Page:United States Statutes at Large Volume 119.djvu/226

 119 STAT. 208

PUBLIC LAW 109–8—APR. 20, 2005 (A) consumers, in establishing new credit arrangements, are aware of their existing payment obligations, the need to consider those obligations in deciding to take on new credit, and how taking on excessive credit can result in financial difficulty; (B) minimum periodic payment features offered in connection with open end credit plans impact consumer default rates; (C) consumers make only the required minimum payment under open end credit plans; (D) consumers are aware that making only required minimum payments will increase the cost and repayment period of an open end credit obligation; and (E) the availability of low minimum payment options is a cause of consumers experiencing financial difficulty. (3) REPORT TO CONGRESS.—Findings of the Board in connection with any study conducted under this subsection shall be submitted to Congress. Such report shall also include recommendations for legislative initiatives, if any, of the Board, based on its findings.

SEC.

1302.

ENHANCED DISCLOSURE SECURED BY A DWELLING.

FOR

CREDIT

EXTENSIONS

(a) OPEN END CREDIT EXTENSIONS.— (1) CREDIT APPLICATIONS.—Section 127A(a)(13) of the Truth in Lending Act (15 U.S.C. 1637a(a)(13)) is amended— (A) by striking ‘‘CONSULTATION OF TAX ADVISER.—A statement that the’’ and inserting the following: ‘‘TAX DEDUCTIBILITY.—A statement that— ‘‘(A) the’’; and (B) by striking the period at the end and inserting the following: ‘‘; and ‘‘(B) in any case in which the extension of credit exceeds the fair market value (as defined under the Internal Revenue Code of 1986) of the dwelling, the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes.’’. (2) CREDIT ADVERTISEMENTS.—Section 147(b) of the Truth in Lending Act (15 U.S.C. 1665b(b)) is amended— (A) by striking ‘‘If any’’ and inserting the following: ‘‘(1) IN GENERAL.—If any’’; and (B) by adding at the end the following: ‘‘(2) CREDIT IN EXCESS OF FAIR MARKET VALUE.—Each advertisement described in subsection (a) that relates to an extension of credit that may exceed the fair market value of the dwelling, and which advertisement is disseminated in paper form to the public or through the Internet, as opposed to by radio or television, shall include a clear and conspicuous statement that— ‘‘(A) the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and ‘‘(B) the consumer should consult a tax adviser for further information regarding the deductibility of interest and charges.’’. (b) NON-OPEN END CREDIT EXTENSIONS.—

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