S 257 ISCommentsClose CommentsPermalink

To amend title 11, United States Code, to disallow certain claims resulting from high cost credit debts, and for other purposes.CommentsClose CommentsPermalink

January 15, 2009CommentsClose CommentsPermalink

Mr. WHITEHOUSE (for himself and Mr. DURBIN) introduced the following bill; which was read twice and referred to the Committee on the JudiciaryCommentsClose CommentsPermalink

To amend title 11, United States Code, to disallow certain claims resulting from high cost credit debts, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Consumer Credit Fairness Act’.CommentsClose CommentsPermalink

SEC. 2. EFFECTS OF HIGH COST CREDIT ON BANKRUPTCY PROCEEDINGS.

(a) Definitions- Section 101 of title 11, United States Code, is amended--CommentsClose CommentsPermalink





(1) by redesignating paragraph (27B) as paragraph (27C); andCommentsClose CommentsPermalink





(2) by inserting after paragraph (27A) the following:CommentsClose CommentsPermalink





‘(27B) The term ‘high cost consumer credit transaction’ means an extension of credit by a ‘creditor’ (as defined in section 103 of the Truth in Lending Act (15 U.S.C. 1602(f))), resulting in a consumer debt that has an applicable annual percentage rate (as determined in accordance with section 107(a) of the Truth in Lending Act (15 U.S.C. 1606(a)), and including costs and fees incurred in connection with the extension of such credit) that exceeds, at any time while the credit is outstanding, the lesser of--CommentsClose CommentsPermalink





‘(A) the sum of 15 percent and the yield on United States Treasury securities having a 30-year period of maturity; orCommentsClose CommentsPermalink





‘(B) 36 percent.’.CommentsClose CommentsPermalink





(b) Disallowance of Claims- Section 502 of title 11, United States Code, is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(l) Notwithstanding subsections (a) and (b) of this section, the court shall disallow any claim arising from a high cost consumer credit transaction for the purpose of distribution under this title.’.CommentsClose CommentsPermalink

SEC. 3. EXCLUSION.

Section 707(b) of title 11, United States Code, is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(8) Paragraph (2) shall not apply in the case of a debtor who has any debts arising from a high cost consumer credit transaction.’.CommentsClose CommentsPermalink