Veterans and Consumers Fair Credit Act

II 116TH CONGRESS 1ST SESSION S. 2833 To amend the Truth in Lending Act to extend the consumer credit protections provided to members of the Armed Forces and their dependents under title 10, United States Code, to all consumers. IN THE SENATE OF THE UNITED STATES NOVEMBER 12, 2019 Mr. MERKLEY (for himself, Mr. BROWN, Mr. REED, and Mr. VAN HOLLEN) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Truth in Lending Act to extend the consumer credit protections provided to members of the Armed Forces and their dependents under title 10, United States Code, to all consumers. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Veterans and Con- 4 sumers Fair Credit Act’’. 5 VerDate Sep 11 2014 03:56 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2833.IS S2833 kjohnson on DSK79L0C42 with BILLS 2 •S 2833 IS SEC. 2. LIMITATIONS ON CONSUMER CREDIT AND MAX- 1 IMUM RATES OF INTEREST. 2 (a) IN GENERAL.—Chapter 2 of the Truth in Lend- 3 ing Act (15 U.S.C. 1631 et seq.) is amended by adding 4 at the end the following: 5 ‘‘§ 140B. Limitations on consumer credit and max- 6 imum rates of interest 7 ‘‘(a) APPLICATION OF THE MILITARY LENDING 8 ACT.— 9 ‘‘(1) IN GENERAL.—Except as provided in para- 10 graph (2), section 987(b) of title 10, United States 11 Code (commonly referred to as the ‘Military Lending 12 Act’), shall apply to a creditor who extends con- 13 sumer credit to a consumer to the same extent as 14 such section applies to a creditor who extends con- 15 sumer credit to a covered member or a dependent 16 with respect to a covered member (as those terms 17 are defined in such section 987). 18 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 19 apply to— 20 ‘‘(A) a residential mortgage; 21 ‘‘(B) a loan procured in the course of pur- 22 chasing a car or other personal property, when 23 that loan is offered for the express purpose of 24 financing the purchase and is secured by the 25 car or personal property procured; or 26 VerDate Sep 11 2014 03:56 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2833.IS S2833 kjohnson on DSK79L0C42 with BILLS 3 •S 2833 IS ‘‘(C) a loan made by a Federal credit 1 union, as that term is defined in section 101 of 2 the Federal Credit Union Act (12 U.S.C. 3 1752), subject to the usury limit provided under 4 section 107(5)(A) of the Federal Credit Union 5 Act (12 U.S.C. 1757(5)(A)), as implemented by 6 the National Credit Union Administration 7 Board. 8 ‘‘(b) NO EXEMPTIONS PERMITTED.—The exemption 9 authority of the Bureau under section 105(f) shall not 10 apply with respect to this section. 11 ‘‘(c) CALCULATION OF THE ANNUAL PERCENTAGE 12 RATE FOR OPEN-END CREDIT.— 13 ‘‘(1) IN GENERAL.—For purposes of this sec- 14 tion, the annual percentage rate applicable to an 15 open-end credit plan shall be calculated under sec- 16 tion 107(a)(2), subject to adjustments to the 17 amount considered a finance charge, as provided in 18 the rules issued by the Secretary of Defense on July 19 22, 2015, to carry out section 987 of title 10, 20 United States Code. 21 ‘‘(2) EXCEPTION TO FINANCE CHARGE CAL- 22 CULATION.— 23 ‘‘(A) IN GENERAL.—Notwithstanding para- 24 graph (1), for consumer credit extended in a 25 VerDate Sep 11 2014 03:56 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2833.IS S2833 kjohnson on DSK79L0C42 with BILLS 4 •S 2833 IS credit card account under an open-end (not 1 home-secured) consumer credit plan, a bona 2 fide fee other than a periodic rate is not a 3 charge required to be included within the fi- 4 nance charge for purposes of this section if the 5 fee is assessed in compliance with section 6 127(n). 7 ‘‘(B) LIMITATION.—Subparagraph (A) 8 shall not apply to— 9 ‘‘(i) any credit insurance premium or 10 fee, including any charge for single pre- 11 mium credit insurance, any fee for a debt 12 cancellation contract, or any fee for a debt 13 suspension agreement; or 14 ‘‘(ii) any fee for a credit-related ancil- 15 lary product sold in connection with the 16 credit card account under an open-end (not 17 home-secured) consumer credit plan. 18 ‘‘(d) RELATION TO STATE LAW.—Nothing in this 19 section may be construed to preempt any provision of 20 State law that provides greater protection to consumers 21 than is provided under this section. 22 ‘‘(e) PENALTIES AND REMEDIES.—Section 987(f) of 23 title 10, United States Code, shall apply to a creditor who 24 extends consumer credit to a consumer in violation of this 25 VerDate Sep 11 2014 03:56 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2833.IS S2833 kjohnson on DSK79L0C42 with BILLS 5 •S 2833 IS section to the same extent as such section 987(f) applies 1 to a creditor who extends consumer credit to a covered 2 member or a dependent with respect to a covered member 3 (as those terms are defined in such section 987). 4 ‘‘(f) PRESERVATION OF STATE ENFORCEMENT.— 5 ‘‘(1) STATE ATTORNEYS GENERAL.—Not later 6 than 3 years after the date on which a violation of 7 this section occurs, the attorney general of a State 8 (or an equivalent official) may bring a civil action in 9 the name of that State— 10 ‘‘(A) in any district court of the United 11 States that is located in that State or in a 12 State court that is located in that State and 13 that has jurisdiction over the defendant; and 14 ‘‘(B) to— 15 ‘‘(i) enforce provisions of this section 16 or rules issued under this section; and 17 ‘‘(ii) secure remedies under provisions 18 of this section or remedies otherwise pro- 19 vided under other law. 20 ‘‘(2) STATE REGULATORS.—Not later than 3 21 years after the date on which a violation of this sec- 22 tion occurs, a State regulator may bring a civil ac- 23 tion or initiate another appropriate proceeding to— 24 VerDate Sep 11 2014 03:56 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2833.IS S2833 kjohnson on DSK79L0C42 with BILLS 6 •S 2833 IS ‘‘(A) enforce the provisions of this section 1 or regulations issued under this section with re- 2 spect to any entity that is, or is required to be, 3 State-chartered, incorporated, licensed, or oth- 4 erwise authorized to do business under State 5 law; and 6 ‘‘(B) secure remedies under provisions of 7 this section or remedies otherwise provided 8 under other provisions of law with respect to an 9 entity described in subparagraph (A). 10 ‘‘(3) NOTICE REQUIREMENT; ADDITIONAL REG- 11 ULATIONS.—Subsections (b), (c), and (d) of section 12 1042 of the Consumer Financial Protection Act of 13 2010 (12 U.S.C. 5552), shall apply to a civil action 14 or other appropriate proceeding brought or initiated 15 under paragraph (1) or (2) to the same extent as 16 those subsections apply to actions and other admin- 17 istrative and regulatory proceedings described in 18 subsection (a) of such section 1042. 19 ‘‘(g) REGULATIONS.— 20 ‘‘(1) IN GENERAL.—Notwithstanding section 21 1027(o) of the Consumer Financial Protection Act 22 (12 U.S.C. 5517(o)), not later than 1 year after the 23 date of enactment of this section, the Bureau, in 24 consultation with the Secretary of Defense, shall— 25 VerDate Sep 11 2014 03:56 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2833.IS S2833 kjohnson on DSK79L0C42 with BILLS 7 •S 2833 IS ‘‘(A) issue rules carrying out this section; 1 and 2 ‘‘(B) notify Congress and the public, in- 3 cluding on the website of the Bureau, regarding 4 the issuance of the rules required under sub- 5 paragraph (A). 6 ‘‘(2) CONSISTENCY.—The rules issued by the 7 Bureau under paragraph (1)— 8 ‘‘(A) shall be consistent with rules issued 9 by the Secretary of Defense to carry out section 10 987 of title 10, United States Code; and 11 ‘‘(B) may not provide lesser protection to 12 consumers than the protection afforded covered 13 members, as that term is defined in section 987 14 of title 10, United States Code, in applicable 15 provisions in the rules issued by the Secretary 16 of Defense on July 22, 2015, to carry out such 17 section 987.’’. 18 (b) CLERICAL AMENDMENT.—The table of contents 19 for chapter 2 of the Truth in Lending Act is amended 20 by adding at the end the following: 21 ‘‘140B. Limitations on consumer credit and maximum rates of interest.’’. (c) APPLICABILITY.—The amendments made by sub- 22 section (a) shall apply to an extension of credit made after 23 the earlier of— 24 VerDate Sep 11 2014 03:56 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2833.IS S2833 kjohnson on DSK79L0C42 with BILLS 8 •S 2833 IS (1) the date on which the rules issued by the 1 Bureau of Consumer Financial Protection under 2 subsection (g) of section 140B of the Truth in Lend- 3 ing Act, as added by subsection (a) of this section, 4 require compliance; and 5 (2) the date that is 18 months after the date 6 of enactment of this Act. 7 Æ VerDate Sep 11 2014 03:56 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S2833.IS S2833 kjohnson on DSK79L0C42 with BILLS