text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Protecting Consumers from 
  Unreasonable Credit Rates Act of 2009''.
  
  SEC. 2. FINDINGS.
  
      Congress finds that--
              (1) attempts have been made to prohibit usurious interest 
          rates in America since colonial times;
              (2) at the State level, 15 states and the District of 
          Columbia have enacted broadly applicable usury laws that 
          protect borrowers from high-cost payday loans and many other 
          forms of credit, while 34 states and the District of Columbia 
          have limited annual interest rates to 36 percent or less for 1 
          or more types of consumer credit;
              (3) at the Federal level, in 2006, Congress enacted a 
          Federal 36 percent annualized usury cap for service members and 
          their families for covered credit products, as defined by the 
          Department of Defense, which curbed payday, car title, and tax 
          refund lending around military bases;
              (4) notwithstanding such attempts to curb predatory 
          lending, high-cost lending persists in all 50 States due to 
          loopholes in State laws, safe harbor laws for specific forms of 
          credit, and the exportation of unregulated interest rates 
          permitted by preemption;
              (5) due to the lack of a comprehensive Federal usury cap, 
          consumers annually pay approximately $17,500,000,000 for high-
          cost overdraft loans, as much as $8,600,000,000 for storefront 
          and online payday loans, and nearly $900,000,000 for tax refund 
          anticipation loans;
              (6) cash-strapped consumers pay on average 400 percent 
          annual interest for payday loans, 300 percent annual interest 
          for car title loans, up to 3,500 percent for bank overdraft 
          loans, 50 to 500 percent annual interest for loans secured by 
          expected tax refunds, and higher than 50 percent annual 
          percentage interest for credit cards that charge junk fees;
              (7) a national maximum interest rate that includes all 
          forms of fees and closes all loopholes is necessary to 
          eliminate such predatory lending; and
              (8) alternatives to predatory lending that encourage small 
          dollar loans with minimal or no fees, installment payment 
          schedules, and affordable repayment periods should be 
          encouraged.
  
  SEC. 3. NATIONAL MAXIMUM INTEREST RATE.
  
      The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by 
  adding at the end the following:
  
  ``SEC. 141. MAXIMUM RATES OF INTEREST.
  
      ``(a) In General.--Notwithstanding any other provision of law, no 
  creditor may make an extension of credit to a consumer with respect to 
  which the fee and interest rate, as defined in subsection (b), exceeds 
  36 percent.
      ``(b) Fee and Interest Rate Defined.--
              ``(1) In general.--For purposes of this section, the fee 
          and interest rate includes all charges payable, directly or 
          indirectly, incident to, ancillary to, or as a condition of the 
          extension of credit, including--
                      ``(A) any payment compensating a creditor or 
                  prospective creditor for--
                              ``(i) an extension of credit or making 
                          available a line of credit, such as fees 
                          connected with credit extension or availability 
                          such as numerical periodic rates, annual fees, 
                          cash advance fees, and membership fees; or
                              ``(ii) any fees for default or breach by a 
                          borrower of a condition upon which credit was 
                          extended, such as late fees, creditor-imposed 
                          not sufficient funds fees charged when a 
                          borrower tenders payment on a debt with a check 
                          drawn on insufficient funds, overdraft fees, 
                          and over limit fees;
                      ``(B) all fees which constitute a finance charge, 
                  as defined by rules of the Board in accordance with 
                  this title;
                      ``(C) credit insurance premiums, whether optional 
                  or required; and
                      ``(D) all charges and costs for ancillary products 
                  sold in connection with or incidental to the credit 
                  transaction.
              ``(2) Tolerances.--
                      ``(A) In general.--With respect to a credit 
                  obligation that is payable in at least 3 fully 
                  amortizing installments over at least 90 days, the term 
                  `fee and interest rate' does not include--
                              ``(i) application or participation fees 
                          that in total do not exceed the greater of $30 
                          or, if there is a limit to the credit line, 5 
                          percent of the credit limit, up to $120, if--
                                      ``(I) such fees are excludable from 
                                  the finance charge pursuant to section 
                                  106 and regulations issued thereunder;
                                      ``(II) such fees cover all credit 
                                  extended or renewed by the creditor for 
                                  12 months; and
                                      ``(III) the minimum amount of 
                                  credit extended or available on a 
                                  credit line is equal to $300 or more;
                              ``(ii) a late fee charged as authorized by 
                          State law and by the agreement that does not 
                          exceed either $20 per late payment or $20 per 
                          month; or
                              ``(iii) a creditor-imposed not sufficient 
                          funds fee charged when a borrower tenders 
                          payment on a debt with a check drawn on 
                          insufficient funds that does not exceed $15.
                      ``(B) Adjustments for inflation.--The Board may 
                  adjust the amounts of the tolerances established under 
                  this paragraph for inflation over time, consistent with 
                  the primary goals of protecting consumers and ensuring 
                  that the 36 percent fee and interest rate limitation is 
                  not circumvented.
      ``(c) Calculations.--
              ``(1) Open end credit plans.--For an open end credit plan--
                      ``(A) the fee and interest rate shall be calculated 
                  each month, based upon the sum of all fees and finance 
                  charges described in subsection (b) charged by the 
                  creditor during the preceding 1-year period, divided by 
                  the average daily balance; and
                      ``(B) if the credit account has been open less than 
                  1 year, the fee and interest rate shall be calculated 
                  based upon the total of all fees and finance charges 
                  described in subsection (b)(1) charged by the creditor 
                  since the plan was opened, divided by the average daily 
                  balance, and multiplied by the quotient of 12 divided 
                  by the number of full months that the credit plan has 
                  been in existence.
              ``(2) Other credit plans.--For purposes of this section, in 
          calculating the fee and interest rate, the Board shall require 
          the method of calculation of annual percentage rate specified 
          in section 107(a)(1), except that the amount referred to in 
          that section 107(a)(1) as the `finance charge' shall include 
          all fees, charges, and payments described in subsection (b)(1).
              ``(3) Adjustments authorized.--The Board may make 
          adjustments to the calculations in paragraphs (1) and (2), but 
          the primary goals of such adjustment shall be to protect 
          consumers and to ensure that the 36 percent fee and interest 
          rate limitation is not circumvented.
      ``(d) Definition of Creditor.--As used in this section, the term 
  `creditor' has the same meaning as in section 702(e) of the Equal 
  Credit Opportunity Act (15 U.S.C. 1691a(e)).
      ``(e) No Exemptions Permitted.--The exemption authority of the 
  Board under section 105 shall not apply to the rates established under 
  this section or the disclosure requirements under section 127(b)(6).
      ``(f) Disclosure of Fee and Interest Rate for Credit Other Than 
  Open End Credit Plans.--In addition to the disclosure requirements 
  under section 127(b)(6), the Board may prescribe regulations requiring 
  disclosure of the fee and interest rate established under this section 
  in addition to or instead of annual percentage rate disclosures 
  otherwise required under this title.
      ``(g) 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 in this section.
      ``(h) Civil Liability and Enforcement.--In addition to remedies 
  available to the consumer under section 130(a), any payment 
  compensating a creditor or prospective creditor, to the extent that 
  such payment is a transaction made in violation of this section, shall 
  be null and void, and not enforceable by any party in any court or 
  alternative dispute resolution forum, and the creditor or any 
  subsequent holder of the obligation shall promptly return to the 
  consumer any principal, interest, charges, and fees, and any security 
  interest associated with such transaction. Notwithstanding any statute 
  of limitations or repose, a violation of this section may be raised as 
  a matter of defense by recoupment or setoff to an action to collect 
  such debt or repossess related security at any time.
      ``(i) Violations.--Any person that violates this section, or seeks 
  to enforce an agreement made in violation of this section, shall be 
  subject to, for each such violation, 1 year in prison and a fine in an 
  amount equal to the greater of--
              ``(1) 3 times the amount of the total accrued debt 
          associated with the subject transaction; or
              ``(2) $50,000.
      ``(j) State Attorneys General.--An action to enforce this section 
  may be brought by the appropriate State attorney general in any United 
  States district court or any other court of competent jurisdiction 
  within 3 years from the date of the violation, and such attorney 
  general may obtain injunctive relief.''.
  
  SEC. 4. DISCLOSURE OF FEE AND INTEREST RATE FOR OPEN END CREDIT PLANS.
  
      Section 127(b)(6) of the Truth in Lending Act (15 U.S.C. 
  1637(b)(6)) is amended by striking ``the total finance charge 
  expressed'' and all that follows through the end of the paragraph and 
  inserting ``the fee and interest rate, displayed as `FAIR', established 
  under section 141.''.
target: Protecting Consumers from Unreasonable Credit Rates Act of 2009 - Amends the Truth in Lending Act to prohibit a creditor from extending credit to a consumer under an open end consumer credit plan (credit card) for which the fee and interest rate exceeds 36%.
  
  Sets forth criminal penalties for violation of this Act. Empowers state Attorneys General to enforce this Act.
  
  Revises requirements for a periodic statement for each billing cycle with respect to where the total finance charge exceeds 50 cents for a monthly or longer billing cycle, or the pro rata part of 50 cents for a billing cycle shorter than monthly. Requires inclusion of the fee and interest rate, displayed as "FAIR," instead of the total finance charge expressed as an annual percentage rate (APR).
feat_title: A bill to amend the Truth in Lending Act to establish a national usury rate for consumer credit transactions.