Bill Summary
This legislation, known as the "Small Business and Consumer Emergency Credit Act", amends the Truth in Lending Act to extend consumer credit protections provided to members of the Armed Forces and their dependents to all consumers. It sets limitations on consumer credit and maximum rates of interest during national emergencies, such as the COVID-19 pandemic. It also defines consumer credit to include credit extended to nonprofits and small businesses, and exempts certain credit unions from these limitations. The act also prohibits the Bureau of Consumer Financial Protection from exempting certain creditors from these limitations. It provides rules for calculating the annual percentage rate for open-end and closed-end credit and states that it does not preempt any state laws providing greater consumer protections. The act also outlines penalties and remedies for creditors who violate these provisions and allows state attorneys general and regulators to bring civil actions to enforce them.
Possible Impacts
1. The "Small Business and Consumer Emergency Credit Act" could affect consumers by limiting the amount of interest they can be charged on credit during national emergencies. This could provide financial relief to individuals who may be struggling financially during a crisis.
2. This legislation could also affect small businesses and non-profit organizations by providing them with the same consumer credit protections as members of the Armed Forces. This could make it easier for these organizations to obtain credit and potentially help them stay afloat during times of crisis.
3. The "Small Business and Consumer Emergency Credit Act" could also have an impact on state enforcement, as State Attorneys General and State Regulators are given the authority to bring civil actions and secure remedies for violations of this act. This could potentially provide more resources for individuals and organizations to seek justice and protection against predatory lending practices.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3560 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
2d Session
S. 3560
To amend the Truth in Lending Act to extend the consumer credit
protections provided to members of the Armed Forces and their
dependents under title 10, United States Code, to all consumers.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 22, 2020
Mr. Van Hollen (for himself and Mr. Brown) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Truth in Lending Act to extend the consumer credit
protections provided to members of the Armed Forces and their
dependents under title 10, United States Code, to all consumers.
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 ``Small Business and Consumer
Emergency Credit Act''.
SEC. 2. LIMITATIONS ON CONSUMER CREDIT AND MAXIMUM RATES OF INTEREST.
(a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
1631 et seq.) is amended by adding at the end the following:
``Sec. 140B. Limitations on consumer, small business, and nonprofit
maximum rates of interest during national emergencies
``(a) Definitions.--In this section, the term `consumer credit'
includes consumer credit and credit extended to--
``(1) an organization that is described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt from
tax under section 501(a) of such Code; and
``(2) a small business concern, as defined in section 3 of
the Small Business Act (15 U.S.C. 632).
``(b) Application of the Military Lending Act.--
``(1) Coronavirus disease 2019 (covid-19) national
emergency.--The annual percentage rate of interest described in
section 987(b) of title 10, United States Code (commonly
referred to as the `Military Lending Act'), shall be applicable
under this section for any extension of consumer credit made
during the period beginning 1 day after the date of enactment
of this section and ending on the date on which the national
emergency declared by the President under the National
Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the
coronavirus disease 2019 (COVID-19) terminates.
``(2) Exceptions.--Paragraph (1) shall not apply to credit
extended by a Federal credit union, as defined in section 101
of the Federal Credit Union Act (12 U.S.C. 1752), subject to
the limitation on rate of interest described in section
107(5)(A)(vi) of that Act (12 U.S.C. 1757(5)(A)(vi)), as
implemented by the National Credit Union Administration Board,
or to a State credit union that complies with that limitation.
``(c) No Exemptions Permitted.--The exemption authority of the
Bureau under section 105(f) shall not apply with respect to this
section.
``(d) Calculation of the Annual Percentage Rate for Open End
Credit.--
``(1) In general.--For purposes of this section, the annual
percentage rate applicable to an open end credit plan shall be
calculated under section 107(a)(2), subject to adjustments to
the amount considered a finance charge, as provided in the
rules issued by the Secretary of Defense on July 22, 2015, to
carry out section 987 of title 10, United States Code.
``(2) Exception to finance charge calculation.--
``(A) In general.--Notwithstanding paragraph (1),
for consumer credit extended in a credit card account
under an open end consumer credit plan, a bona fide fee
other than a periodic rate is not a charge required to
be included within the finance charge for purposes of
this section if the fee, including any fee charged
before the account is opened or during the 1-year
period beginning on the date on which the account is
opened, is assessed in compliance with section 127(n).
``(B) Limitation.--Subparagraph (A) shall not apply
to--
``(i) any credit insurance premium or fee,
including any charge for single premium credit
insurance, any fee for a debt cancellation
contract, or any fee for a debt suspension
agreement; or
``(ii) any fee for a credit-related
ancillary product sold in connection with the
credit card account under an open end consumer
credit plan.
``(e) Calculation of the Annual Percentage Rate for Closed-End
Credit.--For purposes of this section, the annual percentage rate
applicable to credit not under an open end credit plan shall be
calculated under section 107(a)(1), subject to adjustments to the
amount considered a finance charge, as provided in the rules issued by
the Secretary of Defense on July 22, 2015, to carry out section 987 of
title 10, United States Code.
``(f) Relation to State Law.--Nothing in this section may be
construed to preempt any provision of State law that provides greater
protection to consumers than is provided under this section.
``(g) Penalties and Remedies.--In addition to the penalties and
remedies in this Act, section 987(f) of title 10, United States Code,
shall apply to a creditor who extends consumer credit to a consumer in
violation of this section to the same extent as such section 987(f)
applies to a creditor who extends consumer credit to a covered member
or a dependent with respect to a covered member (as those terms are
defined in such section 987).
``(h) Preservation of State Enforcement.--
``(1) State attorneys general.--Not later than 3 years
after the date on which a violation of this section occurs, the
attorney general of a State (or an equivalent official) may
bring a civil action in the name of that State--
``(A) in any district court of the United States
that is located in that State or in a State court that
is located in that State and that has jurisdiction over
the defendant; and
``(B) to--
``(i) enforce provisions of this section or
rules issued under this section; and
``(ii) secure remedies under provisions of
this section or remedies otherwise provided
under other law.
``(2) State regulators.--Not later than 3 years after the
date on which a violation of this section occurs, a State
regulator may bring a civil action or initiate another
appropriate proceeding to--
``(A) enforce the provisions of this section or
regulations issued under this section with respect to
any entity that is, or is required to be, State-
chartered, incorporated, licensed, or otherwise
authorized to do business under State law; and
``(B) secure remedies under provisions of this
section or remedies otherwise provided under other
provisions of law with respect to an entity described
in subparagraph (A).
``(3) Notice requirement; additional regulations.--
Subsections (b), (c), and (d) of section 1042 of the Consumer
Financial Protection Act of 2010 (12 U.S.C. 5552), shall apply
to a civil action or other appropriate proceeding brought or
initiated under paragraph (1) or (2) to the same extent as
those subsections apply to actions and other administrative and
regulatory proceedings described in subsection (a) of such
section 1042.''.
(b) Clerical Amendment.--The table of contents for chapter 2 of the
Truth in Lending Act is amended by adding at the end the following:
``140B. Limitations on consumer, small business, and nonprofit maximum
rates of interest during national
emergencies.''.
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