S.Amdt. 1059

SA 1059. Mr. WHITEHOUSE (for himself and Mr. Sanders) submitted an
amendment intended to be proposed by him to the bill H.R. 627, to amend
the Truth in Lending Act to establish fair and transparent practices
relating to the extension of credit under an open end consumer credit
plan, and for other purposes; which was ordered to lie on the table; as
follows:

At the end of title I, add the following:

SEC. 112. EFFECTS OF HIGH COST CREDIT ON BANKRUPTCY
PROCEEDINGS.

(a) Definitions.--Section 101 of title 11, United States
Code, is amended--
(1) by redesignating paragraph (27B) as paragraph (27C);
and
(2) by inserting after paragraph (27A) the following:
``(27B) The term `high cost consumer credit transaction'
means an extension of credit by a `creditor' (as defined in
section 103 of the Truth in Lending Act (15 U.S.C. 1602(f))),
resulting in a consumer debt that has an applicable annual
percentage rate (as determined in accordance with section
107(a) of the Truth in Lending Act (15 U.S.C. 1606(a)), and
including costs and fees incurred in connection with the
extension of such credit) that exceeds, at any time while the
credit is outstanding, the lesser of--
``(A) the sum of 15 percent and the yield on United States
Treasury securities having a 30-year period of maturity; or
``(B) 36 percent.''.
(b) Disallowance of Claims.--Section 502 of title 11,
United States Code, is amended by adding at the end the
following:
``(l) Notwithstanding subsections (a) and (b) of this
section, the court shall disallow any claim arising from a
high cost consumer credit transaction for the purpose of
distribution under this title.''.
(c) Exclusion.--Section 707(b) of title 11, United States
Code, is amended by adding at the end the following:
``(8) Paragraph (2) shall not apply in the case of a debtor
who has any debts arising from a high cost consumer credit
transaction.''.
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