......................  ........        X   .........  Ms. Jenkins......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Lee..........        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Paulsen......        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. Lance........        X   ........  .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
Mr. Speier.....................  ........        X   .........
Mr. Childers...................  ........        X   .........
Mr. Minnick....................  ........        X   .........
Mr. Adler......................  ........        X   .........
Ms. Kilroy.....................  ........        X   .........
Mr. Driehaus...................  ........        X   .........
Ms. Kosmas.....................  ........  ........  .........
Mr. Grayson....................  ........        X   .........
Mr. Himes......................  ........        X   .........
Mr. Peters.....................  ........        X   .........
Mr. Maffei.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    The following other amendments were also considered by the 
Committee:
    An amendment by Ms. Waters, No. 3, requiring a report to 
Congress on reductions of consumer credit card limits based on 
certain information as to experience or transactions of the 
consumer, was agreed to by voice vote.
    An amendment by Mrs. McCarthy (NY), No. 5, changing ``in'' 
to ``on'' regarding periodic statements, was agreed to by voice 
vote.
    An amendment by Mr. Miller (NC), No. 7, regarding minimum 
payment advisory, was offered and withdrawn.
    An amendment by Mr. Moore (KS) (and Mrs. McCarthy (NY), 
Mrs. Capito, and Mrs. Biggert), No. 8, regarding small issuers, 
was agreed to by voice vote.
    During the Subcommittee on Financial Institutions and 
Consumer Credit markup, the following amendments were disposed 
of by record votes. The names of Members voting for and against 
follow:
    An amendment by Mr. Ackerman, No. 1, prohibiting fees for 
payment on credit card accounts by electronic fund transfers, 
was agreed to by a record vote of 18 yeas and 17 nays (Record 
vote no. FI-1):

                                              RECORD VOTE NO. FI-1
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Gutierrez..................        X   ........  .........  Mr. Hensarling...  ........        X   .........
Mrs. Maloney...................        X   ........  .........  Mr. Barrett......  ........        X   .........
Mr. Watt.......................        X   ........  .........  Mr. Castle.......  ........        X   .........
Mr. Ackerman...................        X   ........  .........  Mr. King.........  ........        X   .........
Mr. Sherman....................        X   ........  .........  Mr. Royce........  ........        X   .........
Mr. Moore......................        X   ........  .........  Mr. Jones........  ........  ........  .........
Mr. Kanjorski..................        X   ........  .........  Mrs. Capito......  ........        X   .........
Ms. Waters.....................        X   ........  .........  Mr. Garrett......  ........  ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Gerlach......  ........  ........  .........
Mrs. McCarthy..................        X   ........  .........  Mr. Neugebauer...  ........        X   .........
Mr. Baca.......................        X   ........  .........  Mr. Price........  ........        X   .........
Mr. Green......................  ........  ........  .........  Mr. McHenry......  ........        X   .........
Mr. Clay.......................        X   ........  .........  Mr. Campbell.....  ........        X   .........
Mr. Miller.....................        X   ........  .........  Mr. McCarthy.....  ........  ........  .........
Mr. Scott......................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Mr. Cleaver....................        X   ........  .........  Mr. Lee..........  ........        X   .........
Ms. Bean.......................  ........        X   .........  Mr. Paulsen......  ........  ........  .........
Mr. Hodes......................  ........  ........  .........  Mr. Lance........  ........        X   .........
Mr. Ellison....................  ........  ........  .........  Mr.Bachus          ........  ........  .........
                                                                 (ExOfficio)
Mr. Klein......................        X   ........  .........
Mr. Wilson.....................  ........        X   .........
Mr. Meeks......................        X   ........  .........
Mr. Foster.....................        X   ........  .........
Mr. Perlmutter.................        X   ........  .........
Ms. Speier.....................  ........  ........  .........
Mr. Childers...................  ........        X   .........
Mr. Minnick....................  ........        X   .........
Mr.Frank(ExOfficio)              ........  ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Hensarling, No. 4, regarding repeated 
history of irresponsible borrowing, was not agreed to by a 
record vote of 15 yeas and 24 nays (Record vote no. FI-2):

                                              RECORD VOTE NO. FI-2
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Gutierrez..................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Barrett......        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. King.........        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Moore......................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Kanjorski..................  ........        X   .........  Mrs. Capito......        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Garrett......        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Gerlach......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Price........        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Miller.....................  ........        X   .........  Mr. McCarthy.....  ........  ........  .........
Mr. Scott......................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Lee..........        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Paulsen......  ........  ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Lance........        X   ........  .........
Mr. Ellison....................  ........  ........  .........  Mr.Bachus          ........  ........  .........
                                                                 (ExOfficio)
Mr. Klein......................  ........        X   .........
Mr. Wilson.....................  ........        X   .........
Mr. Meeks......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Perlmutter.................  ........        X   .........
Ms. Speier.....................  ........  ........  .........
Mr. Childers...................  ........        X   .........
Mr. Minnick....................  ........        X   .........
Mr.Frank(ExOfficio)              ........  ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Hensarling, No. 5, delaying the 
effective date pending certification by the Federal Reserve 
Board, was not agreed to by a record vote of 15 yeas and 25 
nays (Record vote no. FI-3):

                                              RECORD VOTE NO. FI-3
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Gutierrez..................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Barrett......        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. King.........        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Moore......................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Kanjorski..................  ........        X   .........  Mrs. Capito......        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Garrett......        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Gerlach......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Price........        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Campbell.....  ........        X   .........
Mr. Miller.....................  ........        X   .........  Mr. McCarthy.....  ........  ........  .........
Mr. Scott......................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Lee..........        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Paulsen......        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Lance........        X   ........  .........
Mr. Ellison....................  ........  ........  .........  Mr.Bachus          ........  ........  .........
                                                                 (ExOfficio)
Mr. Klein......................  ........        X   .........
Mr. Wilson.....................  ........        X   .........
Mr. Meeks......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Perlmutter.................  ........        X   .........
Ms. Speier.....................  ........  ........  .........
Mr. Childers...................  ........        X   .........
Mr. Minnick....................  ........        X   .........
Mr.Frank(ExOfficio)              ........  ........  .........
----------------------------------------------------------------------------------------------------------------

    The following other amendments were considered by the 
Subcommittee:
    An amendment by Mr. Hensarling, No. 2, regarding 
nonapplicability to certain creditors who make available 
alternative card options, was not agreed to by a voice vote.
    An amendment by Mr., Gutierrez (and Mr. Castle, Mrs. 
McCarthy (N.Y), Mr. Paulsen, Mr. Cleaver and Mr. Meeks), No. 3, 
regarding the effective date, was agreed to by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a hearing and made 
findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    H.R. 627 prohibits certain unfair and deceptive credit card 
practices and provides consumers with tools to manage their 
credit card debt responsibly.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                                    April 27, 2009.
Hon. Barney Frank,
Chairman, Committee on the Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 627, the Credit 
Cardholders' Bill of Rights Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact for federal 
revenues is Barbara Edwards; for federal spending, Susan 
Willie; and for the private-sector impact, Jacob Kuipers.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 627--Credit Cardholders' Bill of Rights Act of 2009

    Summary: H.R. 627 would amend the Truth in Lending Act to 
restrict the use of a number of billing practices applied to 
consumer credit cards, including those related to changes in 
interest rates and calculations of balances to which interest 
rates are applied. It would direct the Board of Governors of 
the Federal Reserve System (Federal Reserve), in consultation 
with other financial regulatory agencies, to issue regulations 
implementing the new standards. It also would increase the 
information that the Federal Reserve is required to collect on 
the financial activities of credit card issuers. Finally, H.R. 
627 would require the Federal Reserve to report to the Congress 
about certain practices of credit card issuers, the prevalence 
of those practices during the 3 years preceding enactment of 
the bill, and recommendations for regulations or statutes to 
prevent such practices.
    CBO estimates that enacting H.R. 627 would have no 
significant impact on direct spending or revenues.
    H.R. 627 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA) and would impose no 
costs on state, local, or tribal governments.
    H.R. 627 would impose private-sector mandates, as defined 
in UMRA. The bill would require creditors to submit detailed 
information on a semiannual basis to the Federal Reserve and 
prohibit creditors from engaging in certain credit card billing 
and issuing practices. Based on information from the Federal 
Reserve and industry sources, CBO estimates that the aggregate 
cost of those requirements would likely exceed the annual 
threshold established in UMRA for private-sector mandates ($139 
million in 2009, adjusted annually for inflation) in at least 
one of the first five years the mandates are in effect.
    Estimated cost to the Federal Government: For this 
estimate, CBO assumes that the bill will be enacted near the 
end of fiscal year 2009. CBO estimates that enacting H.R. 627 
would affect direct spending and revenues, but that those 
effects would not be significant.
    According to the Federal Reserve and other federal 
financial regulatory agencies, the activities required by H.R. 
627 would not have a significant effect on their workload or 
budgets. In May 2008, the Federal Reserve proposed a number of 
regulatory changes that covered some of the same issues 
addressed by H.R. 627, and issued those regulations in December 
2008. The related changes are scheduled to take effect in July 
of 2010. CBO expects the additional requirements for the 
Federal Reserve to collect data and provide reports would not 
have a significant effect on its workload and we anticipate 
that existing resources would be used to comply with H.R. 627. 
The budgetary effects on the Federal Reserve are recorded as 
changes in revenues (governmental receipts). Costs incurred by 
the other financial regulatory agencies affect direct spending, 
but most of those expenses are offset by fees or income from 
deposit insurance premiums. Thus, CBO estimates that enacting 
this bill would not significantly affect revenues, and would 
have a negligible net effect on direct spending.
    Estimated impact on state, local, and tribal governments: 
H.R. 627 contains no intergovernmental mandates as defined in 
UMRA and would impose no costs on state, local, or tribal 
governments.
    Estimated impact on the private sector: H.R. 627 contains 
several private-sector mandates as defined in UMRA because it 
would require creditors to submit detailed information to the 
Federal Reserve on a semiannual basis and prohibit creditors 
from engaging in certain billing and issuing practices. The 
aggregate cost for creditors to comply with those mandates 
would likely exceed the annual threshold established in UMRA 
for private-sector mandates ($139 million in 2009, adjusted 
annually for inflation) in at least one of the first five years 
the mandates are in effect.
    The bill also would codify several requirements included in 
credit card regulations recently established by the Federal 
Reserve and other financial regulatory agencies. CBO believes 
that action would not constitute a new mandate.

Reporting requirements

    The bill would require the Federal Reserve to collect 
additional data from creditors on the profitability of their 
credit card operations, the percentages of income derived from 
different sources, the level of fees on cardholders and 
merchants, certain changes made to credit limits and interest 
rates, and any other specified material sources of income. 
Under current law, the Federal Reserve collects financial data 
semiannually from a large sample of creditors. Those data are 
readily compiled by creditors, and the cost of submitting the 
data is minimal. However, according to the Federal Reserve and 
industry sources, in order to comply with the new requirements 
creditors would need to develop and implement new software 
programs and systems to compile the necessary data. Information 
from the Federal Reserve and industry sources indicates that 
the mandate would affect a large number of creditors and the 
cost to set up the systems could be significant.

Over-the-limit fees

    The bill would require creditors to allow cardholders to 
establish a credit limit that cannot be exceeded. As such, 
creditors would be prevented from completing any transaction 
that would put the cardholder in excess of their credit limit. 
Under current practice, most cardholders are allowed to exceed 
their credit limit and are charged a fee for doing so. Under 
the bill, creditors would be prohibited from charging over-the-
limit fees on accounts which the cardholder has requested a 
credit limit that cannot be exceeded. Because the bill also 
would require creditors to notify their cardholders of the 
option to establish a credit limit and provide the necessary 
tools for cardholders to do so, the Federal Reserve and 
industry representatives believe that many cardholders would 
elect to use the option. According to the Federal Reserve and 
industry sources, this requirement could significantly affect 
the amount that creditors collect in fees each year. The 
industry currently collects billions of dollars in such fees 
annually. Even if only a small percentage of cardholders 
elected to use this option, creditors could lose a significant 
amount of fees.

Standards for issuing cards

    The bill also would prohibit creditors from allowing 
individuals to pay any fees as part of the credit made 
available to them when the terms of the credit card include 
fees in the first year totaling more than 25 percent of the 
credit limit. According to the Federal Reserve and industry 
experts, credit cards with such fees are typically issued to 
individuals who have low credit scores and they typically carry 
a higher-than-average interest rate. The Federal Reserve 
believes that demand for such cards would fall under the bill 
because some customers in this market would no longer be able 
to pay the fees. The loss in net income to creditors could be 
substantial because the industry currently collects billions of 
dollars annually in interest and fees from such cards.
    The bill also would prohibit creditors from issuing credit 
cards to individuals under the age of 18, unless they meet the 
exceptions specified in the bill. According to industry 
representatives and the Federal Reserve, individuals under the 
age of 18 account for a very small percentage of credit 
cardholders. Therefore, CBO estimates that the cost to 
creditors to comply with this mandate would be small relative 
to the annual threshold established in UMRA.

Credit account features

    H.R. 627 would impose several new requirements on creditors 
regarding account pricing, terms, and disclosures. The bill 
would prohibit creditors from charging interest on payments 
received between the end of the account period and the receipt 
of the payment. The bill also would impose new requirements on 
creditors regarding the disclosure of activation information 
and interest rate increases and would require creditors to 
provide a service through which cardholders can determine their 
payoff balance. Creditors would be prohibited from charging 
credit cardholders for making payments regardless of the manner 
in which the payment is made. Finally, the bill would prohibit 
creditors from using the term ``prime rate'' unless the term is 
based on the definition provided in the bill. The cost to 
creditors would likely be small because compliance would 
involve only a small adjustment in current procedures, because 
some of the fees prohibited do not generate much income for the 
industry, and because most creditors do not engage in the 
prohibited acts.
    Previous CBO estimate: On April 24, 2009, CBO transmitted 
an estimate for S. 414, the Credit Card Accountability, 
Responsibility, and Disclosure Act of 2009, as ordered reported 
by the Senate Committee on Banking, Housing, and Urban Affairs 
on March 31, 2009. Both H.R. 627 and S. 414 would require the 
Federal Reserve to develop regulations that restrict the use of 
certain billing practices applied to consumer credit cards. S. 
414 also contains provisions, not included in H.R. 627, that 
would make changes to the funds administered by the Federal 
Deposit Insurance Corporation and the National Credit Union 
Administration (NCUA) including an increase in the amounts they 
could borrow from the U.S. Treasury. S. 414 also would lengthen 
the amount of time the NCUA would have to replenish its 
insurance fund after experiencing losses. CBO's cost estimates 
for the two bills reflect those differences.
    Estimate prepared by: Federal revenues: Barbara Edwards; 
Federal costs: Susan Willie; Impact on state, local, and tribal 
governments: Elizabeth Delisle; Impact on the private sector: 
Jacob Kuipers.
    Estimate approved by: Frank J. Sammartino, Acting Assistant 
Director for Tax Analysis; Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 627 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section establishes the short title of the bill, the 
``Credit Cardholders' Bill of Rights Act of 2009.''

Section 2. Credit cards on terms consumers can repay

            Retroactive rate increases and universal default limited
    Section 2(a). A creditor is prohibited from raising the 
annual percentage rate of interest (APR) on existing consumer 
credit card balances, except as provided in section 2(b). If a 
creditor raises an APR and there is an existing balance to 
which such rate increase may not apply, the creditor must allow 
the consumer to repay that existing balance through a method 
that is at least as beneficial to the consumer as one of the 
following: (1) a five-year amortization period or (2) the 
percentage of the existing balance included in the minimum 
payment before the rate increase cannot be more than doubled. 
``Existing balance'' means the amount owed on a consumer credit 
card as of the end of the 14th day after the creditor provides 
notice of the rate increase under section 2(c). A creditor is 
prohibited from assessing a fee or charge based solely on an 
existing balance to which an APR increase may not apply.
    Section 2(b). A creditor may increase an APR on an existing 
balance on a consumer credit card only if the increase is due 
solely to (1) the operation of an index that is not under the 
creditor's control and is available to the general public; (2) 
the expiration of a promotional rate; (3) the consumer's 
failure to comply with a negotiated workout plan with the 
creditor (but the new APRs for each category of transactions 
cannot exceed the corresponding APRs on the day before the 
effective date of the workout plan); or (4) the consumer's 
failure to make minimum payment within 30 days of the minimum 
payment due date.
    Section 2(c). No increase in any consumer credit card APR 
(other than an increase due solely to the operation of an index 
that is not under the creditor's control and is available to 
the general public) may take effect unless the creditor 
provides the consumer a written notice at least 45 days before 
the effective date that fully describes the changes in the APR 
and the extent to which such increase would apply to an 
existing balance. Except for the types of rate increases 
described in paragraph 2(b), no written notice of an APR 
increase for which notice is required by this paragraph may 
take effect until at least one year after the account was 
opened.
    A creditor also must provide written notice to the consumer 
of all significant changes to a credit card contract at least 
45 days before such changes take effect.

Section 3. Additional provisions regarding account features, terms, and 
        pricing

            Double cycle billing prohibited
    Section 3(a). Some creditors provide a time within which 
any credit extended under the credit plan for purchases of 
goods and services may be repaid by the consumer without 
incurring a finance charge (a ``grace period''). The bill 
prohibits a creditor from imposing a finance charge on a credit 
card balance that is based on balances for days in billing 
cycles preceding the most recent billing cycle as a result of a 
loss of any grace period, with exceptions that allow the 
creditor to adjust finance charges if a payment is returned for 
insufficient funds or following resolution of a billing 
dispute.
            Limitations relating to account balances attributable only 
                    to accrued interest
    Section 3(b). If the outstanding balance at the end of a 
billing period represents an amount attributable only to 
interest accrued during the preceding billing period on an 
outstanding balance that was fully repaid during that period, 
then the creditor may not impose a fee on such balance 
attributable only to interest before such end of the billing 
period and may not treat any failure to pay such balance before 
such end of the billing period as a default on the account. 
Such balance remains a legally binding debt obligation of the 
consumer, and interest may accrue on that balance in accordance 
with the account terms.
            Payoff balance information
    Section 3(c). This section generally requires a creditor to 
provide on each periodic statement a toll-free telephone 
number, Internet address, and web site at which a consumer may 
request a payoff balance. A creditor that issues fewer than 
500,000 credit cards would be required to provide only one of 
these notification methods.
            Consumer right to reject card before notice is provided of 
                    open account
    Section 3(d). A creditor is prohibited from furnishing to a 
consumer reporting agency (as defined in section 603 of the 
Truth in Lending Act) information about the establishment of a 
newly-opened credit card account until the cardholder uses or 
activates the card. This does not, however, prohibit the 
creditor from furnishing information to a credit reporting 
agency about any application for a credit card account or any 
inquiry about any such account.
            Use of terms
    Section 3(e). The term ``fixed rate,'' when used with 
respect to an APR or interest rate for a credit card account, 
may be used to refer only to a rate that will not change for 
any reason over the period of time clearly specified in the 
account terms.
    The term ``prime rate'' when used in an agreement or 
contract for a credit card account, may be used to refer only 
to the bank prime rate published by the Federal Reserve in the 
H.15 statistical release (or any successor publication).
    To clarify the term ``due date,'' this section requires 
that each periodic statement contain a date by which the next 
periodic payment must be made to avoid a late fee or be 
considered a late payment. Any payment received by 5 P.M., 
local time at the location specified by the creditor for the 
receipt of payment, on the specified date shall be timely for 
all purposes. Online and telephone payments that are made 
directly to the creditor before 5 p.m., local time at the 
location specified by the creditor, on a business day must be 
credited to the consumer's account that business day. A receipt 
from the U.S. Postal Service or a common carrier indicating 
that a payment was sent no less than 7 days before the due date 
creates a presumption of timely payment, which may be rebutted 
by the creditor for fraud or dishonesty with respect to the 
mailing date.
            Payment allocations
    Section 3(f). If two or more different APRs apply to 
different portions of an outstanding credit card balance and 
the consumer pays more than the minimum payment, the creditor 
must apply the excess payment either (1) to the portion with 
the highest APR (and then to additional portions, if any, in 
descending order of APR) or (2) in the same proportion as each 
such portion bears to the total outstanding balance. A creditor 
may allocate the entire amount of an excess payment to a 
balance on which interest is deferred for the two billing 
cycles preceding the expiration of the interest deferral 
period. A creditor that offers an interest-free period to a 
consumer who pays the balance in full may not deny a consumer 
who takes advantage of a promotional rate or deferred interest 
offer any such time period for repaying credit without 
incurring finance charges.
            Timely provision of periodic statement
    Section 3(g). A creditor must send each periodic statement 
with respect to a credit card account to the consumer not less 
than 21 days before the due date.
            Due dates
    Section 3(h). If a due date falls on a day that mail is not 
delivered to, or accepted for processing by, the creditor, then 
the payment would be timely if received by mail the next 
business day.

Section 4. Consumer choice with respect to Over-the-Limit transactions

    If a creditor imposes an over-the-limit (OTL) fee for an 
extension of credit that exceeds the consumer's credit limit, 
the consumer may elect to prohibit the creditor from completing 
any transaction that would involve extending credit in excess 
of the consumer's credit limit. Such an election becomes 
effective three business days after the creditor receives it 
and remains effective until the consumer revokes it.
    A creditor generally must establish and maintain a 
notification system, including a toll-free telephone number, 
Internet address, and web site, through which consumers can opt 
out of OTL transactions. A creditor that maintains fewer than 
500,000 credit card accounts would be required to maintain only 
one of these notification methods. A consumer may exercise the 
OTL transaction opt-out by notifying the creditor either 
through this notification system or by submitting a form issued 
by the creditor for this purpose.
    A creditor must notify consumers of the availability of the 
OTL transaction opt-out at least annually on the periodic 
statement and on any periodic statement that reflects 
imposition of an OTL fee during the period covered by the 
statement.
    If a consumer exercises the OTL opt-out right, then the 
creditor may not charge an OTL fee for any reason that caused 
the outstanding balance to exceed the consumer's credit limit. 
If a consumer does not exercise the right to opt out of OTL 
transactions, an OTL fee may be imposed only once during a 
billing cycle if the credit limit is exceeded on the last day 
of such billing cycle, and an OTL fee may be imposed only once 
in each of the two subsequent billing cycles with respect to 
such charges in excess of the credit limit (unless the consumer 
has obtained an additional extension of credit or the consumer 
reduces the outstanding balance below the credit limit as of 
the end of such billing cycle). A creditor may not charge an 
OTL fee due solely to credit holds, unless the actual amount of 
the transaction subject to the hold exceeded the credit limit.
    The Federal Reserve must issue rules allowing for the 
completion of OTL transactions that for operational reasons 
exceed the credit limit by a de minimis amount, even if the 
cardholder has opted out. These rules cannot, however, allow 
for the imposition of any fee or rate increase based on an OTL 
transaction permitted under these rules.

Section 5. Strengthen credit card information collection

    This section amends an existing provision, which requires 
the FRB to collect credit card price and availability data on a 
semiannual basis, to specify in detail information to be 
collected with respect to each creditor regarding the type and 
level of credit card rates and fees charged by issuers 
(including the number of consumers assessed such rates and 
fees), the total number and value of credit card accounts and 
transactions, and other information relating to consumer credit 
card accounts.
    This section also requires the Federal Reserve annually to 
transmit to Congress and make public a report of estimates of 
the approximate relative percentage of income derived by the 
credit card operations of depository institutions from interest 
(including separate estimates for income derived from interest 
with an annual APR at/above and below 25 percent); fees on 
cardholders; fees on merchants; and other material sources.

Section 6. Standards applicable to initial issuance of subprime or 
        ``Fee Harvester'' cards

    If the terms of a credit card account require the payment 
of any fee (other than late fees, OTL fees, or fees for 
payments returned for insufficient funds) by the consumer in 
the first year the account is open in an amount that exceeds 25 
percent of the credit limit at account opening, then the 
consumer cannot use credit made available by the card to pay 
any fee (other than late fees, OTL fees, or fees for payments 
returned for insufficient funds).

Section 7. Extension of credit to underage consumers

    This section prohibits issuance of credit cards to a 
consumer who is under 18, unless the consumer is emancipated 
under applicable State law. A signed application by a consumer 
stating that (s)he is over 18 is sufficient proof of age.

Section 8. Prohibit fees for payment on credit card accounts by 
        electronic fund transfer

    This section prohibits the imposition of any fee based on 
the manner in which payment on any credit card account is made, 
including a fee for making a payment by electronic fund 
transfer. This section applies to all payments made after the 
date of enactment, and any fee imposed after such date in 
contravention of this provision shall be promptly recredited to 
the consumer's account.

Section 9. Report to Congress on reductions of consumer credit card 
        limits based on certain information as to experience or 
        transactions of the consumer

    Within 6 months of enactment, this section requires the 
Federal Reserve Board, in consultation with the other Federal 
banking agencies and the Federal Trade Commission, to report to 
the House Financial Services Committee and the Senate Banking, 
Housing, and Urban Affairs Committee on the extent to which 
creditors have, during the previous 3 years, reduced credit 
limits or raised interest rates applicable to credit cards 
based on the geographical area in which a transaction occurs, 
the identity of the merchant involved in a transaction, the 
identity of the creditor that extended or holds the consumer's 
mortgage loan, or other characteristics of the consumer's 
credit transactions (such as transaction types or prices or the 
types of items purchased).
    The report to the congressional committees must include the 
number and identity of creditors engaged in the above-mentioned 
practices, the extent to which such practices adversely affect 
minority and low-income consumers, any other relevant 
information regarding such practices, and recommendations on 
regulatory or statutory changes that may be needed to restrict 
or prevent such practices.

Section 10. Effective date

    The bill generally takes effect after the earlier of the 
end of the 12-month period beginning on the date of enactment 
or after June 30, 2010. An interim effective period for notices 
regarding APR increases provides that, during the period 
beginning 90 days after the date of enactment and ending on the 
effective date of the Act, no increase in APR may take effect 
without a written notice being delivered at least 45 days 
before the increase takes effect, except that notice shall not 
be required during this period for increases due solely to 
operation of a publically available index not set by the 
creditor, expiration of a promotional rate, or the consumer's 
failure to comply with a negotiated workout plan.
    The Federal Reserve, in consultation with the other Federal 
banking agencies, must promulgate final implementing rules by 
the earlier of the end of the 5 month period beginning on the 
date of enactment or June 1, 2010.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TRUTH IN LENDING ACT

           *       *       *       *       *       *       *


TITLE I--CONSUMER CREDIT COST DISCLOSURE

           *       *       *       *       *       *       *


CHAPTER 1--GENERAL PROVISIONS

           *       *       *       *       *       *       *


Sec. 101. Short title

  This title may be cited as the Truth in Lending Act.

           *       *       *       *       *       *       *


                     CHAPTER 2--CREDIT TRANSACTIONS

Sec.
121. General requirement of disclosure.
     * * * * * * *
127B. Additional requirements for credit card accounts under an open end 
          consumer credit plan.

           *       *       *       *       *       *       *


Sec. 127. Open end consumer credit plans

  (a) * * *

           *       *       *       *       *       *       *

  (c) Disclosure in Credit and Charge Card Applications and 
Solicitations.--
          (1) * * *

           *       *       *       *       *       *       *

          (8) Extensions of credit to underage consumers.--
                  (A) In general.--No credit card may be 
                knowingly issued to, or open end credit plan 
                established on behalf of, a consumer who has 
                not attained the age of 18, unless the consumer 
                is emancipated under applicable State law.
                  (B) Rule of construction.--For the purposes 
                of determining the age of an applicant, the 
                submission of a signed application by a 
                consumer stating that the consumer is over 18 
                shall be considered sufficient proof of age.

           *       *       *       *       *       *       *

  (i) Payments by EFT.--In the case of a credit card account 
under an open end consumer credit plan, a creditor may not 
impose a fee based on the manner in which payment on the 
account is made, including a fee for making any such payment by 
electronic fund transfer (as defined in section 903).

           *       *       *       *       *       *       *


Sec. 127B. Additional requirements for credit card accounts under an 
                    open end consumer credit plan

  (a) Retroactive Rate Increases and Universal Default 
Limited.--
          (1) In general.--Except as provided in subsection 
        (b), no creditor may increase any annual percentage 
        rate of interest applicable to the existing balance on 
        a credit card account of the consumer under an open end 
        consumer credit plan.
          (2) Existing balance defined.--For purposes of this 
        subsection and subsections (b) and (c), the term 
        ``existing balance'' means the amount owed on a 
        consumer credit card account as of the end of the 14th 
        day after the creditor provides notice of an increase 
        in the annual percentage rate in accordance with 
        subsection (c).
          (3) Treatment of existing balances following rate 
        increase.--If a creditor increases any annual 
        percentage rate of interest applicable to the credit 
        card account of a consumer under an open end consumer 
        credit plan and there is an existing balance in the 
        account to which such increase may not apply, the 
        creditor shall allow the consumer to repay the existing 
        balance using a method provided by the creditor which 
        is at least as beneficial to the consumer as 1 of the 
        following methods:
                  (A) An amortization period for the existing 
                balance of at least 5 years starting from the 
                date on which the increased annual percentage 
                rate went into effect.
                  (B) The percentage of the existing balance 
                that was included in the required minimum 
                periodic payment before the rate increase 
                cannot be more than doubled.
          (4) Limitation on certain fees.--If--
                  (A) a creditor increases any annual 
                percentage rate of interest applicable on a 
                credit card account of the consumer under an 
                open end consumer credit plan; and
                  (B) the creditor is prohibited by this 
                section from applying the increased rate to an 
                existing balance,
        the creditor may not assess any fee or charge based 
        solely on the existing balance.
  (b) Exceptions.--
          (1) In general.--A creditor may increase any annual 
        percentage rate of interest applicable to the existing 
        balance on a credit card account of the consumer under 
        an open end consumer credit plan only under the 
        following circumstances:
                  (A) Change in index.--The increase is due 
                solely to the operation of an index that is not 
                under the creditor's control and is available 
                to the general public.
                  (B) Expiration of promotional rate.--The 
                increase is due solely to the expiration of a 
                promotional rate.
                  (C) Failure to comply with workout plan.--The 
                increase is due solely to the fact the consumer 
                failed to comply with a negotiated workout plan 
                with the creditor.
                  (D) Payment not received during 30-day grace 
                period after due date.--The increase is due 
                solely to the fact that any consumer's minimum 
                payment has not been received within 30 days 
                after the due date for such minimum payment.
          (2) Limitation on increases due to failure to comply 
        with workout plan.--Notwithstanding paragraph (1)(C), 
        the annual percentage rate in effect with respect to 
        each category of transactions for a credit card account 
        under an open end consumer credit plan after the 
        increase permitted under such subsection due to the 
        failure of a consumer to comply with a workout plan may 
        not exceed the annual percentage applicable to such 
        category of transactions on the day before the 
        effective date of the workout plan.
          (3) Standards required.--The Board shall prescribe, 
        by regulation, standards--
                  (A) for entering into any workout plan 
                applicable to any credit card account under an 
                open end consumer credit plan; and
                  (B) governing any such workout plan.
  (c) Advance Notice of Rate Increases.--
          (1) In general.--In the case of any credit card 
        account under an open end consumer credit plan, no 
        increase in any annual percentage rate of interest 
        (other than an increase described in subsection 
        (b)(1)(A)) may take effect unless the creditor provides 
        a written notice to the consumer at least 45 days 
        before the increase takes effect which fully describes 
        the changes in the annual percentage rate, in a 
        complete and conspicuous manner, and the extent to 
        which such increase would apply to an existing balance.
          (2) Limitation on rate increase notices within first 
        year.--Except in the case of an increase described in 
        subparagraph (B), (C), or (D) of subsection (b)(1), no 
        written notice under paragraph (1) of an increase in 
        any annual percentage rate of interest on any credit 
        card account under an open end consumer credit plan 
        (for which notice is required under such paragraph) 
        shall be effective before the end of the 1-year period 
        beginning when the account is opened.
  (d) Advance Notice of Significant Contract Changes.--In the 
case of any credit card account under an open end consumer 
credit plan, no significant change to the contract (such as any 
fee) may take effect unless the creditor provides a written 
notice of at least 45 days before the change takes effect which 
fully describes the changes in the contract, in a complete and 
conspicuous manner.
  (e) Double Cycle Billing.--
          (1) In general.--No finance charge may be imposed by 
        a creditor with respect to any balance on a credit card 
        account under an open end consumer credit plan that is 
        based on balances for days in billing cycles preceding 
        the most recent billing cycle as a result of the loss 
        of any grace period.
          (2) Exceptions.--Paragraph (1) shall not apply so as 
        to prohibit a creditor from--
                  (A) adjusting finance charges following the 
                return of a payment for insufficient funds; or
                  (B) adjusting finance charges following 
                resolution of a billing error dispute.
          (3) Grace period.--For purposes of this subsection, 
        the term ``grace period'' means, with respect to any 
        credit card account under an open end consumer credit 
        plan, the time period, if any, provided by the creditor 
        within which any credit extended under such credit plan 
        for purchases of goods or services may be repaid by the 
        consumer without incurring a finance charge.
  (f) Limitations Relating to Account Balances Attributable 
Only to Accrued Interest.--
          (1) In general.--If the outstanding balance on a 
        credit card account under an open end consumer credit 
        plan at the end of a billing period represents an 
        amount attributable only to interest accrued during the 
        preceding billing period on an outstanding balance that 
        was fully repaid during the preceding billing period--
                  (A) no fee may be imposed or collected in 
                connection with such balance attributable only 
                to interest before such end of the billing 
                period; and
                  (B) any failure to make timely repayments of 
                the balance attributable only to interest 
                before such end of the billing period shall not 
                constitute a default on the account.
        Such balance remains a legally binding debt obligation.
          (2) Rule of construction.--Paragraph (1) shall not be 
        construed as affecting--
                  (A) the consumer's obligation to pay any 
                accrued interest on a credit card account under 
                an open end consumer credit plan; or
                  (B) the accrual of interest on the 
                outstanding balance on any such account in 
                accordance with the terms of the account and 
                this title.
  (g) Payoff Balance Information.--
          (1) In general.--Each periodic statement provided by 
        a creditor to a consumer with respect to a credit card 
        account under an open end consumer credit plan shall 
        contain the toll-free telephone number, Internet 
        address, and website at which the consumer may request 
        the payoff balance on the account.
          (2) Small issuers.--Notwithstanding paragraph (1), in 
        the case of any credit card issuer which issues fewer 
        than 50,000 credit cards in conjunction with credit 
        card accounts under open end consumer credit plans, 
        each periodic statement provided by such a creditor to 
        a consumer with respect to any such credit card account 
        shall contain the toll-free telephone number, Internet 
        address, or website at which the consumer may request 
        the payoff balance on the account.
  (h) Consumer Right to Reject Card Before Notice of New 
Account Is Provided to Consumer Reporting Agency.--
          (1) In general.--A creditor may not furnish any 
        information to a consumer reporting agency (as defined 
        in section 603) concerning the establishment of a newly 
        opened credit card account under an open end consumer 
        credit plan until the credit card has been used or 
        activated by the consumer.
          (2) Rule of construction.--Paragraph (1) shall not be 
        construed as prohibiting a creditor from furnishing 
        information about any application for a credit card 
        account under an open end consumer credit plan or any 
        inquiry about any such account to a consumer reporting 
        agency (as so defined).
  (i) Use of Terms.--The following requirements shall apply 
with respect to the terms of any credit card account under any 
open end consumer credit plan:
          (1) ``Fixed'' rate.--The term ``fixed'', when 
        appearing in conjunction with a reference to the annual 
        percentage rate or interest rate applicable with 
        respect to such account, may only be used to refer to 
        an annual percentage rate or interest rate that will 
        not change or vary for any reason over the period 
        clearly and conspicuously specified in the terms of the 
        account.
          (2) Prime rate.--The term ``prime rate'', when 
        appearing in any agreement or contract for any such 
        account, may only be used to refer to the bank prime 
        rate published in the Federal Reserve Statistical 
        Release on selected interest rates (daily or weekly), 
        and commonly referred to as the H.15 release (or any 
        successor publication).
          (3) Due date.--
                  (A) In general.--Each periodic statement for 
                any such account shall contain a date by which 
                the next periodic payment on the account must 
                be made to avoid a late fee or be considered a 
                late payment, and any payment received by 5 
                p.m., local time at the location specified by 
                the creditor for the receipt of payment, on 
                such date shall be treated as a timely payment 
                for all purposes.
                  (B) Certain electronic fund transfers.--Any 
                payment with respect to any such account made 
                by a consumer online to the website of the 
                credit card issuer or by telephone directly to 
                the credit card issuer before 5 p.m., local 
                time at the location specified by the creditor 
                for the receipt of payment, on any business day 
                shall be credited to the consumer's account 
                that business day.
                  (C) Presumption of timely payment.--Any 
                evidence provided by a consumer in the form of 
                a receipt from the United States Postal Service 
                or other common carrier indicating that a 
                payment on a credit card account was sent to 
                the issuer not less than 7 days before the due 
                date contained in the periodic statement under 
                subparagraph (A) for such payment shall create 
                a presumption that such payment was made by the 
                due date, which may be rebutted by the creditor 
                for fraud or dishonesty on the part of the 
                consumer with respect to the mailing date.
  (j) Payment Allocations.--
          (1) In general.--If 2 or more different annual 
        percentage rates apply to different portions of an 
        outstanding balance on a credit card account under an 
        open end consumer credit plan, the amount of any 
        periodic payment in excess of the required minimum 
        payment shall be applied using 1 of the following 
        methods:
                  (A) High-to-low method.--The excess amount is 
                allocated first to the balance with the highest 
                annual percentage rate and any remaining 
                portion is allocated to any other balance in 
                descending order, based on the applicable 
                annual percentage rate each portion of such 
                balance bears, from the highest such rate to 
                the lowest.
                  (B) Pro rata method.--The excess amount is 
                allocated among each of the portions of such 
                balance which bear different rates of interest 
                in the same proportion as each such portion of 
                the outstanding balance bears to the total 
                outstanding balance.
          (2) Clarification relating to certain deferred 
        interest arrangements.--A creditor may allocate the 
        entire amount paid by the consumer in excess of the 
        required minimum periodic payment to a balance on which 
        interest is deferred during the 2 billing cycles 
        immediately preceding the expiration of the period 
        during which interest is deferred.
          (3) Prohibition on restricted grace periods under 
        certain circumstances.--If, with respect to any credit 
        card account under an open end consumer credit plan, a 
        creditor offers a time period in which to repay credit 
        extended without incurring finance charges to 
        cardholders who pay the balance in full, the creditor 
        may not deny a consumer who takes advantage of a 
        promotional rate balance or deferred interest rate 
        balance offer with respect to such an account any such 
        time period for repaying credit without incurring 
        finance charges.
  (k) Timely Provision of Periodic Statements.--Each periodic 
statement with respect to a credit card account under an open 
end consumer credit plan shall be sent by the creditor to the 
consumer not less than 21 calendar days before the due date 
identified in such statement for the next payment on the 
outstanding balance on such account, and section 163(a) shall 
be applied with respect to any such account by substituting 
``21'' for ``fourteen''.
  (l) Due Dates.--If the date established by a creditor as the 
date on which a periodic payment on a credit card account under 
an open end consumer credit plan is due is a day on which mail 
is either not delivered to such creditor or is not accepted by 
the creditor for processing on such day, the creditor may not 
treat the receipt by the creditor of any such periodic payment 
by mail as of the next business day of the creditor as late for 
any purpose.
  (m) Opt-Out of Creditor Authorization of Over-the-Limit 
Transactions if Fees Are Imposed.--
          (1) In general.--In the case of any credit card 
        account under an open end consumer credit plan under 
        which an over-the-limit-fee may be imposed by the 
        creditor for any extension of credit in excess of the 
        amount of credit authorized to be extended under such 
        account, the consumer may elect to prohibit the 
        creditor, with respect to such account, from completing 
        any transaction involving the extension of credit, with 
        respect to such account, in excess of the amount of 
        credit authorized by notifying the creditor of such 
        election in accordance with paragraph (2).
          (2) Notification by consumer.--A consumer shall 
        notify a creditor under paragraph (1)--
                  (A) through the notification system 
                maintained by the creditor under paragraph (4); 
                or
                  (B) by submitting to the creditor a signed 
                notice of election, by mail or electronic 
                communication, on a form issued by the creditor 
                for purposes of this subparagraph.
          (3) Effectiveness of election.--An election by a 
        consumer under paragraph (1) shall be effective 
        beginning 3 business days after the creditor receives 
        notice from the consumer in accordance with paragraph 
        (2) and shall remain effective until the consumer 
        revokes the election.
          (4) Notification system.--
                  (A) In general.--Each creditor that maintains 
                credit card accounts under an open end consumer 
                credit plan shall establish and maintain a 
                notification system, including a toll-free 
                telephone number, Internet address, and 
                website, which permits any consumer whose 
                credit card account is maintained by the 
                creditor to notify the creditor of an election 
                under this subsection in accordance with 
                paragraph (2).
                  (B) Small issuers.--Notwithstanding 
                subparagraph (A), any credit card issuer which 
                issues fewer than 50,000 credit cards in 
                conjunction with credit card accounts under 
                open end consumer credit plans shall establish 
                and maintain a notification system, which shall 
                include a toll-free telephone number, Internet 
                address, or website, which permits any consumer 
                whose credit card account is maintained by the 
                creditor to notify the creditor of an election 
                under this subsection in accordance with 
                paragraph (2).
          (5) Annual notice to consumers of availability of 
        election.--In the case of any credit card account under 
        an open end consumer credit plan, the creditor shall 
        include a notice, in clear and conspicuous language, of 
        the availability of an election by the consumer under 
        this paragraph as a means of avoiding over-the limit 
        fees and a higher amount of indebtedness, and the 
        method for providing such notice--
                  (A) on the periodic statement required under 
                section 127(b) with respect to such account at 
                least once each calendar year; and
                  (B) on any such periodic statement which 
                includes a notice of the imposition of an over-
                the-limit fee during the period covered by the 
                statement.
          (6) No fees if consumer has made an election.--If a 
        consumer has made an election under paragraph (1), no 
        over-the-limit fee may be imposed on the account for 
        any reason that has caused the outstanding balance in 
        the account to exceed the credit limit.
          (7) Regulations.--
                  (A) In general.--The Board shall issue 
                regulations allowing for the completion of 
                over-the-limit transactions that for 
                operational reasons exceed the credit limit by 
                a de minimis amount, even where the cardholder 
                has made an election under paragraph (1).
                  (B) Subject to no fee limitation.--The 
                regulations prescribed under subparagraph (A) 
                shall not allow for the imposition of any fee 
                or any rate increase based on the permitted 
                over-the-limit transactions.
  (n) Over-the-Limit Fee Restrictions.--With respect to a 
credit card account under an open end consumer credit plan, an 
over-the-limit fee may be imposed only once during a billing 
cycle if, on the last day of such billing cycle, the credit 
limit on the account is exceeded, and an over-the-limit fee, 
with respect to such excess credit, may be imposed only once in 
each of the 2 subsequent billing cycles, unless the consumer 
has obtained an additional extension of credit in excess of 
such credit limit during any such subsequent cycle or the 
consumer reduces the outstanding balance below the credit limit 
as of the end of such billing cycle.
  (o) Over-the-Limit Fees Prohibited in Conjunction With 
Certain Credit Holds.--Notwithstanding subsection (n), an over-
the-limit fee may not be imposed if the credit limit was 
exceeded due to a hold unless the actual amount of the 
transaction for which the hold was placed would have resulted 
in the consumer exceeding the credit limit.
  (p) Standards Applicable to Initial Issuance of Subprime or 
``Fee Harvester'' Cards.--
          (1) In general.--In the case of any credit card 
        account under an open end consumer credit plan the 
        terms of which require the payment of any fee (other 
        than any late fee, any over-the-limit fee, or any fee 
        for a payment returned for insufficient funds) by the 
        consumer in the first year the account is opened in an 
        amount in excess of 25 percent of the total amount of 
        credit authorized under the account when the account is 
        opened, no payment of any fee (other than any late fee, 
        any over-the-limit fee, or any fee for a payment 
        returned for insufficient funds) may be made from the 
        credit made available by the card.
          (2) Rule of construction.--No provision of this 
        subsection may be construed as authorizing any 
        imposition or payment of advance fees otherwise 
        prohibited by any provision of law.

           *       *       *       *       *       *       *


Sec. 136. Dissemination of annual percentage rates

  (a) * * *
  (b) Credit Card Price and Availability Information.--
          (1) [Collection required.--The Board shall] 
        Collection required.--
                  (A) In general.--The Board shall collect, on 
                a semiannual basis, credit card price and 
                availability information, including the 
                information required to be disclosed under 
                section 127(c) of this chapter, from a broad 
                sample of financial institutions which offer 
                credit card services.
                  (B) Information to be included.--The 
                information under subparagraph (A) shall 
                include, for the relevant semiannual period, 
                the following information with respect each 
                creditor in connection with any consumer credit 
                card account:
                          (i) A list of each type of 
                        transaction or event during the 
                        semiannual period for which 1 or more 
                        creditors has imposed a separate 
                        interest rate upon a consumer credit 
                        card accountholder, including 
                        purchases, cash advances, and balance 
                        transfers.
                          (ii) For each type of transaction or 
                        event identified under clause (i)--
                                  (I) each distinct interest 
                                rate charged by the card issuer 
                                to a consumer credit card 
                                accountholder during the 
                                semiannual period; and
                                  (II) the number of 
                                cardholders to whom each such 
                                interest rate was applied 
                                during the last calendar month 
                                of the semiannual period, and 
                                the total amount of interest 
                                charged to such accountholders 
                                at each such rate during such 
                                month.
                          (iii) A list of each type of fee that 
                        1 or more of the creditors has imposed 
                        upon a consumer credit card 
                        accountholder during the semiannual 
                        period, including any fee imposed for 
                        obtaining a cash advance, making a late 
                        payment, exceeding the credit limit on 
                        an account, making a balance transfer, 
                        or exchanging United States dollars for 
                        foreign currency.
                          (iv) For each type of fee identified 
                        under clause (iii), the number of 
                        accountholders upon whom the fee was 
                        imposed during each calendar month of 
                        the semiannual period, and the total 
                        amount of fees imposed upon cardholders 
                        during such month.
                          (v) The total number of consumer 
                        credit card accountholders that 
                        incurred any finance charge or any 
                        other fee during the semiannual period.
                          (vi) The total number of consumer 
                        credit card accounts maintained by each 
                        creditor as of the end of the 
                        semiannual period.
                          (vii) The total number and value of 
                        cash advances made during the 
                        semiannual period under a consumer 
                        credit card account.
                          (viii) The total number and value of 
                        purchases involving or constituting 
                        consumer credit card transactions 
                        during the semiannual period.
                          (ix) The total number and amount of 
                        repayments on outstanding balances on 
                        consumer credit card accounts in each 
                        month of the semiannual period.
                          (x) The percentage of all consumer 
                        credit card accountholders (with 
                        respect to any creditor) who--
                                  (I) incurred a finance charge 
                                in each month of the semiannual 
                                period on any portion of an 
                                outstanding balance on which a 
                                finance charge had not 
                                previously been incurred; and
                                  (II) incurred any such 
                                finance charge at any time 
                                during the semiannual period.
                          (xi) The total number and amount of 
                        balances accruing finance charges 
                        during the semiannual period.
                          (xii) The total number and amount of 
                        the outstanding balances on consumer 
                        credit card accounts as of the end of 
                        such semiannual period.
                          (xiii) Total credit limits in effect 
                        on consumer credit card accounts as of 
                        the end of such semiannual period and 
                        the amount by which such credit limits 
                        exceed the credit limits in effect as 
                        of the beginning of such period.
                          (xiv) Any other information related 
                        to interest rates, fees, or other 
                        charges that the Board deems of 
                        interest.

           *       *       *       *       *       *       *

          (5) Report to congress.--The Board shall, on an 
        annual basis, transmit to Congress and make public a 
        report containing estimates by the Board of the 
        approximate, relative percentage of income derived by 
        the credit card operations of depository institutions 
        from--
                  (A) the imposition of interest rates on 
                cardholders, including separate estimates for--
                          (i) interest with an annual 
                        percentage rate of less than 25 
                        percent; and
                          (ii) interest with an annual 
                        percentage rate equal to or greater 
                        than 25 percent;
                  (B) the imposition of fees on cardholders;
                  (C) the imposition of fees on merchants; and
                  (D) any other material source of income, 
                while specifying the nature of that income.

           *       *       *       *       *       *       *


                            DISSENTING VIEWS

    The way that consumers pay for products and services is 
dramatically changing, with electronic payments (credit and 
debit cards) now accounting for more than half of all 
transactions. Credit cards provide quick, easy and convenient 
ways for consumers to conduct their daily financial 
transactions. And given the crucial role that credit cards have 
come to play for individual consumers and the economy, it may 
be appropriate to consider new ways to protect consumers from 
unfair and deceptive credit card practices, ensuring that they 
receive useful and complete disclosures about the terms and 
conditions governing their cards. But policymakers must realize 
that in endeavoring to protect consumers, they may end up 
imposing considerable costs on the U.S. economy, because even 
the best policy cannot substitute for personal responsibility 
and may end up both raising the price of credit for some and 
unfairly limiting access to credit to others. It is our view 
that the Credit Cardholders' Bill of Rights Act of 2009 (H.R. 
627) is likely to impose such costs.
    In limiting credit card issuers' ability to price for risk, 
Congress needs to avoid overreacting by forcing responsible 
card-holders to subsidize irresponsible ones through higher 
fees and fewer rewards. Moreover, in the midst of an economic 
downturn, we should not be restricting options for success, 
especially for small businesses, which are the economic engine 
and America's number one jobs creator. The Small Business 
Administration has testified that small businesses rely on 
credit cards as a tool for their day-to-day operations and 
often shut down or lay off employees when banks will not 
provide the necessary credit.
    And the Federal Reserve (Fed) has already proffered new 
rules--due to be implemented on July 1, 2010--to protect 
consumers who use credit cards. Utilizing its statutory 
authority under the Federal Trade Commission Act to limit 
unfair or deceptive acts or practices and its power under the 
Truth in Lending Act (Regulation Z) to regulate account 
disclosures, the Fed has issued 1,200 pages of regulations that 
fully address many of the practices that consumers find 
offensive and that H.R. 627 purports to remedy. Given the 
complexity of credit card products and cardholder agreements, 
the Fed engaged in an extensive rule-writing process and 
conducted wide-ranging consumer testing to ensure that the new 
rules could be effective.
    Even as it spent more than three years drafting rules, 
reacting to the concerns that more than 60,000 individuals 
shared in comment letters and studying the ways that 
individuals process card disclosures, the Fed acknowledged that 
its regulations may increase the costs of credit and limit its 
availability. As former Fed Governor Randall Kroszner said when 
announcing the new rules, ``Unfair practices can impose 
significant costs on consumers. Likewise, the new rules will 
have a cost, too. . . . Although consumers might see some costs 
decline as new business models emerge, consumers might see 
other costs increase.'' The strong possibility that responsible 
credit cardholders will face higher costs from limitations on 
issuers' ability to price for risk is all the more reason why 
layering potentially conflicting statutory directives on top of 
the comprehensive regulatory regime established by the Federal 
Reserve is unwise.
    Implementing sweeping reforms that might work takes time. 
In a December 2008 meeting to finalize the rules, the Federal 
Reserve System's Director of Consumer Affairs explained to 
Chairman Ben Bernanke that because card issuers will need to 
rethink their entire business models, reprogram their systems, 
and redesign their marketing materials, solicitations, periodic 
statements and contracts, no earlier implementation date than 
July 2010 would be feasible. Fed representatives have also 
testified previously that speeding up implementation could be 
counter-productive if issuers passed higher expenses on to 
customers or eliminated some product offerings that consumers 
depend on. The Majority seems to disagree.
    Yet the Majority cannot credibly contend that the 
regulators are stalling or that its solutions are inadequate. 
H.R. 627 has been designed to address identical consumer 
concerns. Like the Fed rules, H.R. 627 seeks to prevent card 
companies from accruing finance charges because of two-cycle 
billing computation methods; increasing interest rates 
retroactively; allocating payments to maximize interest rate 
charges; and providing consumers insufficient time to make 
payments. Heeding the Fed's warnings that H.R. 627's three-
month implementation period was unreasonably short and 
potentially harmful to consumers, the Financial Institutions 
and Consumer Credit Subcommittee accepted an amendment to delay 
H.R. 627's implementation date. But the Full Committee undid 
the Subcommittee's work, over the regulators' objections, and 
accepted an amendment offered by Mrs. Maloney and Mr. Maffei to 
re-accelerate the implementation of certain disclosure rules.
    The Committee Majority also defeated--on a straight party-
line vote--a second-degree amendment that Mr. Hensarling 
offered to a provision added by Mrs. Waters requiring the 
Federal banking regulators to study the ways creditors make 
credit decisions based on geography and consumer spending 
patterns. The Hensarling amendment would have simply required 
the study to also encompass the impact of the legislation on 
the costs and availability of credit for consumers, yet 
Democrats voted in lock-step to block it. This suggests that 
the Majority either does not care about the consequences of the 
legislation it passes, or fears that the findings of an 
independent study of such consequences would validate the 
concerns of those who believe that H.R. 627 threatens to do 
more harm than good.
    Economic anxiety is widespread and Americans do not feel 
secure. Yet H.R. 627, a bill whose proponents claim will 
address one of the sources of that anxiety, may only make 
matters worse, by driving up the costs of credit and 
significantly curtailing its availability. It is the wrong bill 
at the wrong time.

                                   Michele Bachmann.
                                   Scott Garrett.
                                   Thomas Price.
                                   Spencer Bachus.
                                   Jeb Hensarling.
                                   Randy Neugebauer.
                                   Frank D. Lucas.