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his deposit shall be insured in an amount not to exceed $100,000 per account. "(b) The Corporation may limit the aggregate amount of funds that may be invested or deposited in time and savings deposits in any insured bank by any depositor referred to in subparagraph (A) of this paragraph on the basis of the size of any such bank in terms of its assets: Provided, however, such limitation may be exceeded by the pledging of acceptable securities to the depositor referred to in subparagraph (A) of this paragraph when and where required." (b) Title IV of the National Housing Act is amended— loarasloclf (1) in section 401(b) (12 U.S.C. 1724(b)), by striking out tio^ns?public' "Funds" in the third sentence and inserting in lieu thereof the ^""'^^ ^"' ''°^following: "Except in the case of an insured member referred to in the preceding sentence, funds"; (2) in section 405(a) (12 U.S.C. 1728(a)), by inserting after "except that no member or investor" the following: "(other than a member or investor referred to in subsection (d)) "; and (3) by adding at the end of section 405 (12 U.S.C. 1728) the following new subsection: " (d)(1) Notwithstanding any limitation in this subchapter or in any other provision of law relating to the amount of deposit insurance available for any one account, in the case of an insured member who is— "(i) an officer, employee, or agent of the United States having official custody of public funds and lawfully investing the same in an insured institution; "(ii) an officer, employee, or agent of any State of the United States, or of any county, municipality, or political subdivision thereof having official custody of public funds and lawfully investing the same in an insured institution in such State; " (iii) an officer, employee, or agent of the District of Columbia having official custody of public funds and lawfully investing the same in an insured institution in the District of Columbia; or "(iv) an officer, employee, or agent of the Commonwealth of Puerto Rico, or of the Virgin Islands, or of any county, municipality, or political subdivision thereof having official custody of public funds and lawfully investing the same in an insured institution in the Commonwealth of Puerto Rico or the Virgin Islands, respectively; the account of such insured member shall be insured in an amount not to exceed $100,000 per account. "(2) The Corporation may limit the aggregate amount of funds that may be invested in any insured institution by any insured member referred to in paragraph (1) of this subsection on the basis of the size of any such institution in terms of its assets." (c) Subsection (c) of section 207 of the Federal Credit Union Act Credit unions, public funds in, (12 U.S.C. 1787) is amended by— coverage. (1) inserting " (1) " after " (c) ", (2) striking out "For the purposes of this subsection," and inserting in lieu thereof the following: "Subject to the provisions of paragraph (2), for the purposes of this subsection,", and (3) adding at the end thereof the following: "(2)(A) Notwithstanding any limitation in this Act or in any other provision of law relating to the amount of insurance available for the account of any one depositor or member, in the case of a depositor or member who is— " (i) an officer, employee, or agent of the United States having official custody of public funds and lawfully investing the same in a credit union insured in accordance with this title; "(ii) an officer, employee, or agent of any State of the United

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12 USC 1464.

Study. 42 USC 4275 note.

Report to Congress.

12 USC 1813 note.

[88 STAT.

States, or of any county, municipality, or political subdivision thereof having official custody of public funds and lawfully investing the same in a credit union insured in accordance with this title in such State; "(iii) an officer, employee, or agent of the District of Columbia having official custody of public funds and lawfully investing the same in a credit union insured in accordance with this title in the District of Columbia; or "(iv) an officer, employee, or agent of the Commonwealth of Puerto Rico, of the Panama Canal Zone, or of any territory or possession of the United States, or of any county, municipality, or political subdivision thereof having official custody of public funds and lawfully investing the same in a credit union insured in accordance with this title in the Commonwealth of Puerto Rico, the Panama Canal Zone, or any such territory or possession, respectively; his account shall be insured in an amount not to exceed $100,000 per account. " (B) The Administrator may limit the aggregate amount of funds that may be invested or deposited in any credit union insured in accordance with this title by any depositor or member referred to in subparagraph (A) on the basis of the size of any such credit union in terms of its assets." (d) Section 107(7) of the Federal Credit Union Act (12 U.S.C. 1757(7)) is amended by adding at the end thereof the following: "and to receive from an officer, employee, or agent of those nonmember units of Federal, State, or local governments and political subdivisions thereof enumerated in section 207 of this Act (12 U.S.C. 1787) and in the manner so prescribed payments on shares, share certificates, and share deposits;". (e) Section 5(b)(2) of the Home Owners' Loan Act of 1933 is amended by inserting immediately after "security," "may be surety as defined by the Board". (f)(1) The Advisory Commission on Intergovernmental Relations (hereinafter referred to as the "Commission") shall conduct a study of the impact of this section on funds available for housing and on State and local bond markets. (2) The Commission shall make a report to the Congress of the results of its study not later than two years after the date of enactment of this Act. (3) There is authorized to be appropriated to the Commission such sums as may be necessary to carry out this subsection. (g) This section and the amendments made by it shall take effect on the thirtieth day beginning after the date of enactment of this Act. INCREASED CEILING ON DEPOSIT INSURANCE: FEDERAL DEPOSIT INSURANCE CORPORATION

12

note.

use

1813

Effective date. 12 USC 1813 note

SEC. 102. (a) The following provisions of the Federal Deposit Insurance Act are amended by striking out "$20,000" each place it appears therein and inserting in lieu thereof "$40,000": (1) The first sentence of section 3(m) (12 U.S.C. 1813 (m)). (2) The first sentence of section 7(i) (12 U.S.C. 1817(i)). (3) The last sentence of section 11(a) (12 U.S.C. 1821(a)). (4) The fifth sentence of section 11(i) (12 U.S.C. 1821 (i)). (b) The amendments made by this section are not applicable to any claim arising out of the closing of a bank prior to the effective date of this section. (c) The amendments made by this section shall take effect on the thirtieth day beginning after the date of enactment of this Act.

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INCREASED C E I L I N G ON DEPOSIT INSURANCE: FEDERAL SAVINGS A N D LOAN INSURANCE CORPORATION

SEC. 103. (a) The following provisions of title IV of the National Housing Act are amended by striking out "$20,000" each place it ^^ use 1724. appears therein and inserting in lieu thereof "$40,000": (1) Section 401(b) (12 U.S.C. 1724(b)). (2) Section 405(a) (12 U.S.C. 1728(a)). (b) The amendments made by this section are not applicable to 12 USC 1724 any claim arising out of a default, as defined in section 401(d) of the National Housing Act, where the appointment of a conservator, receiver, or other legal custodian as set forth in that section becomes effective prior to the effective date of this section. (c) The amendments made by this section shall take effect on the f2^u'sc'^ 17^24*^' thirtieth day beginning after the date of enactment of this Act. note. INCREASED C E I L I N G ON DEPOSIT INSURANCE: I N S U R E D CREDIT U N I O N S

SEC. 104. (a) The first sentence of section 207(c) of title II of the Federal Credit Union Act (12 U.S.C. 1787 (c)) is amended by striking out "$20,000" and inserting in lieu thereof "$40,000". (b) The amendment made by this section is not applicable to any 12 USC 1737 claim arising out of the closing of a credit union for liquidation on note. account of bankruptcy or insolvency pursuant to section 207 of title II of the Federal Credit Union Act (12 U.S.C. 1787) prior to the effective date of this section. da (c) The amendment made by this section shall take effect on the Effective1787t e. 12 USC thirtieth day beginning after the date of enactment of this Act. note. CONVERSION OF SAVINGS AND LOAN ASSOCIATIONS

SEC. 105. (a) Section 403(b) of the National Housing Act, as amended (12 U.S.C. 1726(b)), is amended by adding at the end thereof the following new sentence: "As used in this subsection the term "Reserves." 'reserves' shall, to such extent as the Corporation may provide, include capital stock and other items, as defined by the Corporation.". (b) Section 12(i) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 781 (i)), is amended to read as follows: " (i) I n respect of any securities issued by banks the deposits of which are insured in accordance with the Federal Deposit Insurance Act or institutions the accounts of which are insured by the Federal 12 USC is 11 Savings and Loan Insurance Corporation, the powers, functions, and "°*^" duties vested in the Commission to administer and enforce sections 12, 13, 14(a), 14(c), 14(d), 14(f), and 16, (1) with respect to national ^^^^ use 78^ banks and banks operating under the Code of Law for the District 78m, 78n, 78p. of Columbia are vested in the Comptroller of the Currency, (2) with respect to all other member banks of the Federal Eeser\ie System are vested in the Board of Governors of the Federal Reserve System, (3) with respect to all other insured banks are vested in the Federal Deposit Insurance Corporation, and (4) with respect to institutions the accounts of which are insured by the Federal Savings and Loan Insurance Corporation are vested in the Federal Home Loan Bank Board. The Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Federal Home Loan Bank Board shall have the power to make such rules and regulations as may be necessary for the execution of the functions vested in them as provided in this subsection. I n carrying out their responsibilities under this subsection, the agencies named in the first sentence of this subsection shall issue substantially similar regulations to regulations and rules issued by the

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12 USC 1464.

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

Commission under sections 12, 13, 14(a), 14(c), 14(d), 14(f) and 16, unless they find that implementation of substantially similar regulations with respect to insured banks and insured institutions are not necessary or appropriate in the public interest or for protection of invcstors, and publish such findings, and the detailed reasons therefor, -^ ^^^ Federal Registcr. Such regulations of the above-named agencies, or the reasons for failure to publish such substantially similar regulations to those of the Commission, shall be published in the Federal Register within 120 days of the date of enactment of this subsection, and, thereafter, within 60 days of any changes made by the Commission in its iielevant regulations and rules." (c) Paragraph (5) of subsection (1) of section 407 of the National Housing Act, as amended (12 U.S.C. 1730(1)(5)), is amended by inserting after "disclosures" a comma and the following: "including proxy statements and the solicitation of proxies thereby,". (d) Subsection (j) of section 402 of the National Housing Act, as amended (12 LT.S.C. 1725 (j)), is amended to read as follows: " (j)(l) Except as otherwise provided in this subsection, until June 30, 1976, the Corporation shall not approve, under regulations adopted pursuant to this title or section 5 of the Home Owners' Loan ^QI of 1933^ by order or otherwise, a conversion from the mutual to stock form of organization involving or to involve an insured institution, except that this sentence shall not be deemed to limit now or hereafter the authority of the Corporation to approve conversions in supervisory cases. The Corporation may by rule, regulation, or otherwise and under such civil penalties (which may be cumulative to any other remedies) as it may prescribe take whatever action it deems necessary or appropriate to implement or enforce this subsection. (2) The number of applications for conversion which the Corporation may approve pursuant to such regulations prior to such date shall be determined by the Corporation but shall not in any case be in excess of 1 per centum of the total number of all insured institutions in existence on the date of enactment, exclusive of the number of applications submitted for filing prior to May 22, 1973. Provided, that the Corporation shall process to final determination any application submitted for filing prior to May 22, 1973, pursuant to regulations in effect and adopted pursuant to thi& title or section 5 of the Home Owners' Loan Act of 1933: with further proviso that, with respect to a plan of conversion of any such applicant which, before May 22, 1973, has given written public notice to its accountholders of adoption of a plan of conversion or has obtained waiver forms from substantially all its new accountholders subsequent to the giving of such notice, such plan need not require payment for stock distributed to accountholders as of a record date prior to the date of such notice. "(3) Notwithstanding any other provision of law, an insured institution converting in accordance with this subsection may retain its Federal charter. The Corporation shall not, however, permit the conversion of Federally chartered associations in States the laws of which do not authorize the operation of State chartered stock associations, except that the prohibition contained in this sentence shall not apply to the District of Columbia, the Commonwealth of Puerto Rico, or a State where all insured institutions domiciled therein are Federally chartered. "(4) Any aggrieved person may obtain review of a final action of the Federal Home Loan Bank Board or the Corporation which approves, with or without conditions, or disapproves a plan of conversion pursuant to this subsection only by complying with the provisions of subsection (k) of section 408 of this title (12 U.S.C. 1730a (k)) within the time limit and in the manner therein prescribed,

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which provisions shall apply in all respects as if such final action were an order the review of which is therein provided for, except that such F^de^i'i'^R^egrs-" time limit shall commence upon publication of notice of such final ter. action in the Federal Register or upon the giving of such general notice of such final action as is required by or approved under regulations of the Corporation, whichever is later. "(5) The Corporation shall, at least annually and more often as ^^9°'-^^ t° circumstances require, render reports to the Congress on the exercise of its authority under this subsection. "(6) I n implementing the provisions of this subsection the Corporation shall regulate the approvals granted so as to achieve (A) as much geographical dispersion as practicable; (B) an equitable distribution with respect to the size of converting institutions; (C) an appropriate distribution between State chartered and Federally chartered institutions; (D) timeliness of filing; (E) flexibility to the extent possible in plans of conversion taking into account the characteristics of particular converting institutions; (F) the meeting of capital needs; and (G) such other reasonable results as it may consider necessary or appropriate in the public interest." MORATORIUM ON CONVERSION OF FEDERAL DEPOSIT INSURANCE CORPORATION I N S U R E D INSTITUTIONS

SEC. 106, Section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by adding at the end thereof the following new subsection: "(10) Until June 30, 1976, the responsible agency shall not grant any approval required by law which has the practical eifect of permitting a conversion from the mutual to the stock form of organization, including approval of any application pending on the date of enactment of this subsection, except that this sentence shall not be deemed to limit now or hereafter the authority of the responsible agency to grant approvals in cases where the responsible agency finds that it must act in order to maintain the safety, soundness, and stability of an insured bank. The responsible agency may by rule, regulation, or otherwise and under such civil penalties (which shall be cumulative to any other remedies) as it may prescribe take whatever action it deems necessary or appropriate to implement or enforce this subsection." E X T E N S I O N OF F L E X I B L E REGULATION OF I N T E R E S T RATES AUTHORITY

S E C 107. Section 7 of the Act of September 21, 1966 (Public Law 89-597), is amended by striking out "December 31, 1974" and inserting _if use 46i note. in lieu thereof "December 31, 1975". I N C R E A S E DOLLARS L I M I T A T I O N ON THE COST FOR CONSTRUCTION FEDERAL RESERVE B A N K B R A N C H B U I L D I N G S

OF

SEC. 108. The ninth paragraph of section 10 of the Federal Reserve Act, as amended (12 U.S.C. 522), is amended by striking out "$60,000,000" and inserting in lieu thereof "$140,000,000". P U R C H A S E OF UNITED STATES OBLIGATIONS BY FEDERAL RESERVE

BANKS

SEC. 109. (a) Section 14(b) of the Federal Reserve Act, as amended (12 U.S.C. 355), is amended by striking out "November 1, 1973" and inserting in lieu thereof "November 1, 1975" and by striking out "October 31, 1973" and inserting in lieu thereof "October 31, 1976".

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[88 STAT.

SUPERVISORY AUTHORITY OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM OVER B A N K H O L D I N G C O M P A N I E S A N D THE I R N O N B A N K I N G SUBSIDIARIES

12 USC 1841

note

SEC. 110. Subsection (b) of section 8 of the Federal Deposit Insurance Act, as amended (12 U.S.C. 1818(b)), is amended by adding at the end thereof the following new paragraph: "(3) This subsection and subsections (c), (d), (h), (i), (k), (1), (m), and (n) of this section shall apply to any bank holding company, and to any subsidiary (other than a bank) of a holding company, as those terms are defined in the Bank Holding Company Act of 1956, in the same manner as they apply to a State member insured bank." I N D E P E N D E N C E OF F I N A N C I A L REGULATORY

12 USC 250.

AGENCIES

S E C 111. No officer or agency of the United States shall have any authority to require the Securities and Exchange Commission, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Federal Home Loan Bank Board, or the National Credit Union Administration to submit 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 Congress if such recommendations, testimony, or comments to the Congress include a statement indicating that the views expressed therein are those of the agency submitting them and do not necessarily represent the views of the President. I N C R E A S E I N AUTHORITY O F THE TREASURY TO P U R C H A S E FEDERAL H O M E LOAN B A N K OBLIGATIONS

Repayment of

SEC. 112. Subsection (i) of section 11 of the Federal Home Loan Bank Act, as amended (12 U.S.C. 1431 (i)), is amended as follows: (1) I n the fourth sentence of the first paragraph, strike out "subsection" both places it appears and insert in lieu thereof "paragraph". (2) Strike out the second paragraph and insert in lieu thereof the following: " I n addition to obligations authorized to be purchased by the preceding paragraph, the Secretary of the Treasury is authorized to purchase any obligations issued pursuant to this section in amounts not to exceed $2,000,000,000. The authority provided in this paragraph shall expire August 10, 1975. "Notwithstanding the foregoing, the authority provided in this subsection may be exercised during any calendar quarter beginning after the date of enactment of the Depository Institutions Amendments of 1974 only if the Secretary of the Treasury and the Chairman of the Federal Home Loan Bank Board certify to the Congress that (1) alternative means cannot be effectively employed to permit members of the Home I^oan Bank System to continue to supply reasonable amounts of funds to the mortgage market, and (2) the ability to supply such funds is substantially impaired because of monetary stringeucy and a high level of interest rates. Any funds borrowed under this subsection shall be repaid by the Home Loan Banks at the earliest practicable date.". AUTHORITY OF THE FEDERAL H O M E LOAN MORTGAGE CORPORATION TO P U R C H A S E MORTGAGES FROM STATE I N S U R E D INSTITUTIONS

12 USC 1454.

SEC. 113. The first sentence of section 305(a)(1) of the Federal Home Loan Mortgage Corporation Act is amended by inserting "or

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from any financial institution the deposits or accounts of which are insured under the laws of any State if the total amount of time and savings deposits held in all such institutions in that State is more than 20 per centum of the total amount of such deposits in all banks, building and loan, savings and loan, and homestead associations (including cooperative banks) in that State" immediately after "agency of the United States". TECHNICAL

AMENDMENT

SEC. 114. (a) Section 7(d)(2) of the Act of August 16, 1973 (Public Law 93-100), is amended by striking out "the Commonwealth of Puerto Rico,". (b) The amendment made by subsection (a) applies with respect to any taxable year or other taxable period beginning on or after August 16, 1973. FEDERAL

SAVINGS

AND

LOAN INSURANCE CORPORATION RESERVE ADJUSTMENT

SECONDARY

SEC. 115. Paragraph (1) of subsection (d) of section 404 of the National Housing Act, as amended (12 U.S.C. 1727), is amended by inserting " (A) " immediately after " (d)(1) " and by adding at the end thereof the following: " (B)(i) As used in this subparagraph (B), 'minimum net reduction year' means a year in which, at the close of December 31, the aggregate of the primary reserve and secondary reserve equals or exceeds 1 ^ per centum of the total amount of all accounts of insured members of all insured institutions, and 'beginning balance' means, with respect to each insured institution, the amount of such institution's pro rata share, if any, of the secondary reserve as of the close of December 31, 1973, plus any amount or amounts which, after such close, shall have been transferred to such institution under the last sentence of subsection (e) of this section. " (ii) I n May of each year succeeding each of the first ten minimum net reduction years occurring after December 31, 1973, the Corporation shall reduce the amount of each insured institution's pro rata share, if any, of the secondary reserve as of the preceding December 31 by making to the extent available, a cash refund to each such institution of the difference, if any, between such pro rata share and the applicable percentage of its beginning balance prescribed in the following table: Percent of begln-

"Minimum net reduction year: 1 2 3 4 5 6 7 8 9 10

12 USC 548 note.

ning balance 98.1818182 94. 5454546 89. 0909091 81. 8181818 72. 7272727 61. 8181818 49. 0909091 34. 5454546 18.1818182 0. 0000000".

CREDIT U N I O N M A N A G E M E N T: REASONABLE H E A L T H A N D ACCIDENT INSURANCE N O T CONSIDERED C O M P E N S A T I O N

SEC. 116. Section H I, of the Federal Credit Union Act (12 U.S.C. 1761) is amended by striking the period at the end thereof and adding ": Provided, however, That reasonable health, accident, and similar insurance protection shall not be considered compensation under regulations promulgated by the Administrator.".

"Minimum i reduction yet

"Beginning balance."

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TITLE II — N A T I O N A L COMMISSION ON E L E C T R O N I C FUND TRANSFERS ESTABLISHMENT

12 USC 2401.

gpj(.^ 201. There is established the National Commission on Electronic Fund Transfers (hereinafter referred to as the "Commission") which shall be an independent instrumentality of the United States. MEMBERSHIP

12 USC 2402.

g^^^ ^202, (a) The Commission shall be composed of twenty-six members as follows: (1) the Chairman of the Board of Governors of the Federal Reserve System or his delegate; (2) the Attorney General or his delegate; (3) the Comptroller of the Currency or his delegate; (4) the Chairman of the Federal Home Loan Bank Board or his delegate; (5) the Administrator of the National Credit Union Administration or his delegate; (6) the Chairman of the Board of Directors of the Federal Deposit Insurance Corporation or his delegate; (7) the Chairman of the Federal Communications Commission or his delegate; (8) the Postmaster General or his delegate; (9) the Secretary of the Treasury or his delegate; (10) the Chairman of the Federal Trade Commission or his delegate; (11) two individuals, appointed by the President, one of whom is an official of a State agency which regulates banking, or similar financial institutions, and one of whom is an official of a State agency which regulates thrift or similar financial institutions; (12) seven individuals, appointed by the President, who are officers or employees of, or who otherwise represent banking, thrift, or other business entities, including one representative each of commercial banks, mutual savings banks, savings and loan associations, credit unions, retailers, nonbanking institutions offering credit card services, and organizations providing interchange services for credit cards issued by banks; (13) five individuals, appointed by the President, from private life who are not affiliated with, do not represent and have no substantial interest in any banking, thrift, or other financial institution, including but not limited to credit unions, retailers, and insurance companies; (14) the Comptroller General of the United States or his delegate; and (15) the Director of the Office of Technology Assessment. (b) The Chairperson shall be designated by the President at the time of his appointment from among the members of the Commission and such selection shall be by and with the advice and consent of the Senate unless the appointee holds an office to which he was appointed by and with the advice and consent of the Senate. (c) A vacancy in the Commission shall be filled in the manner in which the original appointment was made. FUNCTIONS

12'us'e 2403

^^^* ^^^' (^) '^^^ Commission shall conduct a thorough study and investigation and recommend appropriate administrative action and

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legislation necessary in connection with the possible development of public or private electronic fund transfer systems, taking into account, among other things— (1) the need to preserve competition among the financial institutions and other business enterprises using such a system; (2) the need to promote competition among financial institutions and to assure Government regulation and involvement or participation in a system competitive with the private sector be kept to a minimum; (3) the need to prevent unfair or discriminatory practices by any financial institution or business enterprise using or desiring to use such a system; (4) the need to afford maximum user and consumer convenience; (5) the need to afford maximum user and consumer rights to privacy and confidentiality; (6) the impact of such a system on economic and monetary policy; (7) the implications of such a system on the availability of credit; (8) the implications of such a system expanding internationaly and into other forms of electronic communications; and (9) the need to protect the legal rights of users and consumers. (b) The Commission shall make an interim report within one year of its findings and recommendations and at such other times as it deems advisable and shall transmit to the President and to the Congress not later than two years after the date of enactment of this Act a final report of its findings and recommendations. Any such report shall include all hearing transcripts, staff studies, and other material used in preparation of the report. The interim and final reports shall be made available to the public upon transmittal. Sixty days after transmission of its final report the Commission shall cease to exist. (c) The Commission shall not be required to obtain the clearance of any Federal agency prior to the transmittal of any interim or final report.

Interim report. F i n a l report to P r e s i d e n t and C o n g r e s s,

Termination date.

POWERS OF COMMISSION

SEC. 204. (a) The Commission may for the purpose of carrying out this Act hold such hearings, sit and act at such times and places, take such testimony, and receive such evidence, as the Commission may deem advisable. The Commission may administer oaths of affirmations to witnesses appearing before it. (b) When so authorized by the Commission, any member or agent of the Commission may take any action which the Commission is authorized to take by this section. (c) The Commission may secure directly from any department or agency of the United States information necessary to enable it to carry out this Act. Upon request of the Chairperson of the Commission, the head of such department or agency shall furnish such information to the Commission. (d)(1) The Commission shall have power to issue subpenas requiring the attendance and testimony of witnesses and the production of any evidence that relates to any matter under investigation by the Commission. Such attendance of witnesses and the production of such evidence may be required from any place within the United States at any designated place of hearing within the United States. (2) If a person issued a subpena under paragraph (1) refuses to obey such subpena or is guilty of contumacy, any court of the United States within the judicial district within which the hearing is con« 38-194 O - 76 - 13 Pt. 2

Hearings. 12 USC 2404.

Subpenas.

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[88 STAT.

ducted or within the judicial district within which such person is found or resides or transacts business may (upon application by the Commission) order such person to appear before the Commission to produce evidence or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be punished by such court as a contempt thereof. (3) The subpenas of the Commission shall be served in the manner provided for subpenas issued by a United States district court under the Federal Rules of Civil Procedure for the United States district courts. (4) All process of any court to which application may be made under this section may be served in the judicial district wherein the pereon required to be served resides or may be found. ADMINISTRATION 12 USC 2405.

5 USC 101 et seq. 5 USC 5101, 5331. 5 USC 5332 note. Experts and consultants. Audits, report to Congress.

SEC. 205, (a) The Commission— (1) may appoint with the advice and consent of the Senate and fix the compensation of an Executive Director, and such additional staff pereonnel as he deems necessary, without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and without regard to cJiapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, but at rates not in excess of the maximum rate for GS-18 of the General Schedule under section 5332 of such title; and (2) may procure temporary and intermittent services to the same extent as is authorized by section 3109 of title 5, United States Code, but at rates not to exceed $150 a day for individuals. (b) The Comptroller General is authorized to make detailed audits of the books and records of the Commission, and shall report the results of any such audit to the Commission and to the Congress. COMPENSATION

12 USC 2406.

SEC. 206. (a) A member of the Commission who is an officer or employee of the United States shall serve as a member of the Commission without additional compensation, but shall be entitled to reimbursement for travel, subsistence, and other necessary expenses incurred in the performance of his duties as a member of the Commission. (b) A member of the Commission who is not otherwise an officer or employee of the United States shall be compensated at a rate of $150 per day when engaged in the performance of his duties as a member of the (commission, and shall also be reimbursed for travel, subsistence, and other necessary expenses incurred in the performance of his duties as a member of the Commission. ASSISTANCE OF GOVERNMENT AGENCIES

12 USC 2407.

SEC. 207. (a) Each department, agency, and instrumentality of the executive branch of the Government, including independent agencies, is authorized and directed to furnish to the Commission, upon request, such data, reports, and other information as the Commission deems necessary to carry out its functions under this title. (b) The head of any department, agency, or instrumentality of the United States may detail such personnel and may furnish such services, with or without reimbursement, as the Commission may request to assist it in carrying out its functions.

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AUTHORIZATION OF APPROPRIATIONS

SEC. 208. There are authorized to be appropriated without fiscal year limitations such sums, not to exceed $2,000,000, as may be necessary to carry out the provisions of this title. TITLE III—FAIR CREDIT BILLING

12 USC 24os.

^-'^ c;-'^" Billing Act.

§ 301. Short title This title may be cited as the " F a i r Credit Billing Act". J^l use leoi § 302. Declaration of purpose The last sentence of section 102 of the Truth in Lending Act (15 U.S.C. 1601) is amended by striking out the period and inserting in lieu thereof a comma and the following: "and to protect the consumer against inaccurate and unfair credit billing and credit card practices." § 303. Definitions of creditor and open end credit plan The first sentence of section 103(f) of the Truth in Lending Act (15 U.S.C. 1602(f)) is amended to read as follows: "The term 'creditor' refers only to creditors who regularly extend, or arrange for the i extension of, credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, whether in connection with loans, sales of property or services, or otherwise. For the purposes of the requirements imposed under Chapter 4 and sections 127(a)(6), 127(a)(7), 127(a)(8), 127 (b)(1), 127(b)(2), 127(b)(3), 127(b)(9), and 127(b) (11) of Chapter 2 of this Title, the term 'creditor' shall also include card issuers whether ^°^j' P- ^ ^ ^ ^ • or not the amount due is payable by agreement in more than four 15 USC 1637, installments or the payment of a finance charge is or may be required, and the Board shall, by regulation, apply these requirements to such card issuers, to the extent appropriate, even though the requirements are by their terms applicable only to creditors offering open end credit plans. § 304. Disclosure of fair credit billing rights (a) Section 127(a) of the Truth in l and i n g Act (15 U.S.C. 1637 (a)) is amended by adding at the end thereof a new paragraph as follows: "(8) A statement, in a form prescribed by regulations of the Board of the protection provided by sections 161 and 170 to an Post, pp. 1512, obligor and the creditor's responsibilities under sections 162 and ^^^^' 170. With respect to each of two billing cycles per year, at semiannual intervals, the creditor shall transmit such statement to each obligor to whom the creditor is required to transmit a statement pursuant to section 127(b) for such billing cycle." (b) Section 127(c) of such Act (15 U.S.C. 1637(c)) is amended to read: "(c) I n the case of any existing account under an open end consumer credit plan having an outstanding balance of more than $1 at or after the close of the creditor's first full billing cycle under the plan after the effective date of subsection (a) or any amendments thereto, the items described in subsection (a), to the extent applicable and not previously disclosed, shall be disclosed in a notice mailed or delivered to the obligor not later than the time of mailing the next statement required by subsection (b). " § 305. Disclosure of billing contact Section 127(b) of the Truth in Lending Act (16 U.S.C. 1637(b)) is amended by adding at the end thereof a new paragraph as follows:

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"(11) The address to be used by the creditor for the purpose of receiving billin<>j inquiries from the obligor." § 306. Billing practices The Truth in Lending Act (15 U.S.C. 1601-1665) is amended by adding at the end thereof a new chapter as follows: "Chapter 4—CREDIT BILLING "Sec.

"161. "162. "163. "164. "165. "166. "167. "168. "169. "170. "171.

15 USC 1666. Ante, p. 1511. Ante,

p. 1511.

Correction of billing errors. Regulation of credit reports. Length of billing period. Prompt crediting of payments. Crediting excess payments. Prompt notification of returns. Use of cash discounts. Prohibition of tie-in services. Prohibition of offsets. Rights of credit card customers. Relation to State laws,

"§ 161. Correction of billing errors " (a) If a creditor, within sixty days after having transmitted to an obligor a statement of the obligor's account in connection with an extension of consumer credit, receives at the address disclosed under section 127(b) (11) a written notice (other than notice on a payment stub or other payment medium supplied by the creditor if the creditor so stipulates with the disclosure required under section 127(a)(8)) from the obligor in which the obligor— "(1) sets forth or otherwise enables the creditor to identify the name and account number (if any) of the obligor, "(2) indicates the obligor's belief that the statement contains a billing error and the amount of such billing error, and "(3) sets forth the reasons for the obligor's belief (to the extent applicable) that the statement contains a billing error, the creditor shall, unless the obligor has, after giving such written notice and before the expiration of the time limits herein specified, agreed that the statement was correct— " (A) not later than thirty days after the receipt of the notice, send a written acknowledgement thereof to the obligor, unless the action required in subparagraph (B) is taken within such thirtyday period, and " (B) not later than two complete billing cycles of the creditor (in no event later than ninety days) after the receipt of the notice and prior to taking any action to collect the amount, or any part thereof, indicated by the obligor under paragraph (2) either— " (i) make appropriate corrections in the account of the obligor, including the crediting of any finance charges on amounts erroneously billed, and transmit to the obligor a notification of such corrections and the creditor's explanation of any change in the amount indicated by the obligor under paragraph (2) and, if any such change is made and the obligor so requests, copies of documentary evidence of the obligor's indebtedness; or "(ii) send a written explanation or clarification to the obligor, after having conducted an investigation, setting forth to the extent applicable the reasons why the creditor believes the account of the obligor was correctly shown in the statement and. upon request of the obligor, provide copies of documentary evidence of the obligor's indebtedness. I n the case of a billing error where the obligor alleges that the creditor's billing statement reflects goods not delivered to

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text: Dictionary of National Biography, 1885-1900/Williams, Robert (1767-1850)


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the obligor or his designee in accordance with the agreement made at the time of the transaction, a creditor may not construe such amount to be correctly shown unless he determines that such goods were actually delivered, mailed, or otherwise sent to the obligor and provides the obligor with a statement of such determination. After complying with the provisions of this subsection with respect to an alleged billing error, a creditor has no further responsibility under this section if the obligor continues to make substantially the same allegation with respect to such error. " (b) For the purpose of this section, a 'billing error' consists of any of the following: " (1) A reflection on a statement of an extension of credit which was not made to the obligor or, if made, was not in the amount reflected on such statement. "(2) A reflection on a statement of an extension of credit for which the obligor requests additional clarification including documentary evidence thereof. "(3) A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction. "(4) The creditor's failure to reflect properly on a statement a payment made by the obligor or a credit issued to the obligor. "(5) A computation error or similiar error of an accounting nature of the creditor on a statement. " (6) Any other error described in regulations of the Board. "(c) For the purposes of this section, 'action to collect the amount, or any part thereof, indicated by an obligor under paragraph (2) ' does not include the sending of statements of account to the obligor following written notice from the obligor as specified under subsection (a), if— "(1) the obligor's account is not restricted or closed because of the failure of the obligor to pay the amount indicated under paragraph (2) of subsection (a), and "(2) the creditor indicates the payment of such amount is not required pending the creditor's compliance with this section. Nothing in this section shall be construed to prohibit any action by a creditor to collect any amount which has not been indicated by the obligor to contain a billing error. " (d) Pursuant to regulations of the Board, a creditor operating an open end consumer credit plan may not, prior to the sending of the written explanation or clarification required under paragraph (B) (ii), restrict or close an account with respect to which the obligor has indicated pursuant to subsection (a) that he believes such account to contain a billing error solely because of the obligor's failure to pay the amount indicated to be in error. Nothing in this subsection shall be deemed to prohibit a creditor from applying against the credit limit on the obliefor's account the amount indicated to be in error. "(e) Any creditor who fails to comply with the requirements of this section or section 162 forfeits any right to collect from the obligor the amount indicated by the obligor under paragraph (2) of subsection (a) of this section, and any finance charges thereon, except that the amount required to be forfeited under this subsection may not exceed $50. " (a) After receiving a notice from an obligor as provided in section 161(a), a creditor or his agent may not directly or indirectly threaten
 * '§ 162. Regulation of credit reports

1513

Definitions.

Noncompliance.

^^ ^^^ ^^^^^•

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to report to any person adversely on the obligor's credit rating or credit standing because of the obligor's failure to pay the amount indicated by the obligor under section 161(a)(2), and such amount may not be reported as delinquent to any third party until the creditor has met the requirements of section 161 and has allowed the obligor the same number of days (not less than ten) thereafter to make payment as is provided under the credit agreement with the obligor for the payment of undisputed amounts. "(b) If a creditor receives a further written notice from an obligor that an amount is still in dispute within the time allowed for payment under subsection (a) of this section, a creditor may not report to any third party that the amount of the obligor is delinquent because the obligor has failed to pay an amount which he has indicated under section 161(a)(2), unless the creditor also reports that the amount is in dispute and, at the same time, notifies the obligor of the name and address of each party to whom the creditor is reporting information concerning the delinquency. "(c) A creditor shall report any subsequent resolution of any delinquencies reported pursuant to subsection (b) to the parties to whom such delinquencies were initially reported. "§ 163. Length of billing period 15 USC 1666b. " (a) If an open end consumer credit plan provides a time period within which an obligor may repay any portion of the credit extended without incurring an additional finance charge, such additional finance charge may not be imposed with respect to such portion of the credit extended for the billing cycle of which such period is a part unless a statement which includes the amount upon which the finance charge for that period is based was mailed at least fourteen days prior to the date specified in the statement by which payment must be made in order to avoid imposition of that finance charge. " (b) Subsection (a) does not apply in any case where a creditor has been prevented, delayed, or hindered in making timely mailing or delivery of such periodic statement within the time period specified in such subsection because of an act of God, war, natural disaster, strike, or other excusable or justifiable cause, as determined under regulations of the Board. "§ 164. Prompt crediting of payments 15 USC 1666c, "Payments received from an obligor under an open end consumer credit plan by the creditor shall be posted promptly to the obligor's account as specified in regulations of the Board. Such regulations shall prevent a finance charge from being imposed on any obligor if the creditor has received the obligor's payment in readily identifiable form in the amount, manner, location, and time indicated by the creditor to avoid the imposition thereof. "§ 165. Crediting excess payments 15 USC 1666d. "Whenever an obligor transmits funds to a creditor in excess of the total balance due on an open end consumer credit account, the creditor shall promptly (1) upon request of the obligor refund the amount of the overpayment, or (2) credit such amount to the obligor's account. 15 USC i666e. "With rcspcct to any sales transaction where a credit card has been used to obtain credit, where the seller is a person other than the card issuer, and where the seller accepts or allows a return of the goods or forgiveness of a debit for services which were the subject of such sale, the seller shall promptly transmit to the credit card issuer, a credit statement with respect thereto and the credit card issuer shall credit the account of the obligor for the amount of the transaction.
 * § 166. Prompt notification of returns

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"§ 167. Use of cash discounts " (a) With respect to credit card which may be used for extensions of credit in sales transactions in which the seller is a person other than the card issuer, the card issuer may not, by contract or otherwise, prohibit any such seller from offering a discount to a cardholder to induce the cardholder to pay by cash, check, or similar means rather than use a credit card. "(b) With respect to any sales transaction, any discount not in excess of 5 per centum offered by the seller for the purpose of inducing payment by cash, check, or other means not involving the use of a credit card shall not constitute a finance charge as determined under section 106, if such discount is offered to all prospective buyers and its availability is disclosed to all prospective buyers clearl}^ and conspicuously in accordance with regulations of the Board. "§ 168. Prohibition of tie-in services "Notwithstanding any agreement to the contrary, a card issuer may not require a seller, as a condition to participating in a credit card plan, to open an account with or procure any other service from the card issuer or its subsidiary or agent. "§ 169. Prohibition of offsets "(a) A card issuer may not take any action to offset a cardholder's indebtedness arising in connection with a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer unless— "(1) such action was previously authorized in writing by the cardholder in accordance with a credit plan whereby the cardholder agrees periodically to pay debts incurred in his open end credit account by permitting the card issuer periodically to deduct all or a portion of such debt from the cardholder's deposit account, and "(2) such action with respect to any outstanding disputed amount not be taken by the card issuer upon request of the cardholder. In the case of any credit card account in existence on the effective date of this section, the previous written authorization referred to in clause (1) shall not be required until the date (after such effective date) when such account is renewed, but in no case later than one year after such effective date. Such written authorization shall be deemed to exist if the card issuer has previously notified the cardholder that the use of his credit card account will subject any funds which the card issuer holds in deposit accounts of such cardholder to offset against any amounts due and payable on his credit card account which have not been paid in accordance with the terms of the agreement between the card issuer and the cardholder. "(b) This section does not alter or affect the right under State law of a card issuer to attach or otherwise levy upon funds of a cardholder held on deposit with the card issuer if that remedy is constitutionally available to creditore generally. "§ 170. Rights of credit card customers " (a) Subject to the limitation contained in subsection (b), a card issuer who has issued a credit card to a cardholder pursuant to an open end consumer credit plan shall be subject to all claims (other than tort claims) and defenses arising out of any transaction in which the credit card is used as a method of payment or extension of credit if (1) the obligor has made a good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction from the person honoring the credit card; (2) the amount of the initial

1515

15 USC 1666f.

15 USC 1666g.

15 USC 1666h.

15 USC 16661

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transaction exceeds $50; and (3) the place where the initial transaction occurred was in the same State as the mailing address previously provided by the cardholder or was within 100 miles from such address, except that the limitations set forth in clauses (2) and (3) with respect to an obligor's right to assert claims and defenses against a card issuer shall not be applicable to any transaction in which the person honoring the credit card (A) is the same person as the card issuer, (B) is controlled by the card issuer, (C) is under direct or indirect common control with the card issuer, (D) is a franchised dealer in the card issuer's products or services, or (E) has obtained the order for such transaction through a mail solicitation made by or participated in by the card issuer in which the cardholder is solicited to enter into such transaction by using the credit card issued by the card issuer. "(b) The amount of claims or defenses asserted by the cardholder may not exceed the amount of credit outstanding with respect to such transaction at the time the cardholder first notifies the card issuer or the person honoring the credit card of such claim or defense. For the purpose of deterrriining the amount of credit outstanding in the preceding sentence, payments and credits to the cardholder's account are deemed to have been applied, in the order indicated, to the payment of: (1) late charges in the order of their entry to the account; (2) finance charges in order of their entry to the account; and (3) debits to the account other than those set forth above, in the order in which each debit entry to the account was made. "§ 171. Relation to State laws " (a) This chapter does not annul, alter, or affect, or exempt any person subject to the provisions of this chapter from complying with, the laws of any State with respect to credit billing practices, except to the extent that those laws are inconsistent with any provision of this chapter, and then only to the extent of the inconsistency. The Board is authorized to determine whether such inconsistencies exist. The Board ma^ not determine that any State law is inconsistent with any provision of this chapter if the Board determines that such law gives greater protection to the consumer. " (b) The Board shall by regulation exempt from the requirements of this chapter any class of credit transactions within any State if it determines that under the law of that State that class of transactions is subject to requirements substantially similar to those imposed under this chapter or that such law gives greater protection to the consumer, and that there is adequate provision for enforcement." § 307. Conforming amendments (a) The table of chapters of the Truth in Lending Act is amended by adding immediately under item 3 the following: "4. CREDIT B IIX I N G

161"

(b) Section 111(d) of such Act (15 U. S. C 1610(d)) is amended by striking out "and 130" and inserting in lieu thereof a comma and the following: "130, and 166". (c) Section 121(a) of such Act (15 U.S.C. 1631(a)) is amended— (1) by striking out "and upon whom a finance charge is or may be imposed"; and (2) by inserting "or chapter 4" immediately after "this chapter". (d) Section 121(b) of such Act (15 U.S.C. 1631 (b)) is amended by inserting "or chapter 4 " immediately after "this chapter". (e) Section 122(a) of such Act (15 U.S.C. 1632(a)) is amended by inserting "or chapter 4" immediately after "this chapter".

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(f) Section 122(b) of such Act (15 U. S. C 1632(b)) is amended by inserting "or chapter 4" immediately after "this chapter". § 308. Effective date This title takes effect upon the expiration of one year after the date of its enactment.

1517

is use leee

TITLE IV—AMENDMENTS TO THE T R U T H I N LENDING ACT §401. Advertising; more-than-four-installment rule (a) Chapter 3 of the Truth in Lending Act (15 U.S.C. 1661-1665) is amended by adding at the end thereof a new section as follows: "Any advertisement to aid, promote, or assist directly or indirectly the extension of consumer credit repayable in more than four installments shall, unless a finance charge is imposed, clearly and conspicuously state, in accordance with the regulations of the Board: " ' THE COST OF C R E D I T I S I N C L U D E D I N THE P R I C E Q U O T E D FOR THE GOODS A N D SERVICES. ' " (h) The table of sections of such chapter is amended by adding at the end thereof a new item as follows:
 * '§ 146. More-than-four-installment rule

^^ use leesa.

"146. More-than-four-installment rule.".

§ 402. Agricultural credit exemption Section 104 of the Truth in Lending Act (15 U.S.C. 1603) is amended by adding at the end thereof a new paragraph as follows: "(5) Credit transactions primarily for agricultural purposes in which the total amount to be financed exceeds $25,000." u - f ^ § 403. Administrative enforcement (a) Section 108(a) of the Truth in Lending Act (15 U.S.C. 1607 (a)) is amended by striking out paragraph (4) and by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively. (b) Section 108(a) of such Act (15 U.S.C. 1607(a)) is amended by adding at the end thereof a new paragraph as follows: "(6) the F a r m Credit Act of 1971, by the Farm Credit Ad- _\l use 2001 ministration with respect to any Federal land bank, Federal land note. "" ° bank association, Federal intermediate credit bank, or production credit association." § 404. Liens arising by operation of State law Section 125 of the Truth in Lending Act (15 U.S.C. 1635) is amended— (1) by striking out "is" the first time it appears in the first sentence of subsection (a) and inserting in lieu thereof ", including any such interest arising by operation of law, is or will be"; and (2) by inserting after "obligor" the second time it appears in the first sentence of subsection (b) the following: ", including any such interest arising by operation of law,". § 405. Time limit for right of rescission Section 125 of the T r u t h in Lending Act (15 U.S.C. 1635) is amended by adding at the end thereof a new subsection as follows: " (f) An obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs earlier, notwithstanding the fact that the disclosures required under this section or any other material dis-

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closures required under this chapter have not been delivered to the obligor." § 406. Good faith compliance Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended by adding at the end thereof a new subsection as follows: " (f) No provision of this section or section 112 imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the Board, notwithstanding that after such act or omission has occurred, such rule, regulation, or interpretation is amended, rescinded, or determined by judicial or other authority to be invalid for any reason." § 407. Liability for multiple disclosures Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended by adding at the end thereof a new subsection as follows: " (g) The multiple failure to disclose to any person any information required under this chapter to be disclosed in connection with a single account under an open end consumer credit plan, other single consumer credit sale, consumer loan, or other extension of consumer credit, shall entitle the person to a single recovery under this section but continued failure to disclose after a recovery has been granted shall give rise to rights to additional recoveries." § 408. Civil liability (a) Section 130(a) of the Truth in l and i n g Act (15 U.S.C. 1640(a)) is amended to read as follows: " (a) Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this chapter or chapter 4 of this title with respect to any person is liable to such person in an amount equal to the sum of— "(1) any actual damage sustained by such person as a result of the failure; "(2)(A) in the case of an individual action twice the amount of any finance charge in connection with the transaction, except that the liability under this subparagraph shall not be less than $100 nor greater than $1,000; or " (B) in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery in such action shall not be more than the lesser of $100,000 or 1 per centum of the net worth of the creditor; and "(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court. In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor's failure of compliance was intentional." (b) Section 130(b) of such Act (15 U.S.C. 1640(b)) is amended by inserting after "this section" the first place it appears the following: "for any failure to comply with any requirement imposed under this chapter,". (c) Section 130(c) of such Act (15 U.S.C. 1640(c)) is amended by striking out "chapter" and inserting in lieu thereof "title". (d) Section 130 of such Act (15 U.S.C. 1640) is amended by adding at the end thereof a new subsection as follows: " (h) A person may not take any action to offset any amount for which a creditor is potentially liable to such person under subsection

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(a)(2) against any amount owing to such creditor by such person, unless the amount of the creditor's liability to such person has been determined by judgment of a court of competent jurisdiction in an action to which such person was a party." (e) The amendments made by sections 406, 407, and 408 shall apply ^J^^ use i64o in determining the liability of any person under chapter 2 or 4 of the Truth in Lending Act, unless prior to the date of enactment of this Act such liability has been determined by final judgment of a court of competent jurisdiction and no further review of such judgment may be had by appeal or otherwise. § 409. Full statement of closing costs Section 121 of the Truth in Lending Act (15 U.S.C. 1631) is, amended by adding at the end thereof a new subsection as follows: "(c) For the purpose of subsection (a), the information required under this chapter shall include a full statement of closing costs to be incurred by the consumer, which shall be presented, in accordance with the regulations of the Board— "(1) prior to the time when any downpayment is made, or "(2) m the case of a consumer credit transaction involving real property, at the time the creditor makes a commitment with respect to the transaction. The Board may provide by regulation that any portion of the information required to be disclosed by this section may be given in the form of estimates where the provider of such information is not in a position to know exact information." § 410. Business use of credit cards ] (a) Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631-1644) is amended by adding the following new section at the end thereof: "The exemption provided by section 104(1) does not apply to the 15 USC 1645. provisions of sections 132, 133, and 134, except that a card issuer and ^^ use i642, a busmess or other organization which provides credit cards issued 1643, 1644. by the same card issuer to ten or more of its employees may by contract agree as to liability of the business or other organization with respect to unauthorized use of such credit cards without regard to the provisions of section 133, but in no case may such business or other organization or card issuer impose liability upon any employee with respect to unauthorized use of such a credit card except in accordance with and subject to the limitations of section 133." (b) The table of sections of such chapter is amended by adding at the end thereof a new item as follows: "135. Business credit cards.".
 * § 135. Business credit cards

§ 411. Identification of transaction Section 127(b)(2) of the Truth in Lending Act (15 U.S.C. 1637 (b)(2)) is amended to read as follows: "(2) The amount and date of each extension of credit during the period and a brief identification on or accompanying the statement of each extension of credit in a form prescribed by regulations of the Board sufficient to enable the obligor to identify the transaction, or relate it to copies of sales vouchers or similar instruments previously furnished." §412. Exemption for State lending agencies Section 125(e) of the Truth in Lending Act (15 U.S.C. 1635(e)) is amended by striking the period at the end thereof and adding the following: "or to a consumer credit transaction in which an agency of a State is the creditor."

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§ 413. Liability of assignees (a) Chapter 1 of the Truth in Lending Act (15 U.S.C. 1601-1613) is amended by adding at the end thereof a new section as follows: "§ 115. Liability of assignees "Except as otherwise specifically provided in this title, any civil action for a violation of this title which may be brought against the original creditor in any credit transaction may be maintained against any subsequent assignee of the original creditor where the violation from which the alleged liability arose is apparent on the face of the instrument assigned unless the assignment is involuntary." (b) The analysis of such chapter is amended by adding at the end thereof a new item as follows: "115. Liability of assignees.".

Penalty.

§ 414. Credit card fraud Section 134 of the Truth in Lending Act (15 U.S.C. 1644) is amended to read as follows: "§ 134. Fraudulent use of credit card " (a) Whoever knowingly in a transaction affecting interstate or foreign commerce, uses or attempts or conspires to use any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card to obtain money, goods, services, or anything else of value which within any one-year period has a value aggregating $1,000 or more; or "(b) Whoever, with unlawful or fraudulent intent, transports or attempts or conspires to transport in interstate or foreign commerce a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained; or "(c) Whoever, with unlawful or fraudulent intent, uses any instrumentality of interstate or foreign commerce to sell or transport a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained; or " (d) Whoever knowingly receives, conceals, uses, or transport money, goods, services, or anything else of value (except tickets for interstate or foreign transportation) which (1) within any one-year period has a value aggregating $1,000 or more, (2) has moved in or is part of, or which constitutes interstate or foreign coromerce, and (3) has been obtained with a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card; or "(e) Whoever knowingly receives, conceals, uses, sells, or transports in interstate or foreign commerce one or more tickets for interstate or foreign transportation, which (1) within any one-year period have a value aggregating $500 or more, and (2) have been purchased or obtained with one or more counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit cards; or "(f) Whoever in a transaction affecting interstate or foreign commerce furnishes money, property, services, or anything else of value, which within any one-year period has a value aggregating $1,000 or more, through the use of any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained— shall be fined not more than $10,000 or imprisoned not more than ten year-s, or both."

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§ 415. Grace period for consumers Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended— (1) by amending subsection (a)(1) to read as follows: "(1) The conditions under which a finance charge may be imposed, including the time period (if any) within which any credit extended may be repaid without incurring a finance charge, except that the creditor may, at his election and without disclosure, impose no such finance charge if payment is received after the termination of such time period."; and (2) by amending subsection (b) (10) to read as follows: "(10) The date by which or the period (if any) within which, payment must be made to avoid additional finance charges, except that the creditor may, at his election and without disclosure, impose no such additional finance charge if payment is received after such date or the termination of such period." § 416. Effective date This title takes effect upon the date of its enactment, except that sections 409 and 411 take effect upon the expiration of one year after the date of its enactment.

is use leesa

TITLE V—EQUAL C R E D I TO P P O R T U N I T Y § 501. Short title This title may be cited as the "Equal Credit Opportunity Act". •^

^

1X

.7

^''"^i Credit Opportunity Act.

§ 502. Findings and purpose is use i69i The Congress finds that there is a need to insure that the various 15 USC i69i financial institutions and other firms engaged in the extensions of note. credit exercise their responsibility to make credit available with fairness, impartiality, and without discrimination on the basis of sex or marital status. Economic stabilization would be enhanced and competition among the various financial institutions and other firms engaged in the extension of credit would be strengthened by an absence of discrimination on the basis of sex or marital status, as well as by the informed use of credit which Congress has heretofore sought to promote. I t is the purpose of this Act to require that financial institutions and other firms engaged in the extension of credit make that credit equally available to all creditworthy customers without regard to sex or marital status. § 503. Amendment to the Consumer Credit Protection Act The Consumer Credit Protection Act (Public Law 90-321), is „^\l^^^ ^^^^ note. amended by adding at the end thereof a new title VII: "TITLE VII—EQUAL CREDIT OPPORTUNITY "Sec.

"701. "702. "703. "704. "705. "706. "707.

Prohibited discrimination. Definitions. Regulations. Administrative enforcement, Relation to State laws. Civil liability. Effective date.

"§ 701. Prohibited discrimination " (a) I t shall be unlawful for any creditor to discriminate against any applicant on the basis of sex or marital status with respect to any aspect of a credit transaction. " (b) An inquiry of marital status shall not constitute discrimination for purposes of this title if such inquiry is for the purpose of ascer-

15 USC 1691.

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[88 STAT.

taining the creditor's rights and remedies applicable to the particular extension of credit, and not to discriminate in a determination of creditworthiness. "§702. Definitions IS use 1691a. " (a) The definitions and rules of construction set forth in this section are applicable for the purposes of this title. "(b) The term 'applicant' means any person who applies to a creditor directly for an extension, renewal, or continuation of credit, or applies to a creditor indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit. "(c) The term 'Board' refers to the Board of Governors of the Federal Reserve System. " (d) The term 'credit' means the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor. " (e) The term 'creditor' means any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit. " (f) The term 'person' means a natural person, a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association. " (g) Any reference to any requirement imposed under this title or any provision thereof includes reference to the regulations of the Board under this title or the provision thereof in question. "§703. Regulations 15 USC 1691b. "The Board shall prescribe regulations to carry out the purposes of this title. These regulations may contain but are not limited to such classifications, differentiation, or other provision, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Board are necessary or proper to effectuate the purposes of this title, to prevent circumvention or evasion thereof, or to facilitate or substantiate compliance therewith. Such regulations shall be prescribed as soon as possible after the date of enactment of this Act, but in no event later than the effective date of this Act. "§ 704. Administrative enforcement IS use 1691c. " (a) Compliance with the requirements imposed under this title shall be enforced under: 12 USC 1818. "(1) Section 8 of the Federal Deposit Insurance Act, in the case of— " (A) national banks, by the Comptroller of the Currency, " (B) member banks of the Federal Reserve System (other than national banks), by the Board, " (C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), by the Board of Directors of the Federal Deposit Insurance Corporation. 12 USC 1464. «(2) Section 5(d) of the Home Owners' Loan Act of 19.33, 12 USC 1730. section 407 of the National Housing Act, and sections 6(i) and 143^7"^^ ^426, ^ 17 of the Federal Honie Loan Bank Act, by the Federal Home Loan Bank Board (acting directly or through the Federal Savings and Loan Insurance Corporation), in the case of any institution subject to any of those provisions. 12 USC 1751. "(3) The Federal Credit Union Act, by the Administrator of the National Credit Union Administration with respect to any Federal Credit Union.

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"(4) The Acts to regulate commerce, by the Interstate Commerce Commission with respect to any common carrier subject to "(5) The Federal Aviation Act of 1958, by the Civil Aero- „t^ "^"^ ' ' ° ' l * - r »

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l

•

•

(

»

•

•

. note.

nautics Board with respect to any air carrier or foreign air carrier subject to that Act. "(6) The Packers and Stockyards Act, 1921 (except as provided ^J^^^'^ ^^^ in section 406 of that Act), by the Secretary of Agriculture with? use 226, 227. respect to any activities subject to that Act. " (7) The Farm Credit Act of 1971, by the Farm Credit Admin- 12 USC 2001 istration with respect to any Federal land bank. Federal land "°*^' bank association, Federal intermediate credit bank, and production credit association; "(8) The Securities Exchange Act of 1934, by the Securities ^^ use 78a. and Exchange Commission with respect to brokers and dealers; and " (9) The Small Business Investment Act of 1958, by the_Small is use 661 Business Administration, with respect to small business invest- "°*^" ment companies. "(b) For the purpose of the exercise by any agency referred to in subsection (a) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act. I n addition to its powers under any provision of law specifically referred to in subsection (a), each of the agencies referred to in that subsection may exercise for the purpose of enforcing compliance with any requirement imposed under this title, any other authority conferred on it by law. The exercise of the authorities of any of the agencies referred to in subsection (a) for the purpose of enforcing compliance with any requirement imposed under this title shall in no way preclude the exercise of such authorities for the purpose of enforcing compliance with any other provision of law not relatin^r to the prohibition of discrimination on the basis of sex or marital status with respect to any aspect of a credit transaction. "(c) Except to the extent that enforcement of the requirements imposed under this title is specifically committed to some other Government agency under subsection (a), the Federal Trade Commission shall enforce such requirements. For the purpose of the exercise by the Federal Trade Commission of its functions and powers under the Federal Trade Commission Act, a violation of any requirement imposed under this title shall be deemed a violation of a requirement imposed under that Act. All of the functions and powers of the Federal Trade Commission under the Federal Trade Commission Act are available to the Commission to enforce compliance by any person with the requirements imposed under this title, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests in the Federal Trade Commission Act. ^^ use 58. " (d) The authority of the Board to issue regulations under this title does not impair the authority of any other agency designated in this section to make rules respecting its own procedures in enforcing compliance with requirements imposed under this title. "§ 705. Relation to State laws " (a) A request for the signature of both parties to a marriage for ^^ use i69id. the purpose of creating a valid lien, passing clear title, waiving inchoate rights to property, or assigning earnings, shall not constitute discrimination under this title: Provided, however, That this provision shall not be construed to permit a creditor to take sex or marital

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15 USC 1691e.

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

status into account in connection with the evaluation of creditworthiness of any applicant. "(b) Consideration or application of State property laws directly or indirectly affecting creditworthiness shall not constitute discrimination for purposes of this title. "(c) Any provision of State law which prohibits the separate extension of consumer credit to each party to a marriage shall not apply in any case where each party to a marriage voluntarily applies for separate credit from the same creditor: Provided, That in any case where such a State law is so preempted, each party to the marriage shall be solely responsible for the debt so contracted. " (d) When each party to a marriage separately and voluntarily applies for and obtains separate credit accounts with the same creditor, those accounts shall not be aggregated or otherwise combined for purposes of determining permissible finance charges or permissible loan ceilings under the laws of any State or of the United States. "(e) Except as otherwise provided in this title, the applicant shall have the option of pursuing remedies under the provisions of this title in lieu of, but not in addition to, the remedies provided by the laws of any State or governmental subdivision relating to the prohibition of discrimination on the basis of sex or marital status with respect to any aspect of a credit transaction. "§ 706. Civil liability " (a) Any creditor who fails to comply with any requirement imposed under this title shall be liable to the aggrieved applicant in an amount equal to the sum of any actual damages sustained by such applicant acting either in an individual capacity or as a representative of a class. "(b) Any creditor who fails to comply with any requirement imposed under this title shall be liable to the aggrieved applicant for punitive damages in an amount not greater than $10,000, as determined by the court, in addition to any actual damages provided in section 706(a): Provided, however, That in pursuing the recovery allowed under this subsection, the applicant may proceed only in an individual capacity and not as a representative of a class. "(c) Section 706(b) notwithstanding, any creditor who fails to comply with any requirement imposed under this title may be liable for punitive damages in the case of a class action in such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery in such action shall not exceed the lesser of $100,000 or 1 percent of the net worth of the creditor. In determining the amoiint of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor's failure of compliance was intentional. " (d) When a creditor fails to comply with any requirement imposed under this title, an aggrieved applicant may institute a civil action for preventive relief, including an application for a permanent or temporary injunction, restraining order, or other action. "(e) In the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court shall be added to any damages awarded by the court under the provisions of subsections (a), (b), and (c) of this section. "(f) No provision of this title imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule.

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regulation, or interpretation thereof by the Board, notwithstanding that after such act or omission has occurred, such rule, regulation, or interpretation is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. " is) Without regard to the amount in controversy, any action under this title may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation. "§ 707. Effective date "This title takes effect upon the expiration of one year after the date of its enactment.".

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is use i69i note.

TITLE VI—DISPOSITION OF ABANDONED MONEY ORDERS AND TRAVELER'S CHECKS FINDINGS

SEC. 601. The Congress finds and declares that— (1) the books and records of banking and financial organizations and business associations engaged in issuing and selling money orders and traveler's checks do not, as a matter of business practice, show the last known addresses of purchasers of such instruments; (2) a substantial majority of sudh purchasers reside in the States where such instruments are purchased; (3) the States wherein the purchasers of money orders and traveler's checks reside should, as a matter of equity among the several States, be entitled to the proceeds of such instruments in the event of abandonment; (4) it is a burden on interstate commerce that the proceeds of such instruments are not being distributed to the States entitled thereto; and (5) the cost of maintaining and retrieving addresses of purchasers of money orders and traveler's checks is an additional burden on interstate commerce since it has been determined that most purchasers reside in the State of purchase of such instruments.

12 USC 2501.

,

DEFINITIONS

SEC. 602. As used in this title— (1) "banking organization" means any bank, trust company, savings bank, safe deposit company, or a private banker engaged in business in the United States; (2) "business association" means any corporation (other than a public corporation), joint stock company, business trust, partnership, or any association for business purposes of two or more individuals; and (3) "financial organization" means any savings and loan association, building and loan association, credit union, or investment company engaged in business in the United States.

12 USC 2502.

STATE ENTITLED TO ESCHEAT OR TAKE CUSTODY

SEC. 603. Where any sum is payable on a money order, traveler's check, or other similar written instrument (other than a third party bank check) on which a banking or financial organization or a business association is directly liable— (1) if the books and records of such banking or financial organization or business association show the State in which such 38-194 O - 76 -14 Pt. 2

12 USC

2503.

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money order, traveler's check, or similar written instrument was purchased, that State shall be entitled exclusively to escheat or take custody of the sum payable on such instrument, to the extent of that State's power under its own laws to escheat or take custody of such sum; (2) if the books and records of such banking or financial organization or business association do not show the State in which such money order, traveler's check, or similar written instrument was purchased, the State in which the banking or financial organization or business association has its principal place of business shall be entitled to escheat or take custody of the sum payable on such money order, traveler's check, or similar written instrument, to the extent of that State's power under its own laws to escheat or take custody of such sum, until another State shall demonstrate by written evidence that it is the State of purchase; or (3) if the books and records of such banking or financial organizations or business association show the State in which such money order, traveler's check, or similar written instrument was purchased and the laws of the State of purchase do not provide for the escheat or custodial taking of the sum payable on such instrument, the State in which the banking or financial organization or business association has its principal place of business shall be entitled to escheat or take custody of the sum payable on such money order, traveler's check, or similar written instrument, to the extent of that State's power under its own laws to escheat or take custody of such sum, subject to the right of the State of purchase to recover such sum from the State of principal place of business if and when the law of the State of purchase makes provision for escheat or custodial taking of such sum. APPLICABILITY

note ^^^^ ^^°^

^^^' ^^^* ^^^^ *i^l® shall be applicable to sums payable on money orders, traveler's checks, and similar written instruments deemed abandoned on or after February 1, 1965, except to the extent that such sums have been paid over to a State prior to January 1, 1974. Approved October 28, 1974. Public Law 93-496

October 28, 1974 [H. R. 15427]

AN ACT rji(j amend the Rail Passenger Service Act of 1970 to provide financial assistance to the National Railroad Passenger Corporation, and for other purposes.

Be it enacted by the Senate and House of Representatives of the mim^A^'t ^^^I97A' ^^^'^^^ States of America in Congress assembled, That this Act may be 45 USC 501 cited as the "Amtrak Improvement Act of 1974". "National Rail^^^- ^- Section 304(b) of the Eail Passenger Service Act of 1970 road Passenger (45 U.S.C. 544(b)) is amended by striking out "owned" and inserting Corporation, stock j ^ lieu thcreof "voted", and by adding at the end thereof the followownership.

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ing new sentence: "If any railroad or any person controlling one or more railroads, as defined in section 1(3)(b) of the Interstate Commerce Act (49 U.S.C. 1(3)(b)), owns, directly or indirectly through subsidiaries or affiliated companies, nominees, or any person subject to its direction or control, a number of shares in excess of 33^3 per centum of the total number of common shares issued and outstanding, such excess number shall, for voting and quorum purposes, be deemed to be not issued and outstanding.". SEC. 3. Section 305 of such Act (45 U.S.C. 545) is amended by adding at the end thereof the following new subsections: "(f) The Corporation shall, to the maximum extent practicable, directly perform all maintenance, rehabilitation, repair, and refurbishment of rail passenger equipment. Until the Corporation obtains, by purchase, lease, construction, or any other method of acquisition. Corporation-owned or controlled facilities which are adequate for the proper maintenance, repair, rehabilitation, and refurbishment of the rolling stock and other equipment and facilities of the Corporation, the railroads performing such services shall do so as expeditiously as possible. " (g) The Corporation shall advise, consult and cooperate with, and, upon request, is authorized to assist in any other manner the Secretary, the United States Railway Association, the Corps of Engineers, and the Consolidated Rail Corporation in order to facilitate completion and implementation of the Northeast Corridor project, as defined in section 206(a)(3) of the Regional Rail Reorganization Act of 1973, by the earliest practicable date. The Secretary shall assign the highest priority to the completion of such project.". SEC. 4. Section 305 of such Act is amended by adding at the end thereof the following new subsection: "(f) The Secretary of the Treasury shall establish and maintain, in cooperation with the Corporation, customs inspection procedures aboard trains operated in international intercity rail passenger service under paragraph (7) of subsection (e) of this section, which procedures will be convenient for passengers and will result in the most rapid possible transit between embarkation and debarkation points on such service.". SEC. 5. (a) Section 403 of such Act (45 U.S.C. 563) is amended by striking out subsections (b) and (c) and inserting in lieu thereof the following new subsection; " (b) Any State, regional, or local agency may request of the Corporation rail passenger service beyond that included within the basic system. The Corporation shall institute such service if the State, regional, or local agency agrees to reimburse the Corporation for 66% per centum of the solely related costs and associated capital costs of such service, including interest on passenger equipment, less revenues attributable to such service.". (b) Such section 403 is amended by redesignating subsection (d) as subsection (c) and by adding at the end of such subsection the following new sentence: " I n carrying out the provisions of this subsection, the Secretary shall give priority to experimental routes designed to extend intercity rail passenger service to the major population area of each of the contiguous 48 States which does not have such service to any large population area designated as part of the basic system.".

1527

Passenger equipment maintenance and repair.

Northeast Corridor project, completion.

45 USC 716. Customs inspection, procedures.

Rail service beyond b a s i c system.

Experimental routes. 45 USC 563.

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 1528 45 USC 545.

Intermodal transportation terminal, design and construction.

Intercity rail p a s s e n g e r service, land acquisition.

Financial, t e c h n i c a l, and advisory assistance. 49 USC 1653.

Criteria.

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[88 STAT.

SEC. 6. Section 305(d)(1) of such Act (45 U.S.C. 305(d)(1)) is amended to read as follows: " (d)(1) The Corporation is authorized, to the extent financial resources are available— " (A) to acquire any property which the Secretary, acting in furtherance of his responsibility to design and construct an intermodal transportation terminal at Union Station in the District of Columbia, requests, upon assurance of full reimbursement by the Secretary; and " (B) to acquire any riglit-of-way, land, or other property (except right-of-way, land, or other property of a railroad or property of a State or political subdivision thereof or of any othei' governmental agency), which is required for the construction of tracks or other facilities necessary to provide intercity rail passenger service; by the exercise of the right of eminent domain, in accordance with the provisions of this subsection, in the district court of the United States for the judicial district in which such property is located or in any such court if a single piece of property is located in more than one judicial district: Provided, That such riglit may only be exercised when the Corporation cannot acquire such property by contract or is unable to agree M'ith the owner as to the amount of compensation to be paid.". "(i)(1) The Secretary shall provide financial, technical, and advisory assistance in accordance with this subsection for the purpose of (A) promoting on a feasibility demonstration basis the conversion of not less than three railroad passenger terminals into intermodal transportation terminals; (B) preserving railroad passenger terminals that have a reasonable likelihood of being converted or otherwise maintained pending the formulation of plans for reuse; and (C) stimulating State and local governments, local and regional transportation authorities, common carriers, philanthropic organizations, and other responsible persons to develop plans for the conversion of railroad passenger terminals into intermodal transportation terminals and civic and cultural activity centers. "(2) Financial assistance for the purpose set forth in paragraph (1)(A) of this subsection shall be granted in accordance with the following criteria: (A) the railroad terminal can be converted to accommodate such other modes of transportation as the Secretary deems appropriate, including motorbus transportation, mass transit (rail or rubber tire), and airline ticket offices and passenger terminal providing direct transportation to area airports; (B) the railroad passenger terminal is listed on the National Register of Historic Places maintained by the Secretary of the Interior; (C) the architectural integrity of the railroad passenger terminal will be preserved and such judgment is concurred in by consultants recommended by the Chairman of the National Endowment of the Arts and the Advisory Council on Historic Preservation and retained for this purpose by the Secretary; (D) to the extent practicable, the use of station facilities for transportation purposes may be combined with use for other civic and cultural activities, especially when such use is recommended by the Advisory Council

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