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The Secret Behind Credit Card Companies

The Secret Behind Credit Card Companies

What is a
Credit Card?

A credit card is a plastic card that enables an
individual to purchase goods, products or services by way of a credit line. The
available credit and the card itself are offered by a financial institution,
such as banks or credit card companies. These institutions will offer an
individual (with a satisfactory credit score) a credit card that is accompanied
by various terms and interest rates.

The interest
rates are based off the individual’s credit score. Those with higher scores,
meaning they are more likely to meet the terms and repayment schedules in the
agreement, will be awarded with a lower interest rate and vice versa.
 

What are Credit Card Companies?

Credit card companies are financial institutions
who lend credit to consumers or businesses. In essence, the issuance of a
credit card is a form of loan. The individual is given a line of credit that he
or she may use to purchase goods. When goods are purchased, the individual must
repay the issuing credit card company, plus any additional interest that falls
under their specific plan.

Credit card
companies, such as MasterCard or Visa, will lend lines of credit to only those
individuals who they feel are credit-worthy, meaning the borrower is likely to
pay off his or her credit card debts. If the individual fails to pay off their
debts, credit card companies will implement various late charges, interest
rates and other fees. 

If the individual fails to meet the demands of their
repayment schedule entirely, the issuing credit card company will hire a debt
collector or initiate an injunction against the holder of the card.
 

Costs for Credit Card Companies

Banks or credit card companies typically borrow
the money they lend to their clients or customers. Credit card companies will
receive low-interest loans from other institutions and flip these loans to
their clients at higher rates. For instance, credit companies may charge 15% on
money lent to cardholders if the initial cost of borrowing was 5%. In this
example, credit card companies will earn 10% on the loan offered to individual
customers or clients.
 

In addition to the money spent on original loans,
credit card companies have considerable operating costs. These costs refer to
the amount of money needed to run a credit card portfolio, including paying
employee salaries, printing the cards, mailing statements, protecting clients
from fraud, marketing and running computers to track every cardholder’s
balance.
 

Credit card companies also face costs when a consumer
becomes severely delinquent on a payment (severe delinquency is typically
regarded after six months without payment). In instances of severe delinquency,
the credit card companies will declare the debt to be charged-off. The credit
card companies will then list the failures of the holder on the debtor’s credit
bureau reports. A charge-off is viewed as uncollectable. To credit card
companies these bad debts are viewed as the cost of doing business.

Credit Card Companies Legality

Credit Card Companies will typically fall under
the jurisdictions of both Finance Law and Commercial Law.

Finance Law is the legal specialty regulating and
overseeing legislation applicable to the exchange and the circulation of
monies. This takes place in both transfer activity undertaken involving hard
currency, as well as Credit Card Companies. 

The precepts of Finance Law ensure
that all terms latent within Credit Card Companies adhere to the Truth in
Lending Act, which ensures that the terms of all Credit Card Companies are
expressed clearly upon applying for credit with Credit Card Companies.

Commercial Law is the legal field that enacts the
regulatory oversight of standards and practices occurring within the commercial
marketplace. With regard to Credit Card Companies, statutory legislation
undertaken within the precepts of Commercial Law ensures that any nature of
predatory lending or financial exploitation is determined to be an illegal
offense. 

Amongst the many types of legislation applicable to Commercial Law,
the Fair Billing Credit Act provides consumer relief from billing procedures
considered to be exploitative and deceptive
.

What are Credit Cards?

What are Credit Cards?

A credit card is a plastic card with a magnetic strip on the back. Credit cards are carried by the majority of consumers in the United States. Holders of such cards have the ability and authorization to purchase goods and services on credit. 
All credit cards are issued by financial intermediaries, such as banks. Furthermore, all credit cards are attached with a credit limit. Users or holders of credit cards cannot go beyond the prescribed cred limit.
In order to obtain a credit card, a consumer must undertake a credit card application process. The applications and the requirements to obtain the credit card will vary based on the banking institution. However, each application will require personal information as well as a review of the individual’s credit history. A credit history refers to the consumer’s financial past and more specifically their ability to repay loans or credit payments.
When an individual purchases a good or service with a credit card they are paying for the product in good faith, meaning there is no exchange of liquid funds for the obtainment of the goods. Rather, the item is purchased with the understanding that the consumer will pay (in full) the amount owed for the products purchased.
When a purchase is made via a credit card, the vendor obtains the underlying credit card’s information from the holder. The bank issuing the card will reimburse the vendor for the products purchased, and eventually the cardholder will repay the bank through periodic monthly payments. 
Financial institutions make money through the issuance of credit cards because each purchase is attached with interest payments. In addition, if a holder fails to make their payments on time, the issuer of the credit card will charge a fee.
Individual financial institutions (entities who issue credit cards) possess their own policies in regards to credit card applications. 
Consumers who apply for a credit card may seek a secured or unsecured form of credit. A secured credit card will require the applicant to deposit an amount of cash equivalent to the card’s credit limit. This deposit requirement offers the financial institution security. 
If the consumer fails to make sufficient payments, the institution will use the deposited money to pay off the credit card debt. In contrast, an unsecured credit card, which is typically issued to consumers with good credit history, does not require a deposit.
Credit limits are determined on an individual basis and are typically raised or lowered based on the holder’s ability to pay off their debts. Credit cards become problematic when the user of the card amasses debt that exceeds their ability to repay.
The laws which govern credit card use regulate interest rates and the amount of late fees delivered by the underlying financial institution. The Federal Reserve has issued rules and detailed guidelines for implementing each phase of credit card law. 
Currently, financial institutions operate with limited interest rate hikes, limited universal default, and the right for the consumer to opt out of their current credit contract. Additionally, as a result of the economic collapse, the Federal Reserve has instituted laws which allow individuals more time to pay off their monthly bills and limit the amount of fees attached to late payments.

A Guide to Low Interest Credit Cards

A Guide to Low Interest Credit Cards

What are Low
Interest Credit Cards?

Low Interest Credit Cards are classified as such
due to the fact that interest rates – as well as their respective Annual
Percentage Rate (APR) – are considered to be amongst the lowest in the spectrum
of the vast expanse of credit cards. Interest is defined as an expressed and
established percentage of the gross balance of Credit Cards.

Interest is
considered to be a compensatory method undertaken by the credit institution as
a result of furnishing an individual with a credit card.  Low Interest
Credit Cards are considered to be amongst the most valuable and coveted
financial instruments in existence within modernity. In most cases, the receipt
of Low Interest Credit Cards will be limited to those in possession of credit
scores and credit history considered to be ‘excellent’ or ‘very good’.

Standards and Practices of Credit Terms Specific
to Low Interest Credit Cards

The notion of Low Interest Credit Cards may exist
within the following 2 ideologies:

The first instance of Low Interest Credit Cards is
a temporary one. Many lending and credit institutions will allow individuals to
enjoy a finite period of time within which they may be eligible for the
receipt of low or non-existent interest rates (also called 0% APR). However,
this period of time is typically limited to a period ranging from 6 months to a
year.

The second instance exists on a permanent basis. Individuals
considered to possess excellent credit may be subject to receive the lowest
interest and APR rates.

Credit Score Analysis with regard to the
Application for Low Interest Credit Cards

Upon applying for a Low Interest Credit Card, both
the applicant’s credit score and credit rating will undergo analysis and
assessment from the applicable lending institution. The following may be
applicable to the approval process of a Low Interest Credit Card:

Credit Score of the Individual Applying for Low
Interest Credit Cards

Low Interest Credit Cards are typically reserved
for individuals with credit scores exceeding 720.

Low Interest Credit Card Interest and Annual
Percentage Rates

Both the interest rates and annual percentage
rates associated with Low Interest Credit Cards may vary. Interest rates
ranging from 2% to 5% are considered to be the most attractive.

Low Interest Credit Cards: Legality

Low Interest Credit Cards will typically fall
under the jurisdictions of both Finance Law and Commercial Law.

Finance Law is the legal specialty regulating and
overseeing legislation applicable to the exchange and the circulation of monies.
This takes place both in transfer activity undertaken involving hard currency,
as well as Low Interest Credit Cards. The precepts of Finance Law ensure that
all terms latent within Low Interest Credit Cards adhere to the Truth in
Lending Act, which ensures that the terms of all Low Interest Credit Cards are
expressed clearly upon applying for Low Interest Credit Cards.

Commercial Law is the legal field that enacts the
regulatory oversight of standards and practices occurring within the commercial
marketplace. With regard to Low Interest Credit Cards, statutory legislature
undertaken within the precepts of Commercial Law ensure the protection from and
prosecution of any nature of predatory lending or financial exploitation.

Contingency Plans in the Event of Rejected
Applications for Low Interest Credit Cards
 

In the event that your application for the receipt
of a Low Interest Credit Card has been rejected, additional options may exist
for your consideration. You are encouraged to investigate the following
options, which may provide assistance with regard to both the receipt of a
credit card in addition to measures undertaken in order to improve your
respective credit score:

In the event that an individual wishes to improve
their credit score, prompt repayment, responsible usage, and the compliance
with terms of service will typically result in increased credit limits and
raised credit scores.

Individuals interested in applying for credit
cards are encouraged to contact legal and financial professionals in order to
better understand both the risks and ramifications implicit within any nature
of credit cards.

Credit Card Act of 2009 Text

Credit Card Act of 2009 Text

One Hundred Eleventh Congress

of the

United States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday,

the sixth day of January, two thousand and nine

An Act

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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the ‘Credit Card Accountability Responsibility and Disclosure Act of 2009’ or the ‘Credit CARD Act of 2009’.

(b) Table of Contents-

The table of contents for this Act is as follows:

SEC. 2. REGULATORY AUTHORITY.

The Board of Governors of the Federal Reserve System (in this Act referred to as the ‘Board’) may issue such rules and publish such model forms as it considers necessary to carry out this Act and the amendments made by this Act.

SEC. 3. EFFECTIVE DATE.

This Act and the amendments made by this Act shall become effective 9 months after the date of enactment of this Act, except as otherwise specifically provided in this Act.

TITLE I–CONSUMER PROTECTION

SEC. 101. PROTECTION OF CREDIT CARDHOLDERS.

(a) Advance Notice of Rate Increase and Other Changes Required-

(1) AMENDMENT TO TILA- Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:

‘(i) Advance Notice of Rate Increase and Other Changes Required-

‘(1) ADVANCE NOTICE OF INCREASE IN INTEREST RATE REQUIRED- In the case of any credit card account under an open end consumer credit plan, a creditor shall provide a written notice of an increase in an annual percentage rate (except in the case of an increase described in paragraph (1), (2), or (3) of section 171(b)) not later than 45 days prior to the effective date of the increase.

‘(2) ADVANCE NOTICE OF OTHER SIGNIFICANT CHANGES REQUIRED- In the case of any credit card account under an open end consumer credit plan, a creditor shall provide a written notice of any significant change, as determined by rule of the Board, in the terms (including an increase in any fee or finance charge, other than as provided in paragraph (1)) of the cardholder agreement between the creditor and the obligor, not later than 45 days prior to the effective date of the change.

‘(3) NOTICE OF RIGHT TO CANCEL- Each notice required by paragraph (1) or (2) shall be made in a clear and conspicuous manner, and shall contain a brief statement of the right of the obligor to cancel the account pursuant to rules established by the Board before the effective date of the subject rate increase or other change.

‘(4) RULE OF CONSTRUCTION- Closure or cancellation of an account by the obligor shall not constitute a default under an existing cardholder agreement, and shall not trigger an obligation to immediately repay the obligation in full or through a method that is less beneficial to the obligor than one of the methods described in section 171(c)(2), or the imposition of any other penalty or fee.’.

(2) EFFECTIVE DATE- Notwithstanding section 3, section 127(i) of the Truth in Lending Act, as added by this subsection, shall become effective 90 days after the date of enactment of this Act.

(b) Retroactive Increase and Universal Default Prohibited- Chapter 4 of the Truth in Lending Act (15 U.S.C. 1666 et seq.) is amended–

(1) by redesignating section 171 as section 173; and

(2) by inserting after section 170 the following:

‘SEC. 171. LIMITS ON INTEREST RATE, FEE, AND FINANCE CHARGE INCREASES APPLICABLE TO OUTSTANDING BALANCES.

‘(a) In General- In the case of any credit card account under an open end consumer credit plan, no creditor may increase any annual percentage rate, fee, or finance charge applicable to any outstanding balance, except as permitted under subsection (b).

‘(b) Exceptions- The prohibition under subsection (a) shall not apply to–

‘(1) an increase in an annual percentage rate upon the expiration of a specified period of time, provided that–

‘(A) prior to commencement of that period, the creditor disclosed to the consumer, in a clear and conspicuous manner, the length of the period and the annual percentage rate that would apply after expiration of the period;

‘(B) the increased annual percentage rate does not exceed the rate disclosed pursuant to subparagraph (A); and

‘(C) the increased annual percentage rate is not applied to transactions that occurred prior to commencement of the period;

‘(2) an increase in a variable annual percentage rate in accordance with a credit card agreement that provides for changes in the rate according to operation of an index that is not under the control of the creditor and is available to the general public;

‘(3) an increase due to the completion of a workout or temporary hardship arrangement by the obligor or the failure of the obligor to comply with the terms of a workout or temporary hardship arrangement, provided that–

‘(A) the annual percentage rate, fee, or finance charge applicable to a category of transactions following any such increase does not exceed the rate, fee, or finance charge that applied to that category of transactions prior to commencement of the arrangement; and

‘(B) the creditor has provided the obligor, prior to the commencement of such arrangement, with clear and conspicuous disclosure of the terms of the arrangement (including any increases due to such completion or failure); or

‘(4) an increase due solely to the fact that a minimum payment by the obligor has not been received by the creditor within 60 days after the due date for such payment, provided that the creditor shall–

‘(A) include, together with the notice of such increase required under section 127(i), a clear and conspicuous written statement of the reason for the increase and that the increase will terminate not later than 6 months after the date on which it is imposed, if the creditor receives the required minimum payments on time from the obligor during that period; and

‘(B) terminate such increase not later than 6 months after the date on which it is imposed, if the creditor receives the required minimum payments on time during that period.

‘(c) Repayment of Outstanding Balance-

‘(1) IN GENERAL- The creditor shall not change the terms governing the repayment of any outstanding balance, except that the creditor may provide the obligor with one of the methods described in paragraph (2) of repaying any outstanding balance, or a method that is no less beneficial to the obligor than one of those methods.

‘(2) METHODS- The methods described in this paragraph are–

‘(A) an amortization period of not less than 5 years, beginning on the effective date of the increase set forth in the notice required under section 127(i); or

‘(B) a required minimum periodic payment that includes a percentage of the outstanding balance that is equal to not more than twice the percentage required before the effective date of the increase set forth in the notice required under section 127(i).

‘(d) Outstanding Balance Defined- For purposes of this section, the term ‘outstanding balance’ means the amount owed on a credit card account under an open end consumer credit plan as of the end of the 14th day after the date on which the creditor provides notice of an increase in the annual percentage rate, fee, or finance charge in accordance with section 127(i).’.

(c) Interest Rate Reduction on Open End Consumer Credit Plans- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661et seq.) is amended by adding at the end the following:

‘SEC. 148. INTEREST RATE REDUCTION ON OPEN END CONSUMER CREDIT PLANS.

‘(a) In General- If a creditor increases the annual percentage rate applicable to a credit card account under an open end consumer credit plan, based on factors including the credit risk of the obligor, market conditions, or other factors, the creditor shall consider changes in such factors in subsequently determining whether to reduce the annual percentage rate for such obligor.

‘(b) Requirements- With respect to any credit card account under an open end consumer credit plan, the creditor shall–

‘(1) maintain reasonable methodologies for assessing the factors described in subsection (a);

‘(2) not less frequently than once every 6 months, review accounts as to which the annual percentage rate has been increased since January 1, 2009, to assess whether such factors have changed (including whether any risk has declined);

‘(3) reduce the annual percentage rate previously increased when a reduction is indicated by the review; and

‘(4) in the event of an increase in the annual percentage rate, provide in the written notice required under section 127(i) a statement of the reasons for the increase.

‘(c) Rule of Construction- This section shall not be construed to require a reduction in any specific amount.

‘(d) Rulemaking- The Board shall issue final rules not later than 9 months after the date of enactment of this section to implement the requirements of and evaluate compliance with this section, and subsections (a), (b), and (c) shall become effective 15 months after that date of enactment.’.

(d) Introductory and Promotional Rates- Chapter 4 of the Truth in Lending Act (15 U.S.C. 1666 et seq.) is amended by inserting after section 171, as amended by this Act, the following:

‘SEC. 172. ADDITIONAL LIMITS ON INTEREST RATE INCREASES.

‘(a) Limitation on Increases Within First Year- Except in the case of an increase described in paragraph (1), (2), (3), or (4) of section 171(b), no increase in any annual percentage rate, fee, or finance charge on any credit card account under an open end consumer credit plan shall be effective before the end of the 1-year period beginning on the date on which the account is opened.

‘(b) Promotional Rate Minimum Term- No increase in any annual percentage rate applicable to a credit card account under an open end consumer credit plan that is a promotional rate (as that term is defined by the Board) shall be effective before the end of the 6-month period beginning on the date on which the promotional rate takes effect, subject to such reasonable exceptions as the Board may establish, by rule.’.

(e) Clerical Amendment- The table of sections for chapter 4 of the Truth in Lending Act is amended by striking the item relating to section 171 and inserting the following:

‘171. Limits on interest rate, fee, and finance charge increases applicable to outstanding balances.

‘172. Additional limits on interest rate increases.

‘173. Applicability of State laws.’.

SEC. 102. LIMITS ON FEES AND INTEREST CHARGES.

(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:

‘(j) Prohibition on Penalties for On-Time Payments-

‘(1) PROHIBITION ON DOUBLE-CYCLE BILLING AND PENALTIES FOR ON-TIME PAYMENTS- Except as provided in paragraph (2), a creditor may not impose any finance charge on a credit card account under an open end consumer credit plan as a result of the loss of any time period provided by the creditor within which the obligor may repay any portion of the credit extended without incurring a finance charge, with respect to–

‘(A) any balances for days in billing cycles that precede the most recent billing cycle; or

‘(B) any balances or portions thereof in the current billing cycle that were repaid within such time period.

‘(2) EXCEPTIONS- Paragraph (1) does not apply to–

‘(A) any adjustment to a finance charge as a result of the resolution of a dispute; or

‘(B) any adjustment to a finance charge as a result of the return of a payment for insufficient funds.

‘(k) Opt-in Required for 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, no such fee shall be charged, unless the consumer has expressly elected to permit the creditor, with respect to such account, to complete transactions involving the extension of credit under such account in excess of the amount of credit authorized.

‘(2) DISCLOSURE BY CREDITOR- No election by a consumer under paragraph (1) shall take effect unless the consumer, before making such election, received a notice from the creditor of any over-the-limit fee in the form and manner, and at the time, determined by the Board. If the consumer makes the election referred to in paragraph (1), the creditor shall provide notice to the consumer of the right to revoke the election, in the form prescribed by the Board, in any periodic statement that includes notice of the imposition of an over-the-limit fee during the period covered by the statement.

‘(3) FORM OF ELECTION- A consumer may make or revoke the election referred to in paragraph (1) orally, electronically, or in writing, pursuant to regulations prescribed by the Board. The Board shall prescribe regulations to ensure that the same options are available for both making and revoking such election.

‘(4) TIME OF ELECTION- A consumer may make the election referred to in paragraph (1) at any time, and such election shall be effective until the election is revoked in the manner prescribed under paragraph (3).

‘(5) REGULATIONS- The Board shall prescribe regulations–

‘(A) governing disclosures under this subsection; and

‘(B) that prevent unfair or deceptive acts or practices in connection with the manipulation of credit limits designed to increase over-the-limit fees or other penalty fees.

‘(6) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed to prohibit a creditor from completing an over-the-limit transaction, provided that a consumer who has not made a valid election under paragraph (1) is not charged an over-the-limit fee for such transaction.

‘(7) RESTRICTION ON FEES CHARGED FOR AN OVER-THE-LIMIT TRANSACTION- 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 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.

‘(l) Limit on Fees Related to Method of Payment- With respect to a credit card account under an open end consumer credit plan, the creditor may not impose a separate fee to allow the obligor to repay an extension of credit or finance charge, whether such repayment is made by mail, electronic transfer, telephone authorization, or other means, unless such payment involves an expedited service by a service representative of the creditor.’.

(b) Reasonable Penalty Fees-

(1) IN GENERAL- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661 et seq.), as amended by this Act, is amended by adding at the end the following:

‘SEC. 149. REASONABLE PENALTY FEES ON OPEN END CONSUMER CREDIT PLANS.

‘(a) In General- The amount of any penalty fee or charge that a card issuer may impose with respect to a credit card account under an open end consumer credit plan in connection with any omission with respect to, or violation of, the cardholder agreement, including any late payment fee, over-the-limit fee, or any other penalty fee or charge, shall be reasonable and proportional to such omission or violation.

‘(b) Rulemaking Required- The Board, in consultation with the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision, and the National Credit Union Administration Board, shall issue final rules not later than 9 months after the date of enactment of this section, to establish standards for assessing whether the amount of any penalty fee or charge described under subsection (a) is reasonable and proportional to the omission or violation to which the fee or charge relates. Subsection (a) shall become effective 15 months after the date of enactment of this section.

‘(c) Considerations- In issuing rules required by this section, the Board shall consider–

‘(1) the cost incurred by the creditor from such omission or violation;

‘(2) the deterrence of such omission or violation by the cardholder;

‘(3) the conduct of the cardholder; and

‘(4) such other factors as the Board may deem necessary or appropriate.

‘(d) Differentiation Permitted- In issuing rules required by this subsection, the Board may establish different standards for different types of fees and charges, as appropriate.

‘(e) Safe Harbor Rule Authorized- The Board, in consultation with the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision, and the National Credit Union Administration Board, may issue rules to provide an amount for any penalty fee or charge described under subsection (a) that is presumed to be reasonable and proportional to the omission or violation to which the fee or charge relates.’.

(2) CLERICAL AMENDMENTS- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661 et seq.) is amended–

(A) in the chapter heading, by inserting ‘AND LIMITS ON CREDIT CARD FEES’ after ‘ADVERTISING’; and

(B) in the table of sections for the chapter, by adding at the end the following:

‘148. Interest rate reduction on open end consumer credit plans.

‘149. Reasonable penalty fees on open end consumer credit plans.’.

SEC. 103. USE OF TERMS CLARIFIED.

Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:

‘(m) Use of Term ‘Fixed Rate’- With respect to the terms of any credit card account under an open end consumer credit plan, 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 specified clearly and conspicuously in the terms of the account.’.

SEC. 104. APPLICATION OF CARD PAYMENTS.

Section 164 of the Truth in Lending Act (15 U.S.C. 1666c) is amended–

(1) by striking the section heading and all that follows through ‘Payments’ and inserting the following:

-‘Sec. 164. Prompt and fair crediting of payments

‘(a) In General- Payments’;

(2) by inserting ‘, by 5:00 p.m. on the date on which such payment is due,’ after ‘in readily identifiable form’;

(3) by striking ‘manner, location, and time’ and inserting ‘manner, and location’; and

(4) by adding at the end the following:

‘(b) Application of Payments-

‘(1) IN GENERAL- Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted.

‘(2) CLARIFICATION RELATING TO CERTAIN DEFERRED INTEREST ARRANGEMENTS- A creditor shall allocate the entire amount paid by the consumer in excess of the minimum payment amount to a balance on which interest is deferred during the last 2 billing cycles immediately preceding the expiration of the period during which interest is deferred.

‘(c) Changes by Card Issuer- If a card issuer makes a material change in the mailing address, office, or procedures for handling cardholder payments, and such change causes a material delay in the crediting of a cardholder payment made during the 60-day period following the date on which such change took effect, the card issuer may not impose any late fee or finance charge for a late payment on the credit card account to which such payment was credited.’.

SEC. 105. STANDARDS APPLICABLE TO INITIAL ISSUANCE OF SUBPRIME OR ‘FEE HARVESTER’ CARDS.

Section 127 of the Truth in Lending Act (15 U.S.C. 1637), as amended by this Act, is amended by adding at the end the following new subsection:

‘(n) Standards Applicable to Initial Issuance of Subprime or ‘Fee Harvester’ Cards-

‘(1) IN GENERAL- If the terms of a credit card account under an open end consumer credit plan require the payment of any fees (other than any late fee, over-the-limit fee, or fee for a payment returned for insufficient funds) by the consumer in the first year during which the account is opened in an aggregate 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 fees (other than any late fee, over-the-limit fee, or fee for a payment returned for insufficient funds) may be made from the credit made available under the terms of the account.

‘(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. 106. RULES REGARDING PERIODIC STATEMENTS.

(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:

‘(o) Due Dates for Credit Card Accounts-

‘(1) IN GENERAL- The payment due date for a credit card account under an open end consumer credit plan shall be the same day each month.

‘(2) WEEKEND OR HOLIDAY DUE DATES- If the payment due date for a credit card account under an open end consumer credit plan is a day on which the creditor does not receive or accept payments by mail (including weekends and holidays), the creditor may not treat a payment received on the next business day as late for any purpose.’.

(b) Length of Billing Period-

(1) IN GENERAL- Section 163 of the Truth in Lending Act (15 U.S.C. 1666b) is amended to read as follows:

‘SEC. 163. TIMING OF PAYMENTS.

‘(a) Time To Make Payments- A creditor may not treat a payment on an open end consumer credit plan as late for any purpose, unless the creditor has adopted reasonable procedures designed to ensure that each periodic statement including the information required by section 127(b) is mailed or delivered to the consumer not later than 21 days before the payment due date.

‘(b) Grace Period- If an open end consumer credit plan provides a time period within which an obligor may repay any portion of the credit extended without incurring an additional finance charge, such additional finance charge may not be imposed with respect to such portion of the credit extended for the billing cycle of which such period is a part, unless a statement which includes the amount upon which the finance charge for the period is based was mailed or delivered to the consumer not later than 21 days before the date specified in the statement by which payment must be made in order to avoid imposition of that finance charge.’.

(2) EFFECTIVE DATE- Notwithstanding section 3, section 163 of the Truth in Lending Act, as amended by this subsection, shall become effective 90 days after the date of enactment of this Act.

(c) Clerical Amendments- The table of sections for chapter 4 of the Truth in Lending Act is amended–

(1) by striking the item relating to section 163 and inserting the following:

‘163. Timing of payments.’; and

(2) by striking the item relating to section 171 and inserting the following:

‘171. Universal defaults prohibited.

‘172. Unilateral changes in credit card agreement prohibited.

‘173. Applicability of State laws.’.

SEC. 107. ENHANCED PENALTIES.

Section 130(a)(2)(A) of the Truth in Lending Act (15 U.S.C. 1640(a)(2)(A)) is amended by striking ‘or (iii) in the’ and inserting the following: ‘(iii) in the case of an individual action relating to an open end consumer credit plan that is not secured by real property or a dwelling, twice the amount of any finance charge in connection with the transaction, with a minimum of $500 and a maximum of $5,000, or such higher amount as may be appropriate in the case of an established pattern or practice of such failures; or (iv) in the’.

SEC. 108. CLERICAL AMENDMENTS.

Section 103(i) of the Truth in Lending Act (15 U.S.C. 1602(i)) is amended–

(1) by striking ‘term’ and all that follows through ‘means’ and inserting the following: ‘terms ‘open end credit plan’ and ‘open end consumer credit plan’ mean’; and

(2) in the second sentence, by inserting ‘or open end consumer credit plan’ after ‘credit plan’ each place that term appears.

SEC. 109. CONSIDERATION OF ABILITY TO REPAY.

(a) In General- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1666 et seq.), as amended by this title, is amended by adding at the end the following:

‘SEC. 150. CONSIDERATION OF ABILITY TO REPAY.

‘A card issuer may not open any credit card account for any consumer under an open end consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the ability of the consumer to make the required payments under the terms of such account.’.

(b) Clerical Amendment- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661 et seq.) is amended in the table of sections for the chapter, by adding at the end the following:

‘150. Consideration of ability to repay.’.

TITLE II–ENHANCED CONSUMER DISCLOSURES

SEC. 201. PAYOFF TIMING DISCLOSURES.

(a) In General- Section 127(b)(11) of the Truth in Lending Act (15 U.S.C. 1637(b)(11)) is amended to read as follows:

‘(11)(A) A written statement in the following form: ‘Minimum Payment Warning: Making only the minimum payment will increase the amount of interest you pay and the time it takes to repay your balance.’, or such similar statement as is established by the Board pursuant to consumer testing.

‘(B) Repayment information that would apply to the outstanding balance of the consumer under the credit plan, including–

‘(i) the number of months (rounded to the nearest month) that it would take to pay the entire amount of that balance, if the consumer pays only the required minimum monthly payments and if no further advances are made;

‘(ii) the total cost to the consumer, including interest and principal payments, of paying that balance in full, if the consumer pays only the required minimum monthly payments and if no further advances are made;

‘(iii) the monthly payment amount that would be required for the consumer to eliminate the outstanding balance in 36 months, if no further advances are made, and the total cost to the consumer, including interest and principal payments, of paying that balance in full if the consumer pays the balance over 36 months; and

‘(iv) a toll-free telephone number at which the consumer may receive information about accessing credit counseling and debt management services.

‘(C)(i) Subject to clause (ii), in making the disclosures under subparagraph (B), the creditor shall apply the interest rate or rates in effect on the date on which the disclosure is made until the date on which the balance would be paid in full.

‘(ii) If the interest rate in effect on the date on which the disclosure is made is a temporary rate that will change under a contractual provision applying an index or formula for subsequent interest rate adjustment, the creditor shall apply the interest rate in effect on the date on which the disclosure is made for as long as that interest rate will apply under that contractual provision, and then apply an interest rate based on the index or formula in effect on the applicable billing date.

‘(D) All of the information described in subparagraph (B) shall–

‘(i) be disclosed in the form and manner which the Board shall prescribe, by regulation, and in a manner that avoids duplication; and

‘(ii) be placed in a conspicuous and prominent location on the billing statement.

‘(E) In the regulations prescribed under subparagraph (D), the Board shall require that the disclosure of such information shall be in the form of a table that–

‘(i) contains clear and concise headings for each item of such information; and

‘(ii) provides a clear and concise form stating each item of information required to be disclosed under each such heading.

‘(F) In prescribing the form of the table under subparagraph (E), the Board shall require that–

‘(i) all of the information in the table, and not just a reference to the table, be placed on the billing statement, as required by this paragraph; and

‘(ii) the items required to be included in the table shall be listed in the order in which such items are set forth in subparagraph (B).

‘(G) In prescribing the form of the table under subparagraph (D), the Board shall employ terminology which is different than the terminology which is employed in subparagraph (B), if such terminology is more easily understood and conveys substantially the same meaning.’.

(b) Civil Liability- Section 130(a) of the Truth in Lending Act (15 U.S.C. 1640(a)) is amended, in the undesignated paragraph following paragraph (4), by striking the second sentence and inserting the following: ‘In connection with the disclosures referred to in subsections (a) and (b) of section 127, a creditor shall have a liability determined under paragraph (2) only for failing to comply with the requirements of section 125, 127(a), or any of paragraphs (4) through (13) of section 127(b), or for failing to comply with disclosure requirements under State law for any term or item that the Board has determined to be substantially the same in meaning under section 111(a)(2) as any of the terms or items referred to in section 127(a), or any of paragraphs (4) through (13) of section 127(b).’.

(c) Guidelines Required-

(1) IN GENERAL- Not later than 6 months after the date of enactment of this Act, the Board shall issue guidelines, by rule, in consultation with the Secretary of the Treasury, for the establishment and maintenance by creditors of a toll-free telephone number for purposes of providing information about accessing credit counseling and debt management services, as required under section 127(b)(11)(B)(iv) of the Truth in Lending Act, as added by this section.

(2) APPROVED AGENCIES- Guidelines issued under this subsection shall ensure that referrals provided by the toll-free number referred to in paragraph (1) include only those nonprofit budget and credit counseling agencies approved by a United States bankruptcy trustee pursuant to section 111(a) of title 11, United States Code.

SEC. 202. REQUIREMENTS RELATING TO LATE PAYMENT DEADLINES AND PENALTIES.

Section 127(b)(12) of the Truth in Lending Act (15 U.S.C. 1637(b)(12)) is amended to read as follows:

‘(12) REQUIREMENTS RELATING TO LATE PAYMENT DEADLINES AND PENALTIES-

‘(A) LATE PAYMENT DEADLINE REQUIRED TO BE DISCLOSED- In the case of a credit card account under an open end consumer credit plan under which a late fee or charge may be imposed due to the failure of the obligor to make payment on or before the due date for such payment, the periodic statement required under subsection (b) with respect to the account shall include, in a conspicuous location on the billing statement, the date on which the payment is due or, if different, the date on which a late payment fee will be charged, together with the amount of the fee or charge to be imposed if payment is made after that date.

‘(B) DISCLOSURE OF INCREASE IN INTEREST RATES FOR LATE PAYMENTS- If 1 or more late payments under an open end consumer credit plan may result in an increase in the annual percentage rate applicable to the account, the statement required under subsection (b) with respect to the account shall include conspicuous notice of such fact, together with the applicable penalty annual percentage rate, in close proximity to the disclosure required under subparagraph (A) of the date on which payment is due under the terms of the account.

‘(C) PAYMENTS AT LOCAL BRANCHES- If the creditor, in the case of a credit card account referred to in subparagraph (A), is a financial institution which maintains branches or offices at which payments on any such account are accepted from the obligor in person, the date on which the obligor makes a payment on the account at such branch or office shall be considered to be the date on which the payment is made for purposes of determining whether a late fee or charge may be imposed due to the failure of the obligor to make payment on or before the due date for such payment.’.

SEC. 203. RENEWAL DISCLOSURES.

Section 127(d) of the Truth in Lending Act (15 U.S.C. 1637(d)) is amended–

(1) by striking paragraph (2);

(2) by redesignating paragraph (3) as paragraph (2); and

(3) in paragraph (1), by striking ‘Except as provided in paragraph (2), a card issuer’ and inserting the following: ‘A card issuer that has changed or amended any term of the account since the last renewal that has not been previously disclosed or’.

SEC. 204. INTERNET POSTING OF CREDIT CARD AGREEMENTS.

(a) In General- Section 122 of the Truth and Lending Act (15 U.S.C. 1632) is amended by adding at the end the following new subsection:

‘(d) Additional Electronic Disclosures-

‘(1) POSTING AGREEMENTS- Each creditor shall establish and maintain an Internet site on which the creditor shall post the written agreement between the creditor and the consumer for each credit card account under an open-end consumer credit plan.

‘(2) CREDITOR TO PROVIDE CONTRACTS TO THE BOARD- Each creditor shall provide to the Board, in electronic format, the consumer credit card agreements that it publishes on its Internet site.

‘(3) RECORD REPOSITORY- The Board shall establish and maintain on its publicly available Internet site a central repository of the consumer credit card agreements received from creditors pursuant to this subsection, and such agreements shall be easily accessible and retrievable by the public.

‘(4) EXCEPTION- This subsection shall not apply to individually negotiated changes to contractual terms, such as individually modified workouts or renegotiations of amounts owed by a consumer under an open end consumer credit plan.

‘(5) REGULATIONS- The Board, in consultation with the other Federal banking agencies (as that term is defined in section 603) and the Federal Trade Commission, may promulgate regulations to implement this subsection, including specifying the format for posting the agreements on the Internet sites of creditors and establishing exceptions to paragraphs (1) and (2), in any case in which the administrative burden outweighs the benefit of increased transparency, such as where a credit card plan has a de minimis number of consumer account holders.’.

SEC. 205. PREVENTION OF DECEPTIVE MARKETING OF CREDIT REPORTS.

(a) Preventing Deceptive Marketing- Section 612 of the Fair Credit Reporting Act (15 U.S.C. 1681j) is amended by adding at the end the following:

‘(g) Prevention of Deceptive Marketing of Credit Reports-

‘(1) IN GENERAL- Subject to rulemaking pursuant to section 205(b) of the Credit CARD Act of 2009, any advertisement for a free credit report in any medium shall prominently disclose in such advertisement that free credit reports are available under Federal law at: ‘AnnualCreditReport.com’ (or such other source as may be authorized under Federal law).

‘(2) TELEVISION AND RADIO ADVERTISEMENT- In the case of an advertisement broadcast by television, the disclosures required under paragraph (1) shall be included in the audio and visual part of such advertisement. In the case of an advertisement broadcast by televison or radio, the disclosure required under paragraph (1) shall consist only of the following: ‘This is not the free credit report provided for by Federal law’.’.

(b) Rulemaking-

(1) IN GENERAL- Not later than 9 months after the date of enactment of this Act, the Federal Trade Commission shall issue a final rule to carry out this section.

(2) CONTENT- The rule required by this subsection–

(A) shall include specific wording to be used in advertisements in accordance with this section; and

(B) for advertisements on the Internet, shall include whether the disclosure required under section 612(g)(1) of the Fair Credit Reporting Act (as added by this section) shall appear on the advertisement or the website on which the free credit report is made available.

(3) INTERIM DISCLOSURES- If an advertisement subject to section 612(g) of the Fair Credit Reporting Act, as added by this section, is made public after the 9-month deadline specified in paragraph (1), but before the rule required by paragraph (1) is finalized, such advertisement shall include the disclosure: ‘Free credit reports are available under Federal law at: ‘AnnualCreditReport.com’.’.

TITLE III–PROTECTION OF YOUNG CONSUMERS

SEC. 301. 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:

‘(8) APPLICATIONS FROM UNDERAGE CONSUMERS-

‘(A) PROHIBITION ON ISSUANCE- No credit card may be issued to, or open end consumer credit plan established by or on behalf of, a consumer who has not attained the age of 21, unless the consumer has submitted a written application to the card issuer that meets the requirements of subparagraph (B).

‘(B) APPLICATION REQUIREMENTS- An application to open a credit card account by a consumer who has not attained the age of 21 as of the date of submission of the application shall require–

‘(i) the signature of a cosigner, including the parent, legal guardian, spouse, or any other individual who has attained the age of 21 having a means to repay debts incurred by the consumer in connection with the account, indicating joint liability for debts incurred by the consumer in connection with the account before the consumer has attained the age of 21; or

‘(ii) submission by the consumer of financial information, including through an application, indicating an independent means of repaying any obligation arising from the proposed extension of credit in connection with the account.

‘(C) SAFE HARBOR- The Board shall promulgate regulations providing standards that, if met, would satisfy the requirements of subparagraph (B)(ii).’.

SEC. 302. PROTECTION OF YOUNG CONSUMERS FROM PRESCREENED CREDIT OFFERS.

Section 604(c)(1)(B) of the Fair Credit Reporting Act (15 U.S.C. 1681b(c)(1)(B)) is amended–

(1) in clause (ii), by striking ‘and’ at the end; and

(2) in clause (iii), by striking the period at the end and inserting the following: ‘; and

‘(iv) the consumer report does not contain a date of birth that shows that the consumer has not attained the age of 21, or, if the date of birth on the consumer report shows that the consumer has not attained the age of 21, such consumer consents to the consumer reporting agency to such furnishing.’.

SEC. 303. ISSUANCE OF CREDIT CARDS TO CERTAIN COLLEGE STUDENTS.

Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following new subsection:

‘(p) Parental Approval Required To Increase Credit Lines for Accounts for Which Parent Is Jointly Liable- No increase may be made in the amount of credit authorized to be extended under a credit card account for which a parent, legal guardian, or spouse of the consumer, or any other individual has assumed joint liability for debts incurred by the consumer in connection with the account before the consumer attains the age of 21, unless that parent, guardian, or spouse approves in writing, and assumes joint liability for, such increase.’.

SEC. 304. PRIVACY PROTECTIONS FOR COLLEGE STUDENTS.

Section 140 of the Truth in Lending Act (15 U.S.C. 1650) is amended by adding at the end the following:

‘(f) Credit Card Protections for College Students-

‘(1) DISCLOSURE REQUIRED- An institution of higher education shall publicly disclose any contract or other agreement made with a card issuer or creditor for the purpose of marketing a credit card.

‘(2) INDUCEMENTS PROHIBITED- No card issuer or creditor may offer to a student at an institution of higher education any tangible item to induce such student to apply for or participate in an open end consumer credit plan offered by such card issuer or creditor, if such offer is made–

‘(A) on the campus of an institution of higher education;

‘(B) near the campus of an institution of higher education, as determined by rule of the Board; or

‘(C) at an event sponsored by or related to an institution of higher education.

‘(3) SENSE OF THE CONGRESS- It is the sense of the Congress that each institution of higher education should consider adopting the following policies relating to credit cards:

‘(A) That any card issuer that markets a credit card on the campus of such institution notify the institution of the location at which such marketing will take place.

‘(B) That the number of locations on the campus of such institution at which the marketing of credit cards takes place be limited.

‘(C) That credit card and debt education and counseling sessions be offered as a regular part of any orientation program for new students of such institution.’.

SEC. 305. COLLEGE CREDIT CARD AGREEMENTS.

(a) In General- Section 127 of the Truth in Lending Act (15 U.S.C. 1637), as otherwise amended by this Act, is amended by adding at the end the following:

‘(r) College Card Agreements-

‘(1) DEFINITIONS- For purposes of this subsection, the following definitions shall apply:

‘(A) COLLEGE AFFINITY CARD- The term ‘college affinity card’ means a credit card issued by a credit card issuer under an open end consumer credit plan in conjunction with an agreement between the issuer and an institution of higher education, or an alumni organization or foundation affiliated with or related to such institution, under which such cards are issued to college students who have an affinity with such institution, organization and–

‘(i) the creditor has agreed to donate a portion of the proceeds of the credit card to the institution, organization, or foundation (including a lump sum or 1-time payment of money for access);

‘(ii) the creditor has agreed to offer discounted terms to the consumer; or

‘(iii) the credit card bears the name, emblem, mascot, or logo of such institution, organization, or foundation, or other words, pictures, or symbols readily identified with such institution, organization, or foundation.

‘(B) COLLEGE STUDENT CREDIT CARD ACCOUNT- The term ‘college student credit card account’ means a credit card account under an open end consumer credit plan established or maintained for or on behalf of any college student.

‘(C) COLLEGE STUDENT- The term ‘college student’ means an individual who is a full-time or a part-time student attending an institution of higher education.

‘(D) INSTITUTION OF HIGHER EDUCATION- The term ‘institution of higher education’ has the same meaning as in section 101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001 and 1002).

‘(2) REPORTS BY CREDITORS-

‘(A) IN GENERAL- Each creditor shall submit an annual report to the Board containing the terms and conditions of all business, marketing, and promotional agreements and college affinity card agreements with an institution of higher education, or an alumni organization or foundation affiliated with or related to such institution, with respect to any college student credit card issued to a college student at such institution.

‘(B) DETAILS OF REPORT- The information required to be reported under subparagraph (A) includes–

‘(i) any memorandum of understanding between or among a creditor, an institution of higher education, an alumni association, or foundation that directly or indirectly relates to any aspect of any agreement referred to in such subparagraph or controls or directs any obligations or distribution of benefits between or among any such entities;

‘(ii) the amount of any payments from the creditor to the institution, organization, or foundation during the period covered by the report, and the precise terms of any agreement under which such amounts are determined; and

‘(iii) the number of credit card accounts covered by any such agreement that were opened during the period covered by the report, and the total number of credit card accounts covered by the agreement that were outstanding at the end of such period.

‘(C) AGGREGATION BY INSTITUTION- The information required to be reported under subparagraph (A) shall be aggregated with respect to each institution of higher education or alumni organization or foundation affiliated with or related to such institution.

‘(D) INITIAL REPORT- The initial report required under subparagraph (A) shall be submitted to the Board before the end of the 9-month period beginning on the date of enactment of this subsection.

‘(3) REPORTS BY BOARD- The Board shall submit to the Congress, and make available to the public, an annual report that lists the information concerning credit card agreements submitted to the Board under paragraph (2) by each institution of higher education, alumni organization, or foundation.’.

(b) Study and Report by the Comptroller General-

(1) STUDY- The Comptroller General of the United States shall, from time to time, review the reports submitted by creditors under section 127(r) of the Truth in Lending Act, as added by this section, and the marketing practices of creditors to determine the impact that college affinity card agreements and college student card agreements have on credit card debt.

(2) REPORT- Upon completion of any study under paragraph (1), the Comptroller General shall periodically submit a report to the Congress on the findings and conclusions of the study, together with such recommendations for administrative or legislative action as the Comptroller General determines to be appropriate.

TITLE IV–GIFT CARDS

SEC. 401. GENERAL-USE PREPAID CARDS, GIFT CERTIFICATES, AND STORE GIFT CARDS.

The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) is amended–

(1) by redesignating sections 915 through 921 as sections 916 through 922, respectively; and

(2) by inserting after section 914 the following:

‘SEC. 915. GENERAL-USE PREPAID CARDS, GIFT CERTIFICATES, AND STORE GIFT CARDS.

‘(a) Definitions- In this section, the following definitions shall apply:

‘(1) DORMANCY FEE; INACTIVITY CHARGE OR FEE- The terms ‘dormancy fee’ and ‘inactivity charge or fee’ mean a fee, charge, or penalty for non-use or inactivity of a gift certificate, store gift card, or general-use prepaid card.

‘(2) GENERAL USE PREPAID CARD, GIFT CERTIFICATE, AND STORE GIFT CARD-

‘(A) GENERAL-USE PREPAID CARD- The term ‘general-use prepaid card’ means a card or other payment code or device issued by any person that is–

‘(i) redeemable at multiple, unaffiliated merchants or service providers, or automated teller machines;

‘(ii) issued in a requested amount, whether or not that amount may, at the option of the issuer, be increased in value or reloaded if requested by the holder;

‘(iii) purchased or loaded on a prepaid basis; and

‘(iv) honored, upon presentation, by merchants for goods or services, or at automated teller machines.

‘(B) GIFT CERTIFICATE- The term ‘gift certificate’ means an electronic promise that is–

‘(i) redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo;

‘(ii) issued in a specified amount that may not be increased or reloaded;

‘(iii) purchased on a prepaid basis in exchange for payment; and

‘(iv) honored upon presentation by such single merchant or affiliated group of merchants for goods or services.

‘(C) STORE GIFT CARD- The term ‘store gift card’ means an electronic promise, plastic card, or other payment code or device that is–

‘(i) redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo;

‘(ii) issued in a specified amount, whether or not that amount may be increased in value or reloaded at the request of the holder;

‘(iii) purchased on a prepaid basis in exchange for payment; and

‘(iv) honored upon presentation by such single merchant or affiliated group of merchants for goods or services.

‘(D) EXCLUSIONS- The terms ‘general-use prepaid card’, ‘gift certificate’, and ‘store gift card’ do not include an electronic promise, plastic card, or payment code or device that is–

‘(i) used solely for telephone services;

‘(ii) reloadable and not marketed or labeled as a gift card or gift certificate;

‘(iii) a loyalty, award, or promotional gift card, as defined by the Board;

‘(iv) not marketed to the general public;

‘(v) issued in paper form only (including for tickets and events); or

‘(vi) redeemable solely for admission to events or venues at a particular location or group of affiliated locations, which may also include services or goods obtainable–

‘(I) at the event or venue after admission; or

‘(II) in conjunction with admission to such events or venues, at specific locations affiliated with and in geographic proximity to the event or venue.

‘(3) SERVICE FEE-

‘(A) IN GENERAL- The term ‘service fee’ means a periodic fee, charge, or penalty for holding or use of a gift certificate, store gift card, or general-use prepaid card.

‘(B) EXCLUSION- With respect to a general-use prepaid card, the term ‘service fee’ does not include a one-time initial issuance fee.

‘(b) Prohibition on Imposition of Fees or Charges-

‘(1) IN GENERAL- Except as provided under paragraphs (2) through (4), it shall be unlawful for any person to impose a dormancy fee, an inactivity charge or fee, or a service fee with respect to a gift certificate, store gift card, or general-use prepaid card.

‘(2) EXCEPTIONS- A dormancy fee, inactivity charge or fee, or service fee may be charged with respect to a gift certificate, store gift card, or general-use prepaid card, if–

‘(A) there has been no activity with respect to the certificate or card in the 12-month period ending on the date on which the charge or fee is imposed;

‘(B) the disclosure requirements of paragraph (3) have been met;

‘(C) not more than one fee may be charged in any given month; and

‘(D) any additional requirements that the Board may establish through rulemaking under subsection (d) have been met.

‘(3) DISCLOSURE REQUIREMENTS- The disclosure requirements of this paragraph are met if–

‘(A) the gift certificate, store gift card, or general-use prepaid card clearly and conspicuously states–

‘(i) that a dormancy fee, inactivity charge or fee, or service fee may be charged;

‘(ii) the amount of such fee or charge;

‘(iii) how often such fee or charge may be assessed; and

‘(iv) that such fee or charge may be assessed for inactivity; and

‘(B) the issuer or vendor of such certificate or card informs the purchaser of such charge or fee before such certificate or card is purchased, regardless of whether the certificate or card is purchased in person, over the Internet, or by telephone.

‘(4) EXCLUSION- The prohibition under paragraph (1) shall not apply to any gift certificate–

‘(A) that is distributed pursuant to an award, loyalty, or promotional program, as defined by the Board; and

‘(B) with respect to which, there is no money or other value exchanged.

‘(c) Prohibition on Sale of Gift Cards With Expiration Dates-

‘(1) IN GENERAL- Except as provided under paragraph (2), it shall be unlawful for any person to sell or issue a gift certificate, store gift card, or general-use prepaid card that is subject to an expiration date.

‘(2) EXCEPTIONS- A gift certificate, store gift card, or general-use prepaid card may contain an expiration date if–

‘(A) the expiration date is not earlier than 5 years after the date on which the gift certificate was issued, or the date on which card funds were last loaded to a store gift card or general-use prepaid card; and

‘(B) the terms of expiration are clearly and conspicuously stated.

‘(d) Additional Rulemaking-

‘(1) IN GENERAL- The Board shall–

‘(A) prescribe regulations to carry out this section, in addition to any other rules or regulations required by this title, including such additional requirements as appropriate relating to the amount of dormancy fees, inactivity charges or fees, or service fees that may be assessed and the amount of remaining value of a gift certificate, store gift card, or general-use prepaid card below which such charges or fees may be assessed; and

‘(B) shall determine the extent to which the individual definitions and provisions of the Electronic Fund Transfer Act or Regulation E should apply to general-use prepaid cards, gift certificates, and store gift cards.

‘(2) CONSULTATION- In prescribing regulations under this subsection, the Board shall consult with the Federal Trade Commission.

‘(3) TIMING; EFFECTIVE DATE- The regulations required by this subsection shall be issued in final form not later than 9 months after the date of enactment of the Credit CARD Act of 2009.’.

SEC. 402. RELATION TO STATE LAWS.

Section 920 of the Electronic Fund Transfer Act (as redesignated by this title) is amended by inserting ‘dormancy fees, inactivity charges or fees, service fees, or expiration dates of gift certificates, store gift cards, or general-use prepaid cards,’ after ‘electronic fund transfers,’.

SEC. 403. EFFECTIVE DATE.

This title and the amendments made by this title shall become effective 15 months after the date of enactment of this Act.

TITLE V–MISCELLANEOUS PROVISIONS

SEC. 501. STUDY AND REPORT ON INTERCHANGE FEES.

(a) Study Required- The Comptroller General of the United States (in this section referred to as the ‘Comptroller’) shall conduct a study on use of credit by consumers, interchange fees, and their effects on consumers and merchants.

(b) Subjects for Review- In conducting the study required by this section, the Comptroller shall review–

(1) the extent to which interchange fees are required to be disclosed to consumers and merchants, whether merchants are restricted from disclosing interchange or merchant discount fees, and how such fees are overseen by the Federal banking agencies or other regulators;

(2) the ways in which the interchange system affects the ability of merchants of varying size to negotiate pricing with card associations and banks;

(3) the costs and factors incorporated into interchange fees, such as advertising, bonus miles, and rewards, how such costs and factors vary among cards;

(4) the consequences of the undisclosed nature of interchange fees on merchants and consumers with regard to prices charged for goods and services;

(5) how merchant discount fees compare to the credit losses and other costs that merchants incur to operate their own credit networks or store cards;

(6) the extent to which the rules of payment card networks and their policies regarding interchange fees are accessible to merchants;

(7) other jurisdictions where the central bank has regulated interchange fees and the impact on retail prices to consumers in such jurisdictions;

(8) whether and to what extent merchants are permitted to discount for cash; and

(9) the extent to which interchange fees allow smaller financial institutions and credit unions to offer payment cards and compete against larger financial institutions.

(c) Report Required- Not later than 180 days after the date of enactment of this Act, the Comptroller shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives containing a detailed summary of the findings and conclusions of the study required by this section, together with such recommendations for legislative or administrative actions as may be appropriate.

SEC. 502. BOARD REVIEW OF CONSUMER CREDIT PLANS AND REGULATIONS.

(a) Required Review- Not later than 2 years after the effective date of this Act and every 2 years thereafter, except as provided in subsection (c)(2), the Board shall conduct a review, within the limits of its existing resources available for reporting purposes, of the consumer credit card market, including–

(1) the terms of credit card agreements and the practices of credit card issuers;

(2) the effectiveness of disclosure of terms, fees, and other expenses of credit card plans;

(3) the adequacy of protections against unfair or deceptive acts or practices relating to credit card plans; and

(4) whether or not, and to what extent, the implementation of this Act and the amendments made by this Act has affected–

(A) cost and availability of credit, particularly with respect to non-prime borrowers;

(B) the safety and soundness of credit card issuers;

(C) the use of risk-based pricing; or

(D) credit card product innovation.

(b) Solicitation of Public Comment- In connection with conducting the review required by subsection (a), the Board shall solicit comment from consumers, credit card issuers, and other interested parties, such as through hearings or written comments.

(c) Regulations-

(1) NOTICE- Following the review required by subsection (a), the Board shall publish a notice in the Federal Register that–

(A) summarizes the review, the comments received from the public solicitation, and other evidence gathered by the Board, such as through consumer testing or other research; and

(B) either–

(i) proposes new or revised regulations or interpretations to update or revise disclosures and protections for consumer credit cards, as appropriate; or

(ii) states the reason for the determination of the Board that new or revised regulations are not necessary.

(2) REVISION OF REVIEW PERIOD FOLLOWING MATERIAL REVISION OF REGULATIONS- In the event that the Board materially revises regulations on consumer credit card plans, a review need not be conducted until 2 years after the effective date of the revised regulations, which thereafter shall be treated as the new date for the biennial review required by subsection (a).

(d) Board Report to the Congress- The Board shall report to Congress not less frequently than every 2 years, except as provided in subsection (c)(2), on the status of its most recent review, its efforts to address any issues identified from the review, and any recommendations for legislation.

(e) Additional Reporting- The Federal banking agencies (as that term is defined in section 3 of the Federal Deposit Insurance Act) and the Federal Trade Commission shall provide annually to the Board, and the Board shall include in its annual report to Congress under section 10 of the Federal Reserve Act, information about the supervisory and enforcement activities of the agencies with respect to compliance by credit card issuers with applicable Federal consumer protection statutes and regulations, including–

(1) this Act, the amendments made by this Act, and regulations prescribed under this Act and such amendments; and

(2) section 5 of the Federal Trade Commission Act, and regulations prescribed under the Federal Trade Commission Act, including part 227 of title 12 of the Code of Federal Regulations, as prescribed by the Board (referred to as ‘Regulation AA’).

SEC. 503. STORED VALUE.

(a) In General- Not later than 270 days after the date of enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of Homeland Security, shall issue regulations in final form implementing the Bank Secrecy Act, regarding the sale, issuance, redemption, or international transport of stored value, including stored value cards.

(b) Consideration of International Transport- Regulations under this section regarding international transport of stored value may include reporting requirements pursuant to section 5316 of title 31, United States Code.

(c) Emerging Methods for Transmittal and Storage in Electronic Form- Regulations under this section shall take into consideration current and future needs and methodologies for transmitting and storing value in electronic form.

SEC. 504. PROCEDURE FOR TIMELY SETTLEMENT OF ESTATES OF DECEDENT OBLIGORS.

(a) In General- Chapter 2 of the Truth in Lending Act ( U.S.C. 1631 et seq.) is amended by adding at the end the following new section:

-‘Sec. 140A Procedure for timely settlement of estates of decedent obligors

‘The Board, in consultation with the Federal Trade Commission and each other agency referred to in section 108(a), shall prescribe regulations to require any creditor, with respect to any credit card account under an open end consumer credit plan, to establish procedures to ensure that any administrator of an estate of any deceased obligor with respect to such account can resolve outstanding credit balances in a timely manner.’.

(b) Clerical Amendment- The table of sections for chapter 2 of the Truth in Lending Act is amended by inserting after the item relating to section 140 the following new item:

‘140A. Procedure for timely settlement of estates of decedent obligors’.’.

SEC. 505. 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 1-year period beginning on the date of enactment of this Act, the Board, 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 submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on 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 geographic location where a credit transaction with the consumer took place, or the identity of the merchant involved in the transaction;

(2) the credit transactions of the consumer, 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 use of such credit card account by the consumer; and

(3) the identity of the mortgage creditor which extended or holds the mortgage loan secured by the primary residence of the consumer.

(b) Other Information- The report required under subsection (a) shall also include–

(1) the number 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 any regulatory or statutory changes that may be needed to restrict or prevent such practices.

SEC. 506. BOARD REVIEW OF SMALL BUSINESS CREDIT PLANS AND RECOMMENDATIONS.

(a) Required Review- Not later than 9 months after the date of enactment of this Act, the Board shall conduct a review of the use of credit cards by businesses with not more than 50 employees (in this section referred to as ‘small businesses’) and the credit card market for small businesses, including–

(1) the terms of credit card agreements for small businesses and the practices of credit card issuers relating to small businesses;

(2) the adequacy of disclosures of terms, fees, and other expenses of credit card plans for small businesses;

(3) the adequacy of protections against unfair or deceptive acts or practices relating to credit card plans for small businesses;

(4) the cost and availability of credit for small businesses, particularly with respect to non-prime borrowers;

(5) the use of risk-based pricing for small businesses;

(6) credit card product innovation relating to small businesses; and

(7) the extent to which small business owners use personal credit cards to fund their business operations.

(b) Recommendations- Following the review required by subsection (a), the Board shall, not later than 12 months after the date of enactment of this Act–

(1) provide a report to Congress that summarizes the review and other evidence gathered by the Board, such as through consumer testing or other research, and

(2) make recommendations for administrative or legislative initiatives to provide protections for credit card plans for small businesses, as appropriate.

SEC. 507. SMALL BUSINESS INFORMATION SECURITY TASK FORCE.

(a) Definitions- In this section–

(1) the terms ‘Administration’ and ‘Administrator’ mean the Small Business Administration and the Administrator thereof, respectively;

(2) the term ‘small business concern’ has the same meaning as in section 3 of the Small Business Act (15 U.S.C. 632); and

(3) the term ‘task force’ means the task force established under subsection (b).

(b) Establishment- The Administrator shall, in conjunction with the Secretary of Homeland Security, establish a task force, to be known as the ‘Small Business Information Security Task Force’, to address the information technology security needs of small business concerns and to help small business concerns prevent the loss of credit card data.

(c) Duties- The task force shall–

(1) identify–

(A) the information technology security needs of small business concerns; and

(B) the programs and services provided by the Federal Government, State Governments, and nongovernment organizations that serve those needs;

(2) assess the extent to which the programs and services identified under paragraph (1)(B) serve the needs identified under paragraph (1)(A);

(3) make recommendations to the Administrator on how to more effectively serve the needs identified under paragraph (1)(A) through–

(A) programs and services identified under paragraph (1)(B); and

(B) new programs and services promoted by the task force;

(4) make recommendations on how the Administrator may promote–

(A) new programs and services that the task force recommends under paragraph (3)(B); and

(B) programs and services identified under paragraph (1)(B);

(5) make recommendations on how the Administrator may inform and educate with respect to–

(A) the needs identified under paragraph (1)(A);

(B) new programs and services that the task force recommends under paragraph (3)(B); and

(C) programs and services identified under paragraph (1)(B);

(6) make recommendations on how the Administrator may more effectively work with public and private interests to address the information technology security needs of small business concerns; and

(7) make recommendations on the creation of a permanent advisory board that would make recommendations to the Administrator on how to address the information technology security needs of small business concerns.

(d) Internet Website Recommendations- The task force shall make recommendations to the Administrator relating to the establishment of an Internet website to be used by the Administration to receive and dispense information and resources with respect to the needs identified under subsection (c)(1)(A) and the programs and services identified under subsection (c)(1)(B). As part of the recommendations, the task force shall identify the Internet sites of appropriate programs, services, and organizations, both public and private, to which the Internet website should link.

(e) Education Programs- The task force shall make recommendations to the Administrator relating to developing additional education materials and programs with respect to the needs identified under subsection (c)(1)(A).

(f) Existing Materials- The task force shall organize and distribute existing materials that inform and educate with respect to the needs identified under subsection (c)(1)(A) and the programs and services identified under subsection (c)(1)(B).

(g) Coordination With Public and Private Sector- In carrying out its responsibilities under this section, the task force shall coordinate with, and may accept materials and assistance as it determines appropriate from, public and private entities, including–

(1) any subordinate officer of the Administrator;

(2) any organization authorized by the Small Business Act to provide assistance and advice to small business concerns;

(3) other Federal agencies, their officers, or employees; and

(4) any other organization, entity, or person not described in paragraph (1), (2), or (3).

(h) Appointment of Members-

(1) CHAIRPERSON AND VICE-CHAIRPERSON- The task force shall have–

(A) a Chairperson, appointed by the Administrator; and

(B) a Vice-Chairperson, appointed by the Administrator, in consultation with appropriate nongovernmental organizations, entities, or persons.

(2) MEMBERS-

(A) CHAIRPERSON AND VICE-CHAIRPERSON- The Chairperson and the Vice-Chairperson shall serve as members of the task force.

(B) ADDITIONAL MEMBERS-

(i) IN GENERAL- The task force shall have additional members, each of whom shall be appointed by the Chairperson, with the approval of the Administrator.

(ii) NUMBER OF MEMBERS- The number of additional members shall be determined by the Chairperson, in consultation with the Administrator, except that–

(I) the additional members shall include, for each of the groups specified in paragraph (3), at least 1 member appointed from within that group; and

(II) the number of additional members shall not exceed 13.

(3) GROUPS REPRESENTED- The groups specified in this paragraph are–

(A) subject matter experts;

(B) users of information technologies within small business concerns;

(C) vendors of information technologies to small business concerns;

(D) academics with expertise in the use of information technologies to support business;

(E) small business trade associations;

(F) Federal, State, or local agencies, including the Department of Homeland Security, engaged in securing cyberspace; and

(G) information technology training providers with expertise in the use of information technologies to support business.

(4) POLITICAL AFFILIATION- The appointments under this subsection shall be made without regard to political affiliation.

(i) Meetings-

(1) FREQUENCY- The task force shall meet at least 2 times per year, and more frequently if necessary to perform its duties.

(2) QUORUM- A majority of the members of the task force shall constitute a quorum.

(3) LOCATION- The Administrator shall designate, and make available to the task force, a location at a facility under the control of the Administrator for use by the task force for its meetings.

(4) MINUTES-

(A) IN GENERAL- Not later than 30 days after the date of each meeting, the task force shall publish the minutes of the meeting in the Federal Register and shall submit to the Administrator any findings or recommendations approved at the meeting.

(B) SUBMISSION TO CONGRESS- Not later than 60 days after the date that the Administrator receives minutes under subparagraph (A), the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives such minutes, together with any comments the Administrator considers appropriate.

(5) FINDINGS-

(A) IN GENERAL- Not later than the date on which the task force terminates under subsection (m), the task force shall submit to the Administrator a final report on any findings and recommendations of the task force approved at a meeting of the task force.

(B) SUBMISSION TO CONGRESS- Not later than 90 days after the date on which the Administrator receives the report under subparagraph (A), the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives the full text of the report submitted under subparagraph (A), together with any comments the Administrator considers appropriate.

(j) Personnel Matters-

(1) COMPENSATION OF MEMBERS- Each member of the task force shall serve without pay for their service on the task force.

(2) TRAVEL EXPENSES- Each member of the task force shall receive travel expenses, including per diem in lieu of subsistence, in accordance with applicable provisions under subchapter I of chapter 57 of title 5, United States Code.

(3) DETAIL OF SBA EMPLOYEES- The Administrator may detail, without reimbursement, any of the personnel of the Administration to the task force to assist it in carrying out the duties of the task force. Such a detail shall be without interruption or loss of civil status or privilege.

(4) SBA SUPPORT OF THE TASK FORCE- Upon the request of the task force, the Administrator shall provide to the task force the administrative support services that the Administrator and the Chairperson jointly determine to be necessary for the task force to carry out its duties.

(k) Not Subject to Federal Advisory Committee Act- The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the task force.

(l) Startup Deadlines- The initial appointment of the members of the task force shall be completed not later than 90 days after the date of enactment of this Act, and the first meeting of the task force shall be not later than 180 days after the date of enactment of this Act.

(m) Termination-

(1) IN GENERAL- Except as provided in paragraph (2), the task force shall terminate at the end of fiscal year 2013.

(2) EXCEPTION- If, as of the termination date under paragraph (1), the task force has not complied with subsection (i)(4) with respect to 1 or more meetings, then the task force shall continue after the termination date for the sole purpose of achieving compliance with subsection (i)(4) with respect to those meetings.

(n) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $300,000 for each of fiscal years 2010 through 2013.

SEC. 508. STUDY AND REPORT ON EMERGENCY PIN TECHNOLOGY.

(a) In General- The Federal Trade Commission, in consultation with the Attorney General of the United States and the United States Secret Service, shall conduct a study on the cost-effectiveness of making available at automated teller machines technology that enables a consumer that is under duress to electronically alert a local law enforcement agency that an incident is taking place at such automated teller machine, including–

(1) an emergency personal identification number that would summon a local law enforcement officer to an automated teller machine when entered into such automated teller machine; and

(2) a mechanism on the exterior of an automated teller machine that, when pressed, would summon a local law enforcement to such automated teller machine.

(b) Contents of Study- The study required under subsection (a) shall include–

(1) an analysis of any technology described in subsection (a) that is currently available or under development;

(2) an estimate of the number and severity of any crimes that could be prevented by the availability of such technology;

(3) the estimated costs of implementing such technology; and

(4) a comparison of the costs and benefits of not fewer than 3 types of such technology.

(c) Report- Not later than 9 months after the date of enactment of this Act, the Federal Trade Commission shall submit to Congress a report on the findings of the study required under this section that includes such recommendations for legislative action as the Commission determines appropriate.

SEC. 509. STUDY AND REPORT ON THE MARKETING OF PRODUCTS WITH CREDIT OFFERS.

(a) Study- The Comptroller General of the United States shall conduct a study on the terms, conditions, marketing, and value to consumers of products marketed in conjunction with credit card offers, including–

(1) debt suspension agreements;

(2) debt cancellation agreements; and

(3) credit insurance products.

(b) Areas of Concern- The study conducted under this section shall evaluate–

(1) the suitability of the offer of products described in subsection (a) for target customers;

(2) the predatory nature of such offers; and

(3) specifically for debt cancellation or suspension agreements and credit insurance products, loss rates compared to more traditional insurance products.

(c) Report to Congress- The Comptroller shall submit a report to Congress on the results of the study required by this section not later than December 31, 2010.

SEC. 510. FINANCIAL AND ECONOMIC LITERACY.

(a) Report on Federal Financial and Economic Literacy Education Programs-

(1) IN GENERAL- Not later than 9 months after the date of enactment of this Act, the Secretary of Education and the Director of the Office of Financial Education of the Department of the Treasury shall coordinate with the President’s Advisory Council on Financial Literacy–

(A) to evaluate and compile a comprehensive summary of all existing Federal financial and economic literacy education programs, as of the time of the report; and

(B) to prepare and submit a report to Congress on the findings of the evaluations.

(2) CONTENTS- The report required by this subsection shall address, at a minimum–

(A) the 2008 recommendations of the President’s Advisory Council on Financial Literacy;

(B) existing Federal financial and economic literacy education programs for grades kindergarten through grade 12, and annual funding to support these programs;

(C) existing Federal postsecondary financial and economic literacy education programs and annual funding to support these programs;

(D) the current financial and economic literacy education needs of adults, and in particular, low- and moderate-income adults;

(E) ways to incorporate and disseminate best practices and high quality curricula in financial and economic literacy education; and

(F) specific recommendations on sources of revenue to support financial and economic literacy education activities with a specific analysis of the potential use of credit card transaction fees.

(b) Strategic Plan-

(1) IN GENERAL- The Secretary of Education and the Director of the Office of Financial Education of the Department of the Treasury shall coordinate with the President’s Advisory Council on Financial Literacy to develop a strategic plan to improve and expand financial and economic literacy education.

(2) CONTENTS- The plan developed under this subsection shall–

(A) incorporate findings from the report and evaluations of existing Federal financial and economic literacy education programs under subsection (a); and

(B) include proposals to improve, expand, and support financial and economic literacy education based on the findings of the report and evaluations.

(3) PRESENTATION TO CONGRESS- The plan developed under this subsection shall be presented to Congress not later than 6 months after the date on which the report under subsection (a) is submitted to Congress.

(c) Effective Date- Notwithstanding section 3, this section shall become effective on the date of enactment of this Act.

SEC. 511. FEDERAL TRADE COMMISSION RULEMAKING ON MORTGAGE LENDING.

(a) In General- Section 626 of division D of the Omnibus Appropriations Act, 2009 (Public Law 111-8) is amended–

(1) in subsection (a)–

(A) by striking ‘Within’ and inserting ‘(1) Within’;

(B) in paragraph (1), as designated by subparagraph (A), by inserting after the first sentence the following: ‘Such rulemaking shall relate to unfair or deceptive acts or practices regarding mortgage loans, which may include unfair or deceptive acts or practices involving loan modification and foreclosure rescue services.’; and

(C) by adding at the end the following:

‘(2) Paragraph (1) shall not be construed to authorize the Federal Trade Commission to promulgate a rule with respect to an entity that is not subject to enforcement of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) by the Commission.

‘(3) Before issuing a final rule pursuant to the proceeding initiated under paragraph (1), the Federal Trade Commission shall consult with the Federal Reserve Board concerning any portion of the proposed rule applicable to acts or practices to which the provisions of the Truth in Lending Act (15 U.S.C. 1601 et seq.) may apply.

‘(4) The Federal Trade Commission shall enforce the rules issued under paragraph (1) in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made part of this section.’; and

(2) in subsection (b)–

(A) by striking so much as precedes paragraph (2) and inserting the following:

‘(b)(1) Except as provided in paragraph (6), in any case in which the attorney general of a State has reason to believe that an interest of the residents of that State has been or is threatened or adversely affected by the engagement of any person subject to a rule prescribed under subsection (a) in a practice that violates such rule, the State, as parens patriae, may bring a civil action on behalf of the residents of the State in an appropriate district court of the United States or other court of competent jurisdiction–

‘(A) to enjoin that practice;

‘(B) to enforce compliance with the rule;

‘(C) to obtain damages, restitution, or other compensation on behalf of residents of the State; or

‘(D) to obtain penalties and relief provided by the Federal Trade Commission Act and such other relief as the court considers appropriate.’; and

(B) in paragraphs (2), (3), and (6), by striking ‘Commission’ each place it appears and inserting ‘primary Federal regulator’.

(b) Effective Date- The amendments made by subsection (a) shall take effect on March 12, 2009.

SEC. 512. PROTECTING AMERICANS FROM VIOLENT CRIME.

(a) Congressional Findings- Congress finds the following:

(1) The Second Amendment to the Constitution provides that ‘the right of the people to keep and bear Arms, shall not be infringed’.

(2) Section 2.4(a)(1) of title 36, Code of Federal Regulations, provides that ‘except as otherwise provided in this section and parts 7 (special regulations) and 13 (Alaska regulations), the following are prohibited: (i) Possessing a weapon, trap or net (ii) Carrying a weapon, trap or net (iii) Using a weapon, trap or net’.

(3) Section 27.42 of title 50, Code of Federal Regulations, provides that, except in special circumstances, citizens of the United States may not ‘possess, use, or transport firearms on national wildlife refuges’ of the United States Fish and Wildlife Service.

(4) The regulations described in paragraphs (2) and (3) prevent individuals complying with Federal and State laws from exercising the second amendment rights of the individuals while at units of–

(A) the National Park System; and

(B) the National Wildlife Refuge System.

(5) The existence of different laws relating to the transportation and possession of firearms at different units of the National Park System and the National Wildlife Refuge System entrapped law-abiding gun owners while at units of the National Park System and the National Wildlife Refuge System.

(6) Although the Bush administration issued new regulations relating to the Second Amendment rights of law-abiding citizens in units of the National Park System and National Wildlife Refuge System that went into effect on January 9, 2009–

(A) on March 19, 2009, the United States District Court for the District of Columbia granted a preliminary injunction with respect to the implementation and enforcement of the new regulations; and

(B) the new regulations–

(i) are under review by the administration; and

(ii) may be altered.

(7) Congress needs to weigh in on the new regulations to ensure that unelected bureaucrats and judges cannot again override the Second Amendment rights of law-abiding citizens on 83,600,000 acres of National Park System land and 90,790,000 acres of land under the jurisdiction of the United States Fish and Wildlife Service.

(8) The Federal laws should make it clear that the second amendment rights of an individual at a unit of the National Park System or the National Wildlife Refuge System should not be infringed.

(b) Protecting the Right of Individuals To Bear arms in Units of the National Park System and the National Wildlife Refuge System- The Secretary of the Interior shall not promulgate or enforce any regulation that prohibits an individual from possessing a firearm including an assembled or functional firearm in any unit of the National Park System or the National Wildlife Refuge System if–

(1) the individual is not otherwise prohibited by law from possessing the firearm; and

(2) the possession of the firearm is in compliance with the law of the State in which the unit of the National Park System or the National Wildlife Refuge System is located.

SEC. 513. GAO STUDY AND REPORT ON FLUENCY IN THE ENGLISH LANGUAGE AND FINANCIAL LITERACY.

(a) Study- The Comptroller General of the United States shall conduct a study examining–

(1) the relationship between fluency in the English language and financial literacy; and

(2) the extent, if any, to which individuals whose native language is a language other than English are impeded in their conduct of their financial affairs.

(b) Report- Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives that contains a detailed summary of the findings and conclusions of the study required under subsection (a).

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.

Legal vs. Illegal Credit Card Offers

Legal vs. Illegal Credit Card Offers

What are
Credit Card Offers?

Credit Card Offers are bids and proposals
furnished by credit card companies in order to amass new customers. Within the
vast expanse of Credit Card Offers, there exist a variety of factors, terms,
conditions, and components offered to prospective patrons. As a result, the
initial conditions and terms latent within Credit Card Offers set forth, oftentimes
regarded as ‘Introductory Offers’, will typically vary from the long-term
conditions implicit within respective credit card contracts.
 

Introductory vs. Long-term Credit Card Offers

The following is an example of introductory credit
card offers that are not typically subject to long-term facilitation:

0% APR and Interest-Free Credit Card Offers

Credit Card Offers advertising ‘0% APR’, which is
defined as the absence of an interest rate existing in conjunction with a
respective credit card, may exist within the initial approval of a credit card.
In certain cases, lending institutions may allow individual applicants approved
for the receipt of credit cards to undergo a year without interest. Interest is
defined as a percentage of a specific, gross amount that is added to the total
amount due for repayment.

Although the prospect of the absence of interest
is considered to be attractive, individuals are encouraged to investigate the
applicable interest and Annual Percentage Rates enacted subsequent to the
termination of the introductory offer.

Introductory credit card offers are subject to
immediate revocation in the event that the individual fails to adhere to the
scheduled repayment(s) expressed and required by the lending institution.

A Guide to the Legality of Credit Card Offers

Credit Card Offers will typically fall under the
jurisdictions of both Finance Law and Commercial Law, as well as be subject to
legislation passed with regard to both standards and practices of lending
institutions determined to be legal, ethical, and lawful.

Finance Law 

Credit Card Offers are typically regulated by this
legal field, which is responsible for the authorization and oversight of
legislation applicable to the exchange and the circulation of monies. This
takes place both transfer activity undertaken involving hard currency, as well
as the review of the terms and conditions latent within Credit Card Offers.

The precepts of Finance Law ensure that all terms
latent within Credit Card Offers adhere to the Truth in Lending Act, which
ensures that the terms of all Credit Card Offers are expressed clearly upon
applying for Credit Card Offers.

Commercial Law

Credit Card Offers are typically regulated by this
legal field, which is responsible for the enactment and the regulatory
oversight of standards and practices occurring within the commercial
marketplace. With regard to Credit Card Offers, statutory legislation
undertaken within the precepts of Commercial Law ensures that any nature of
predatory lending or financial exploitation is regarded as a criminal offense.

The Fair Billing Credit Act provides consumer
relief from billing procedures considered to be exploitative and deceptive. Primarily,
this Bill reviews the legality expressed within Credit Card Offers.

The CARD Act of 2009, or The Credit Card
Accountability, Responsibility, and Disclosure Act, disallows for both
predatory lending and exploitative measures undertaken by credit card lending
institutions upon making Credit Card Offers
.

What You May Not Know About Credit Card Debt

What You May Not Know About Credit Card Debt

What is
Credit Card Debt?

Credit card debt is an unfortunate situation that
occurs when an individual over-extends themselves by purchasing goods with
credit beyond their means to pay the debt. In essence, credit card debt occurs
when an individual’s debt, as a result of their credit card use, exceeds their
ability to pay the debt or their income.

Credit card
debt is fairly easy to get involved with, even if the consumer maintains some
sort of budget. The reasoning behind this prevalence is that financial
institutions who issue credit cards do so with interest or APR rates attached.
These rates are multiplied into unpaid monthly balances. Over time, these small
percentage increases can suffocate a borrower.
 

Why do most people get in Credit Card Debt?

In addition to interest rates, all credit cards
are attached with finance fees, usage fees and other terms that may be hidden
in the original credit card agreement. That being said, credit card debt occurs
most frequently when an individual becomes reckless with their lines of credit.

The majority
of consumers with credit card debt, when given the ability to purchase a product
in good faith, do not acknowledge the long-term problems that could arise from
an over-extension. Those stricken with credit card debt purchase goods with the
assumption that they will pay them off in the future. 

Unfortunately, unforeseen
events occur, such as layoffs or other costs, which prevent an individual from
making significant credit payments. As a result, the consumer is only able to
make minimum payments, which is attached with interest charges.
 

Example of how APR affects my Credit Card payments

If a consumer has a credit card with an available
credit line of $500 and an annual percent rate of 20% and spends the full
credit amount of $500 in one month on various goods and services, he or she
will be required to pay off that debt over time. Credit card billing cycles are
monthly, meaning the individual is required to pay off all or some of the debt
at the end of each month. 

If the individual does not pay the $500 and only pays
the minimum (typically $15), the APR of 20% will be applied to the next month’s
bill in the form of a monthly fee (.20/12), or .01667. Add 1 to this figure to
reveal 1.016, which is then multiplied by your remaining balance. Therefore, if
you have $485 due next month, you will take $485 and multiply it by 1.016 to
yield a new balance of $492.76. This added $7.76 may not seem like much, but
over time as more credit is made available and subsequently used, this figure
will grow exponentially.
 

In addition, if you multiply the $7.76 times 12
(months) you can see that you are paying nearly $100 in interest for a small
credit line. Credit cards with larger lines of credit will obviously have
larger figures. 

Therefore, those who extend themselves more, meaning they buy
more goods with credit, will be more susceptible to facing severe credit card
debt. The terms attached to each credit card will vary based on the issuing
institution’s protocol and the credit score of the prospective borrower.
 

How to avoid or get out of Credit Card Debt

There are numerous ways to get out of credit card
debt, the most basic of which is to develop a budget and only purchase items
that are needed on credit. The development of a budget, in alignment with your
disposable income, will ensure that you do not exceed your ability to repay the
debts. 

Aside from this basic step, an individual facing credit card debt can
consolidate their payments by contacting their lender and developing a more
feasible repayment plan.

In addition to personal approaches, an individual
can get out of credit card debt through the inclusion of a credit counseling
agency. These organizations will provide educational resources on how to
properly balance one’s debt. A credit counseling agency will also work with the
individual’s lenders to create repayment plans that are more feasible.

Aside from incorporating a credit counseling
service, an individual can engage in credit repair by filing for bankruptcy. In
most cases, filing for bankruptcy is a last resort form of credit repair. That
being said, credit card bankruptcy will, in essence, clear an individual’s
credit history after a few years. 

As stated before, credit repair is vital for
those individuals facing mounting debts because a poor credit score will
prevent an individual from obtaining any source of financing in the future,
including mortgages, credit cards with favorable terms, personal loans, leases,
and in some cases employment. 
 

Free Credit Reports

 Free Credit Reports

How to get Free Credit Reports
A credit report gives information on an individual’s location, how the individual pays bills, record of lawsuits and arrests, and any history of bankruptcy. Credit reports can be used by businesses, employers, creditors, insurers, as a means of evaluation for various things such as employment, credit, or housing. The credit report contains three different reports from the three major credit bureaus.
Looking at a free credit report can help improve the chances affect getting a job or a loan at a certain percent of internet. Free credit reports can show an individual what their credit score is and how it can be improved.
Under the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act, everyone is entitled to free credit reports once a year. This law was created in order to provide individuals with a free copy annually of their credit report upon request, making them more aware of their financial position. Free credit reports can be obtained by providing a name, date of birth, address, and social security number. 
There are many different companies that advertise free credit reports, but only one is authorized by the government to give you the free credit report that you are entitled to receive annually. An individual can get a credit report online which has immediate access. It is also possible to call a toll free line or fill out an Annual Credit Report Request Form to order a credit report by mail. Requesting a credit report can take up to 15 days to receive, although it can take longer when backed up.
While everyone is entitled to just one free credit report a year, others can be obtained in the situation where a company takes actions against the individual, for example denial of employment, insurance or credit. An additional free credit report is given when an individual is unemployed or on welfare. If an individual needs a credit report but does not qualify for one, it can be purchased for up to $10.50.
There are certain actions that can affect a credit report negatively and cause a lower credit score. These things can be reported seven years such as an unpaid lawsuit, unless it is bankruptcy information which can be reported for 10 years. Certain information is permanent, such as criminal convictions, reports of an annual salary above $75,000, or applications for credit or life insurance above $150,000.
Any errors in the credit report should be reported by the individual to the reporting company, who will then work to make any corrections as necessary. The company should provide a written report and a copy of the credit report. The creditor must also be made aware of the error in order to prevent future erroneous reporting.

Credit Checks

Credit Checks

How Credit Checks Work


When applying for credit, lenders can inquire for a copy of an individual’s credit report from one of the major credit bureaus. These inquiries or credit checks can be listed on a credit report. While these inquiries may cause a credit score to drop, it will not change drastically. Sometimes, looking for a new credit line can mean a higher risk, but most credit scores do not get affected by multiple inquiries from mortgage, auto, or student loan lenders.
A credit check can be useful to determine an individual’s credit score, which many businesses, employers, creditors, and insurers use. The best way to go about doing a credit check is by getting a credit report. This provides information on an individual’s location, how the individual pays bills, record of lawsuits and arrests, and any history of bankruptcy. The credit report contains three different reports from the three major credit bureaus.
 A credit check can come in two forms. There is the soft pull which is just a basic credit check to determine a credit score. It is only use for informational purposes in order to find out a score. There is also a hard pull credit check, which results in more complicated reports. Lenders will often use hard pull credit checks for new accounts. These are the credit checks that can affect credit score.
The impression from applying for credit and having a credit check done will vary on a person to person basis based on their unique credit histories. For most people, one additional credit inquiry takes less than five points off. However, inquiries can show a greater impact with less accounts or a shorter credit history.
Large amounts inquiries also imply greater risk. An individual with at least six inquiries on their credit reports statically can be up to eight times more likely to declare bankruptcy in comparison to people with no inquiries. While inquiries can help assess risk, they play a minor part in doing so. How an individual pays bills and his overall debt burden as shown on your credit report is much more influential.
Performing a credit check through a credit report can help improve the chances of getting a job or a loan. Credit reports can show an individual what their credit score is and how it can be improved as opposed to jut a number.
Under the Fair Credit Reporting Act along with the Fair & Accurate Credit Transactions Act, everyone is entitled to free credit report annually from the major credit bureaus. This law was created in order to provide individuals with a free copy annually of their credit report upon request, making them more aware of their financial position. Free credit reports can be obtained by providing a name, date of birth, address, and social security number. 

Fix Credit Scores

Fix Credit Scores

How to Fix Credit Scores


There is no way to quickly fix credit scores since the process takes time to be successful. The best way to fix credit scores is to take care of it in a responsible way steadily over time in order or to repair credit history. Here are some tips for accomplishing that.
Fix Credit Scores: First Steps
Check a credit report: Free copies can be requested and will provide information used to calculate a credit score. There can be potential errors such as incorrect late payments or amounts owed. Any errors should be disputed and corrected through the credit bureau as well as the reporting agency.
Setting up payment reminders in order to prevent late payments, which can have a very harmful effect to a credit score. Banks will often provide this service through the online banking sections of their websites. Automatic payments are another possible way to avoid late payments.
Reduce owed debt by reducing credit card use, and having more effective payment plans.

Fix Credit Scores: Long Term Solutions
If there are no credit cards associated to an individual, a credit card can help to help show regular payments.
Showing payments to installment loans such as auto loans, personal loans, mortgages, or student loans can help fix credit scores.
Paying off credit cards and other revolving credit lines is also an extremely effective way to fix credit scores. It is best to show large gaps credit available and credit used. Typically it is ideal to stay below 30%. Two effective ways of paying off or down credit cards are by either paying the cards with the highest interest rates or those that are closest to their limits.
Instead of accumulating large balances on credit cards, using less than 30% or especially less than 10%. Balances are reported to credit unions so they should be kept as low as possible.
Verify limits to be sure the lender is not showing a lower limit. If a lender is doing this, the lender can update this information quickly upon request.
Keep older cards to maintain an older credit history, but make sure to use them occasionally otherwise the issuer may stop sending updates to credit bureaus, lessening its weight on a credit report.
If there is just one late payment, a lender may be willing to overlook and erase it from the record. Any requests must be made in writing.
Fix Credit Scores: Avoid these Mistakes
Don’t lower credit limits because it will lower the gap between available credit and balances, which can lower a credit score.
Avoid any late payments since they hurt good scores even harder than bad ones. They are not as damaging to an already bad score, but they should still be avoided.
Consolidating accounts may lead to a big balance on one account as opposed to smaller balances on multiple accounts, which can hurt credit scores.

Credit Fixes

 Credit Fixes

Helpful Credit Fixes


In order to do a credit fix, it is important to know how to avoid some scams and claims. Many companies will claim to be able to remove judgments, bankruptcies, bad loans, or liens from a credit file. Some companies may even claim to remove bad credit or make a new credit identity. 
According to the Federal trade Commissions, most of these are just scams. Even attorneys from the country’s consumer protection agency have yet to find a legitimate credit fix operation that has followed through on such claims.
Legally, no one is allowed to do a credit fix by removing timely and accurate negative information from a credit report, so it is important not to believe that these credit fixes will really work. The only thing that is allowed is removing negative information that is incomplete or inaccurate.
Here are some credit fixes that will help improve a credit score:
If the bad information on a credit report is the result from an outstanding debt, work to repay these debts as rapidly as possible. It is ideal to pay off debts that have the highest interest rates before those with lower interest rates.
If the debts are too overwhelming, a nonprofit credit-counseling organization may be helpful in making a plan to repay debts. A counselor can help consolidate debts and can talk to debtors to try to eliminate or reduce extra finance charges.
Attempt to maintain a lifestyle that can help with the credit fix. Make sure to make all payments for rent, mortgages, and utilities before they become late, maintain the same job and residence, and keep a savings and checking account. Furthermore, create and follow a budget.
Punctually paying off monthly credit card balances in order to avoid late fees is an effective credit fix to follow.
Cut off credit card use to avoid even more debt.
Setting up payment reminders in order to prevent late payments, which can have a very harmful effect to a credit score. Banks will often provide this service through the online banking sections of their websites. Automatic payments are another possible way to avoid late payments.
Pay more than just the minimum on the monthly payments.
Ask for a copy of a credit report and check for any errors. If there are, they should be corrected.
Avoid large purchases until paying off all the credit card debt.
Transfer the debt to a lower interest credit card.
Pay half the minimum twice the month to reduce the monthly average, which will reduce the finance charges that are assessed.
Close the newest accounts to make the average age of credit history older.