To prohibit extensions of credit to underage consumers.

1. Adds SEC. __. EXTENSIONS OF CREDIT TO UNDERAGE CONSUMERS wherever appropriate

   Adds a section

   Inserted: SEC. __. EXTENSIONS OF CREDIT TO UNDERAGE CONSUMERS.

   Inserted: Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is amended by inserting after paragraph (5), the following:

   Inserted: "(6) Applications from underage consumers.--

   Inserted: "(A) Prohibition on issuance.--No credit card may be issued to, or open end credit plan established 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).

   Inserted: "(B) Application requirements.--An application to open a credit card account by an individual who has not attained the age of 21 as of the date of submission of the application shall require--

   Inserted: "(i) the signature of the parent, legal guardian, or spouse of the consumer, or any other individual 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;

   Inserted: "(ii) submission by the consumer of financial information indicating an independent means of repaying any obligation arising from the proposed extension of credit in connection with the account; or

   Inserted: "(iii) proof by the consumer that the consumer has completed a credit counseling course of instruction by a nonprofit budget and credit counseling agency approved by the Board for such purpose.

   Inserted: "(C) Minimum requirements for counseling agencies.--To be approved by the Board under subparagraph (B)(iii), a credit counseling agency shall, at a minimum--

   Inserted: "(i) be a nonprofit budget and credit counseling agency, the majority of the board of directors of which--

   Inserted: "(I) is not employed by the agency; and

   Inserted: "(II) will not directly or indirectly benefit financially from the outcome of a credit counseling session;

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   Inserted: "(ii) if a fee is charged for counseling services, charge a reasonable fee, and provide services without regard to ability to pay the fee; and

   Inserted: "(iii) provide trained counselors who receive no commissions or bonuses based on referrals, and demonstrate adequate experience and background in providing credit counseling.".

   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