To require prior notice of rate increases.

1. Adds SEC. __. PRIOR NOTICE OF RATE INCREASES REQUIRED wherever appropriate

   Adds a section

   Inserted: SEC. __. PRIOR NOTICE OF RATE INCREASES REQUIRED.

   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) Advance Notice of Increase in Interest Rate Required.--

   Inserted: "(1) In general.--In the case of any credit card account under an open end consumer credit plan, no increase in any annual percentage rate of interest (other than an increase due to the expiration of any introductory percentage rate of interest, or due solely to a change in another rate of interest to which such rate is indexed)--

   Inserted: "(A) may take effect before the beginning of the billing cycle which begins not less than 15 days after the obligor receives notice of such increase; or

   Inserted: "(B) may apply to any outstanding balance of credit under such plan as of the date of the notice of the increase required under paragraph (1).

   Inserted: "(2) Notice of right to cancel.--The notice referred to in paragraph (1) with respect to an increase in any annual percentage rate of interest shall be made in a clear and conspicuous manner and shall contain a brief statement of the right of the obligor to cancel the account before the effective date of the increase.".

   Inserted: SEC. __. FREEZE ON INTEREST RATE TERMS AND FEES ON CANCELED CARDS.

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

   Inserted: "(i) Freeze on Interest Rate Terms and Fees on Canceled Cards.--If an obligor referred to in subsection (h) closes or cancels a credit card account before the beginning of the billing cycle referred to in subsection (h)(1)--

   Inserted: "(1) an annual percentage rate of interest applicable after the cancellation with respect to the outstanding balance on the account as of the date of cancellation may not exceed any annual percentage rate of interest applicable with respect to such balance under the terms and conditions in effect before the date of the notice of any increase referred to in subsection (h)(1); and

   Inserted: "(2) the repayment of the outstanding balance after the cancellation shall be subject to all other terms and conditions applicable with respect to such account before the date of the notice of the increase referred to in subsection (h).".

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

   Original wording

   At the appropriate place, insert the following:

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As printed