Full text of Fair Credit Billing Act and Equal Credit Opportunity Act

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1500

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

amended by striking the semicolon and the word "the" after the words
"section 250 of title 28" and inserting in lieu thereof a colon and the
following: ''''Provided^ That expenditures for food, rations, or provisions shall not be deemed payments on the claim. The".
Approved October 27, 1974.
Public Law 93-495
October 28, 1974
[ H . R . 11221]

AN ACT
To increase deposit insurance from $20,000 to $40,000, to provide full insurance
for public unit deposits of $100,000 per account, to establish a National
Commission on Electronic Fund Transfers, and for other purposes.

Be it enacted by the Senate and House of Representatives
Federal deposit United States of America in Congress assembled^
insurance,
crease.

T I T L E I — A M E N D M E N T S TO AND E X T E N S I O N S O F P R O V I S I O N S O F L A W R E L A T I N G TO F E D E R A L R E G U L A TION OF DEPOSITORY INSTITUTIONS
F U L L DEPOSIT I N S U R A N C E FOR P U B L I C

12 u s e 181
note.

Infra.

Insured ba n k s ,
public funds in.
coverage.

of the

UNITS

SECTION 101. (a) The Federal Deposit Insurance Act is amended—
(1) in subsection (m) of section 3 (12 U.S.C. 1813(m)), by
inserting immediately after "depositor" in the first sentence the
following: "(other than a depositor referred to in the third sentence of this subsection)";
(2) in subsection (i) of section 7 (12 U.S.C. 1817(i)), by striking out "Trust" and inserting in lieu thereof the following:
"Except with respect to trust funds which are owned by a depositor referred to in paragraph (2) of section 11(a) of this Act,
trust"; and
(3) in subsection (a) of section 11 (12 U.S.C. 1821(a)), by
inserting " ( 1 ) " immediately after " ( a ) " , by striking out "The"
in the last sentence and inserting in lieu thereof the following:
"Except as provided in paragraph (2), the", and by inserting at
the end of such subsection the following:
" (2) (A) Notwithstanding any limitation in this Act or in any other
provision of law relating to the amount of deposit insurance available
for the account of any one depositor, in the case of a depositor who is—
"(i) an officer, employee, or agent of the United States having
official custody of public funds and lawfully investing or depositing the same in time and savings deposits in an insured bank;
"(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 or depositing the same in time and savings deposits in
an insured bank in such State;
"(iii) an officer, employee, or agent of the District of Columbia
having official custody of public funds and lawfully investing or
depositing the same in time and savings deposits in an insured
bank in the District of Columbia; or
"(iv) an officer, employee, or agent of the Commonwealth of
Puerto Rico, of the Virgin Islands, of American Samoa, or of
Guam, or of any county, municipality, or political subdivision
thereof having official custody of public funds and lawfully investing or depositing the same in time and savings deposits in a.n
insured bank in the Commonwealth of Puerto Rico, the Virgin
Islands, American Samoa, or Guam, respectively;

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

1501

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 I V of the National Housing Act is amended—
loarasloclf
(1) in section 401(b) (12 U.S.C. 1724(b)), by striking out tio^ns?pubuc'
"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

1502

PUBLIC LAW 93-495-OCT. 28, 1974

12 u s e 1464.

Study.
42 u s e 4275
note.

Report to
Congress.

12 u s e 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 I N S U R A N C E : FEDERAL DEPOSIT I N S U R A N C E
CORPORATION

12

note.

use

1813

Effective d a t e .
use 1813

12

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.

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

1503

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

SEC. 103. (a) The following provisions of title I V 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) Section405(a) (12U.S.C. 1728(a)).
(b) The amendments made by this section are not applicable to
12 use 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 I N S U R A N C E : 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 I I 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 use 1737
claim arising out of the closing of a credit union for liquidation on n o t e .
account of bankruptcy or insolvency pursuant to section 207 of title I I
of the Federal Credit Union Act (12 U.S.C. 1787) prior to the effective
date of this section.
date.
(c) The amendment made by this section shall take effect on the Effective
12 u s e 1787
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 use 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

1504
78m "iln ^78^'
™' "' ^'
Publication in
F^ederai Regis-

12 use 1464.

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

Commisslon 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,

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

1505

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 I N S U R A N C E
CORPORATION I N S U R E D I N S T I T U T I O N S

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 O F F L E X I B L E REGULATION O F 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 T H E 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 U N I T E D 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".

1506

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

SUPERVISORY A U T H O R I T Y OF T H E BOARD OF GOVERNORS OF T H E 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 T H E I R N O N B A N K I N G SUBSIDIARIES

12 use 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 use 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 A U T H O R I T Y O F T H E 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.".
A U T H O R I T Y OF T H E 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 I N S T I T U T I O N S

12 use 1454.

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

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

1507

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 I N S U R A N C E
CORPORATION
RESERVE A D J U S T M E N T

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 u s e 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
I N S U R A N C E 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."

1508

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

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

12 use 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 use 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 i-epresent 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

STAT. ]

1509

PUBLIC LAW 93-495-OCT. 28, 1974

legislation necessary in connection with tlie 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 internationally
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 C O M M I S S I O N

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 u s e 2404.

Subpenas.

1510

PUBLIC LAW 93-495-OCT. 28, 1974

[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.
ADMIN ISTRATION
12 u s e 2405.

5 u s e 101 et
seq.
5 u s e 5101,
5331.
5 u s e 5332
note.
Experts and
consultants.
Audits, report
to eongress.

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 I I I 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 u s e 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 u s e 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.

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

1511

A U T H O R I Z A T I O N 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 use 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 use 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 a n d 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:

1512

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

"(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 use 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
sectiou 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 anv 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

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

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 i)rovides 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 ) , a n d
"(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.
*'§ 162. Regulation of credit reports
" ( 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

1513

Definitions.

Noncompliance.

^^ ^^^ ^^^^^•

1514

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

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 use 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 use 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 u s e 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.
**§ 166. Prompt notification of returns
15 use 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.

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

"§ 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 use 1666f.

15 use 1666g.

15 use 1666h.

15 use 16661

1516

15 use 1666J.

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

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 I I X 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".

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

(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

T I T L E IV—AMENDMENTS TO T H E 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:
*'§ 146. More-than-four-installment rule
"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:
" ' T H E COST O F C R E D I T I S I N C L U D E D I N T H E
P R I C E Q U O T E D F O R T H E GOODS A N D S E R V I C E S . ' "
(h) The table of sections of such chapter is amended by adding
at the end thereof a new item as follows:

^^ 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-

1518

Ante, p, 1512,

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

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 l)e 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 a n d 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 chaptcr 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

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

15:L9

(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) F o r 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:
**§ 135. Business credit cards
"The exemption provided by section 104(1) does not apply to the 15 use 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.".

§ 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."

1520

15 use 1614.

PUBLIC LAW 93-495-OCT. 28, 1974

[88 STAT.

§ 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."

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

1521

§ 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

T I T L E V—EQUAL C R E D I T O 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 use 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 V I I :
"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 u s e 1691.

1522

PUBLIC LAW 93-495-OCT. 28, 1974

[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 use 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 use 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 use 1464.
«(2) Section 5(d) of the Home Owners' Loan Act of 19.33,
12 use 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 use 1751.
"(3) The Federal Credit Union Act, by the Administrator of
the National Credit Union Administration with respect to any
Federal Credit Union.

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

1523

"(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 »

T

'

l

•

•

(

»

•

•

. n o t e .

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 A c t ) , 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 use 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, hoioever, That this provision shall not be construed to permit a creditor to take sex or marital

1524

15 u s e 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^ hoivever^ 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 anv liability shall apply
to any act done or omitted in good faith in conformity with any rule.

88 STAT. ]

PUBLIC LAW 93-495-OCT. 28, 1974

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 d a t e
"This title takes effect upon the expiration of one year after the
date of its enactment.".

1525

is use i69i
note.

T I T L E 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 use 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 use 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 u s e

2503.

1526

PUBLIC LAW 93-496-OCT. 28, 1974

[88 STAT.

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]

mim^A^'t ^^^I97A'
45 use 501
"National Railroad Passenger
Corporation, stock
ownership.

AN A C T
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 hy the Senate and House of Representatives of the
^^^'^^^ States of America in Congress assembled^ That this Act may be
cited as the "Amtrak Improvement Act of 1974".
^^^- ^- Sectiou 304(b) of the Eail Passenger Service Act of 1970
(45 U.S.C. 544(b)) is amended by striking out "owned" and inserting
j ^ lieu thcreof "voted", and by adding at the end thereof the foUow7

./

o