text: SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
  
      This Act may be cited as the ``Credit Card Accountability 
  Responsibility and Disclosure Act of 2006'' or the ``Credit CARD Act of 
  2006''.
  
  SEC. 2. REGULATORY AUTHORITY.
  
      The Board of Governors of the Federal Reserve System may issue such 
  rules or publish such model forms as it considers necessary to carry 
  out this Act and the amendments made by this Act, in accordance with 
  sections 105 and 122 of the Truth in Lending Act.
  
           TITLE I--REGULATIONS REGARDING CERTAIN RATES AND FEES
  
  SEC. 101. PRIOR NOTICE OF RATE INCREASES REQUIRED.
  
      Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
  by adding at the end the following:
      ``(h) Advance Notice of Increase in Interest Rate Required.--
              ``(1) In general.--In the case of any credit card account 
          under an open end consumer credit plan, no increase in any 
          annual percentage rate of interest (other than an increase due 
          to the expiration of any introductory percentage rate of 
          interest, or due solely to a change in another rate of interest 
          to which such rate is indexed)--
                      ``(A) may take effect before the beginning of the 
                  billing cycle which begins not less than 15 days after 
                  the obligor receives notice of such increase; or
                      ``(B) may apply to any outstanding balance of 
                  credit under such plan as of the date of the notice of 
                  the increase required under paragraph (1).
              ``(2) Notice of right to cancel.--The notice referred to in 
          paragraph (1) with respect to an increase in any annual 
          percentage rate of interest shall be made in a clear and 
          conspicuous manner and shall contain a brief statement of the 
          right of the obligor to cancel the account before the effective 
          date of the increase.''.
  
  SEC. 102. FREEZE ON INTEREST RATE TERMS AND FEES ON CANCELED CARDS.
  
      Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
  by inserting after subsection (h) (as added by section 101 of this 
  title) the following new subsection:
      ``(i) Freeze on Interest Rate Terms and Fees on Canceled Cards.--If 
  an obligor referred to in subsection (h) closes or cancels a credit 
  card account before the beginning of the billing cycle referred to in 
  subsection (h)(1)--
              ``(1) an annual percentage rate of interest applicable 
          after the cancellation with respect to the outstanding balance 
          on the account as of the date of cancellation may not exceed 
          any annual percentage rate of interest applicable with respect 
          to such balance under the terms and conditions in effect before 
          the date of the notice of any increase referred to in 
          subsection (h)(1); and
              ``(2) the repayment of the outstanding balance after the 
          cancellation shall be subject to all other terms and conditions 
          applicable with respect to such account before the date of the 
          notice of the increase referred to in subsection (h).''.
  
  SEC. 103. LIMITS ON FINANCE AND INTEREST CHARGES FOR ON-TIME PAYMENTS.
  
      Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
  by inserting after subsection (i) (as added by section 102 of this 
  title) the following new subsection:
      ``(j) Prohibition on Penalties for On-Time Payments.--
              ``(1) Prohibition on finance charges for on-time 
          payments.--In the case of any credit card account under an open 
          end credit plan, where no other balance is owing on the 
          account, no finance or interest charge may be imposed with 
          regard to any amount of a new extension of credit that was paid 
          on or before the date on which it was due.
              ``(2) Prohibition on cancellation or additional fees for 
          on-time payments or payment in full.--In the case of any credit 
          card account under an open end consumer credit plan, no fee or 
          other penalty may be imposed on the consumer in connection with 
          the payment in full of an existing account balance, or payment 
          of more than the minimum required payment of an existing 
          account balance.''.
  
  SEC. 104. PROHIBITION ON OVER-THE-LIMIT FEES FOR CREDITOR-APPROVED 
                TRANSACTIONS.
  
      Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
  by inserting after subsection (j) (as added by section 103 of this 
  title) the following new subsection:
      ``(k) Limitation on Imposition of Over-the-Limit Fees.--In the case 
  of any credit card account under an open end consumer credit plan, a 
  creditor may not impose any fees on the obligor for any extension of 
  credit in excess of the amount of credit authorized to be extended with 
  respect to such account, if the extension of credit is made in 
  connection with a credit transaction which the creditor approves in 
  advance or at the time of the transaction.''.
  
                  TITLE II--ENHANCED CONSUMER DISCLOSURES
  
  SEC. 201. PAYOFF TIMING DISCLOSURES.
  
      (a) In General.--Section 127(b) of the Truth in Lending Act (15 
  U.S.C. 1637(b)) is amended by adding at the end the following new 
  paragraph:
              ``(12) Repayment information.--
                      ``(A) In general.--Repayment information that would 
                  apply to the outstanding balance of the consumer under 
                  the credit plan, including--
                              ``(i) the outstanding balance in the 
                          account at the beginning of the statement 
                          period, as required by paragraph (1) of this 
                          subsection;
                              ``(ii) the required minimum monthly payment 
                          on that balance, represented as both a dollar 
                          figure and as a percentage of that balance;
                              ``(iii) the grace period within which 
                          payment must be made to avoid additional 
                          charges, as required by paragraph (9) of this 
                          subsection; and
                              ``(iv) the monthly payments amount that 
                          would be required for the consumer to eliminate 
                          the outstanding balance in 36 months if no 
                          further advances are made.
                      ``(B) Applicable annual percentage rate.--
                              ``(i) In general.--Subject to clause (ii), 
                          in making the disclosures under subparagraph 
                          (A), the creditor shall apply the annual 
                          percentage rate in effect on the date on which 
                          the disclosure is made until the date on which 
                          the balance would be paid in full.
                              ``(ii) Exception.--If the annual percentage 
                          rate in effect on the date on which the 
                          disclosure is made is a temporary rate that 
                          will change under a contractual provision 
                          applying an index or formula for subsequent 
                          interest rate adjustment, the creditor shall 
                          apply the rate in effect on the date on which 
                          the disclosure is made for as long as that rate 
                          will apply under that contractual provision, 
                          and then apply an annual percentage rate based 
                          on the index or formula in effect on the 
                          applicable billing date.''.
      (b) Tabular Format Required for Disclosures.--Section 122 of the 
  Truth in Lending Act (15 U.S.C. 1632) by adding at the end the 
  following new subsection:
      ``(d) Format Required for Certain Disclosures Under Section 
  127(b)(12).--
              ``(1) Form of disclosure.--All of the information disclosed 
          pursuant to section 127(b)(12)(A) shall--
                      ``(A) be disclosed in the form and manner which the 
                  Board shall prescribe by regulations under this section 
                  and in accordance with section 105; and
                      ``(B) be placed in a conspicuous and prominent 
                  location on the billing statement in typeface that is 
                  at least as large as the largest type on the statement, 
                  but in no instance less than 12-point in size.
              ``(2) Tabular format.--In the regulations prescribed under 
          paragraph (1), the Board shall require that the disclosure of 
          such information shall be in the form of a table that--
                      ``(A) contains clear and concise headings for each 
                  item of such information; and
                      ``(B) provides a clear and concise form stating 
                  each item of information required to be disclosed under 
                  each such heading.
              ``(3) Requirements regarding location and order of table.--
          In prescribing the form of the table under paragraph (2), the 
          Board shall require that--
                      ``(A) all of the information in the table, and not 
                  just a reference to the table, be placed on the billing 
                  statement, as required by this subparagraph; and
                      ``(B) the items required to be included in the 
                  table shall be listed in the order in which such items 
                  are set forth in section 127(b)(12)(A).
              ``(4) Board discretion in prescribing order and wording of 
          table.--In prescribing the form of the table under subparagraph 
          (C), the Board may employ terminology which is different than 
          the terminology which is employed in subparagraph (A), if such 
          terminology is easily understood and conveys substantially the 
          same meaning.''.
      (c) Civil Liability.--Section 130(a) of the Truth in Lending Act 
  (15 U.S.C. 1640(a)) is amended, in the undesignated paragraph following 
  paragraph (4), by striking the second sentence and inserting the 
  following: ``In connection with the disclosures referred to in 
  subsections (a) and (b) of section 127, a creditor shall have a 
  liability determined under paragraph (2) only for failing to comply 
  with the requirements of section 125, 127(a), or paragraph (4), (5), 
  (6), (7), (8), (9), (10), or (11) of section 127(b), or for failing to 
  comply with disclosure requirements under State law for any term or 
  item that the Board has determined to be substantially the same in 
  meaning under section 111(a)(2) as any of the terms or items referred 
  to in section 127(a), or paragraph (4), (5), (6), (7), (8), (9), (10), 
  (11), or (12) of section 127(b).
  
  SEC. 202. REQUIREMENTS RELATING TO LATE PAYMENT DEADLINES AND 
                PENALTIES.
  
      Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
  by inserting after subsection (k) (as added by section 104 of this Act) 
  the following new subsection:
      ``(l) Requirements Relating to Late Payment Deadlines and 
  Penalties.--
              ``(1) Late payment deadline and postmark date required to 
          be disclosed.--In the case of a credit card account under an 
          open end consumer credit plan under which a late fee or charge 
          may be imposed due to the failure of the obligor to make 
          payment on or before the due date for such payment, the 
          periodic statement required under subsection (b) with respect 
          to the account shall include, in a conspicuous location on the 
          billing statement--
                      ``(A) the date by which the payment must be 
                  postmarked, if paid by mail, in order to avoid the 
                  imposition of a late payment fee with respect to the 
                  payment; and
                      ``(B) a statement that no late fee may be imposed 
                  in connection with a payment made by mail which was 
                  postmarked on or before the postmark date.
              ``(2) Disclosure of increase in interest rates for late 
          payments.--If 1 or more late payments under an open end 
          consumer credit plan may result in an increase in the annual 
          percentage rate the account, the statement required under 
          subsection (b) with respect to the account shall include 
          conspicuous notice of such fact, together with the applicable 
          penalty annual percentage rate, in close proximity to the 
          disclosure required in paragraph (1) of the date on which 
          payment is due under the terms of the account.
              ``(3) Requirements relating to postmark date.--
                      ``(A) In general.--The date included in a periodic 
                  statement pursuant to paragraph (1)(B) with regard to 
                  the postmark on a payment shall allow, in accordance 
                  with regulations prescribed by the Board under 
                  subparagraph (B), a reasonable time for the consumer to 
                  make the payment and a reasonable time for the delivery 
                  of the payment by the due date.
                      ``(B) Board regulations.--The Board shall prescribe 
                  guidelines for determining a reasonable period of time 
                  for making a payment and delivery of a payment for 
                  purposes of subparagraph (A), after consultation with 
                  the Postmaster General and representatives of consumer 
                  and trade organizations.
              ``(4) Payment at local branches.--If the creditor, in the 
          case of a credit card account referred to in paragraph (1), is 
          a financial institution which maintains branches or offices at 
          which payments on any such account are accepted from the 
          obliger in person, the date on which the obliger makes a 
          payment on the account at such branch or office shall be 
          considered as the date on which the payment is made for 
          purposes of determining whether a late fee or charge may be 
          imposed due to the failure of the obligor to make payment on or 
          before the due date for such payment, to the extent that such 
          payment is made before the close of business of the branch or 
          office on the business day immediately preceding the due date 
          for such payment.''.
  
                  TITLE III--PROTECTION OF YOUNG CONSUMERS
  
  SEC. 301. EXTENSIONS OF CREDIT TO UNDERAGE CONSUMERS.
  
      Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is 
  amended by adding at the end the following new paragraph:
              ``(8) Applications from underage consumers.--
                      ``(A) Prohibition on issuance.--No credit card may 
                  be issued to, or open end credit plan established on 
                  behalf of, a consumer who has not attained the age of 
                  21, unless the consumer has submitted a written 
                  application to the card issuer that meets the 
                  requirements of subparagraph (B).
                      ``(B) Application requirements.--An application to 
                  open a credit card account by an individual who has not 
                  attained the age of 21 as of the date of submission of 
                  the application shall require--
                              ``(i) the signature of the parent, legal 
                          guardian, or spouse of the consumer, or any 
                          other individual having a means to repay debts 
                          incurred by the consumer in connection with the 
                          account, indicating joint liability for debts 
                          incurred by the consumer in connection with the 
                          account before the consumer has attained the 
                          age of 18;
                              ``(ii) submission by the consumer of 
                          financial information indicating an independent 
                          means of repaying any obligation arising from 
                          the proposed extension of credit in connection 
                          with the account; or
                              ``(iii) proof by the consumer that the 
                          consumer has completed a credit counseling 
                          course of instruction by a nonprofit budget and 
                          credit counseling agency approved by the Board 
                          for such purpose.
                      ``(C) Minimum requirements for counseling 
                  agencies.--To be approved by the Board under 
                  subparagraph (B)(iii), a credit counseling agency 
                  shall, at a minimum--
                              ``(i) be a nonprofit budget and credit 
                          counseling agency, the majority of the board of 
                          directors of which--
                                      ``(I) is not employed by the 
                                  agency; and
                                      ``(II) will not directly or 
                                  indirectly benefit financially from the 
                                  outcome of a credit counseling session;
                              ``(ii) if a fee is charged for counseling 
                          services, charge a reasonable fee, and provide 
                          services without regard to ability to pay the 
                          fee; and
                              ``(iii) provide trained counselors who 
                          receive no commissions or bonuses based on 
                          referrals, and demonstrate adequate experience 
                          and background in providing credit 
                          counseling.''.
  
  SEC. 302. ENHANCED PENALTIES.
  
      Section 130(a)(2)(A) of the Truth in Lending Act (15 U.S.C. 1640 
  (a)(2)(A)(iii)) is amended----
              (1) by striking ``or (iii) in the'' and inserting the 
          following:
              ``(iii) in the case of an individual action relating to an 
          open end credit plan that is not secured by real property or a 
          dwelling, twice the amount of any finance charge in connection 
          with the transaction, with a minimum of $500 and a maximum of 
          $5,000 or such higher amount as may be appropriate in the case 
          of an established pattern or practice of such failures; or
              ``(iv) in the''; and.
              (2) in clause (ii), by striking ``this subparagraph'' and 
          inserting ``this clause''.
  
  SEC. 303. RESTRICTIONS ON CERTAIN AFFINITY CARDS.
  
      Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended 
  by inserting after subsection (l) (as added by section 202 of this Act) 
  the following new subsection:
      ``(m) Restrictions on Issuance of Affinity Cards to Students.--No 
  credit card account under an open end credit plan may be established by 
  an individual who has not attained the age of 18 as of the date of 
  submission of the application pursuant to any agreement relating to 
  affinity cards, as defined by the Board, between the creditor and an 
  institution of higher education (as defined in section 101(a) of the 
  Higher Education Act of 1965), unless the requirements of section 
  127(c)(8) are met with respect to the obliger.''.
target: Credit Card Accountability Responsibility and Disclosure Act of 2006, or the Credit CARD Act of 2006 - Amends the Truth in Lending Act to require advance notice of any increase in the annual percentage rate (APR) of interest pertaining a credit card account under an open end consumer credit plan.
  
  Imposes a freeze on interest rate terms and fees on canceled cards.
  
  Prohibits: (1) penalties for on-time payments; and (2) over-the-limit fees for creditor-approved transactions.
  
  Requires disclosure of: (1) the repayment information applicable to the outstanding balance; and (2) late payment deadlines, postmark dates, and any increase in interest rates for late payments.
  
  Increases the civil penalty against any creditor who fails to comply with specified requirements in the case of an individual action relating to an open end credit plan that is not secured by real property or a dwelling.
  
  Prohibits issuance of: (1) a credit card under an open end credit plan on behalf of a consumer who has not attained the age of 21, unless the consumer has submitted a written application meeting specified requirements; or (2) certain affinity cards to students unless certain requirements have been met.
feat_title: To amend the Consumer Credit Protection Act to ban abusive credit practices, enhance consumer disclosures, protect underage consumers, and for other purposes.