S.Amdt. 2182

SA 2182. Mr. CARPER submitted an amendment intended to be proposed by
him to the bill S. 2155, to promote economic growth, provide tailored
regulatory relief, and enhance consumer protections, and for other
purposes; which was ordered to lie on the table; as follows:

At the end, add the following:

TITLE VI--MISCELLANEOUS

Subtitle A--Loans

PART I--PAYDAY, VEHICLE TITLE, AND CERTAIN HIGH-COST INSTALLMENT LOANS

Subpart A--General

SEC. 601. AUTHORITY AND PURPOSE.

(a) Authority.--The regulation in this part is issued by
the Bureau of Consumer Financial Protection (in this section
referred to as the ``Bureau'') pursuant to title X of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (12
U.S.C. 5481 et seq.).
(b) Purpose.--The purpose of this part is to identify
certain unfair and abusive acts or practices in connection
with certain consumer credit transactions and to set forth
requirements for preventing such acts or practices. This part
also prescribes requirements to ensure that the features of
those consumer credit transactions are fully, accurately, and
effectively disclosed to consumers. This part also prescribes
processes and criteria for registration of information
systems.

SEC. 602. DEFINITIONS.

(a) Definitions.--For the purposes of this part, the
following definitions apply:
(1) Account.--The term ``account'' has the same meaning as
in section 1005.2(b) of title 12, Code of Federal
Regulations.
(2) Affiliate.--The term ``affiliate'' has the same meaning
as in section 1002 of the Consumer Financial Protection Act
of 2010 (12 U.S.C. 5481).
(3) Closed-end credit.--The term ``closed-end credit''
means an extension of credit to a consumer that is not open-
end credit.
(4) Consumer.--The term ``consumer'' has the same meaning
as in section 1002 of the Consumer Financial Protection Act
of 2010 (12 U.S.C. 5481).
(5) Consummation.--The term ``consummation'' means the time
that a consumer becomes contractually obligated on a new loan
or a modification that increases the amount of an existing
loan.
(6) Cost of credit.--The term ``cost of credit'' means the
cost of consumer credit as expressed as a per annum rate and
is determined as follows:
(A) Charges included in the cost of credit.--The cost of
credit includes all finance charges as set forth in section
1026.4 of title 12, Code of Federal Regulations, but without
regard to whether the credit is consumer credit, as that term
is defined in section 1026.2(a)(12) of title 12, Code of
Federal Regulations, or is extended to a consumer, as that
term is defined in section 1026.2(a)(11) of title 12, Code of
Federal Regulations.
(B) Calculation of the cost of credit.--
(i) Closed-end credit.--For closed-end credit, the cost of
credit must be calculated according to the requirements
section 1026.22 of title 12, Code of Federal Regulations.
(ii) Open-end credit.--For open-end credit, the cost of
credit must be calculated according to the rules for
calculating the effective annual percentage rate for a
billing cycle as set forth in section 1026.14 (c) and (d) of
title 12, Code of Federal Regulations.
(7) Covered longer-term balloon-payment loan.--The term
``covered longer-term balloon-payment loan'' means a loan
described in section 603(b)(2).
(8) Covered longer-term loan.--The term ``covered longer-
term loan'' means a loan described in section 603(b)(3).
(9) Covered person.--The term ``covered person'' has the
same meaning as in section 1002 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5481).
(10) Covered short-term.--The term ``covered short-term
loan'' means a loan described in section 603(b)(1).
(11) Credit.--The term ``credit'' has the same meaning as
in section 1026.2(a)(14) of title 12, Code of Federal
Regulations.
(12) Electronic fund transfer.--The term ``electronic fund
transfer'' has the same meaning as in section 1005.3(b) of
title 12, Code of Federal Regulations.
(13) Lender.--The term ``lender'' means a person who
regularly extends credit to a consumer primarily for
personal, family, or household purposes.
(14) Loan sequence or sequence.--The term ``loan sequence''
or ``sequence'' means a series of consecutive or concurrent
covered short-term loans or covered longer-term balloon-
payment loans, or a combination thereof, in which each of the
loans (other than the first loan) is made during the period
in which the consumer has a covered short-term loan or
covered longer-term balloon-payment loan outstanding and for
30 days thereafter. For the purpose of determining where a
loan is located within a loan sequence--
(A) a covered short-term loan or covered longer-term
balloon-payment loan is the first loan in a sequence if the
loan is extended to a consumer who had no covered short-term
loan or covered longer-term balloon-payment loan outstanding
within the immediately preceding 30 days;
(B) a covered short-term or covered longer-term balloon-
payment loan is the second loan in the sequence if the
consumer has a currently outstanding covered short-term loan
or covered longer-term balloon-payment loan that is the first
loan in a sequence, or if the consummation date of the second
loan is within 30 days following the last day on which the
consumer's first loan in the sequence was outstanding;
(C) a covered short-term or covered longer-term balloon-
payment loan is the third loan in the sequence if the
consumer has a currently outstanding covered short-term loan
or covered longer-term balloon-payment loan that is the
second loan in the sequence, or if the consummation date of
the third loan is within 30 days following the last day on
which the consumer's second loan in the sequence was
outstanding; and
(D) a covered short-term or covered longer-term balloon-
payment loan would be the fourth loan in the sequence if the
consumer has a currently outstanding covered short-term loan
or covered longer-term balloon-payment loan that is the third
loan in the sequence, or if the consummation date of the
fourth loan would be within 30 days following the last day on
which the consumer's third loan in the sequence was
outstanding.
(15) Motor vehicle.--The term ``motor vehicle'' means any
self-propelled vehicle primarily used for on-road
transportation. The term does not include motor homes,
recreational vehicles, golf carts, and motor scooters.
(16) Open-end credit.--The term ``open-end credit'' means
an extension of credit to a consumer that is an open-end
credit plan as defined in section 1026.2(a)(20) of title 12,
Code of Federal Regulations, but without regard to whether
the credit is consumer credit, as defined in section
1026.2(a)(12) of title 12, Code of Federal Regulations, is
extended by a creditor, as defined in section 1026.2(a)(17)
of title 12, Code of Federal Regulations, is extended to a
consumer, as defined in section 1026.2(a)(11) of title 12,
Code of Federal Regulations, or permits a finance charge to
be imposed from time to time on an outstanding balance as
defined in section 1026.4 of title 12, Code of Federal
Regulations.
(17) Outstanding loan.--The term ``outstanding loan'' means
a loan that the consumer is legally obligated to repay,
regardless of whether the loan is delinquent or is subject to
a repayment plan or other workout arrangement, except that a
loan ceases to be an outstanding loan if the consumer has not
made at least one payment on the loan within the previous 180
days.
(18) Service provider.--The term ``service provider'' has
the same meaning as in section 1002 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5481).
(19) Vehicle security.--The term ``vehicle security'' means
an interest in a consumer's motor vehicle obtained by the
lender or service provider as a condition of the credit,
regardless of how the transaction is characterized by State
law, including--
(A) any security interest in the motor vehicle, motor
vehicle title, or motor vehicle registration whether or not
the security interest is perfected or recorded; or
(B) a pawn transaction in which the consumer's motor
vehicle is the pledged good and the consumer retains use of
the motor vehicle during the period of the pawn agreement.
(b) Rule of Construction.--For purposes of this part, where
definitions are incorporated from other statutes or
regulations, the terms have the meaning and incorporate the
embedded definitions, appendices, and commentary from those
other laws except to the extent that this part provides a
different definition for a parallel term.

SEC. 603. SCOPE OF COVERAGE; EXCLUSIONS; EXEMPTIONS.

(a) In General.--This part applies to a lender that extends
credit by making covered loans.
(b) Covered Loan.--The term ``covered loan'' means closed-
end or open-end credit that is extended to a consumer
primarily for personal, family, or household purposes that is
not excluded under subsection (d) or conditionally exempted
under subsection (e) or (f), and--
(1) for closed-end credit that does not provide for
multiple advances to consumers, the consumer is required to
repay substantially the entire amount of the loan within 45
days of consummation, or for all other loans, the consumer is
required to repay substantially the entire amount of any
advance within 45 days of the advance;
(2) for loans not otherwise covered by paragraph (1)--
(A) for closed-end credit that does not provide for
multiple advances to consumers, the consumer is required to
repay substantially the entire balance of the loan in a
single payment more than 45 days after consummation or to
repay such loan through at least one payment that is more
than twice as large as any other payment(s); or
(B) for all other loans, either--
(i) the consumer is required to repay substantially the
entire amount of an advance

[[Page S1602]]

in a single payment more than 45 days after the advance is
made or is required to make at least one payment on the
advance that is more than twice as large as any other
payment(s); or
(ii) a loan with multiple advances is structured such that
paying the required minimum payments may not fully amortize
the outstanding balance by a specified date or time, and the
amount of the final payment to repay the outstanding balance
at such time could be more than twice the amount of other
minimum payments under the plan; or
(3) for loans not otherwise covered by paragraph (1) or
(2), if both of the following conditions are satisfied:
(A) The cost of credit for the loan exceeds 36 percent per
annum, as measured--
(i) at the time of consummation for closed-end credit; or
(ii) at the time of consummation and, if the cost of credit
at consummation is not more than 36 percent per annum, again
at the end of each billing cycle for open-end credit, except
that--

(I) open-end credit meets the condition set forth in this
clause in any billing cycle in which a lender imposes a
finance charge, and the principal balance is $0; and
(II) Once open-end credit meets the condition set forth in
this clause, it meets the condition set forth in this clause
for the duration of the plan.

(B) The lender or service provider obtains a leveraged
payment mechanism as defined in subsection (c).
(c) Leveraged Payment Mechanism.--For purposes of
subsection (b), a lender or service provider obtains a
leveraged payment mechanism if it has the right to initiate a
transfer of money, through any means, from a consumer's
account to satisfy an obligation on a loan, except that the
lender or service provider does not obtain a leveraged
payment mechanism by initiating a single immediate payment
transfer at the consumer's request.
(d) Exclusions for Certain Types of Credit.--This part does
not apply to the following:
(1) Certain purchase money security interest loans.--Credit
extended for the sole and express purpose of financing a
consumer's initial purchase of a good when the credit is
secured by the property being purchased, whether or not the
security interest is perfected or recorded.
(2) Real estate secured credit.--Credit that is secured by
any real property, or by personal property used or expected
to be used as a dwelling, and the lender records or otherwise
perfects the security interest within the term of the loan.
(3) Credit cards.--Any credit card account under an open-
end (not home-secured) consumer credit plan as defined in
section 1026.2(a)(15)(ii) of title 12, Code of Federal
Regulations.
(4) Student loans.--Credit made, insured, or guaranteed
pursuant to a program authorized by title IV of the Higher
Education Act of 1965 (20 U.S.C. 1070 et seq.), or a private
education loan as defined in section 1026.46(b)(5) of title
12, Code of Federal Regulations.
(5) Nonrecourse pawn loans.--Credit in which the lender has
sole physical possession and use of the property securing the
credit for the entire term of the loan and for which the
lender's sole recourse if the consumer does not elect to
redeem the pawned item and repay the loan is the retention of
the property securing the credit.
(6) Overdraft services and lines of credit.--Overdraft
services as defined in section 1005.17(a) of title 12, Code
of Federal Regulations, and overdraft lines of credit
otherwise excluded from the definition of overdraft services
under section 1005.17(a)(1) of title 12, Code of Federal
Regulations.
(7) Wage advance programs.--Advances of wages that
constitute credit if made by an employer, as defined in
section 3 of the Fair Labor Standards Act of 1938 (29 U.S.C.
203), or by the employer's business partner, to the
employer's employees, provided that--
(A) the advance is made only against the accrued cash value
of any wages the employee has earned up to the date of the
advance; and
(B) before any amount is advanced, the entity advancing the
funds warrants to the consumer as part of the contract
between the parties on behalf of itself and any business
partners, that it or they, as applicable--
(i) will not require the consumer to pay any charges or
fees in connection with the advance, other than a charge for
participating in the wage advance program;
(ii) has no legal or contractual claim or remedy against
the consumer based on the consumer's failure to repay in the
event the amount advanced is not repaid in full; and
(iii) with respect to the amount advanced to the consumer,
will not engage in any debt collection activities if the
advance is not deducted directly from wages or otherwise
repaid on the scheduled date, place the amount advanced as a
debt with or sell it to a third party, or report to a
consumer reporting agency concerning the amount advanced.
(8) No-cost advances.--Advances of funds that constitute
credit if the consumer is not required to pay any charge or
fee to be eligible to receive or in return for receiving the
advance, provided that before any amount is advanced, the
entity advancing the funds warrants to the consumer as part
of the contract between the parties--
(A) that it has no legal or contractual claim or remedy
against the consumer based on the consumer's failure to repay
in the event the amount advanced is not repaid in full; and
(B) that, with respect to the amount advanced to the
consumer, such entity will not engage in any debt collection
activities if the advance is not repaid on the scheduled
date, place the amount advanced as a debt with or sell it to
a third party, or report to a consumer reporting agency
concerning the amount advanced.
(e) Alternative Loan.--Alternative loans are conditionally
exempt from the requirements of this part. The term
``alternative loan'' means a covered loan that satisfies the
following conditions and requirements:
(1) Loan term conditions.--An alternative loan must satisfy
the following conditions:
(A) The loan is not structured as open-end credit, as
defined in section 602(a)(16).
(B) The loan has a term of not less than 1 month and not
more than 6 months.
(C) The principal of the loan is not less than $200 and not
more than $1,000.
(D) The loan is repayable in 2 or more payments, all of
which payments are substantially equal in amount and fall due
in substantially equal intervals, and the loan amortizes
completely during the term of the loan.
(E) The lender does not impose any charges other than the
rate and application fees permissible for Federal credit
unions under regulations issued by the National Credit Union
Administration in section 701.21(c)(7)(iii) of title 12, Code
of Federal Regulations.
(2) Borrowing history condition.--Prior to making an
alternative loan under this subsection, the lender must
determine from its records that the loan would not result in
the consumer being indebted on more than 3 outstanding loans
made under this section from the lender within a period of
180 days. The lender must also make no more than one
alternative loan under this subsection at a time to a
consumer.
(3) Income documentation condition.--In making an
alternative loan under this subsection, the lender must
maintain and comply with policies and procedures for
documenting proof of recurring income.
(4) Safe harbor.--Loans made by Federal credit unions in
compliance with the conditions set forth by the National
Credit Union Administration in section 701.21(c)(7)(iii) of
title 12, Code of Federal Regulations, for a Payday
Alternative Loan are deemed to be in compliance with the
requirements and conditions of paragraphs (1), (2), and (3).
(f) Accommodation Loans.--Accommodation loans are
conditionally exempt from the requirements of this part.
Accommodation loan means a covered loan if at the time that
the loan is consummated--
(1) the lender and its affiliates collectively have made
2,500 or fewer covered loans in the current calendar year,
and made 2,500 or fewer such covered loans in the preceding
calendar year;
(2)(A) during the most recent completed tax year in which
the lender was in operation, if applicable, the lender and
any affiliates that were in operation and used the same tax
year derived no more than 10 percent of their receipts from
covered loans; or
(B) if the lender was not in operation in a prior tax year,
the lender reasonably anticipates that the lender and any of
its affiliates that use the same tax year will derive no more
than 10 percent of their receipts from covered loans during
the current tax year; and
(3) provided, however, that covered longer-term loans for
which all transfers meet the conditions in section
622(a)(1)(ii), and receipts from such loans, are not included
for the purpose of determining whether the conditions of
paragraphs (1) and (2) have been satisfied.
(g) Receipts.--For purposes of subsection (f), the term
``receipts'' means ``total income'' (or in the case of a sole
proprietorship ``gross income'') plus ``cost of goods sold''
as these terms are defined and reported on Internal Revenue
Service (IRS) tax return forms (such as Form 1120 for
corporations, Form 1120S and Schedule K for S corporations,
Form 1120, Form 1065 or Form 1040 for LLCs, Form 1065 and
Schedule K for partnerships, and Form 1040, Schedule C for
sole proprietorships). Receipts do not include net capital
gains or losses; taxes collected for and remitted to a taxing
authority if included in gross or total income, such as sales
or other taxes collected from customers but excluding taxes
levied on the entity or its employees; or amounts collected
for another (but fees earned in connection with such
collections are receipts). Items such as subcontractor costs,
reimbursements for purchases a contractor makes at a
customer's request, and employee-based costs such as payroll
taxes are included in receipts.
(h) Tax Year.--For purposes of subsection (f), the term
``tax year'' has the meaning attributed to it by the IRS as
set forth in IRS Publication 538, which provides that a ``tax
year'' is an annual accounting period for keeping records and
reporting income and expenses.

Subpart B--Underwriting

SEC. 611. IDENTIFICATION OF UNFAIR AND ABUSIVE PRACTICE.

It is an unfair and abusive practice for a lender to make
covered short-term loans or covered longer-term balloon-
payment loans without reasonably determining that the
consumers will have the ability to repay the loans according
to their terms.

[[Page S1603]]

SEC. 612. ABILITY-TO-REPAY DETERMINATION REQUIRED.

(a) Definitions.--For purposes of this section:
(1) Basic living expenses.--The term ``basic living
expenses'' means expenditures, other than payments for major
financial obligations, that a consumer makes for goods and
services that are necessary to maintain the consumer's
health, welfare, and ability to produce income, and the
health and welfare of the members of the consumer's household
who are financially dependent on the consumer.
(2) Debt-to-income ratio.--The term ``debt-to-income
ratio'' means the ratio, expressed as a percentage, of the
sum of the amounts that the lender projects will be payable
by the consumer for major financial obligations during the
relevant monthly period and the payments under the covered
short-term loan or covered longer-term balloon-payment loan
during the relevant monthly period, to the net income that
the lender projects the consumer will receive during the
relevant monthly period, all of which projected amounts are
determined in accordance with subsection (c).
(3) Major financial obligations.--The term ``major
financial obligations'' means a consumer's housing expense,
required payments under debt obligations (including, without
limitation, outstanding covered loans), child support
obligations, and alimony obligations.
(4) National consumer report.--The term ``national consumer
report'' means a consumer report, as defined in section
603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)),
obtained from a consumer reporting agency that compiles and
maintains files on consumers on a nationwide basis, as
defined in section 603(p) of the Fair Credit Reporting Act
(15 U.S.C. 1681a(p)).
(5) Net income.--The term ``net income'' means the total
amount that a consumer receives after the payer deducts
amounts for taxes, other obligations, and voluntary
contributions (but before deductions of any amounts for
payments under a prospective covered short-term loan or
covered longer-term balloon-payment loan or for any major
financial obligation); provided that, the lender may include
in the consumer's net income the amount of any income of
another person to which the consumer has a reasonable
expectation of access.
(6) Payment under the covered short-term loan or covered
longer-term balloon-payment loan.--The term ``payment under
the covered short-term loan or covered longer-term balloon-
payment loan''--
(A) means the combined dollar amount payable by the
consumer at a particular time following consummation in
connection with the covered short-term loan or covered
longer-term balloon-payment loan, assuming that the consumer
has made preceding required payments and in the absence of
any affirmative act by the consumer to extend or restructure
the repayment schedule or to suspend, cancel, or delay
payment for any product, service, or membership provided in
connection with the loan;
(B) includes all principal, interest, charges, and fees;
and
(C) for a line of credit is calculated assuming that--
(i) the consumer will utilize the full amount of credit
under the covered short-term loan or covered longer-term
balloon-payment loan as soon as the credit is available to
the consumer; and
(ii) the consumer will make only minimum required payments
under the covered short-term loan or covered longer-term
balloon-payment loan for as long as permitted under the loan
agreement.
(7) Relevant monthly period.--The term ``relevant monthly
period'' means the calendar month in which the highest sum of
payments is due under the covered short-term or covered
longer-term balloon-payment loan.
(8) Residual income.--The term ``residual income'' means
the sum of net income that the lender projects the consumer
will receive during the relevant monthly period, minus the
sum of the amounts that the lender projects will be payable
by the consumer for major financial obligations during the
relevant monthly period and payments under the covered short-
term loan or covered longer-term balloon-payment loan during
the relevant monthly period, all of which projected amounts
are determined in accordance with subsection (c).
(b) Reasonable Determination Required.--(1)(A) Except as
provided in section 613, a lender must not make a covered
short-term loan or covered longer-term balloon-payment loan
or increase the credit available under a covered short-term
loan or covered longer-term balloon-payment loan, unless the
lender first makes a reasonable determination that the
consumer will have the ability to repay the loan according to
its terms.
(B) For a covered short-term loan or covered longer-term
balloon-payment loan that is a line of credit, a lender must
not permit a consumer to obtain an advance under the line of
credit more than 90 days after the date of a required
determination under this subsection, unless the lender first
makes a new determination that the consumer will have the
ability to repay the covered short-term loan or covered
longer-term balloon-payment loan according to its terms.
(2) A lender's determination of a consumer's ability to
repay a covered short-term loan or covered longer-term
balloon-payment loan is reasonable only if either--
(A) based on the calculation of the consumer's debt-to-
income ratio for the relevant monthly period and the
estimates of the consumer's basic living expenses for the
relevant monthly period, the lender reasonably concludes
that--
(i) for a covered short-term loan, the consumer can make
payments for major financial obligations, make all payments
under the loan, and meet basic living expenses during the
shorter of the term of the loan or the period ending 45 days
after consummation of the loan, and for 30 days after having
made the highest payment under the loan; and
(ii) for a covered longer-term balloon-payment loan, the
consumer can make payments for major financial obligations,
make all payments under the loan, and meet basic living
expenses during the relevant monthly period, and for 30 days
after having made the highest payment under the loan; or
(B) based on the calculation of the consumer's residual
income for the relevant monthly period and the estimates of
the consumer's basic living expenses for the relevant monthly
period, the lender reasonably concludes that--
(i) for a covered short-term loan, the consumer can make
payments for major financial obligations, make all payments
under the loan, and meet basic living expenses during the
shorter of the term of the loan or the period ending 45 days
after consummation of the loan, and for 30 days after having
made the highest payment under the loan; and
(ii) for a covered longer-term balloon-payment loan, the
consumer can make payments for major financial obligations,
make all payments under the loan, and meet basic living
expenses during the relevant monthly period, and for 30 days
after having made the highest payment under the loan.
(c) Projecting Consumer Net Income and Payments for Major
Financial Obligations.--
(1) In general.--To make a reasonable determination
required under subsection (b), a lender must obtain the
consumer's written statement in accordance with paragraph
(2)(A), obtain verification evidence to the extent required
by paragraph (2)(B), assess information about rental housing
expense as required by paragraph (2)(C), and use those
sources of information to make a reasonable projection of the
amount of a consumer's net income and payments for major
financial obligations during the relevant monthly period. The
lender must consider major financial obligations that are
listed in a consumer's written statement described in
paragraph (2)(A)(ii) even if they cannot be verified by the
sources listed in paragraph (2)(B)(ii). To be reasonable, a
projection of the amount of net income or payments for major
financial obligations may be based on a consumer's written
statement of amounts under paragraph (2)(A) only as
specifically permitted by paragraph (2) (B) or (C) or to the
extent the stated amounts are consistent with the
verification evidence that is obtained in accordance with
paragraph (2)(B). In determining whether the stated amounts
are consistent with the verification evidence, the lender may
reasonably consider other reliable evidence the lender
obtains from or about the consumer, including any
explanations the lender obtains from the consumer.
(2) Evidence of net income and payments for major financial
obligations.--
(A) Consumer statements.--A lender must obtain a consumer's
written statement of--
(i) the amount of the consumer's net income, which may
include the amount of any income of another person to which
the consumer has a reasonable expectation of access; and
(ii) the amount of payments required for the consumer's
major financial obligations.
(B) Verification evidence.--A lender must obtain
verification evidence for the amounts of the consumer's net
income and payments for major financial obligations other
than rental housing expense, as follows:
(i) For the consumer's net income--

(I) the lender must obtain a reliable record (or records)
of an income payment (or payments) directly to the consumer
covering sufficient history to support the lender's
projection under paragraph (1) if a reliable record (or
records) is reasonably available. If a lender determines that
a reliable record (or records) of some or all of the
consumer's net income is not reasonably available, then, the
lender may reasonably rely on the consumer's written
statement described in subparagraph (A)(i) for that portion
of the consumer's net income; and
(II) if the lender elects to include in the consumer's net
income for the relevant monthly period any income of another
person to which the consumer has a reasonable expectation of
access, the lender must obtain verification evidence to
support the lender's projection under paragraph (1).

(ii) For the consumer's required payments under debt
obligations, the lender must obtain a national consumer
report, the records of the lender and its affiliates, and a
consumer report obtained from an information system that has
been registered for 180 days or more pursuant to section
632(c)(2) or is registered pursuant to section 632(d)(2), if
available. If the reports and records do not include a debt
obligation listed in the consumer's written statement
described in subparagraph (A)(ii), the lender may reasonably
rely on the written statement in determining the amount of
the required payment.

[[Page S1604]]

(iii) For a consumer's required payments under child
support obligations or alimony obligations, the lender must
obtain a national consumer report. If the report does not
include a child support or alimony obligation listed in the
consumer's written statement described in subparagraph
(A)(ii), the lender may reasonably rely on the written
statement in determining the amount of the required payment.
(iv) Notwithstanding clauses (ii) and (iii), the lender is
not required to obtain a national consumer report as
verification evidence for the consumer's debt obligations,
alimony obligations, and child support obligations if during
the preceding 90 days--

(I) the lender or an affiliate obtained a national consumer
report for the consumer, retained the report under section
633(b)(1)(ii), and checked it again in connection with the
new loan; and
(II) the consumer did not complete a loan sequence of three
loans made under this section and trigger the prohibition
under subsection (d)(2) since the previous report was
obtained.

(C) Rental housing expense.--For a consumer's housing
expense other than a payment for a debt obligation that
appears on a national consumer report obtained pursuant to
subparagraph (B)(ii), the lender may reasonably rely on the
consumer's written statement described in subparagraph
(A)(ii).
(d) Additional Limitations on Lending (covered Short-term
Loans and Covered Longer-term Balloon-payment Loans).--
(1) Borrowing history review.--Prior to making a covered
short-term loan or covered longer-term balloon-payment loan
under this section, in order to determine whether any of the
prohibitions in this subsection are applicable, a lender must
obtain and review information about the consumer's borrowing
history from the records of the lender and its affiliates,
and from a consumer report obtained from an information
system that has been registered for 180 days or more pursuant
to section 632(c)(2) or is registered with the Bureau
pursuant to section 632(d)(2), if available.
(2) Prohibition on loan sequences of more than three
covered short-term loans or covered longer-term balloon-
payment loans made under this section.--A lender must not
make a covered short-term loan or covered longer-term
balloon-payment loan under this section during the period in
which the consumer has a covered short-term loan or covered
longer-term balloon-payment loan made under this section
outstanding and for 30 days thereafter if the new covered
short-term loan or covered longer-term balloon-payment loan
would be the fourth loan in a sequence of covered short-term
loans, covered longer-term balloon-payment loans, or a
combination of covered short-term loans and covered longer-
term balloon-payment loans made under this section.
(3) Prohibition on making a covered short-term loan or
covered longer-term balloon-payment loan under this section
following a covered short-term loan made under section 613.--
A lender must not make a covered short-term loan or covered
longer-term balloon-payment loan under this section during
the period in which the consumer has a covered short-term
loan made under section 613 outstanding and for 30 days
thereafter.
(e) Prohibition Against Evasion.--A lender must not take
any action with the intent of evading the requirements of
this section.

SEC. 613. CONDITIONAL EXEMPTION FOR CERTAIN COVERED SHORT-
TERM LOANS.

(a) Conditional Exemption for Certain Covered Short-term
Loans.--Sections 611 and 612 do not apply to a covered short-
term loan that satisfies the requirements set forth in
subsections (b) through (e). Prior to making a covered short-
term loan under this section, a lender must review the
consumer's borrowing history in its own records, the records
of the lender's affiliates, and a consumer report from an
information system that has been registered for 180 days or
more pursuant to section 632(c)(2) or is registered with the
Bureau pursuant to section 632(d)(2). The lender must use
this borrowing history information to determine a potential
loan's compliance with the requirements in subsections (b)
and (c).
(b) Loan Term Requirements.--A covered short-term loan that
is made under this section must satisfy the following
requirements:
(1) The loan satisfies the following principal amount
limitations, as applicable--
(A) for the first loan in a loan sequence of covered short-
term loans made under this section, the principal amount is
no greater than $500;
(B) for the second loan in a loan sequence of covered
short-term loans made under this section, the principal
amount is no greater than two-thirds of the principal amount
of the first loan in the loan sequence; and
(C) for the third loan in a loan sequence of covered short-
term loans made under this section, the principal amount is
no greater than one-third of the principal amount of the
first loan in the loan sequence.
(2) The loan amortizes completely during the term of the
loan and the payment schedule provides for the lender
allocating a consumer's payments to the outstanding principal
and interest and fees as they accrue only by applying a fixed
periodic rate of interest to the outstanding balance of the
unpaid loan principal during every scheduled repayment period
for the term of the loan.
(3) The lender and any service provider do not take vehicle
security as a condition of the loan, as defined in section
602(a)(19).
(4) The loan is not structured as open-end credit, as
defined in section 602(a)(16).
(c) Borrowing History Requirements.--Prior to making a
covered short-term loan under this section, the lender must
determine that the following requirements are satisfied:
(1) The consumer has not had in the past 30 days an
outstanding covered short-term loan under section 612 or
covered longer-term balloon-payment loan under section 612.
(2) The loan would not result in the consumer having a loan
sequence of more than 3 covered short-term loans under this
section.
(3) The loan would not result in the consumer having during
any consecutive 12-month period--
(A) more than 6 covered short-term loans outstanding; or
(B) covered short-term loans outstanding for an aggregate
period of more than 90 days.
(d) Restrictions on Making Certain Covered Loans and
Noncovered Loans Following a Covered Short-term Loan Made
Under the Conditional Exemption.--If a lender makes a covered
short-term loan under this section to a consumer, the lender
or its affiliate must not subsequently make a covered loan,
except a covered short-term loan made in accordance with the
requirements in this section, or a noncovered loan to the
consumer while the covered short-term loan made under this
section is outstanding and for 30 days thereafter.
(e) Disclosures.--
(1) General form of disclosures.--
(A) Clear and conspicuous.--Disclosures required by this
subsection must be clear and conspicuous. Disclosures
required by this section may contain commonly accepted or
readily understandable abbreviations.
(B) In writing or electronic delivery.--Disclosures
required by this subsection must be provided in writing or
through electronic delivery. The disclosures must be provided
in a form that can be viewed on paper or a screen, as
applicable. This subparagraph is not satisfied by a
disclosure provided orally or through a recorded message.
(C) Retainable.--Disclosures required by this subsection
must be provided in a retainable form.
(D) Segregation requirements for notices.--Notices required
by this subsection must be segregated from all other written
or provided materials and contain only the information
required by this section, other than information necessary
for product identification, branding, and navigation.
Segregated additional content that is not required by this
subsection must not be displayed above, below, or around the
required content.
(E) Machine readable text in notices provided through
electronic delivery.--If provided through electronic
delivery, the notices required by paragraph (2)(A) and (B)
must use machine readable text that is accessible via both
web browsers and screen readers.
(F) Model forms.--
(i) First loan notice.--The content, order, and format of
the notice required by paragraph (2)(A) must be substantially
similar to a model form.
(ii) Third loan notice.--The content, order, and format of
the notice required by paragraph (2)(B) must be substantially
similar to a model form.
(G) Foreign language disclosures.--Disclosures required
under this subsection may be made in a language other than
English, provided that the disclosures are made available in
English upon the consumer's request.
(2) Notice requirements.--
(A) First loan notice.--A lender that makes a first loan in
a sequence of loans made under this section must provide to a
consumer a notice that includes, as applicable, the following
information and statements, using language substantially
similar to the language set forth in a model form:
(i) Identifying statement.--The statement ``Notice of
restrictions on future loans,'' using that phrase.
(ii) Warning for loan made under this section.--

(I) Possible inability to repay.--A statement that warns
the consumer not to take out the loan if the consumer is
unsure of being able to repay the total amount of principal
and finance charges on the loan by the contractual due date.
(II) Contractual due date.--Contractual due date of the
loan made under this section.
(III) Total amount due.--Total amount due on the
contractual due date.

(iii) Restriction on a subsequent loan required by federal
law.--A statement that informs a consumer that Federal law
requires a similar loan taken out within the next 30 days to
be smaller.
(iv) Borrowing limits.--In a tabular form:

(I) Maximum principal amount on loan 1 in a sequence of
loans made under this section.
(II) Maximum principal amount on loan 2 in a sequence of
loans made under this section.
(III) Maximum principal amount on loan 3 in a sequence of
loans made under this section.
(IV) Loan 4 in a sequence of loans made under this section
is not allowed.

(v) Lender name and contact information.--Name of the
lender and a telephone number for the lender and, if
applicable, a URL of the website for the lender.
(B) Third loan notice.--A lender that makes a third loan in
a sequence of loans

[[Page S1605]]

made under this section must provide to a consumer a notice
that includes the following information and statements, using
language substantially similar to the language set forth in a
model form:
(i) Identifying statement.--The statement ``Notice of
borrowing limits on this loan and future loans,'' using that
phrase.
(ii) Two similar loans without 30-day break.--A statement
that informs a consumer that the lender's records show that
the consumer has had 2 similar loans without taking at least
a 30-day break between them.
(iii) Restriction on loan amount required by federal law.--
A statement that informs a consumer that Federal law requires
the third loan to be smaller than previous loans in the loan
sequence.
(iv) Prohibition on subsequent loan.--A statement that
informs a consumer that the consumer cannot take out a
similar loan for at least 30 days after repaying the loan.
(v) Lender name and contact information.--Name of the
lender and a telephone number for the lender and, if
applicable, a URL of the website for the lender.
(3) Timing.--A lender must provide the notices required in
paragraph (2)(A) and (B) to the consumer before the
applicable loan under this section is consummated.

Subpart C--Payments

SEC. 621. IDENTIFICATION OF UNFAIR AND ABUSIVE PRACTICE.

It is an unfair and abusive practice for a lender to make
attempts to withdraw payment from consumers' accounts in
connection with a covered loan after the lender's second
consecutive attempts to withdraw payments from the accounts
from which the prior attempts were made have failed due to a
lack of sufficient funds, unless the lender obtains the
consumers' new and specific authorization to make further
withdrawals from the accounts.

SEC. 622. PROHIBITED PAYMENT TRANSFER ATTEMPTS.

(a) Definitions.--For purposes of this section and section
623:
(1) Payment transfer.--The term ``payment transfer'' means
any lender-initiated debit or withdrawal of funds from a
consumer's account for the purpose of collecting any amount
due or purported to be due in connection with a covered loan.
(A) Means of transfer.--A debit or withdrawal meeting the
description in paragraph (1) is a payment transfer regardless
of the means through which the lender initiates it, including
but not limited to a debit or withdrawal initiated through
any of the following means:
(i) Electronic fund transfer, including a preauthorized
electronic fund transfer as defined in section 1005.2(k) of
title 12, Code of Federal Regulations.
(ii) Signature check, regardless of whether the transaction
is processed through the check network or another network,
such as the automated clearing house (ACH) network.
(iii) Remotely created check as defined in section
229.2(fff) of title 12, Code of Federal Regulations.
(iv) Remotely created payment order as defined in section
310.2(cc) of title 16, Code of Federal Regulations.
(v) When the lender is also the account-holder, an account-
holding institution's transfer of funds from a consumer's
account held at the same institution, other than such a
transfer meeting the description in subparagraph (B).
(B) Conditional exclusion for certain transfers by account-
holding institutions.--When the lender is also the account-
holder, an account-holding institution's transfer of funds
from a consumer's account held at the same institution is not
a payment transfer if all of the conditions in this
subparagraph are met, notwithstanding that the transfer
otherwise meets the description in this paragraph.
(i) The lender, pursuant to the terms of the loan agreement
or account agreement, does not charge the consumer any fee,
other than a late fee under the loan agreement, in the event
that the lender initiates a transfer of funds from the
consumer's account in connection with the covered loan for an
amount that the account lacks sufficient funds to cover.
(ii) The lender, pursuant to the terms of the loan
agreement or account agreement, does not close the consumer's
account in response to a negative balance that results from a
transfer of funds initiated in connection with the covered
loan.
(2) Single immediate payment transfer at the consumer's
request.--The term ``single immediate payment transfer at the
consumer's request'' means--
(A) a payment transfer initiated by a one-time electronic
fund transfer within one business day after the lender
obtains the consumer's authorization for the one-time
electronic fund transfer; or
(B) a payment transfer initiated by means of processing the
consumer's signature check through the check system or
through the ACH system within one business day after the
consumer provides the check to the lender.
(b) Prohibition on Initiating Payment Transfers From a
Consumer's Account After Two Consecutive Failed Payment
Transfers.--
(1) In general.--A lender must not initiate a payment
transfer from a consumer's account in connection with any
covered loan that the consumer has with the lender after the
lender has attempted to initiate 2 consecutive failed payment
transfers from that account in connection with any covered
loan that the consumer has with the lender. For purposes of
this subsection, a payment transfer is deemed to have failed
when it results in a return indicating that the consumer's
account lacks sufficient funds or, if the lender is the
consumer's account-holding institution, it is for an amount
that the account lacks sufficient funds to cover.
(2) Consecutive failed payment transfers.--For purposes of
the prohibition in this subsection:
(A) First failed payment transfer.--A failed payment
transfer is the first failed payment transfer from the
consumer's account if it meets any of the following
conditions:
(i) The lender has initiated no other payment transfer from
the account in connection with the covered loan or any other
covered loan that the consumer has with the lender.
(ii) The immediately preceding payment transfer was
successful, regardless of whether the lender has previously
initiated a first failed payment transfer.
(iii) The payment transfer is the first payment transfer to
fail after the lender obtains the consumer's authorization
for additional payment transfers pursuant to subsection (c).
(B) Second consecutive failed payment transfer.--A failed
payment transfer is the second consecutive failed payment
transfer from the consumer's account if the immediately
preceding payment transfer was a first failed payment
transfer. For purposes of this this subparagraph, a previous
payment transfer includes a payment transfer initiated at the
same time or on the same day as the failed payment transfer.
(C) Different payment channel.--A failed payment transfer
meeting the conditions in subparagraph (B) is the second
consecutive failed payment transfer regardless of whether the
first failed payment transfer was initiated through a
different payment channel.
(c) Exception for Additional Payment Transfers Authorized
by the Consumer.--
(1) In general.--Notwithstanding the prohibition in
subsection (b), a lender may initiate additional payment
transfers from a consumer's account after 2 consecutive
failed payment transfers if the additional payment transfers
are authorized by the consumer in accordance with the
requirements and conditions in this subsection or if the
lender executes a single immediate payment transfer at the
consumer's request in accordance with subsection (d).
(2) General authorization requirements and conditions.--
(A) Required payment transfer terms.--For purposes of this
subsection, the specific date, amount, and payment channel of
each additional payment transfer must be authorized by the
consumer, except as provided in subparagraph (B) or (C).
(B) Application of specific date requirement to
reinitiating a returned payment transfer.--If a payment
transfer authorized by the consumer pursuant to this
subsection is returned for nonsufficient funds, the lender
may reinitiate the payment transfer, such as by re-presenting
it once through the ACH system, on or after the date
authorized by the consumer, provided that the returned
payment transfer has not triggered the prohibition in
subsection (b).
(C) Special authorization requirements and conditions for
payment transfers to collect a late fee or returned item
fee.--A lender may initiate a payment transfer pursuant to
this subsection solely to collect a late fee or returned item
fee without obtaining the consumer's authorization for the
specific date and amount of the payment transfer only if the
consumer has authorized the lender to initiate such payment
transfers in advance of the withdrawal attempt. For purposes
of this subparagraph, the consumer authorizes such payment
transfers only if the consumer's authorization obtained under
paragraph (3)(C) includes a statement, in terms that are
clear and readily understandable to the consumer, that
payment transfers may be initiated solely to collect a late
fee or returned item fee and that specifies the highest
amount for such fees that may be charged and the payment
channel to be used.
(3) Requirements and conditions for obtaining the
consumer's authorization.--
(A) In general.--For purposes of this subsection, the
lender must request and obtain the consumer's authorization
for additional payment transfers in accordance with the
requirements and conditions in this paragraph.
(B) Provision of payment transfer terms to the consumer.--
The lender may request the consumer's authorization for
additional payment transfers no earlier than the date on
which the lender provides to the consumer the consumer rights
notice required by section 623(c). The request must include
the payment transfer terms required under paragraph (2)(A)
and, if applicable, the statement required by paragraph
(2)(C). The lender may provide the terms and statement to the
consumer by any one of the following means:
(i) In writing, by mail or in person, or in a retainable
form by email if the consumer has consented to receive
electronic disclosures in this manner under section 623(a)(4)
or agrees to receive the terms and statement by email in the
course of a communication initiated by the consumer in
response to the consumer rights notice required by section
623(c).

[[Page S1606]]

(ii) By oral telephone communication, if the consumer
affirmatively contacts the lender in that manner in response
to the consumer rights notice required by section 623(c) and
agrees to receive the terms and statement in that manner in
the course of, and as part of, the same communication.
(C) Signed authorization required.--
(i) In general.--For an authorization to be valid under
this subsection, it must be signed or otherwise agreed to by
the consumer in writing or electronically and in a retainable
format that memorializes the payment transfer terms required
under paragraph (2)(A) and, if applicable, the statement
required by paragraph (2)(C). The signed authorization must
be obtained from the consumer no earlier than when the
consumer receives the consumer rights notice required by
section 623(c) in person or electronically, or the date on
which the consumer receives the notice by mail. For purposes
of this clause, the consumer is considered to have received
the notice at the time it is provided to the consumer in
person or electronically, or, if the notice is provided by
mail, the earlier of the third business day after mailing or
the date on which the consumer affirmatively responds to the
mailed notice.
(ii) Special requirements for authorization obtained by
oral telephone communication.--If the authorization is
granted in the course of an oral telephone communication, the
lender must record the call and retain the recording.
(iii) Memorialization required.--If the authorization is
granted in the course of a recorded telephonic conversation
or is otherwise not immediately retainable by the consumer at
the time of signature, the lender must provide a
memorialization in a retainable form to the consumer by no
later than the date on which the first payment transfer
authorized by the consumer is initiated. A memorialization
may be provided to the consumer by email in accordance with
the requirements and conditions in subparagraph (B)(i).
(4) Expiration of authorization.--An authorization obtained
from a consumer pursuant to this subsection becomes null and
void for purposes of the exception in this subsection if--
(A) the lender subsequently obtains a new authorization
from the consumer pursuant to this subsection; or
(B) two consecutive payment transfers initiated pursuant to
the consumer's authorization fail, as specified in subsection
(b).
(d) Exception for Initiating a Single Immediate Payment
Transfer at the Consumer's Request.--After a lender's second
consecutive payment transfer has failed as specified in
subsection (b), the lender may initiate a payment transfer
from the consumer's account without obtaining the consumer's
authorization for additional payment transfers pursuant to
subsection (c) if--
(1) the payment transfer is a single immediate payment
transfer at the consumer's request as defined in subsection
(a)(2); and
(2) the consumer authorizes the underlying one-time
electronic fund transfer or provides the underlying signature
check to the lender, as applicable, no earlier than the date
on which the lender provides to the consumer the consumer
rights notice required by section 623(c) or on the date that
the consumer affirmatively contacts the lender to discuss
repayment options, whichever date is earlier.
(e) Prohibition Against Evasion.--A lender must not take
any action with the intent of evading the requirements of
this section.

SEC. 623. DISCLOSURE OF PAYMENT TRANSFER ATTEMPTS.

(a) General Form of Disclosures.--
(1) Clear and conspicuous.--Disclosures required by this
section must be clear and conspicuous. Disclosures required
by this section may contain commonly accepted or readily
understandable abbreviations.
(2) In writing or electronic delivery.--Disclosures
required by this section must be provided in writing or, so
long as the requirements of paragraph (4) are satisfied,
through electronic delivery. The disclosures must be provided
in a form that can be viewed on paper or a screen, as
applicable. This paragraph is not satisfied by a disclosure
provided orally or through a recorded message.
(3) Retainable.--Disclosures required by this section must
be provided in a retainable form, except for electronic short
notices delivered by mobile application or text message under
subsection (b) or (c).
(4) Electronic delivery.--Disclosures required by this
section may be provided through electronic delivery if the
following consent requirements are satisfied:
(A) Consumer consent.--
(i) In general.--Disclosures required by this section may
be provided through electronic delivery if the consumer
affirmatively consents in writing or electronically to the
particular electronic delivery method.
(ii) Email option required.--To obtain valid consumer
consent to electronic delivery under this paragraph, a lender
must provide the consumer with the option to select email as
the method of electronic delivery, separate and apart from
any other electronic delivery methods such as mobile
application or text message.
(B) Subsequent loss of consent.--Notwithstanding
subparagraph (A), a lender must not provide disclosures
required by this section through a method of electronic
delivery if--
(i) the consumer revokes consent to receive disclosures
through that delivery method; or
(ii) the lender receives notification that the consumer is
unable to receive disclosures through that delivery method at
the address or number used.
(5) Segregation requirements for notices.--All notices
required by this section must be segregated from all other
written or provided materials and contain only the
information required by this section, other than information
necessary for product identification, branding, and
navigation. Segregated additional content that is not
required by this section must not be displayed above, below,
or around the required content.
(6) Machine readable text in notices provided through
electronic delivery.--If provided through electronic
delivery, the payment notice required by subsection (b) and
the consumer rights notice required by subsection (c) must
use machine readable text that is accessible via both web
browsers and screen readers.
(7) Model forms.--
(A) Payment notice.--The content, order, and format of the
payment notice required by subsection (b) must be
substantially similar to a model form.
(B) Consumer rights notice.--The content, order, and format
of the consumer rights notice required by subsection (c) must
be substantially similar to a model form.
(C) Electronic short notice.--The content, order, and
format of the electronic short notice required by subsection
(b) must be substantially similar to model forms. The
content, order, and format of the electronic short notice
required by subsection (c) must be substantially similar to
model forms.
(8) Foreign language disclosures.--Disclosures required
under this section may be made in a language other than
English, provided that the disclosures are made available in
English upon the consumer's request.
(b) Payment Notice.--
(1) In general.--Prior to initiating the first payment
withdrawal or an unusual withdrawal from a consumer's
account, a lender must provide to the consumer a payment
notice in accordance with the requirements in this subsection
as applicable.
(A) First payment withdrawal.--The term ``first payment
withdrawal'' means the first payment transfer scheduled to be
initiated by a lender for a particular covered loan, not
including a single immediate payment transfer initiated at
the consumer's request as defined in section 622(a)(2).
(B) Unusual withdrawal.--The term ``unusual withdrawal''
means a payment transfer that meets one or more of the
conditions described in paragraph (3)(B)(iii).
(C) Exceptions.--The payment notice need not be provided
when the lender initiates--
(i) the initial payment transfer from a consumer's account
after obtaining consumer authorization pursuant to section
622(c), regardless of whether any of the conditions in
paragraph (3)(B)(iii) apply; or
(ii) a single immediate payment transfer initiated at the
consumer's request in accordance with section 622(a)(2).
(2) First payment withdrawal notice.--
(A) Timing.--
(i) Mail.--If the lender provides the first payment
withdrawal notice by mail, the lender must mail the notice no
earlier than when the lender obtains payment authorization
and no later than 6 business days prior to initiating the
transfer.
(ii) Electronic delivery.--

(I) If the lender provides the first payment withdrawal
notice through electronic delivery, the lender must send the
notice no earlier than when the lender obtains payment
authorization and no later than three business days prior to
initiating the transfer.
(II) If, after providing the first payment withdrawal
notice through electronic delivery pursuant to the timing
requirements in this subparagraph, the lender loses the
consumer's consent to receive the notice through a particular
electronic delivery method according to subsection (a)(4)(B),
the lender must provide notice of any future unusual
withdrawal, if applicable, through alternate means.

(iii) In person.--If the lender provides the first payment
withdrawal notice in person, the lender must provide the
notice no earlier than when the lender obtains payment
authorization and no later than 3 business days prior to
initiating the transfer.
(B) Content requirements.--The notice must contain the
following information and statements, as applicable, using
language substantially similar to the language set forth in
model forms:
(i) Identifying statement.--The statement, ``Upcoming
Withdrawal Notice,'' using that phrase, and, in the same
statement, the name of the lender providing the notice.
(ii) Transfer terms.--

(I) Date.--Date that the lender will initiate the transfer.
(II) Amount.--Dollar amount of the transfer.
(III) Consumer account.--Sufficient information to permit
the consumer to identify the account from which the funds
will be transferred. The lender must not provide the complete
account number of the consumer, but may use a truncated
version similar to model forms.
(IV) Loan identification information.--Sufficient
information to permit the consumer to identify the covered
loan associated with the transfer.
(V) Payment channel.--Payment channel of the transfer.

[[Page S1607]]

(VI) Check number.--If the transfer will be initiated by a
signature or paper check, remotely created check (as defined
in section 229.2(fff) of title 12, Code of Federal
Regulations), or remotely created payment order (as defined
in section 310.2(cc) of title 16, Code of Federal
Regulations), the check number associated with the transfer.

(iii) Payment breakdown.--In a tabular form:

(I) Payment breakdown heading.--A heading with the
statement ``Payment Breakdown,'' using that phrase.
(II) Principal.--The amount of the payment that will be
applied to principal.
(III) Interest.--The amount of the payment that will be
applied to accrued interest on the loan.
(IV) Fees.--If applicable, the amount of the payment that
will be applied to fees.
(V) Other charges.--If applicable, the amount of the
payment that will be applied to other charges.
(VI) Amount.--The statement ``Total Payment Amount,'' using
that phrase, and the total dollar amount of the payment as
provided in subparagraph (B)(ii)(II).
(VII) Explanation of interest-only or negatively amortizing
payment.--If applicable, a statement explaining that the
payment will not reduce principal, using the applicable
phrase ``When you make this payment, your principal balance
will stay the same and you will not be closer to paying off
your loan'' or ``When you make this payment, your principal
balance will increase and you will not be closer to paying
off your loan.''.

(iv) Lender name and contact information.--Name of the
lender, the name under which the transfer will be initiated
(if different from the consumer-facing name of the lender),
and 3 different forms of lender contact information that may
be used by the consumer to obtain information about the
consumer's loan.
(3) Unusual withdrawal notice.--
(A) Timing.--
(i) Mail.--If the lender provides the unusual withdrawal
notice by mail, the lender must mail the notice no earlier
than 10 business days and no later than 6 business days prior
to initiating the transfer.
(ii) Electronic delivery.--

(I) If the lender provides the unusual withdrawal notice
through electronic delivery, the lender must send the notice
no earlier than 7 business days and no later than 3 business
days prior to initiating the transfer.
(II) If, after providing the unusual withdrawal notice
through electronic delivery pursuant to the timing
requirements in clause (ii), the lender loses the consumer's
consent to receive the notice through a particular electronic
delivery method according to subsection (a)(4)(B), the lender
must provide notice of any future unusual withdrawal attempt,
if applicable, through alternate means.

(iii) In person.--If the lender provides the unusual
withdrawal notice in person, the lender must provide the
notice no earlier than 7 business days and no later than 3
business days prior to initiating the transfer.
(iv) Exception for open-end credit.--If the unusual
withdrawal notice is for open-end credit as defined in
section 602(a)(16), the lender may provide the unusual
withdrawal notice in conjunction with the periodic statement
required under section 1026.7(b) of title 12, Code of Federal
Regulations, in accordance with the timing requirements of
that section.
(B) Content requirements.--The unusual withdrawal notice
must contain the following information and statements, as
applicable, using language substantially similar to the
language set forth in model forms:
(i) Identifying statement.--The statement, ``Alert: Unusual
Withdrawal,'' using that phrase, and, in the same statement,
the name of the lender that is providing the notice.
(ii) Basic payment information.--The content required for
the first withdrawal notice under paragraph (2)(B)(ii)
through (iv) of this section.
(iii) Description of unusual withdrawal.--The following
content, as applicable, in a form substantially similar to
the model forms:

(I) Varying amount.--

(aa) In general.--If the amount of a transfer will vary in
amount from the regularly scheduled payment amount, a
statement that the transfer will be for a larger or smaller
amount than the regularly scheduled payment amount, as
applicable.
(bb) Open-end credit.--If the payment transfer is for open-
end credit as defined in section 602(a)(16), the varying
amount content is required only if the amount deviates from
the scheduled minimum payment due as disclosed in the
periodic statement required under section 1026.7(b) of title
12, Code of Federal Regulations.

(II) Date other than date of regularly scheduled payment.--
If the payment transfer date is not a date on which a
regularly scheduled payment is due under the terms of the
loan agreement, a statement that the transfer will be
initiated on a date other than the date of a regularly
scheduled payment.
(III) Different payment channel.--If the payment channel
will differ from the payment channel of the transfer directly
preceding it, a statement that the transfer will be initiated
through a different payment channel and a statement of the
payment channel used for the prior transfer.
(IV) For purpose of reinitiating returned transfer.--If the
transfer is for the purpose of reinitiating a returned
transfer, a statement that the lender is reinitiating a
returned transfer, a statement of the date and amount of the
previous unsuccessful attempt, and a statement of the reason
for the return.

(4) Electronic delivery.--
(A) In general.--When the consumer has consented to receive
disclosures through electronic delivery, the lender may
provide the applicable payment notice required by paragraph
(b)(1) of this section through electronic delivery only if it
also provides an electronic short notice, except for email
delivery as provided in subparagraph (C).
(B) Electronic short notice.--
(i) General content.--The electronic short notice required
by this subsection must contain the following information and
statements, as applicable, in a form substantially similar to
model forms:

(I) Identifying statement.--Identifying statement, as
required under paragraphs (2)(B)(i) and (3)(B)(i).
(II) Transfer terms.--

(aa) Date.--Date, as required under paragraphs
(2)(B)(ii)(I) and (3)(B)(ii).
(bb) Amount.--Amount, as required under paragraphs
(2)(B)(ii)(II) and (3)(B)(ii).
(cc) Consumer account.--Consumer account, as required and
limited under paragraphs (2)(B)(ii)(III) and (3)(B)(ii); and

(III) Website url.--When the full notice is being provided
through a linked URL rather than as a PDF attachment, the
unique URL of a website that the consumer may use to access
the full payment notice required by this subsection.

(ii) Additional content requirements.--If the transfer
meets any of the conditions for unusual attempts described in
paragraph (3)(B)(iii), the electronic short notice must also
contain the following information and statements, as
applicable, using language substantially similar to the
language in model forms:

(I) Varying amount, as defined under paragraph
(3)(B)(iii)(I).
(II) Date other than due date of regularly scheduled
payment, as defined under paragraph (3)(B)(iii)(II).
(III) Different payment channel, as defined under paragraph
(3)(B)(iii)(III).

(C) Email delivery.--When the consumer has consented to
receive disclosures through electronic delivery, and the
method of electronic delivery is email, the lender may either
deliver the full notice required by paragraph (1) in the body
of the email or deliver the full notice as a linked URL
webpage or PDF attachment along with the electronic short
notice as provided in paragraph (4)(B).
(c) Consumer Rights Notice.--
(1) In general.--After a lender initiates 2 consecutive
failed payment transfers from a consumer's account as
described in section 622(b), the lender must provide to the
consumer a consumer rights notice in accordance with the
requirements of paragraphs (2) through (4).
(2) Timing.--The lender must send the notice no later than
3 business days after it receives information that the second
consecutive attempt has failed.
(3) Content requirements.--The notice must contain the
following information and statements, using language
substantially similar to the language set forth in model
forms:
(A) Identifying statement.--A statement that the lender,
identified by name, is no longer permitted to withdraw loan
payments from the consumer's account.
(B) Last two attempts were returned.--A statement that the
lender's last two attempts to withdraw payment from the
consumer's account were returned due to nonsufficient funds,
or, if applicable to payments initiated by the consumer's
account-holding institution, caused the account to go into
overdraft status.
(C) Consumer account.--Sufficient information to permit the
consumer to identify the account from which the unsuccessful
payment attempts were made. The lender must not provide the
complete account number of the consumer, but may use a
truncated version similar to model forms.
(D) Loan identification information.--Sufficient
information to permit the consumer to identify any covered
loans associated with the unsuccessful payment attempts.
(E) Statement of federal law prohibition.--A statement,
using that phrase, that in order to protect the consumer's
account, Federal law prohibits the lender from initiating
further payment transfers without the consumer's permission.
(F) Contact about choices.--A statement that the lender may
be in contact with the consumer about payment choices going
forward.
(G) Previous unsuccessful payment attempts.--In a tabular
form:
(i) Previous payment attempts heading.--A heading with the
statement ``previous payment attempts.''.
(ii) Payment due date.--The scheduled due date of each
previous unsuccessful payment transfer attempted by the
lender.
(iii) Date of attempt.--The date of each previous
unsuccessful payment transfer initiated by the lender.
(iv) Amount.--The amount of each previous unsuccessful
payment transfer initiated by the lender.
(v) Fees.--The fees charged by the lender for each
unsuccessful payment attempt, if applicable, with an
indication that these fees were charged by the lender.

[[Page S1608]]

(H) CFPB information.--A statement, using that phrase, that
the Consumer Financial Protection Bureau created this notice,
a statement that the CFPB is a Federal Government agency, and
the URL to
www.consumerfinance.gov/payday-rule
. This
statement must be the last piece of information provided in
the notice.
(4) Electronic delivery.--
(A) In general.--When the consumer has consented to receive
disclosures through electronic delivery, the lender may
provide the consumer rights notice required by paragraph (c)
of this section through electronic delivery only if it also
provides an electronic short notice, except for email
delivery as provided in subparagraph (C).
(B) Electronic short notice.--
(i) Content.--The notice must contain the following
information and statements, as applicable, using language
substantially similar to the language set forth in model
forms:

(I) Identifying statement.--As required under paragraph
(3)(A).
(II) Last two attempts were returned.--As required under
paragraph (3)(B) of this section.
(III) Consumer account.--As required and limited under
paragraph (3)(C).
(IV) Statement of federal law prohibition.--As required
under paragraph (3)(E).
(V) Website url.--When the full notice is being provided
through a linked URL rather than as a PDF attachment, the
unique URL of a website that the consumer may use to access
the full consumer rights notice required by this subsection.

(ii) Reserved.--
(C) Email delivery.--When the consumer has consented to
receive disclosures through electronic delivery, and the
method of electronic delivery is email, the lender may either
deliver the full notice required by paragraph (1) in the body
of the email or deliver the full notice as a linked URL
webpage or PDF attachment along with the electronic short
notice as provided in subparagraph (B).

Subpart D--Information Furnishing, Recordkeeping, Anti-Evasion, and
Severability

SEC. 631. INFORMATION FURNISHING REQUIREMENTS.

(a) Loans Subject to Furnishing Requirement.--For each
covered short-term loan and covered longer-term balloon-
payment loan a lender makes, the lender must furnish the loan
information described in subsection (c) to each information
system described in subsection (b)(1).
(b) Information Systems to Which Information Must Be
Furnished.--
(1) A lender must furnish information as required in
subsections (a) and (c) to each information system that, as
of the date the loan is consummated--
(A) has been registered with the Bureau pursuant to section
632(c)(2) for 180 days or more; or
(B) has been provisionally registered with the Bureau
pursuant to section 632(d)(1) for 180 days or more or
subsequently has become registered with the Bureau pursuant
to section 632(d)(2).
(2) The Bureau will publish on its website and in the
Federal Register notice of the provisional registration of an
information system pursuant to 632(d)(1), registration of an
information system pursuant to section 632 (c)(2) or (d)(2),
and suspension or revocation of the provisional registration
or registration of an information system pursuant to section
632(h). For purposes of paragraph (1), an information system
is provisionally registered or registered, and its
provisional registration or registration is suspended or
revoked, on the date that the Bureau publishes notice of such
provisional registration, registration, suspension, or
revocation on its website. The Bureau will maintain on the
Bureau's website a current list of information systems
provisionally registered pursuant to section 632(d)(1) and
registered pursuant to section 632 (c)(2) and (d)(2). In the
event that a provisional registration or registration of an
information system is suspended, the Bureau will provide
instructions on its website concerning the scope and terms of
the suspension.
(c) Information To Be Furnished.--A lender must furnish the
information described in this subsection, at the times
described in this subsection, concerning each covered loan as
required in subsections (a) and (b). A lender must furnish
the information in a format acceptable to each information
system to which it must furnish information.
(1) Information to be furnished at loan consummation.--A
lender must furnish the following information no later than
the date on which the loan is consummated or as close in time
as feasible to the date the loan is consummated:
(A) Information necessary to uniquely identify the loan.
(B) Information necessary to allow the information system
to identify the specific consumer(s) responsible for the
loan.
(C) Whether the loan is a covered short-term loan or a
covered longer-term balloon-payment loan.
(D) Whether the loan is made under section 612 or 613, as
applicable.
(E) The loan consummation date.
(F) For a loan made under section 613, the principal amount
borrowed.
(G) For a loan that is closed-end credit--
(i) the fact that the loan is closed-end credit;
(ii) the date that each payment on the loan is due; and
(iii) the amount due on each payment date.
(H) For a loan that is open-end credit--
(i) the fact that the loan is open-end credit;
(ii) the credit limit on the loan;
(iii) the date that each payment on the loan is due; and
(iv) the minimum amount due on each payment date.
(2) Information to be furnished while loan is an
outstanding loan.--During the period that the loan is an
outstanding loan, a lender must furnish any update to
information previously furnished pursuant to this section
within a reasonable period of the event that causes the
information previously furnished to be out of date.
(3) Information to be furnished when loan ceases to be an
outstanding loan.--A lender must furnish the following
information no later than the date the loan ceases to be an
outstanding loan or as close in time as feasible to the date
the loan ceases to be an outstanding loan:
(A) The date as of which the loan ceased to be an
outstanding loan.
(B) Whether all amounts owed in connection with the loan
were paid in full, including the amount financed, charges
included in the cost of credit, and charges excluded from the
cost of credit.

SEC. 632. REGISTERED INFORMATION SYSTEMS.

(a) Definitions.--
(1) Consumer report.--The term ``consumer report'' has the
same meaning as in section 603 of the Fair Credit Reporting
Act (15 U.S.C. 1681a).
(2) Federal consumer financial law.--The term ``Federal
consumer financial law'' has the same meaning as in section
1002 of the Consumer Financial Protection Act (12 U.S.C.
5481).
(b) Eligibility Criteria for Information Systems.--An
entity is eligible to be a provisionally registered
information system pursuant to subsection (d)(1) or a
registered information system pursuant to subsection (c)(2)
or (d)(2) only if the Bureau determines that the following
conditions are satisfied:
(1) Receiving capability.--The entity possesses the
technical capability to receive information lenders must
furnish pursuant to section 631 immediately upon the
furnishing of such information and uses reasonable data
standards that facilitate the timely and accurate
transmission and processing of information in a manner that
does not impose unreasonable costs or burdens on lenders.
(2) Reporting capability.--The entity possesses the
technical capability to generate a consumer report
containing, as applicable for each unique consumer, all
information described in section 631 substantially
simultaneous to receiving the information from a lender.
(3) Performance.--The entity will perform or performs in a
manner that facilitates compliance with and furthers the
purposes of this part.
(4) Federal consumer financial law compliance program.--The
entity has developed, implemented, and maintains a program
reasonably designed to ensure compliance with all applicable
Federal consumer financial laws, which includes written
policies and procedures, comprehensive training, and
monitoring to detect and to promptly correct compliance
weaknesses.
(5) Independent assessment of federal consumer financial
law compliance program.--The entity provides to the Bureau in
its application for provisional registration or registration
a written assessment of the Federal consumer financial law
compliance program described in paragraph (4) and such
assessment--
(A) sets forth a detailed summary of the Federal consumer
financial law compliance program that the entity has
implemented and maintains;
(B) explains how the Federal consumer financial law
compliance program is appropriate for the entity's size and
complexity, the nature and scope of its activities, and risks
to consumers presented by such activities;
(C) certifies that, in the opinion of the assessor, the
Federal consumer financial law compliance program is
operating with sufficient effectiveness to provide reasonable
assurance that the entity is fulfilling its obligations under
all Federal consumer financial laws; and
(D) certifies that the assessment has been conducted by a
qualified, objective, independent third-party individual or
entity that uses procedures and standards generally accepted
in the profession, adheres to professional and business
ethics, performs all duties objectively, and is free from any
conflicts of interest that might compromise the assessor's
independent judgment in performing assessments.
(6) Information security program.--The entity has
developed, implemented, and maintains a comprehensive
information security program that complies with the Standards
for Safeguarding Customer Information in part 314 of title
16, Code of Federal Regulations.
(7) Independent assessment of information security
program.--
(A) The entity provides to the Bureau in its application
for provisional registration or registration and on at least
a biennial basis thereafter, a written assessment of the
information security program described in paragraph (6) and
such assessment--
(i) sets forth the administrative, technical, and physical
safeguards that the entity has implemented and maintains;
(ii) explains how such safeguards are appropriate to the
entity's size and complexity,

[[Page S1609]]

the nature and scope of its activities, and the sensitivity
of the customer information at issue;
(iii) explains how the safeguards that have been
implemented meet or exceed the protections required by the
Standards for Safeguarding Customer Information in part 314
of title 16, Code of Federal Regulations;
(iv) certifies that, in the opinion of the assessor, the
information security program is operating with sufficient
effectiveness to provide reasonable assurance that the entity
is fulfilling its obligations under the Standards for
Safeguarding Customer Information in part 314 of title 16,
Code of Federal Regulations; and
(v) certifies that the assessment has been conducted by a
qualified, objective, independent third-party individual or
entity that uses procedures and standards generally accepted
in the profession, adheres to professional and business
ethics, performs all duties objectively, and is free from any
conflicts of interest that might compromise the assessor's
independent judgment in performing assessments.
(B) Each written assessment obtained and provided to the
Bureau on at least a biennial basis pursuant to subparagraph
(A) must be completed and provided to the Bureau within 60
days after the end of the period to which the assessment
applies.
(8) Bureau supervisory authority.--The entity acknowledges
it is, or consents to being, subject to the Bureau's
supervisory authority.
(c) Registration of Information Systems Prior to August 19,
2019.--
(1) Preliminary approval.--Prior to August 19, 2019, the
Bureau may preliminarily approve an entity for registration
only if the entity submits an application for preliminary
approval to the Bureau by the deadline set forth in paragraph
(3)(A) containing information sufficient for the Bureau to
determine that the entity is reasonably likely to satisfy the
conditions set forth in subsection (b) by the deadline set
forth in paragraph (3)(B). The assessments described in
subsection (b)(5) and (7) need not be included with an
application for preliminary approval for registration or
completed prior to the submission of the application. The
Bureau may require additional information and documentation
to facilitate this determination.
(2) Registration.--Prior to August 19, 2019, the Bureau may
approve the application of an entity to be a registered
information system only if--
(A) the entity received preliminary approval pursuant to
paragraph (1); and
(B) the entity submits an application to the Bureau by the
deadline set forth in paragraph (3)(B) that contains
information and documentation sufficient for the Bureau to
determine that the entity satisfies the conditions set forth
in subsection (b). The Bureau may require additional
information and documentation to facilitate this
determination or otherwise to assess whether registration of
the entity would pose an unreasonable risk to consumers.
(3) Deadlines.--
(A) The deadline to submit an application for preliminary
approval for registration pursuant to paragraph (1) is April
16, 2018.
(B) The deadline to submit an application to be a
registered information system pursuant to paragraph (2) is
120 days from the date preliminary approval for registration
is granted.
(C) The Bureau may waive the deadlines set forth in this
subsection.
(d) Registration of Information Systems on or After August
19, 2019.--
(1) Provisional registration.--On or after August 19, 2019,
the Bureau may approve an entity to be a provisionally
registered information system only if the entity submits an
application to the Bureau that contains information and
documentation sufficient for the Bureau to determine that the
entity satisfies the conditions set forth in subsection (b).
The Bureau may require additional information and
documentation to facilitate this determination or otherwise
to assess whether provisional registration of the entity
would pose an unreasonable risk to consumers.
(2) Registration.--An information system that is
provisionally registered pursuant to paragraph (1) shall
automatically become a registered information system pursuant
to this paragraph upon the expiration of the 240-day period
commencing on the date the information system is
provisionally registered. For purposes of this paragraph, an
information system is provisionally registered on the date
that the Bureau publishes notice of the provisional
registration on the Bureau's website.
(e) Applications.--Applications for preliminary approval,
registration, and provisional registration shall be submitted
in the form required by the Bureau and shall include, in
addition to the information described in subsection (c) or
this subsection, as applicable, the following information:
(1) The name under which the applicant conducts business,
including any ``doing business as'' or other trade name.
(2) The applicant's main business address, mailing address
if it is different from the main business address, telephone
number, electronic mail address, and Internet website.
(3) The name and contact information (including telephone
number and electronic mail address) of the person authorized
to communicate with the Bureau on the applicant's behalf
concerning the application.
(f) Denial of Application.--The Bureau will deny the
application of an entity seeking preliminary approval for
registration under subsection (c)(1), registration under
subsection (c)(2), or provisional registration under
subsection (d)(1), if the Bureau determines, as applicable,
that--
(1) the entity does not satisfy the conditions set forth in
subsection (b), or, in the case of an entity seeking
preliminary approval for registration, is not reasonably
likely to satisfy the conditions as of the deadline set forth
in subsection (c)(3)(B);
(2) the entity's application is untimely or materially
inaccurate or incomplete; or
(3) preliminary approval, provisional registration, or
registration of the entity would pose an unreasonable risk to
consumers.
(g) Notice of Material Change.--An entity that is a
provisionally registered or registered information system
must provide to the Bureau in writing a description of any
material change to information contained in its application
for registration submitted pursuant to subsection (c)(2) or
provisional registration submitted pursuant to subsection
(d)(1), or to information previously provided to the Bureau
pursuant to this subsection, within 14 days of such change.
(h) Suspension and Revocation.--.
(1) The Bureau will suspend or revoke an entity's
preliminary approval for registration pursuant to subsection
(c)(1), provisional registration pursuant to subsection
(d)(1), or registration pursuant to subsection (c)(2) or
(d)(2) if the Bureau determines--
(A) that the entity has not satisfied or no longer
satisfies the conditions described in subsection (b) or has
not complied with the requirement described in subsection
(g); or
(B) that preliminary approval, provisional registration, or
registration of the entity poses an unreasonable risk to
consumers.
(2) The Bureau may require additional information and
documentation from an entity if it has reason to believe
suspension or revocation under subsection (h)(1) may be
warranted.
(3) Except in cases of willfulness or those in which the
public interest requires otherwise, prior to suspension or
revocation under subsection (h)(1) of this section, the
Bureau will provide written notice of the facts or conduct
that may warrant the suspension or revocation and an
opportunity for the entity or information system to
demonstrate or achieve compliance with this section or
otherwise address the Bureau's concerns.
(4) The Bureau will revoke an entity's preliminary approval
for registration, provisional registration, or registration
if the entity submits a written request to the Bureau that
its preliminary approval, provisional registration, or
registration be revoked.
(5) For purposes of sections 612 and 613 , suspension or
revocation of an information system's registration is
effective five days after the date that the Bureau publishes
notice of the suspension or revocation on the Bureau's
website. For purposes of section 631(b)(1), suspension or
revocation of an information system's provisional
registration or registration is effective on the date that
the Bureau publishes notice of the suspension or revocation
on the Bureau's website. The Bureau will also publish notice
of a suspension or revocation in the Federal Register.
(6) In the event that a provisional registration or
registration of an information system is suspended, the
Bureau will provide instructions concerning the scope and
terms of the suspension on its website and in the notice of
suspension published in the Federal Register.
(i) Administrative Appeals.--
(1) Grounds for administrative appeals.--An entity may
appeal a determination of the Bureau that--
(A) denies the application of an entity seeking preliminary
approval for registration under subsection (c)(1),
registration under subsection (c)(2), or provisional
registration under subsection (d)(1); or
(B) suspends or revokes the entity's preliminary approval
for registration pursuant to subsection (c)(1), provisional
registration pursuant to subsection (d)(1), or registration
pursuant to subsection (c)(2) or (d)(2).
(2) Time limits for filing administrative appeals.--An
appeal must be submitted on a date that is within 30 business
days of the date of the determination. The Bureau may extend
this time for good cause.
(3) Form and content of administrative appeals.--An appeal
shall be made by electronic means as follows:
(A) The appeal shall be submitted as set forth on the
Bureau's website. The appeal shall be labeled ``Information
System Registration Appeal''.
(B) The appeal shall set forth contact information for the
appellant including, to the extent available, a mailing
address, telephone number, or email address at which the
Bureau may contact the appellant regarding the appeal.
(C) The appeal shall specify the date of the letter of
determination, and enclose a copy of the determination being
appealed.
(D) The appeal shall include a description of the issues in
dispute, specify the legal and factual basis for appealing
the determination, and include appropriate supporting
information.
(4) Appeals process.--The filing and pendency of an appeal
does not by itself suspend the determination that is the
subject of the appeal during the appeals process.
Notwithstanding the foregoing, the Bureau may, in its
discretion, suspend the determination that is the subject of
the appeal during the appeals process.

[[Page S1610]]

(5) Decisions to grant or deny administrative appeals.--The
Bureau shall decide whether to affirm the determination (in
whole or in part) or to reverse the determination (in whole
or in part) and shall notify the appellant of this decision
in writing.

SEC. 633. COMPLIANCE PROGRAM AND RECORD RETENTION.

(a) Compliance Program.--A lender making a covered loan
must develop and follow written policies and procedures that
are reasonably designed to ensure compliance with the
requirements in this part. These written policies and
procedures must be appropriate to the size and complexity of
the lender and its affiliates, and the nature and scope of
the covered loan lending activities of the lender and its
affiliates.
(b) Record Retention.--A lender must retain evidence of
compliance with this part for 36 months after the date on
which a covered loan ceases to be an outstanding loan.
(1) Retention of loan agreement and documentation obtained
in connection with originating a covered short-term or
covered longer-term balloon-payment loan.--To comply with the
requirements in this subsection, a lender must retain or be
able to reproduce an image of the loan agreement and
documentation obtained in connection with a covered short-
term or covered longer-term balloon-payment loan, including
the following documentation, as applicable:
(A) Consumer report from an information system that has
been registered for 180 days or more pursuant to section
632(c)(2) or is registered with the Bureau pursuant to
section 632(d)(2).
(B) Verification evidence, as described in section
612(c)(2)(ii).
(C) Written statement obtained from the consumer, as
described in section 612(c)(2)(i).
(2) Electronic records in tabular format regarding
origination calculations and determinations for a covered
short-term or covered longer-term balloon-payment loan under
section 612.--To comply with the requirements in this
subsection, a lender must retain electronic records in
tabular format that include the following information for a
covered loan made under section 612:
(A) The projection made by the lender of the amount of a
consumer's net income during the relevant monthly period.
(B) The projections made by the lender of the amounts of a
consumer's major financial obligations during the relevant
monthly period.
(C) Calculated residual income or debt-to-income ratio
during the relevant monthly period.
(D) Estimated basic living expenses for the consumer during
the relevant monthly period.
(E) Other consumer-specific information considered in
making the ability-to-repay determination.
(3) Electronic records in tabular format regarding type,
terms, and performance of covered short-term or covered
longer-term balloon-payment loan.--To comply with the
requirements in this subsection, a lender must retain
electronic records in tabular format that include the
following information for a covered short-term or covered
longer-term balloon-payment loan:
(A) As applicable, the information listed in section
631(c)(1)(i) through (viii) and (c)(2).
(B) Whether the lender obtained vehicle security from the
consumer.
(C) The loan number in a loan sequence of covered short-
term loans, covered longer-term balloon-payment loans, or a
combination thereof.
(D) For any full payment on the loan that was not received
or transferred by the contractual due date, the number of
days such payment was past due, up to a maximum of 180 days.
(E) For a loan with vehicle security: Whether repossession
of the vehicle was initiated.
(F) Date of last or final payment received.
(G) The information listed in section 631(c)(3).
(4) Retention of records relating to payment practices for
covered loans.--To comply with the requirements in this
subsection, a lender must retain or be able to reproduce an
image of the following documentation, as applicable, in
connection with a covered loan:
(A) Leveraged payment mechanism(s) obtained by the lender
from the consumer.
(B) Authorization of additional payment transfer, as
described in section 622(c)(3)(iii).
(C) Underlying one-time electronic transfer authorization
or underlying signature check, as described in section
622(d)(2).
(5) Electronic records in tabular format regarding payment
practices for covered loans.--To comply with the requirements
in this subsection, a lender must retain electronic records
in tabular format that include the following information for
covered loans:
(A) History of payments received and attempted payment
transfers, as defined in section 622(a)(1), including--
(i) date of receipt of payment or attempted payment
transfer;
(ii) amount of payment due;
(iii) amount of attempted payment transfer;
(iv) amount of payment received or transferred; and
(v) payment channel used for attempted payment transfer.
(B) If an attempt to transfer funds from a consumer's
account is subject to the prohibition in section 622(b)(1),
whether the lender or service provider obtained authorization
to initiate a payment transfer from the consumer in
accordance with the requirements in section 622 (c) or (d).

SEC. 634. PROHIBITION AGAINST EVASION.

A lender must not take any action with the intent of
evading the requirements of this part.

SEC. 635. SEVERABILITY.

The provisions of this part are separate and severable from
one another. If any provision is stayed or determined to be
invalid, the remaining provisions shall continue in effect.
______