Unsolicited Loan Act of 2019

II 116TH CONGRESS 1ST SESSION S. 3036 To amend the Truth in Lending Act to prohibit the distribution of any check or other negotiable instrument as part of a solicitation by a creditor for an extension of credit, to limit the liability of consumers in conjunction with such solicitations, and for other purposes. IN THE SENATE OF THE UNITED STATES DECEMBER 12, 2019 Mr. JONES (for himself, Mr. COTTON, and Mr. MERKLEY) introduced the fol- lowing bill; which was read twice and referred to the Committee on Bank- ing, Housing, and Urban Affairs A BILL To amend the Truth in Lending Act to prohibit the distribu- tion of any check or other negotiable instrument as part of a solicitation by a creditor for an extension of credit, to limit the liability of consumers in conjunction with such solicitations, and for other purposes. 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 ‘‘Unsolicited Loan Act 4 of 2019’’. 5 VerDate Sep 11 2014 03:57 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.IS S3036 kjohnson on DSK79L0C42 with BILLS 2 •S 3036 IS SEC. 2. UNSOLICITED LOAN CHECKS PROHIBITED. 1 (a) IN GENERAL.—Section 132 of the Truth in Lend- 2 ing Act (15 U.S.C. 1642) is amended— 3 (1) by striking the section heading and insert- 4 ing ‘‘UNSOLICITED CREDIT’’; 5 (2) by inserting ‘‘(a) CREDIT CARDS.—’’ before 6 ‘‘No credit’’; and 7 (3) by adding at the end the following: 8 ‘‘(b) UNSOLICITED LOAN CHECKS OR TRANSFERS.— 9 No person may extend any consumer credit that is other- 10 wise subject to this title by— 11 ‘‘(1) making an unsolicited transfer of funds to 12 the consumer’s credit or asset account; or 13 ‘‘(2) through the consumer’s use of an unsolic- 14 ited check, other negotiable instrument, access de- 15 vice or other means of initiating an electronic fund 16 transfer as defined in section 903 of the Electronic 17 Fund Transfer Act (15 U.S.C. 1693a), or such 18 other similar instrument or device as the Bureau 19 may, by rule, determine, that is sent to the con- 20 sumer unless the consumer submitted a written ap- 21 plication for, or otherwise requested in writing, the 22 extension of credit before the date on which the 23 creditor sent the check, negotiable instrument, ac- 24 cess device or other similar instrument or device. 25 VerDate Sep 11 2014 03:57 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.IS S3036 kjohnson on DSK79L0C42 with BILLS 3 •S 3036 IS ‘‘(c) ‘LOOK-ALIKE’ CHECKS.—A certificate, voucher, 1 or other nonnegotiable instrument provided to a consumer 2 in connection with a solicitation for an extension of credit 3 that has the appearance of a check or other negotiable 4 instrument is not an application or request for an exten- 5 sion of credit for purposes of this section. 6 ‘‘(d) LIABILITY OF CONSUMER.— 7 ‘‘(1) DEFINITIONS.—In this subsection, the 8 terms ‘consumer’, ‘consumer reporting agency’, and 9 ‘consumer report’ have the meanings given the terms 10 in section 603 of the Fair Credit Reporting Act (15 11 U.S.C. 1681a). 12 ‘‘(2) AGREEMENT VOID.—Any purported credit 13 agreement entered into or debt purportedly incurred 14 as a result of a violation of subsection (a) or (b) is 15 void and the consumer or cardholder shall not be lia- 16 ble for and no person shall attempt to collect— 17 ‘‘(A) the principal amount sent or trans- 18 ferred to the consumer in violation of this sec- 19 tion; or 20 ‘‘(B) any interest, charge, fee, or penalty. 21 ‘‘(3) CONSUMER REPORTING.—No information 22 relating to the liability of a consumer alleged by a 23 creditor to have been established in violation of sub- 24 section (a) or (b) may be reported to or received by 25 VerDate Sep 11 2014 03:57 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3036.IS S3036 kjohnson on DSK79L0C42 with BILLS 4 •S 3036 IS any consumer reporting agency or included in any 1 consumer report. 2 ‘‘(e) REGULATIONS.—Not later than 180 days after 3 the date of enactment of this subsection, the Bureau shall 4 prescribe final regulations to implement this section.’’. 5 (b) CLERICAL AMENDMENT.—The item relating to 6 section 132 in the table of sections for chapter 2 of the 7 Consumer Credit Protection Act is amended to read as 8 follows: 9 ‘‘132. Unsolicited credit.’’. (c) EFFECTIVE DATE.—The requirements of this Act 10 and the amendments made by this Act shall apply to solici- 11 tations for extensions of credit made to consumers 180 12 days after the date of enactment of this Act. 13 Æ VerDate Sep 11 2014 03:57 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S3036.IS S3036 kjohnson on DSK79L0C42 with BILLS