[atlas:bill]

AN ACT Relating to issuing credit cards to persons under the age of twenty-one; adding a new section to chapter 28B.10 RCW; adding a new chapter to Title 19 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that the predatory and aggressive marketing of credit cards to children and young adults creates serious financial and law enforcement problems. Inappropriate granting of credit to young people with little or no employment or credit history burdens them with debt and clouds their financial futures. In addition, law enforcement problems are increased because of credit card use by minors to buy alcohol, tobacco products (including bidis), internet gambling, and internet pornography.

The legislature further finds that other, more age-appropriate access to credit is available to young people, through student loans, parental cosigned credit, and various types of ATM cards with capped dollar amounts.

The legislature intends to curtail aggressive marketing of credit cards to young people, and to prevent the inappropriate granting of credit, by prohibiting certain marketing practices.

NEW SECTION. Sec. 2. For the purposes of this chapter:

(1) "Credit card" means a card or device issued under an agreement by which the issuer gives to a cardholder residing in this state the privilege of obtaining credit from the issuer or other persons in purchasing or leasing property or services, obtaining loans, or otherwise.

(2) "Credit card issuer" means a financial institution, a lender other than a financial institution, or a merchant that receives applications and issues credit cards to individuals.

NEW SECTION. Sec. 3. A credit card issuer may not issue a credit card to a person who is a resident of this state and who is under twenty-one years of age at the time of application unless:

(1) A written application is obtained in which an applicant indicates a list of all approved but unused credit available to the applicant, by amount and source, and a statement by the applicant indicating the applicant's age;

(2) The applicant qualifies for credit under reasonable and prudent standards used in the industry for extensions of similar credit;

(3) The applicant's parent or guardian cosigns for financial responsibility for charges incurred;

(4) The applicant and cosigning adult are given information about alternatives to credit cards, such as ATM cards and debit cards with capped dollar amounts; and

(5) The applicant applies in person at a financial institution or credit card granting corporation. No applications by persons under twenty-one may be made through use of the internet.

NEW SECTION. Sec. 4. Except where the applicant has misrepresented information required under section 3(1) of this act, failure of the credit card issuer to comply with section 3 of this act constitutes an affirmative defense to the collection of debt incurred by using the card or credit issued.

NEW SECTION. Sec. 5. Credit card issuers may not offer gifts in exchange for the completion of a credit card application as part of a marketing program conducted on any campus of a college or university located in this state. This section does not preclude a credit card issuer from providing educational information regarding personal financial management.

NEW SECTION. Sec. 6. A new section is added to chapter 28B.10 RCW to read as follows:

The sale or other transfer of lists of student names and addresses or other identifiers by any college or university in this state to credit card issuers or affiliates of credit card issuers is prohibited.

NEW SECTION. Sec. 7. Sections 2 through 5 of this act constitute a new chapter in Title 19 RCW.