To require enhanced disclosure to consumers regarding the consequences of making only minimum required payments in the repayment of credit card debt, and for other purposes.

SA 15. Mr. AKAKA (for himself, Mr. Durbin, Mr. Leahy, and Mr.
Sarbanes) submitted an amendment intended to be proposed by him to the
bill S. 256, to amend title 11 of the United States Code, and for other
purposes; as follows:

On page 473, strike beginning with line 12 through page
482, line 24, and insert the following:

SEC. 1301. ENHANCED CONSUMER DISCLOSURES REGARDING MINIMUM
PAYMENTS.

(a) Disclosures Regarding Outstanding Balances .--Section
127(b) of the Truth in Lending Act (15 U.S.C. 1637(b)) is
amended by adding at the end the following:
``(11)(A) Information regarding repayment of the
outstanding balance of the consumer under the account,
appearing in conspicuous type on the front of the first page
of each such billing statement, and accompanied by an
appropriate explanation, containing--
``(i) the words `Minimum Payment Warning: Making only the
minimum payment will increase the amount of interest that you
pay and the time it will take to repay your outstanding
balance.';
``(ii) the number of years and months (rounded to the
nearest month) that it would take for the consumer to pay the
entire amount of that balance, if the consumer pays only the
required minimum monthly payments;
``(iii) the total cost to the consumer, shown as the sum of
all principal and interest payments, and a breakdown of the
total costs in interest and principal, of paying that balance
in full if the consumer pays only the required minimum
monthly payments, and if no further advances are made;
``(iv) 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
``(v) a toll-free telephone number at which the consumer
may receive information about accessing credit counseling and
debt management services.
``(B)(i) Subject to clause (ii), in making the disclosures
under subparagraph (A) the creditor shall apply the interest
rate in effect on the date on which the disclosure is made.
``(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 specifying a subsequent
interest rate or 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 shall apply the adjusted
interest rate, as specified in the contract. If the contract
applies a formula that uses an index that varies over time,
the value of such index on the date on which the disclosure
is made shall be used in the application of the formula.''.
(b) Access to Credit Counseling and Debt Management
Information.--
(1) Guidelines required.--
(A) In general.--Not later than 1 year after the date of
enactment of this Act, the Board of Governors of the Federal
Reserve System and the Federal Trade Commission (in this
section referred to as the ``Board'' and the ``Commission'',
respectively) shall jointly, by rule, regulation, or order,
issue guidelines for the establishment and maintenance by
creditors of a toll-free telephone number for purposes of the
disclosures required under section 127(b)(11) of the Truth in
Lending Act, as added by this Act.
(B) Approved agencies.--Guidelines issued under this
subsection shall ensure that referrals provided by the toll-
free number include only those agencies approved by the Board
and the Commission as meeting the criteria under this
section.
(2) Criteria.--The Board and the Commission shall only
approve a nonprofit budget and credit counseling agency for
purposes of this section that--
(A) demonstrates that it will provide qualified counselors,
maintain adequate provision for safekeeping and payment of
client funds, provide adequate counseling with respect to
client credit problems, and deal responsibly and effectively
with other matters relating to the quality, effectiveness,
and financial security of the services it provides;
(B) at a minimum--
(i) is registered as a nonprofit entity under section
501(c) of the Internal Revenue Code of 1986;
(ii) has a board of directors, the majority of the members
of which--

(I) are not employed by such agency; and
(II) will not directly or indirectly benefit financially
from the outcome of the counseling services provided by such
agency;

(iii) if a fee is charged for counseling services, charges
a reasonable and fair fee, and provides services without
regard to ability to pay the fee;
(iv) provides for safekeeping and payment of client funds,
including an annual audit of the trust accounts and
appropriate employee bonding;
(v) provides full disclosures to clients, including funding
sources, counselor qualifications, possible impact on credit
reports, any costs of such program that will be paid by the
client, and how such costs will be paid;
(vi) provides adequate counseling with respect to the
credit problems of the client, including an analysis of the
current financial condition of the client, factors that
caused such financial condition, and how such client can
develop a plan to respond to the problems without incurring
negative amortization of debt;
(vii) provides trained counselors who--

(I) receive no commissions or bonuses based on the outcome
of the counseling services provided;
(II) have adequate experience; and
(III) have been adequately trained to provide counseling
services to individuals in financial difficulty, including
the matters described in subparagraph (F);

(viii) demonstrates adequate experience and background in
providing credit counseling;
(ix) has adequate financial resources to provide continuing
support services for budgeting plans over the life of any
repayment plan; and
(x) is accredited by an independent, nationally recognized
accrediting organization.
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