To amend the Consumer Credit Protection Act to prevent credit card issuers from taking unfair advantage of full-time, traditional-aged, college students, to protect parents of traditional college student credit card holders, and for other purposes.

March 9, 2005

Ms. SLAUGHTER (for herself and Mr. DUNCAN) introduced the following bill; which was referred to the Committee on Financial Services

To amend the Consumer Credit Protection Act to prevent credit card issuers from taking unfair advantage of full-time, traditional-aged, college students, to protect parents of traditional college student credit card holders, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `College Student Credit Card Protection Act'.

SEC. 2. ISSUANCE OF CREDIT CARDS TO FULL-TIME, TRADITIONAL-AGED, COLLEGE STUDENTS.

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

`(h) Provisions Applicable With Regard to the Issuance of Credit Cards to Full-Time, Traditional-Aged, College Students-

`(1) DEFINITIONS- For purposes of this section, the following definitions shall apply:

`(A) TRADITIONAL COLLEGE STUDENT CREDIT CARD ACCOUNT DEFINED- For purposes of this subsection, the term `traditional college student credit card account' means a credit card account under an open end consumer credit plan established or maintained for or on behalf of any full-time, traditional-aged, college student.

`(B) FULL-TIME, TRADITIONAL-AGED, COLLEGE STUDENT- The term `full-time, traditional-aged, college student' means an individual--

`(i) who is a student described in subparagraphs (A) and (B) of section 484(b)(3) of the Higher Education Act of 1965 at an institution of higher education; and

`(ii) whose age falls within the age cohort defined by such institution of higher education as the age cohort of traditional-aged students.

`(C) INSTITUTION OF HIGHER EDUCATION- The term `institution of higher education' has the meaning given to such term in section 101(a) of the Higher Education Act of 1965.

`(2) MAXIMUM AMOUNT LIMITATION- Unless a parent or guardian of a full-time, traditional-aged, college student assumes joint liability for debts incurred by the student in connection with a traditional college student credit card account, the total amount of credit extended under a traditional college student credit card account to such student may not exceed the greater of--

`(A) 20 percent of the annual gross income of the student in the most recently completed calendar year; or

`(B) the product of $500 and the number of full years which have elapsed since the traditional college student credit card account was opened, not to exceed $2,000.

`(3) PARENTAL APPROVAL REQUIRED TO INCREASE CREDIT LINES FOR ACCOUNTS FOR WHICH PARENT IS JOINTLY LIABLE- No increase may be made in the amount of credit authorized to be extended under a traditional college student credit card account for which a parent or guardian of the consumer has assumed joint liability for debts incurred by the consumer in connection with the account before the consumer attains the upper limit of the age cohort described in paragraph (1)(B)(ii) with respect to such consumer, unless the parent or guardian of the consumer approves, in writing, and assumes joint liability for, such increase.

`(4) PROHIBITION ON MORE THAN 1 CREDIT CARD ACCOUNT FOR ANY FULL-TIME COLLEGE STUDENT WITHOUT INDEPENDENT INCOME- No creditor may open a credit card account for, or issue any credit card to, any full-time, traditional-aged, college student who--

`(A) has no annual gross income; and

`(B) already maintains a credit card account under an open end consumer credit plan.'.

END