To establish requirements with respect to the terms of consumer credit extended by a creditor to a servicemember or the dependent of a servicemember, and for other purposes.

January 4, 2005

Mr. GRAVES introduced the following bill; which was referred to the Committee on Veterans' Affairs

To establish requirements with respect to the terms of consumer credit extended by a creditor to a servicemember or the dependent of a servicemember, 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 `Servicemembers Anti-Predatory Lending Protection Act'.

SEC. 2. TERMS OF CONSUMER CREDIT EXTENDED TO SERVICEMEMBER OR SERVICEMEMBER'S DEPENDENT.

(a) Terms of Consumer Credit- Title II of the Servicemembers Civil Relief Act (50 U.S.C. App. 521 et seq.) is amended by adding at the end the following new section:

`SEC. 208. TERMS OF CONSUMER CREDIT.

`(a) Interest- A creditor who extends consumer credit to a servicemember or a servicemember's dependent shall not require the servicemember or the servicemember's dependent to pay interest with respect to the extension of such credit, except as--

`(1) agreed to under the terms of the credit agreement or promissory note;

`(2) authorized by the applicable State law; and

`(3) not specifically prohibited by this section.

`(b) Annual Percentage Rate- A creditor described in subsection (a) shall not impose an annual percentage rate greater than 36 percent with respect to the consumer credit extended to a servicemember or a servicemember's dependent.

`(c) Mandatory Loan Disclosures-

`(1) INFORMATION REQUIRED- With respect to any extension of consumer credit to a servicemember or a servicemember's dependent, a creditor shall provide to the servicemember or the servicemember's dependent the following information in writing at or before the issuance of the credit:

`(A) A statement of the annual percentage rate applicable to the extension of credit.

`(B) Any disclosures required under the Truth in Lending Act (15 U.S.C. 1601 et seq.).

`(C) A clear description of the payment obligations of the servicemember or the servicemember's dependent, as applicable.

`(2) TERMS- Such disclosures shall be presented in accordance with terms prescribed by the regulations issued by the Board of Governors of the Federal Reserve System to implement the Truth in Lending Act (15 U.S.C. 1601 et seq.).

`(d) Limitation- A creditor described in subsection (a) shall not automatically renew, repay, refinance, or consolidate with the proceeds of other credit extended by the same creditor any consumer credit extended to a servicemember or a servicemember's dependent without--

`(1) executing new loan documentation signed by the servicemember or the servicemember's dependent, as applicable; and

`(2) providing the loan disclosures described in subsection (c) to the servicemember or the servicemember's dependent.

`(e) Preemption- Except as provided in subsection (f)(2), this section preempts any State or Federal law, rule, or regulation, including any State usury law, to the extent that such laws, rules, or regulations are inconsistent with this section, except that this section shall not preempt any such law, rule, or regulation that provides additional protection to a servicemember or a servicemember's dependent.

`(f) Penalties-

`(1) MISDEMEANOR- Any creditor who knowingly violates this section shall be fined as provided in title 18, United States Code, or imprisoned for not more than one year, or both.

`(2) PRESERVATION OF OTHER REMEDIES- The remedies and rights provided under this section are in addition to and do not preclude any remedy otherwise available under law to the person claiming relief under this section, including any award for consequential and punitive damages.

`(g) Definition- For purposes of this section, the term `interest' includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to the extension of consumer credit.'.

(b) Clerical Amendment- The table of contents of the Servicemembers Civil Relief Act (50 U.S.C. App. 501) is amended by inserting after the item relating to section 207 the following new item:

`Sec. 208. Terms of consumer credit.'.

END