To amend the Truth in Lending Act to protect consumers from usury and unreasonable fees, and for other purposes.

April 13, 2005

Mr. SANDERS (for himself, Mr. WEINER, Mr. OWENS, Ms. JACKSON-LEE of Texas, Mr. CONYERS, Mr. KUCINICH, Mr. GEORGE MILLER of California, Ms. LEE, Mr. EVANS, Mr. JACKSON of Illinois, Mr. GRIJALVA, Ms. KILPATRICK of Michigan, Ms. WOOLSEY, Mr. TIERNEY, Mr. STARK, Mr. CUMMINGS, Ms. SCHAKOWSKY, Mr. MCGOVERN, and Mr. LANTOS) introduced the following bill; which was referred to the Committee on Financial Services

To amend the Truth in Lending Act to protect consumers from usury and unreasonable fees, 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 `Loan Shark Prevention Act'.

SEC. 2. NATIONAL CONSUMER CREDIT USURY RATE.

Section 107 of the Truth in Lending Act (15 U.S.C. 1606) is amended by adding at the end thereof the following new subsection:

`(f) National Consumer Credit Usury Rate- The annual percentage rate applicable to any extension of credit may not exceed by more than 8 percentage points the rate established under section 6621(a)(2) of the Internal Revenue Code of 1986, as determined by the Board.'.

SEC. 3. CAP ON FEES CHARGED BY FINANCIAL INSTITUTIONS.

(a) In General- Chapter 1 of the Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by adding at the end the following new section:

`Sec. 115. Cap on fees

`The amount of any fee or charge that a creditor may impose, under the terms of a credit transaction, may not exceed $15.'.

(b) Clerical Amendment- The table of sections for chapter 1 of the Truth in Lending Act is amended by inserting after the item relating to section 114 the following new item:

`115. Cap on fees.'.

SEC. 4. LIMITATION ON USE OF CONSUMER REPORTS.

(a) In General- Subsection (d) of section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b(d)) is amended to read as follows:

`(d) Limitation on Use of Consumer Report-

`(1) IN GENERAL- No credit card issuer may use any negative information contained in a consumer report to increase any annual percentage rate applicable to a credit card account, or to remove or increase any introductory annual percentage rate of interest applicable to such account, for reasons other than actions or omissions of the card holder that are directly related to such account.

`(2) NOTICE TO CONSUMER- The limitation under paragraph (1) on the use by a credit card issuer of information in a consumer report shall be clearly and conspicuously described to the consumer by the credit card issuer in any disclosure or statement required to be made to the consumer under this title or any other title of this Act.'.

(b) Technical and Conforming Amendment- Section 604(a)(3)(F)(ii) of the Fair Credit Reporting Act (15 U.S.C. 1681b(a)(3)(F)(ii)) is amended by inserting `subject to subsection (d)' before `to review'.

END