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Text of the Deceptive Loan Check Elimination Act

This bill was introduced on October 31, 2011, in a previous session of Congress, but was not enacted. The text of the bill below is as of Oct 31, 2011 (Introduced).

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Source: GPO

II

112th CONGRESS

1st Session

S. 1767

IN THE SENATE OF THE UNITED STATES

October 31, 2011

(for himself and Mr. Brown of Ohio) 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 prohibit the distribution of any check or other negotiable instrument as part of a solicitation by a creditor for an extension of credit, to limit the liability of consumers in conjunction with such solicitations, and for other purposes.

1.

Short title

This Act may be cited as the Deceptive Loan Check Elimination Act.

2.

Unsolicited loan checks prohibited

(a)

In general

Chapter 2 of the Truth in Lending Act is amended by striking section 132 (15 U.S.C. 1642) and inserting the following:

132.

Issuance of credit cards and unsolicited loan checks

(a)

Application or request required for issuance of credit cards

No person may issue a credit card, except in response to a request or application for such credit card, other than a credit card in renewal of, or in substitution for, an accepted credit card.

(b)

Unsolicited loan checks prohibited

No person may extend any consumer credit which is otherwise subject to this title through the use by the consumer of a check or other negotiable instrument that the creditor has sent to the consumer in connection with a solicitation by the creditor for an extension of consumer credit, unless the consumer submitted a written application for, or otherwise requested in writing, the extension of credit before the date on which the creditor sent the check or negotiable instrument.

(c)

Look-Alike checks

A certificate, voucher, or other nonnegotiable instrument provided to a consumer in connection with a solicitation for an extension of credit that has the appearance of a check or other negotiable instrument is not an application or request for an extension of credit for purposes of this section.

(d)

Liability of consumer

(1)

Liability of consumer

A consumer shall not be liable for—

(A)

the principal amount of a check or other negotiable instrument sent to the consumer in violation of this section; or

(B)

any interest, fee, or penalty charged in connection with such check or negotiable instrument.

(2)

Information on consumer

No information relating to the liability of a consumer alleged by a creditor to have been established through a check or other negotiable instrument sent by a creditor to the consumer in violation of subsection (b) may be reported to or received by any consumer reporting agency or included in any consumer report (as those terms are defined in section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a)).

(e)

Regulations

Not later than 6 months after the date of enactment of the Deceptive Loan Check Elimination Act, the Board shall prescribe final regulations to implement this section.

(b)

Clerical amendment

The item relating to section 132 in the table of sections for chapter 2 of the Consumer Credit Protection Act is amended to read as follows:

132. Issuance of credit cards and unsolicited loan checks.

.

(c)

Scope of application

The requirements of this Act and the amendments made by this Act shall apply to solicitations for extensions of credit made to consumers after the date of enactment of this Act.