Consumer Credit Safety Commission Act of 2008 - Establishes the Consumer Credit Safety Commission to promulgate consumer credit safety rules that: (1) ban abusive, fraudulent, unfair, deceptive, predatory, anticompetitive, or otherwise anti-consumer practices or product features for creditors; (2) place restrictions on consumer credit practices or product features to reduce the likelihood that they may be provided in a manner inconsistent with this Act; and (3) establish requirements for clear and adequate information appropriate to advance the objectives of this Act.
Directs the Commission to: (1) establish and maintain a best practices guide for providers of consumer credit; (2) conduct, or award grants or contracts for, continuing studies and investigations of consumer credit industry practices; (3) help consumer credit providers to develop consumer credit safety standards or guidelines; and (4) establish and operate a consumer credit customer hotline to register complaints and receive information on how to combat anti-consumer credit.
Directs the Commission to establish a program to promote federal-state cooperation to implement this Act.
Sets forth civil and criminal penalties for acts prohibited by this Act.
[Congressional Bills 110th Congress]
[From the U.S. Government Printing Office]
[H.R. 7258 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 7258
To create a new Consumer Credit Safety Commission, to provide
individual consumers of credit with better information and stronger
protections, and to provide sellers of consumer credit with more
regulatory certainty.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 3, 2008
Mr. Delahunt introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To create a new Consumer Credit Safety Commission, to provide
individual consumers of credit with better information and stronger
protections, and to provide sellers of consumer credit with more
regulatory certainty.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Consumer Credit
Safety Commission Act of 2008''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Establishment of Commission.
Sec. 5. Authorization of appropriations.
Sec. 6. Objectives and responsibilities.
Sec. 7. Coordination of enforcement.
Sec. 8. Authorities.
Sec. 9. Collaboration with Federal and State entities.
Sec. 10. Procedures and rulemaking.
Sec. 11. Prohibited acts.
Sec. 12. Penalties for violations.
Sec. 13. Reports.
Sec. 14. Effective date.
SEC. 2. FINDINGS.
The Congress finds that--
(1) the Nation's multi-agency financial services regulatory
structure has created a dispersion of regulatory
responsibility, which in turn has led to an inadequate focus on
protecting consumers from inappropriate consumer credit
practices;
(2) the absence of appropriate oversight has allowed
excessively costly or predatory consumer credit products to
flourish; and
(3) the creation of a regulator whose sole focus is the
safety of consumer credit products would help address this lack
of consumer protection.
SEC. 3. DEFINITIONS.
For purposes of this Act--
(1) the term ``consumer credit'' includes--
(A) any payment compensating a creditor or
prospective creditor, or an agent or affiliate thereof,
for an extension of credit or making available a line
of credit;
(B) any fees connected with credit extension or
availability, such as numerical periodic rates, late
fees, creditor-imposed not sufficient funds fees
charged when a borrower tenders payment on a debt with
a check drawn on insufficient funds, over limit fees,
annual fees, cash advance fees, or membership fees;
(C) any fees which constitute a finance charge;
(D) credit insurance premiums;
(E) all charges and costs for ancillary products
sold in connection with or incidental to the credit
transaction; and
(F) any direct or indirect fee, cost, or charge
incurred in, in connection with, or ancillary to a
consumer payment system, including but not exclusive to
merchant discount fees, interchange fees, debit card
fees, check-writing fees, automated clearinghouse fees,
payment-by-phone fees, internet payment intermediary
fees, and remote deposit capture fees;
(2) the term ``relevant congressional committees'' means
the Committee on Banking, Housing, and Urban Affairs and the
Subcommittee on Financial Services and General Government of
the Committee on Appropriations of the Senate, and the
Committee on Financial Services and the Subcommittee on
Financial Services and General Government of the Committee on
Appropriations of the House of Representatives, and any
successor committees as may be constituted;
(3) the term ``creditor'' has the same meaning as in
section 103 of the Truth in Lending Act (15 U.S.C. 1602);
(4) the term ``finance charge'' has the same meaning as in
section 106 of the Truth in Lending Act (15 U.S.C. 1605); and
(5) the term ``consumer'' means any natural person and any
small business concern, as defined in section 3 of the Small
Business Act (15 U.S.C. 632).
SEC. 4. ESTABLISHMENT OF COMMISSION.
(a) Establishment; Chairperson.--
(1) In general.--An independent regulatory commission is
hereby established, to be known as the ``Consumer Credit Safety
Commission'' (in this Act referred to as the ``Commission''),
consisting of 5 Commissioners appointed by the President, by
and with the advice and consent of the Senate.
(2) Membership.--In making appointments to the Commission,
the President shall consider individuals who, by reason of
their background and expertise in areas related to consumer
credit, are qualified to serve as members of the Commission.
(3) Chairperson.--The Chairperson shall be appointed by the
President, by and with the advice and consent of the Senate,
from among the members of the Commission. An individual may
serve as a member of the Commission and as Chairperson at the
same time.
(4) Removal.--Any member of the Commission may be removed
by the President for neglect of duty or malfeasance in office,
but for no other cause.
(b) Term; Vacancies.--
(1) In general.--Except as provided in paragraph (2)--
(A) the Commissioners first appointed under this
section shall be appointed for terms ending 3, 4, 5, 6,
and 7 years, respectively, after the date of enactment
of this Act, the term of each to be designated by the
President at the time of nomination; and
(B) each of their successors shall be appointed for
a term of 5 years from the date of the expiration of
the term for which the predecessor was appointed.
(2) Limitations.--Any Commissioner appointed to fill a
vacancy occurring prior to the expiration of the term for which
his predecessor was appointed shall be appointed only for the
remainder of such term. A Commissioner may continue to serve
after the expiration of this term until a successor has taken
office, except that such Commissioner may not continue to serve
more than 1 year after the date on which the term of that
Commissioner would otherwise expire under this subsection.
(c) Restrictions on Outside Activities.--
(1) Political affiliation.--Not more than 3 of the
Commissioners shall be affiliated with the same political
party.
(2) Conflicts of interest.--No individual may hold the
office of Commissioner if that individual--
(A) is in the employ of, or holding any official
relation to, or married to any person engaged in
selling or devising consumer credit;
(B) owns stock or bonds of substantial value in a
person so engaged;
(C) is in any other manner pecuniarily interested
in such a person, or in a substantial supplier of such
a person; or
(D) engages in any other business, vocation, or
employment.
(d) Quorum; Seal; Vice Chairperson.--
(1) Quorum.--No vacancy in the Commission shall impair the
right of the remaining Commissioners to exercise all the powers
of the Commission, but 3 members of the Commission shall
constitute a quorum for the transaction of business, except
that if there are only 3 members serving on the Commission
because of vacancies in the Commission, 2 members of the
Commission shall constitute a quorum for the transaction of
business, and if there are only 2 members serving on the
Commission because of vacancies in the Commission, 2 members
shall constitute a quorum for the 6-month period (or the 1-year
period, if the 2 members are not affiliated with the same
political party) beginning on the date of the vacancy which
caused the number of Commission members to decline to 2.
(2) Seal.--The Commission shall have an official seal of
which judicial notice shall be taken.
(3) Vice chairperson.--The Commission shall annually elect
a Vice Chairperson to act in the absence or disability of the
Chairperson or in case of a vacancy in the office of the
Chairperson.
(e) Offices.--The Commission shall maintain a principal office and
such field offices as it deems necessary, and may meet and exercise any
of its powers at any other place.
(f) Functions of Chairperson; Request for Appropriations.--
(1) Duties.--The Chairperson of the Commission shall be the
principal executive officer of the Commission, and shall
exercise all of the executive and administrative functions of
the Commission, including functions of the Commission with
respect to--
(A) the appointment and supervision of personnel
employed under the Commission (and the Commission shall
fix their compensation at a level comparable to that
for employees of the Securities and Exchange
Commission);
(B) the distribution of business among personnel
appointed and supervised by the Chairperson and among
administrative units of the Commission; and
(C) the use and expenditure of funds.
(2) Governance.--In carrying out any of the functions of
the Chairperson under this subsection, the Chairperson shall be
governed by general policies of the Commission and by such
regulatory decisions, findings, and determinations as the
Commission may, by law, be authorized to make.
(3) Requests for appropriations.--Requests or estimates for
regular, supplemental, or deficiency appropriations on behalf
of the Commission may not be submitted by the Chairperson
without the prior approval of the Commission.
(g) Agenda and Priorities; Establishment and Comments.--At least 30
days before the beginning of each fiscal year, the Commission shall
establish an agenda for Commission action under its jurisdiction and,
to the extent feasible, shall establish priorities for such actions.
Before establishing such agenda and priorities, the Commission shall
conduct a public hearing on the agenda and priorities, and shall
provide reasonable opportunity for the submission of comments.
SEC. 5. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for purposes of carrying
out this Act such sums as may be necessary.
SEC. 6. OBJECTIVES AND RESPONSIBILITIES.
(a) Objectives.--The objectives of the Commission are--
(1) to minimize unreasonable consumer risk associated with
buying and using consumer credit;
(2) to prevent and eliminate unfair practices that lead
consumers to incur unreasonable, inappropriate, or excessive
debt, or make it difficult for consumers to escape existing
debt, including practices or product features that are abusive,
fraudulent, unfair, deceptive, predatory, anticompetitive, or
otherwise inconsistent with consumer protection;
(3) to promote practices that assist and encourage
consumers to use credit responsibly, avoid excessive debt, and
avoid unnecessary or excessive charges derived from or
associated with credit products;
(4) to ensure that credit history is maintained, reported,
and used fairly and accurately;
(5) to maintain strong privacy protections for consumer
credit transactions, credit history, and other personal
information associated with the use of consumer credit;
(6) to collect, investigate, resolve, and inform the public
about consumer complaints regarding consumer credit;
(7) to ensure a fair system of consumer dispute resolution
in consumer credit; and
(8) to take such other steps as are reasonable to protect
consumers of credit products.
(b) Responsibilities.--The Commission shall--
(1) promulgate consumer credit safety rules that--
(A) ban abusive, fraudulent, unfair, deceptive,
predatory, anticompetitive, or otherwise anti-consumer
practices or product features for creditors;
(B) place reasonable restrictions on consumer
credit practices or product features to reduce the
likelihood that they may be provided in a manner that
is inconsistent with the objectives specified in
subsection (a); and
(C) establish requirements for such clear and
adequate warnings or other information, and the form of
such warnings or other information, as may be
appropriate to advance the objectives specified in
subsection (a);
(2) establish and maintain a best practices guide for all
providers of consumer credit;
(3) conduct such continuing studies and investigations of
consumer credit industry practices as it deems necessary;
(4) award grants or enter into contracts for the conduct of
such studies and investigations with any person (including a
governmental entity);
(5) following publication of an advance notice of proposed
rulemaking, a notice of proposed rulemaking, or a rule under
any rulemaking authority administered by the Commission, assist
public and private organizations or groups of consumer credit
providers, administratively and technically, in the development
of consumer credit safety standards or guidelines that would
assist such providers in complying with such rule; and
(6) establish and operate a consumer credit customer
hotline which consumers can call to register complaints and
receive information on how to combat anti-consumer consumer
credit.
SEC. 7. COORDINATION OF ENFORCEMENT.
(a) In General.--Notwithstanding any concurrent or similar
authority of any other agency, the Commission shall enforce the
requirements of this Act.
(b) Rule of Construction.--The authority granted to the Commission
to make and enforce rules under this Act shall not be construed to
impair the authority of any other Federal agency to make and enforce
rules under any other provision of law, provided that any portion of
any rule promulgated by any other such agency that conflicts with a
rule promulgated by the Commission and that is less protective of
consumers than the rule promulgated by the Commission shall be
superseded by the stronger rule promulgated by the Commission, to the
extent of the conflict. Any portion of any rule promulgated by any
other such agency that is not superseded by a rule promulgated by the
Commission shall remain in force without regard to this Act.
(c) Agency Authority.--Any agency designated in subsection (d) may
exercise, for the purpose of enforcing compliance with any requirement
imposed under this Act, any authority conferred on such agency by any
other Act.
(d) Designated Agencies.--The agencies designated in this
subsection are--
(1) the Board of Governors of the Federal Reserve System;
(2) the Federal Deposit Insurance Corporation;
(3) the Office of the Comptroller of the Currency;
(4) the Office of Thrift Supervision;
(5) the National Credit Union Administration;
(6) the Federal Housing Finance Authority;
(7) the Federal Housing Administration;
(8) the Secretary of Housing and Urban Development;
(9) the Federal Home Loan Bank Board; and
(10) the Federal Trade Commission.
SEC. 8. AUTHORITIES.
(a) Authority To Conduct Hearings or Other Inquiries.--The
Commission may, by one or more of its members or by such agents or
agency as it may designate, conduct any hearing or other inquiry
necessary or appropriate to its functions anywhere in the United
States. A Commissioner who participates in such a hearing or other
inquiry shall not be disqualified solely by reason of such
participation from subsequently participating in a decision of the
Commission in the same matter. The Commission shall publish notice of
any proposed hearing in the Federal Register, and shall afford a
reasonable opportunity for interested persons to present relevant
testimony and data.
(b) Commission Powers; Orders.--The Commission shall have the
power--
(1) to require, by special or general orders, any person to
submit in writing such reports and answers to questions as the
Commission may prescribe to carry out a specific regulatory or
enforcement function of the Commission, and such submission
shall be made within such reasonable period and under oath or
otherwise as the Commission may determine, and such order shall
contain a complete statement of the reasons that the Commission
requires the report or answers specified in the order to carry
out a specific regulatory or enforcement function of the
Commission, and shall be designed to place the least burden on
the person subject to the order as is practicable, taking into
account the purpose for which the order was issued;
(2) to administer oaths;
(3) to require by subpoena the attendance and testimony of
witnesses and the production of all documentary evidence
relating to the execution of its duties;
(4) in any proceeding or investigation to order testimony
to be taken by deposition before any person who is designated
by the Commission and has the power to administer oaths and, in
such instances, to compel testimony and the production of
evidence in the same manner as authorized under paragraph (3);
(5) to pay witnesses the same fees and mileage as are paid
in like circumstances in the courts of the United States;
(6) to accept voluntary and uncompensated services relevant
to the performance of the Commission's duties, notwithstanding
the provisions of section 1342 of title 31, United States Code,
and to accept voluntary and uncompensated services (but not
gifts) relevant to the performance of the Commission's duties,
provided that any such services shall not be from parties that
have or are likely to have business before the Commission;
(7) to--
(A) initiate, prosecute, defend, intervene in, or
appeal (other than to the Supreme Court of the United
States), through its own legal representative and in
the name of the Commission, any civil action if the
Commission makes a written request to the Attorney
General of the United States for representation in such
civil action and the Attorney General does not within
the 45-day period beginning on the date such request
was made notify the Commission in writing that the
Attorney General will represent the Commission in such
civil action; and
(B) whenever the Commission obtains evidence that
any person, partnership, or corporation, either
domestic or foreign, has engaged in conduct that may
constitute a violation of Federal criminal law,
including a violation of section 11 of this Act,
transmit such evidence to the Attorney General of the
United States, who may institute criminal proceedings
under appropriate statutes; and
(8) to delegate any of its functions or powers, other than
the power to issue subpoenas under paragraph (3), to any
officer or employee of the Commission.
(c) Noncompliance With Subpoena or Commission Order; Contempt.--Any
United States district court within the jurisdiction of which any
inquiry is carried on, may, upon petition by the Commission (subject to
subsection (b)(7)) or by the Attorney General of the United States, in
case of refusal to obey a subpoena or order of the Commission issued
under subsection (b), issue an order requiring compliance therewith.
Any failure to obey the order of the court may be punished by the court
as a contempt thereof.
(d) Disclosure of Information.--No person shall be subject to civil
liability to any person (other than the Commission or the United
States) for disclosing information to the Commission.
(e) Customer and Revenue Data.--The Commission may by rule require
any provider of consumer credit to provide to the Commission such
customer and revenue data as may be required to carry out the purposes
of this Act.
(f) Purchase of Consumer Credit by Commission.--For purposes of
carrying out this Act, the Commission may purchase any consumer credit,
and it may require any provider of consumer credit to sell the service
to the Commission at cost.
(g) Contract Authority.--The Commission is authorized to enter into
contracts with governmental entities, private organizations, or
individuals for the conduct of activities authorized by this Act.
(h) Budget Estimates and Requests; Legislative Recommendations;
Testimony; Comments on Legislation.--
(1) Budget copies to congress.--Whenever the Commission
submits any budget estimate or request to the President or the
Office of Management and Budget, it shall concurrently transmit
a copy of that estimate or request to the relevant
congressional committees.
(2) Legislative recommendation.--Whenever the Commission
submits any legislative recommendations, or testimony, or
comments on legislation to the President or the Office of
Management and Budget, it shall concurrently transmit a copy
thereof to the relevant congressional committees. No officer or
agency of the United States shall have any authority to require
the Commission to submit its legislative recommendations, or
testimony, or comments on legislation, to any officer or agency
of the United States for approval, comments, or review, prior
to the submission of such recommendations, testimony, or
comments to the relevant congressional committees.
SEC. 9. COLLABORATION WITH FEDERAL AND STATE ENTITIES.
(a) Preemption.--Nothing in this Act or any rule promulgated
thereunder may be construed to preempt any provision of State law that
provides equal or greater protection to consumers than is provided in
this Act.
(b) Programs To Promote Federal-State Cooperation.--The Commission
shall establish a program to promote Federal-State cooperation for the
purposes of carrying out this Act. In implementing such program, the
Commission may--
(1) accept from any State or local authority engaged in
activities relating to consumer credit protection assistance in
such functions as data collection, investigation, and
educational programs, as well as other assistance in the
administration and enforcement of this Act which such States or
localities may be able and willing to provide and, if so
agreed, may pay in advance or otherwise for the reasonable cost
of such assistance; and
(2) commission any qualified officer or employee of any
State or local agency as an officer of the Commission for the
purpose of conducting investigations.
(c) Cooperation of Federal Departments and Agencies.--The
Commission may obtain from any Federal department or agency such
statistics, data, program reports, and other materials as it may deem
necessary to carry out its functions under this Act. Each such
department or agency shall cooperate with the Commission and, to the
extent permitted by law, furnish such materials to it. The Commission
and the heads of other departments and agencies engaged in
administering programs related to consumer credit safety shall, to the
maximum extent practicable, cooperate and consult in order to ensure
fully coordinated efforts.
SEC. 10. PROCEDURES AND RULEMAKING.
(a) Commencement of Proceeding; Publication of Prescribed Notice of
Proposed Rulemaking; Transmittal of Notice.--A proceeding for the
development of a consumer credit safety rule shall be commenced by the
publication in the Federal Register of an advance notice of proposed
rulemaking which shall--
(1) identify the objective or objectives specified in
section 6(a) for the consumer credit safety rule;
(2) include a summary of each of the regulatory
alternatives under consideration by the Commission;
(3) include information with respect to any existing
voluntary standard known to the Commission which may be
relevant to the proceedings, together with a summary of the
reasons why the Commission believes preliminarily that such
standard does not achieve an objective identified in paragraph
(1);
(4) invite interested persons to submit to the Commission,
within such period as the Commission shall specify in the
notice (which period shall not be shorter than 30 days or
longer than 60 days after the date of publication of the
notice), comments with respect to the proposed rulemaking, the
regulatory alternatives being considered, and other possible
alternatives for achieving the objective or objectives
identified in paragraph (1); and
(5) invite any person (other than the Commission) to submit
to the Commission, within such period as the Commission shall
specify in the notice (which period shall not be less than 30
days after the date of publication of the notice), an existing
voluntary standard or a portion of such a standard as a
proposed consumer credit safety rule.
(b) Transmittal to Congress.--The Commission shall transmit such
notice within 10 calendar days to the relevant congressional
committees.
(c) Voluntary Standard; Publication as Proposed Rule; Notice of
Reliance of Commission on Standard.--If the Commission determines that
any standard submitted to it in response to an invitation in a notice
published under subsection (a)(5) if promulgated (in whole, in part, or
in combination with any other standard submitted to the Commission or
any part of such a standard) as a consumer credit safety rule, would
achieve the objective or objectives identified in paragraph (1), the
Commission may publish such standard, in whole, in part, or in such
combination and with nonmaterial modifications, as a proposed consumer
credit safety rule.
(d) Publication of Proposed Rule; Preliminary Regulatory Analysis;
Contents.--No consumer credit safety rule may be proposed by the
Commission unless, not later than 60 days after the date of publication
of the notice required in subsection (a), the Commission publishes in
the Federal Register the text of the proposed rule, including any
alternatives, which the Commission proposes to promulgate, together
with a preliminary regulatory analysis containing--
(1) a preliminary description of the potential benefits and
potential costs of the proposed rule, including any benefits or
costs that cannot be quantified in monetary terms, and an
identification of those likely to receive the benefits and bear
the costs;
(2) a discussion of the reasons any standard or portion of
a standard submitted to the Commission under subsection (a)(5)
was not published by the Commission as the proposed rule or
part of the proposed rule; and
(3) a description of any reasonable alternatives to the
proposed rule, together with a summary description of their
potential costs and benefits, and a brief explanation of why
such alternatives should not be published as a proposed rule.
(e) Transmittal of Notice.--The Commission shall transmit such
notice not later than 10 calendar days after the date of publication of
the notice to the relevant congressional committees.
(f) Final Issuance.--Any proposed consumer credit safety rule shall
be issued within 12 months after the date of publication of an advance
notice of proposed rulemaking under subsection (a) relating to the
consumer credit involved, unless the Commission determines that such
proposed rule is not a reasonable means of achieving the objective or
objectives identified in subsection (a)(1) with respect to such
proposed rule or an objective specified in section 6(a), or is not in
the public interest. The Commission may extend that 12-month period for
good cause. If the Commission extends such period, it shall immediately
transmit notice of such extension to the relevant congressional
committees. Such notice shall include an explanation of the reasons for
such extension, together with an estimate of the date by which the
Commission anticipates such rulemaking will be completed. The
Commission shall publish a notice of such extension and the information
submitted to the Congress in the Federal Register.
(g) Promulgation of Rule.--
(1) Timing.--Not later than 60 days after the date of
publication under subsection (c) of a proposed consumer credit
safety rule, the Commission shall--
(A) promulgate a consumer credit safety rule, if it
makes the findings required under subsection (h); or
(B) withdraw the applicable notice of proposed
rulemaking if it determines that such rule is not--
(i) a reasonable means of achieving the
objective or objectives identified in
subsection (a)(1) with respect to such proposed
rule or an objective specified in section 6(a);
or
(ii) in the public interest.
(2) Extension.--The Commission may extend such 60-day
period in paragraph (1) for good cause shown (if it publishes
its reasons therefor in the Federal Register).
(3) Title 5.--Consumer credit safety rules shall be
promulgated in accordance with section 553 of title 5, United
States Code, except that the Commission shall give interested
persons an opportunity for the oral presentation of data,
views, or arguments, in addition to an opportunity to make
written submissions. A transcript shall be kept of any oral
presentation.
(h) Expression of Objective; Consideration of Available Product
Data; Needs of Elderly and Handicapped.--
(1) Objectives.--A consumer credit safety rule shall
express in the rule itself the objectives identified in
subsection (a)(1) with respect to such rule.
(2) Considerations.--In promulgating such a rule, the
Commission shall--
(A) consider relevant available data, including the
results of investigation activities conducted generally
and pursuant to this Act; and
(B) consider and take into account the special
needs of elderly individuals and individuals with
disabilities to determine the extent to which such
persons may be affected by such rule.
(i) Findings; Final Regulatory Analysis; Judicial Review of Rule.--
(1) Findings.--Prior to promulgating a consumer credit
safety rule, the Commission shall consider, and shall make
appropriate findings for inclusion in such rule with respect
to--
(A) the degree and nature of the benefit to
consumer protection that the rule is designed to
achieve or promote;
(B) the approximate number of consumer credit
products, or types or classes thereof, subject to such
rule;
(C) the need of the public for the consumer credit
product subject to such rule, and the probable effect
of such rule upon the utility, cost, or availability of
such services to meet such need; and
(D) any means of achieving the objective of the
order while minimizing adverse effects on competition
or disruption or dislocation of the provision of
consumer credit.
(2) Regulatory analysis.--The Commission shall not
promulgate a consumer credit safety rule, unless it--
(A) has prepared, on the basis of the findings of
the Commission under paragraph (1) and on other
information before the Commission, a final regulatory
analysis of the rule containing--
(i) a description of the potential benefits
and potential costs of the rule, including
costs and benefits that cannot be quantified in
monetary terms, and the identification of those
likely to receive the benefits and bear the
costs;
(ii) a description of any alternatives to
the final rule which were considered by the
Commission, together with a brief explanation
of the reasons why these alternatives were not
chosen; and
(iii) a summary of any significant issues
raised by the comments submitted during the
public comment period in response to the
preliminary regulatory analysis, and a summary
of the assessment by the Commission of such
issues;
(B) finds (and includes such finding in the rule)--
(i) that the rule (including its effective
date) is reasonably appropriate to achieve an
objective identified in subsection (a)(1) with
respect to such proposed rule or specified in
section 6(a);
(ii) that the promulgation of the rule is
in the public interest; and
(iii) that the benefits expected from the
rule bear a reasonable relationship to its
costs.
(3) Publication.--The Commission shall publish its final
regulatory analysis with the rule.
(4) Limit on judicial review.--Any preliminary or final
regulatory analysis prepared under subsection (c) or (i)(2)
shall not be subject to independent judicial review, except
that when an action for judicial review of a rule is
instituted, the contents of any such regulatory analysis shall
constitute part of the whole rulemaking record of agency action
in connection with such review. The provisions of this
paragraph shall not be construed to alter the substantive or
procedural standards otherwise applicable to judicial review of
any action by the Commission.
(j) Effective Date.--Each consumer credit safety rule shall specify
the date on which such rule is to take effect, not to exceed 180 days
from the date on which it is issued in final form, unless the
Commission finds, for good cause shown, that a later effective date is
in the public interest and publishes its reasons for such finding. The
effective date of a consumer credit safety rule under this Act shall be
set at a date that is at least 30 days after the date of issuance in
final form, unless the Commission for good cause shown determines that
an earlier effective date is in the public interest. In no case may the
effective date be set at a date which is earlier than the date of
issuance in final form.
(k) Amendment or Revocation of Rule.--The Commission may, by rule,
amend or revoke any consumer credit safety rule. Such amendment or
revocation shall specify the date on which it is to take effect, which
shall not exceed 180 days from the date on which the amendment or
revocation is published, unless the Commission finds for good cause
shown that a later effective date is in the public interest and
publishes its reasons for such finding. Where an amendment involves a
material change in a consumer credit safety rule, subsections (a)
through (h) shall apply. In order to revoke a consumer credit safety
rule, the Commission shall publish a proposal to revoke such rule in
the Federal Register, and allow oral and written presentations in
accordance with subsection (d)(2). The Commission may revoke such rule
only if it determines that the rule is not a reasonable means of
achieving an objective identified in subsection (a)(1) with respect to
such proposed rule or an objective specified in subsection 6(a).
(l) Petition To Initiate Rulemaking.--The Commission shall grant,
in whole or in part, or deny any petition under section 553 (e) of
title 5, United States Code, requesting the Commission to initiate a
rulemaking, within a reasonable time after the date on which such
petition is filed. The Commission shall state the reasons for granting
or denying such petition.
SEC. 11. PROHIBITED ACTS.
It shall be unlawful for any person--
(1) to advertise for or offer for sale any consumer credit
which is not in conformity with an applicable consumer credit
safety rule under this Act;
(2) to advertise for or offer for sale any consumer
credit--
(A) which has been declared a banned product by a
rule under this Act; and
(B) in a manner that does not comply with any
requirements for the provision of any warnings or other
information regarding such credit; or
(3) to fail or refuse to permit access to or copying of
records, or fail or refuse to establish or maintain records, or
fail or refuse to make reports or provide information to the
Commission as required under this Act or any rule thereunder,
other than section 9.
SEC. 12. PENALTIES FOR VIOLATIONS.
(a) Criminal Penalties.--
(1) Knowing and willful violations.--Any person who
knowingly and willfully violates section 11 after having
received notice of noncompliance from the Commission shall be
fined not more than $500,000 or be imprisoned not more than one
year, or both.
(2) Executives and agents.--Any individual director,
officer, or agent of a corporation who knowingly and willfully
authorizes, orders, or performs any of the acts or practices
constituting in whole or in part a violation of section 11, and
who has knowledge of notice of noncompliance received by the
corporation from the Commission, shall be subject to penalties
under this section, without regard to any penalties to which
that corporation may be otherwise subject.
(b) Civil Penalties.--
(1) In general.--Any person who violates section 11 shall
be subject to a civil penalty to be established at the
discretion of the Commission. A violation of section 11 shall
constitute a separate civil offense with respect to each
consumer credit transaction involved.
(2) Publication of schedule of penalties.--Not later than
December 1, 2009, and December 1 of each fifth calendar year
thereafter, the Commission shall prescribe and publish in the
Federal Register a schedule of maximum authorized penalties
that shall apply for violations that occur after January 1 of
the year immediately following such publication.
(3) Relevant factors in determining amount of penalty.--In
determining the amount of any penalty to be sought upon
commencing an action seeking to assess a penalty for a
violation of section 11, the Commission shall consider the
nature of the consumer credit product or service, the severity
of the unreasonable risk to the consumer, the number of
products or services sold or distributed, and the
appropriateness of such penalty in relation to the size of the
business of the person charged.
(4) Compromise of penalty; deductions from penalty.--Any
civil penalty under this section may be compromised by the
Commission. In determining the amount of such penalty or
whether it should be remitted or mitigated and in what amount,
the Commission shall consider the appropriateness of such
penalty to the size of the business of the person charged, the
nature of the consumer credit, the severity of the unreasonable
risk to the consumer, the occurrence or absence of consumer
injury, and the number of offending products or services sold.
The amount of such penalty when finally determined, or the
amount agreed on compromise, may be deducted from any sums
owing by the United States to the person charged.
(c) Collection and Use of Penalties.--The Commission shall retain
ownership over criminal and civil fees collected and shall apply these
fees to defray the costs of the Commission's operation or, where
appropriate, provide restitution for harmed consumers.
SEC. 13. REPORTS.
(a) Reports to the Public.--The Commission shall determine what
reports should be produced and distributed to the public on a recurring
and ad hoc basis, and shall prepare and publish such reports on a web
site that provides free access to the general public.
(b) Report to President and Congress.--The Commission shall prepare
and submit to the President and the relevant congressional committees
at the beginning of each regular session of Congress a comprehensive
report on the administration of this Act for the preceding fiscal year.
Such report shall include--
(1) a thorough appraisal, including statistical analyses,
estimates, and long-term projections, of the incidence and
effects of practices associated with the provision of consumer
credit that are inconsistent with the objectives specified in
section 6(a), with a breakdown, insofar as practicable, among
the various sources of injury as the Commission finds
appropriate;
(2) a list of consumer credit safety rules prescribed or in
effect during such year;
(3) an evaluation of the degree of observance of consumer
credit safety rules, including a list of enforcement actions,
court decisions, and compromises of civil penalties, by
location and company name;
(4) a summary of outstanding problems confronting the
administration of this Act in order of priority;
(5) an analysis and evaluation of public and private
consumer credit safety research activities;
(6) a list, with a brief statement of the issues, of
completed or pending judicial actions under this Act;
(7) the extent to which technical information was
disseminated to the scientific and consumer credit communities
and consumer information was made available to the public;
(8) the extent of cooperation between Commission officials
and representatives of industry and other interested parties in
the implementation of this Act, including a log or summary of
meetings held between Commission officials and representatives
of industry and other interested parties;
(9) an appraisal of significant actions of State and local
governments relating to the responsibilities of the Commission;
(10) with respect to voluntary consumer credit safety
standards promulgated as consumer safety rules under section
10(c), a description of--
(A) the number of such standards adopted as rules;
and
(B) the nature and number of the consumer credit
products and services which are the subject of such
adopted rules and the approximate number of consumers
affected;
(11) such recommendations for additional legislation as the
Commission deems necessary to carry out the purposes of this
Act; and
(12) the extent of cooperation with and the joint efforts
undertaken by the Commission in conjunction with other
regulators with whom the Commission shares responsibilities for
consumer credit safety.
SEC. 14. EFFECTIVE DATE.
This Act shall be effective 120 days after the date of enactment of
this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line