Sec. 2. Interest rate reduction
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Section 107 of the Truth in Lending Act ( 15 U.S.C. 1606 ) is amended by adding at the end the following new subsection: Notwithstanding subsection
(a)or any other provision of law, but except as provided in paragraph (2), the annual percentage rate applicable to any extension of credit may not exceed the lesser of— 15 percent on unpaid balances, inclusive of all finance charges; or the maximum rate permitted by the laws of the State in which the consumer resides. Any fees that are not considered finance charges under section 106(a) may not be used to evade the limitations of this paragraph, and the total sum of such fees may not exceed the total amount of finance charges assessed. The Board may establish, after consultation with the appropriate committees of Congress, the Secretary of the Treasury, and any other interested Federal financial institution regulatory agency, an annual percentage rate of interest ceiling exceeding the 15-percent annual rate under paragraph
(1)for periods of not to exceed 18 months, upon a determination that— money market interest rates have risen over the preceding 6-month period; and prevailing interest rate levels threaten the safety and soundness of individual lenders, as evidenced by adverse trends in liquidity, capital, earnings, and growth. The limitation in paragraph
(1)does not apply with respect to any extension of credit by an insured credit union, as that term is defined in section 101 of the Federal Credit Union Act ( 12 U.S.C. 1752 ). The taking, receiving, reserving, or charging of an annual percentage rate or fee greater than that permitted by paragraph (1), when knowingly done, shall be deemed a violation of this title, and a forfeiture of the entire interest which the note, bill, or other evidence of the obligation carries with it, or which has been agreed to be paid thereon. If an annual percentage rate or fee greater than that permitted under paragraph
(1)has been paid, the person by whom it has been paid, or the legal representative thereof, may, by bringing an action not later than 2 years after the date on which the usurious collection was last made, recover back from the lender in an action in the nature of an action of debt, the entire amount of interest, finance charges, or fees paid. Any creditor who violates this subsection shall be subject to the provisions of section 130. Nothing in this section may be construed to preempt any provision of State law that provides greater protection to consumers than is provided in this section. . Section 130(a) of the Truth in Lending Act ( 15 U.S.C. 1640(a) ) is amended by inserting section 107(f), before this chapter .
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