S.Amdt. 125

1. Adds SEC. __. LIMITATIONS ON PENALTIES DUE TO LATE PAYMENTS wherever appropriate

   Adds a section

   Inserted: SEC. __. LIMITATIONS ON PENALTIES DUE TO LATE PAYMENTS.

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

   Inserted: "(h) Limitations on Penalties Due to Late Payments.--

   Inserted: "(1) Limitations on interest rate increases.--

   Inserted: "(A) Advance notice required.--In the case of a credit card account under an open end credit plan, the creditor shall provide written or electronic notice to the obligor of its intention to increase the annual rate of interest applicable to the account due to a delinquency, and the effective date of such increase, not later than 15 days before that effective date.

   Inserted: "(B) Opportunity to remedy delinquency.--Except as provided in subparagraph (C), no increase in an annual rate of interest applicable to a credit card account under an open end credit plan due to a delinquency may be imposed if the obligor makes the payments required to bring the account up to date or to bring the outstanding balance below the amount of credit authorized to be extended with respect to the account, as applicable, during the 15-day period prescribed by subparagraph (A).

   Inserted: "(C) Exception for repeated delinquency.--Subparagraph (B) shall not apply to an increase in an annual rate of interest in any case in which the obligor has been delinquent with respect to the subject account on 3 separate occasions during the 12-month period immediately preceding the date of the increase.

   Inserted: "(3) Relation to state laws.--No provision of this subsection shall be construed to annul, alter, or affect or exempt any person subject to the provisions of this subsection from complying with, the laws of any State with respect to delinquency fees and penalties, except to the extent that those laws are inconsistent with any provision of this subsection and then only to the extent of the inconsistency. The Board may determine whether such inconsistencies exist. The Board may not determine that any State law is inconsistent with any provision of this chapter if the Board determines that such law gives greater protection to the consumer.

   Inserted: "(4) Definitions.--For purposes of this subsection an obligor is 'delinquent' or a 'delinquency' exists, if the obliger has, with respect to the subject credit card account--

   Inserted: "(A) failed to make payment on or before the due date for such payment; or

   Inserted: "(B) exceeded the amount of credit authorized to be extended with respect to the account of the obligor.".

   The amendment doesn't say where this goes; the clerk decides.

   Original wording

   At the appropriate place, insert the following:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed