Sec. 3. Internet Consumer Credit Corporations

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In accordance with the provisions of this Act, and regulations prescribed pursuant to this Act, the Comptroller shall charter creditors which shall become Internet consumer credit corporations (hereinafter referred to as Internet creditors ) to offer financial products or services primarily to underserved consumers and small businesses as provided for in this Act. A person that desires to obtain a Federal charter under this Act shall submit an application to the Comptroller at such time, in such manner, and accompanied by such information as the Comptroller may require. The Comptroller shall make a determination as to whether an application submitted under paragraph

(1)is approved or denied expeditiously. In seeking a Federal charter under this Act, an applicant shall meet the following requirements: A business plan shall be established covering at least the initial 3-year period of operation as a commercially viable entity with its primary business activities being to serve the needs of underserved consumers and small businesses for credit and related financial services through the Internet and electronic devices and not through brick-and-mortar locations, and such plan shall— realistically forecast market demand, the intended customer base, competition, economic conditions, financial projections, and business risks; include a marketing plan that describes the types of financial products or services such creditor intends to offer, how it will market them, and how such products or services are expected to be affordable for underserved consumers and small businesses and commercially viable for the creditor; and contain an acceptable plan for— ensuring compliance with all applicable laws and regulations; and for promptly addressing complaints from underserved consumers and small businesses. A competent and experienced management team of good moral character with expertise in and a commitment to serving the credit needs of underserved consumers, experience in offering financial services products to consumers through the Internet or electronic devices, and awareness and understanding of applicable legal requirements shall be established. Adequate capital structure relative to the operational and financial assumptions and business plans of the applicant, including the cost of utilizing advanced technology and information management systems for its operating and compliance needs, shall be established. No Internet creditor shall be directly or indirectly owned or controlled by any person unless— the person is an individual, a Federal- or State-chartered depository institution, a bank holding company (as defined in section 2(a) of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1841(a) )), a savings and loan holding company (as defined in section 10(a)(1)(D) of the Home Owners’ Loan Act ( 12 U.S.C. 1467a(a)(1)(D) )), or a nonprofit corporation; or the primary business activity of the person involves— providing financial products or services to consumers; or owning or controlling persons whose primary business activity is providing financial products or services to consumers. Any other requirements provided for under this Act or in regulations prescribed by the Comptroller consistent with the purposes of this Act. Upon receiving a Federal charter pursuant to subsection (a), an Internet creditor shall become, as from the date of the execution of its charter, a body corporate, and, as such, an Internet consumer credit corporation, and in the name designated in the charter it is authorized to— adopt and use a corporate seal; have succession from the date its charter is issued until such time as it be dissolved by the act of its shareholders owning two-thirds of its stock, or until its charter is revoked by the Comptroller, or until terminated by an Act of Congress, or until its affairs are placed in the hands of a receiver and finally wound up by the receiver in accordance with title 11, United States Code, or other applicable law; borrow money, issue stock, and enter into contracts; sue and be sued and complain and defend, in any court of law and equity of competent jurisdiction, as fully as natural persons; elect or appoint directors, and by its board of directors to appoint a president, vice president, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places; prescribe, by its board of directors, bylaws not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed; hire employees and consultants and fix their compensation, define their duties, and give such persons appropriate authority to carry on its business operations; enter into joint ventures and other business partnerships with other Internet creditors, depository institutions, State-chartered or licensed nondepository creditors, third-party service providers and vendors, and other parties to promote or facilitate providing as herein authorized commercially viable financial products or services to underserved consumers and small businesses; contribute to community funds, or to charitable, philanthropic, or benevolent instrumentalities conducive to public welfare, such sums as its board of directors may deem expedient and in the interests of the Internet creditor; invest in, or buy or lease, real estate or tangible personal property, including vehicles, equipment, furnishings and furniture, to be used by the Internet creditor in conducting business related operations authorized under this Act; provide loans and other financial services only through the Internet and electronic devices as its board of directors or duly authorized officers or agents may determine, in accordance with this Act and regulations prescribed pursuant to this Act, are appropriate for providing financial products or services to consumers, including underserved consumers, and to small businesses in accordance with the provisions of this Act and regulations prescribed pursuant to this Act; exercise by its board of directors or duly authorized officers or agents, subject to law, all such incidental, implied, or reasonably necessary powers as may be appropriate to carry on its corporate operations and the business of providing commercially viable financial products or services to consumers, including underserved consumers and small businesses in accordance with the provisions of this Act and regulations prescribed pursuant to this Act; be affiliated with, or owned by, an insured depository institution, nondepository creditor, nonprofit organization, or other qualified entities unless otherwise limited by this Act or regulations prescribed pursuant to this Act; acquire or merge with other Internet creditors; and exercise such other powers as may be reasonably necessary or appropriate to offer financial products or services as provided for pursuant to this Act, or provided for through regulations prescribed by the Comptroller pursuant to the provisions of this Act. The Comptroller shall— ensure that Internet creditors only provide loans and other financial products or services through the Internet and electronic devices and that, to the extent reasonably possible, such creditors primarily focus their business operations on providing underserved consumers a variety of affordable financial products or services that are commercially viable for such creditors, including certain products or services that contain features to facilitate personal savings and enhance the credit record of such consumers; encourage and facilitate— innovation with respect to the financial products or services offered to underserved consumers; and joint ventures and other business partnerships among Internet creditors, insured depository institutions, other nondepository creditors, third-party service providers and vendors, nonprofit organizations, and other parties in order to ensure greater credit access for underserved consumers and small businesses; provide, through regulations, details on how Internet creditors should be organized, incorporated, and operated in a prudential manner; conduct examination and supervisory activities of Internet creditors to— access their internal controls and management ability; evaluate their financial condition and risk profile; determine if they are meeting the needs of underserved consumers and small businesses; and monitor their compliance with this Act and other applicable laws and regulations that the Comptroller may have administrative responsibly for, and identify areas in which corrective action is needed; consult, cooperate and coordinate, as appropriate, with the Director and with other Federal and State regulatory agencies, including State bank supervisors, to promote much greater availability of innovative, affordable, commercially viable credit for underserved consumers, and consistent regulatory treatment of consumer and small business financial products and services; help ensure that the supervisory activities, including examination schedules, of Internet creditors and affiliated companies are conducted in a coordinated and efficient manner; and adopt adequate safeguards to ensure appropriate privacy and confidentiality protections with respect to individually identifiable personal data and proprietary corporate data. The Director shall— regulate the offering and provision of consumer financial products or services by Internet creditors under the Federal consumer financial laws pursuant to its authorities under the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301 et seq. ), this Act, and regulations prescribed pursuant to this Act; consult, cooperate, and coordinate, as appropriate, with the Comptroller and with other Federal and State regulatory agencies, including State bank supervisors, to promote— much greater availability of innovative, affordable, commercially viable credit for underserved consumers and small businesses; and consistent regulatory treatment of consumer and small business financial products or services; help ensure that the supervisory activities, including examination schedules, of Internet creditors and affiliated companies are conducted in a coordinated and efficient manner; and adopt adequate safeguards to ensure appropriate privacy and confidentially protections with respect to individually identifiable personal data and proprietary corporate data. Each Internet creditor shall— make financial education information available to each consumer it offers a financial product or service, including information on how a consumer may obtain financial counseling services, the benefits of following a regular personal savings program, and how consumers can improve their credit ratings; comply with all applicable Federal laws and regulations, including Federal consumer financial protection law requirements and such State laws, regulations, and enforcement actions as are authorized under the provisions of this Act; provide account access to its customers through the Internet and a toll-free telephone number; provide, in accordance with regulations prescribed pursuant to this Act, to all consumers who are extended credit with a repayment term of 1 year or less by the Internet creditor a clear and conspicuous statement in the loan agreement that discloses the true cost of the loan, including all interest, fees, and other loan-related charges, as a dollar amount and as a percentage of the principal amount of the loan in lieu of the annual percentage rate disclosure that otherwise would be required under the Truth in Lending Act ( 15 U.S.C. 1601 et seq. ) or regulations prescribed pursuant to such Act; report to the Comptroller or Director such data as either may require regarding its activities, including the types of financial products or services provided to underserved consumers and small businesses, and data demonstrating that its business activities are focused primarily on serving underserved consumers and small businesses as required by this Act; offer— an underserved consumer who is unable to repay an extension of credit by an Internet creditor that has a loan repayment term of less than 120 days, an extended repayment plan, at no cost to the consumer, at least once in a 12-month period; and to the extent reasonably possible, certain financial products or services that contain features to facilitate personal savings that could help underserved consumers enhance their credit records if such consumers fully comply with the terms and conditions of such products or services; and not— accept consumer or commercial deposits; make commercial loans, except to the extent allowed by the provisions of this Act and regulations prescribed pursuant to this Act, with respect to small businesses; make a consumer loan with a term of 30 days or less; make a loan that requires a consumer to repay the loan balance in one lump-sum payment; or extend credit to a consumer— unless the Internet creditor has a reasonable basis for believing that the consumer will have the ability to repay the credit extension; if the maximum principal amount of the credit outstanding from all financial products or services authorized by the Internet creditor to such consumer, in the case of an unsecured credit transaction, exceeds $5,000, or in the case of a secured credit transaction, $25,000, unless a higher amount is authorized by regulations prescribed by the Comptroller; or if the loan terms include a prepayment penalty; or extend credit to a small business in excess of $25,000. Financial products or services that may be offered to underserved consumers pursuant to this subsection for underserved consumers and certain small businesses may also be offered to other consumers and businesses. Nothing in this Act is intended to provide the Comptroller or the Director with the authority to— regulate financial products or services that are provided or offered by an affiliate company or another entity that the Internet creditor has a business relationship with, but the Internet creditor does not provide or offer to underserved consumers or small businesses in accordance with this Act; determine, directly or indirectly, pricing applicable to an extension of credit offered by an Internet creditor to a consumer or small business pursuant to this Act through a usury limit, a cap on the rate of interest, fees, or other charges, or otherwise; prohibit, directly or indirectly, the offering of a financial product or service to underserved consumers or small businesses by an Internet creditor pursuant to this Act unless a determination is made by the Comptroller or Director, based on a fair and reasonable determination of the facts and circumstances regarding the financial product or service, that offering such a product or service will seriously harm the financial interests of underserved consumers or small businesses; or presume or conclude that a credit extension offered to underserved consumers by an Internet creditor under the provisions of this Act, regulations prescribed by this Act, and such other statutes and regulations as either may have administrative and enforcement authority for is unfair, abusive, or otherwise inappropriate solely on the basis that the interest rates and other charges to such consumers, who typically pose relatively high credit risks, are significantly higher than those on credit extensions offered to other consumers who do not pose such high credit risks. Each Internet creditor shall pay to the Comptroller an annual fee in a reasonable amount that the Comptroller determines is sufficient, in the aggregate of all such fees paid by Internet creditors, to offset the cost to the Comptroller of carrying out the provisions of this Act. The Comptroller, pursuant to procedures established in regulations prescribed by the Comptroller, may suspend or revoke the charter of an Internet creditor if there has been a material failure by the Internet creditor to comply with the requirements set forth in the charter, provisions of this Act, or other applicable statutes, regulations, or orders. An Internet creditor is subject to— all otherwise applicable provisions of Federal statutes and regulations, including the consumer financial laws listed under section 1002(14) of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481(14) ), section 987 of title 10, United States Code (relating to consumer credit extended to servicemembers and dependents), and the provisions of this Act and regulations established pursuant to this Act; and the administration and enforcement of such statutes and regulations by the Comptroller, the Director, any other Federal agency, or State attorney general (or the equivalent thereof) having enforcement authority. An Internet creditor, or an employee, agent, or other business partner of an Internet creditor, shall not be subject to— State laws that relate to office location, licensing, education, or training that apply to the operations of an Internet creditor, or its employees, agents, or other business partners to the extent that these operations relate to the exercise of its powers or authorities under this Act and implementing regulations to provide financial products or services to underserved consumers and small businesses; or other State laws that— have a discriminatory effect on an Internet creditor compared to the effect of such laws on any other depository or nondepository creditor chartered or licensed in that State; consistent with the legal standard for preemption in the decision of the Supreme Court of the United States in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 (1996), prevent or significantly interfere with the exercise by an Internet creditor of its powers and authorities as set forth in this Act; or are preempted by any provision of Federal law. An Internet creditor may challenge the applicability of a State law as preventing or significantly interfering with the exercise of such creditor’s powers under this Act, or for violating any provision of paragraph (2), in any court of competent jurisdiction, and the Comptroller or Director, by regulation or order, or any court of competent jurisdiction may make a determination, on a case-by-case basis, that a State law prevents or significantly interferes with the exercise of an Internet creditor’s powers under this Act, or violates a provision of paragraph (2), in accordance with applicable law. The Comptroller or the Director may enforce in any court of competent jurisdiction the provisions of this Act, regulations prescribed pursuant to this Act relating to their respective regulatory authority in this Act, and their respective cease and desist or other orders or regulatory requirements. The attorney general (or the equivalent thereof) of any State shall have the power to investigate violations of this Act and may bring a civil enforcement action in the name of such State against an Internet creditor in any district court of the United States or in State court that has jurisdiction over the Internet creditor and to secure civil penalties and such other remedies under provisions of this Act or otherwise provided under other applicable law. When initiating any action in a court or other administrative or regulatory proceeding against any Internet creditor as authorized by this Act to enforce any provision of this Act, including any regulation pursuant to this Act, a copy of the complete complaint filed or to be filed and written notice describing such action or proceeding shall be provided to the Comptroller and the Director by the State attorney general (or the equivalent thereof) prior to or immediately upon instituting the action or proceeding. The notification required under this paragraph shall, at a minimum, describe— the identity of the parties; the alleged facts underlying the proceeding; and whether there may be a need to coordinate the prosecution of the proceeding so as not to interfere with any action, including any rulemaking, undertaken by the Comptroller or the Director. In any action brought by a State attorney general (or equivalent thereof), the Comptroller and Director may— intervene in the action as a party; and upon intervening— remove the action to the appropriate United States district court, if the action was not originally brought there; be heard on all matters arising in the action; and appeal any order or judgment, to the same extent as any other party in the proceeding may. The Comptroller and the Director shall jointly prescribe regulations to implement the requirements of this subsection and, from time to time, consult with State attorneys general (or the equivalent thereof) in order to develop appropriate protocols to coordinate actions with the State attorneys general and other appropriate regulators. No provision of this Act shall be construed as modifying, limiting, or superseding the operation of any provision of any Federal consumer financial protection law or regulations prescribed pursuant to such laws that relates to the authority of a State attorney general (or the equivalent thereof) to enforce such Federal law and regulations. The relief available for violations of provisions of this Act, regulations prescribed pursuant to this Act, or orders or supervisory mandates, including cease and desist orders, with respect to proceedings involving Internet creditors by the Comptroller, the Director, or State attorneys general (or the equivalent thereof) shall be the same as or equivalent to that provided with respect to actions by the Director in section 1055 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5565). Not later than 180 days after the effective date of this Act, and annually for 5 years thereafter, the Comptroller and the Director shall submit to Congress a joint report on their activities and progress in helping to expand access to innovative and affordable credit for underserved consumers and small businesses, and such reports shall include— a descriptive summary of the actions of the Comptroller and the Director during the reporting period to carry out the purposes of this Act; the number of charter applications received by the Comptroller; the number of charter applications that were approved, disapproved, conditionally approved, or are pending and a detailed explanation of each disapproval or conditional approval; a description of any further actions the Comptroller or the Director believes should be undertaken to— facilitate the chartering of qualified nondepository institutions; and increase the number of financial products that are available to help increase competition and consumer choice for underserved consumers; and any recommendations the Comptroller or the Director may have regarding other legislative measures that would improve the ability of an Internet creditor to provide additional financial products or services to underserved consumers or small businesses. The Comptroller and the Director shall consult and prescribe joint regulations implementing the provisions of this Act not later than 180 days after the effective date of this Act.

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