Transparency and consumer empowerment in small-dollar lending

(a) Small-Dollar consumer credit transactions (1) In general The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended— (A) by inserting after section 109 (15 U.S.C. 1608) the following: 110. Registration requirement for small-dollar lenders (a) Definition In this section, the term small-dollar consumer credit transaction — (1) means any transaction that extends credit that is— (A) made to a consumer in an amount that is not more than— (i) $5,000; or (ii) such greater amount as the Bureau may, by rule, determine to reflect changes in the Consumer Price Index for all urban consumers published by the Department of Labor; and (B) extended pursuant to an agreement that is— (i) (I) other than an open end credit plan; and (II) payable in 1 or more installments of less than 12 months; (ii) an open end credit plan in which each advance is fully repayable within a defined time or in connection with a defined event, or both; or (iii) any other plan as the Bureau determines, by rule; and (2) includes any action that facilitates, brokers, arranges, or gathers applications for a transaction described in paragraph (1). (b) Registration requirement A person shall register with the Bureau before issuing credit in a small-dollar consumer credit transaction.; and (B) in section 173 (15 U.S.C. 1666j), by adding at the end the following: (d) Notwithstanding any other provision of this title, any small-dollar consumer credit transaction, as defined in section 110(a), shall comply with the laws of the State in which the consumer to which credit in the transaction is extended resides with respect to annual percentage rates, interest, fees, charges, and such other similar or related matters as the Bureau may, by rule, determine if the small-dollar consumer credit transaction is— (1) made— (A) over the internet; (B) by telephone; (C) by facsimile; (D) by mail; (E) by electronic mail; or (F) through another electronic communication; or (2) conducted by a national bank.. (2) Technical and conforming amendment The table of sections for chapter 1 of the Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by inserting after the item relating to section 109 the following: 110. Registration requirement for small-dollar lenders.. (b) Prohibition on certain fees Section 915 of the Electronic Fund Transfer Act (15 U.S.C. 1693l–1) is amended— (1) by redesignating subsection (d) as subsection (e); and (2) by inserting after subsection (c) the following: (d) Additional fees prohibited (1) Definition In this subsection, the term prepaid account has the meaning given the term in section 1005.2 of title 12, Code of Federal Regulations, or any successor regulation. (2) Prohibition With respect to the use of a prepaid account by a consumer— (A) it shall be unlawful for any person to charge the consumer a fee for an overdraft with respect to the prepaid account; (B) any transaction for an amount that exceeds the account balance of the prepaid account may be declined by the financial institution holding the prepaid account; and (C) the Bureau may, by rule, prohibit any person from charging a fee with respect to the prepaid account (other than a fee described in subparagraph (A)) so that the Bureau may— (i) prevent unfair, deceptive, or abusive practices; and (ii) promote the ability of the consumer to understand and compare the costs of prepaid accounts..