H.R. 900--Consumer Credit Card Protection Amendments of 1999 March 2, 1999 Section-by-section summary Sponsor: Rep. John LaFalce H.R. 900--Consumer Credit Card Protection Amendments of 1999
March 2, 1999 [-------------------------------]
Section-by-section summary
Sponsor: Rep. John LaFalce

Sec. 1. Short Title/References: "Consumer Credit Card Protection Amendments of 1999"

Sec. 2. Disclosures Regarding Minimum Monthly Payments: Requires new consumer disclosures regarding required minimum monthly payments-

  • In card agreements-how minimum payments are to be calculated;
  • In card solicitations--the charges or penalties to be imposed for failure to pay a minimum payment;
  • In billing statements-estimates of the months required and the total cost to the consumer of repaying card balance in full if payment is made only at level of the required minimum monthly payment.
  • Sec. 3. Disclosure of Late Payment Fees: Requires card issuers that impose a penalty on card holders that fail to make a monthly payment by a required payment due date to state the date that payment is due in bold print in a prominent place on the monthly billing statement, together with the amount of the fee or charge that will be assessed if payment is received after that date.

    Sec. 4. Worldwide Web-Based Credit Card Solicitations: Requires that all disclosures regarding the terms and costs of credit card accounts that are required for direct mail solicitations also be included in solicitations on internet sites or web pages. These disclosures must be clear and conspicuous, readily accessible to consumers and updated regularly to reflect all current credit card terms and costs.

    Sec. 5. Disclosures Relating to "Teaser" Rates: Require more clear and conspicuous disclosure regarding special or introductory interest rates used to entice consumers to open credit card accounts, including--

  • the date that the introductory "teaser" rate will expire;
  • the permanent rate or rates that will be applied to the account after the introductory "teaser" rate expires;
  • any conditions under which the "teaser" rate may be revoked or otherwise conditioned on actions by the card holder (e.g., failure to make the minimum payment or to make payment on time) and the interest rate to be applied to the account as a result of such action.
  • Sec. 6. Limit on Inactivity Fees: Prohibits card issuers from imposing an "inactivity" fee for any monthly billing period where a card holder has an outstanding balance that is subject to finance charges.

    Sec. 7. Issuance of Credit Cards to Underage Consumers: Prohibits issuance of a credit card account to persons who have not reached the age of 21, except where the person submits a written application that is either co-signed by a parent or legal guardian or provides evidence of independent means for repaying any debt obligation.

    Sec. 8. Penalties for On-Time Payment: Prohibits card issuers from canceling credit cards, reimposing annual fees, imposing maintenance fees or minimum finance charges, misrepresenting payment due dates to gain early payment on the account, or other actions which are intended to penalize any card holder solely on the basis that the card holder routinely pays off their monthly credit balances on time without incurring interest charges..

    Sec. 9. Freeze on Interest Rate Terms and Fees on Canceled Cards: Requires that credit card holders who receive notice of an increase in the interest rate applicable to their account be permitted to cancel the account prior and repay any balance at the interest rate and terms applicable at the time of the rate increase. Requires card issuers to provide notice of the consumers' right to cancel the account as part of any notice of an increase in annual interest rates.

    Sec. 10. Disclosures on Credit Advances through Third-Party Checks: Prohibits card issuers from providing card holders with any negotiable or transferable "convenience" check for use in making payment or transfer to a third-party unless the issuer also provides prominent notice of any additional fees and interest costs applicable to any use of these checks.

    Sec. 11. Limitation on Over-The-Limit Fees: Prohibits a card issuer from charging a fee or penalty for an extension of credit that exceeds a card holder's maximum credit limit where the issuer had provided specific prior approval for the extension of credit.

    Sec. 12. Unsolicited Dual Purpose Cards: Prohibits card issuers that seek to avoid current prohibitions against mailing unsolicited credit cards to consumers from sending unsolicited cards that have multiple purposes (i.e., calling cards, stored value, check guarantee, discount/award cards, etc.) but are connected to a credit plan and can be used, either initially or upon later activation, to obtain credit.

    Sec. 13. Civil Liability: Extends civil liability protections under the Truth in Lending by incorporating specific references to new protections authorized by the legislation and by striking language that restricts issuer liability in credit card solicitations only to consumers that use credit cards and pay annual fees.

    Sec. 14. Regulations: Requires the Federal Reserve, within six months of enactment, to issue final regulations implementing the amendments and authorizes the Fed to issue such staff commentary and publish model disclosure statements and forms as it determines necessary.