Recognizing May 25, 2009, as National Missing Children's Day.

Mr. Speaker, I yield myself 5 minutes.

First, I observe this may be the seventh or eighth time we've had an opportunity to essentially debate the same bill. So I first want to congratulate the chairman of the full committee for a very open and deliberative process.

I also want to congratulate the gentlelady from New York. Although I very much disagree with the ultimate consequences of the legislation, certainly she has brought passion and tenacity to an issue and has seen it through the process. And to the extent that I can count votes in the minority where you have the luxury of being right about 99 percent of the time when you count votes, I'm sure her side is on the verge of victory.

But, Mr. Speaker, I just would say before my friends on the other side of the aisle high-five each other, they may want to do a high one or high two, but I'm not sure it's a high five.

I agree with the gentlelady from New York that there have been deceptive trade practices and misleading advertising by a number of credit card companies. This has to stop. There are a number of disclosure provisions that the Federal Reserve has presented after 3 years of a very careful study, a number of those provisions are mirrored in this particular legislation. I think the whole House agrees with those. Clearly, there needs to be consequences for companies that engage in this kind of behavior.

And in addition, we need to ensure that the laws that we have on the books, Mr. Speaker, are enforced: the Deceptive Trade Practices Act, the Truth in Lending Act, and other laws that we have on the books.

But, Mr. Speaker, just like when you hear in a tax debate that Congress is

getting ready to tax the rich, somehow the middle income have to hold on to their wallet; when you hear there's a piece of legislation that is aimed at reining in the credit card companies, well, John Q. Citizen had better watch out as well.

I'm afraid my friends on the other side of the aisle have been very effective through bailout legislation, stimulus legislation, omnibus legislation, a budget that creates more debt in the next 10 years than in the previous 220, they've been very adept at taking the cash out of Americans' wallets, and now with this legislation, many will have their credit cards removed by the Congress as well.

People know that Congress excels at one thing, and that is unintended consequences, and I fear, Mr. Speaker, there will be a number of unintended consequences through this particular legislation.

This legislation ultimately restricts economic opportunities. It has a version of price controls for late fees. It restricts the ability of credit card companies to engage in facets of what is called risk-based pricing, and ultimately what that means is, this legislation, notwithstanding the good portions of the bill which will create better and effective disclosure for consumers, but what it will ultimately do is a couple of things.

Number one, Mr. Speaker, this will force the good customers to yet, again, bail out the not-so-good customers. And it's interesting, Mr. Speaker, having debated this a number of times, there was an article that came out I believe in yesterday's New York Times, and this is isn't National Review or The Weekly Standard or Rush Limbaugh. It's the New York Times. I'd like to quote from portions of that article.

``Credit cards have been a very good deal for people who pay their bills on time and in full. Now Congress is moving to limit the penalties on riskier borrowers who have become a prime source of billions of dollars in fee revenue for the industry, and to make up for the lost income, the card companies are going after those people with sterling credit.''

Again, the observation of the New York Times.

Banks are expected to look at reviving annual fees, curtailing cash back and other rewards programs, and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

From the head of the American Bankers Association, those that manage their credit well will in some degree subsidize those that have credit problems.

Again, Mr. Speaker, I respectfully submit to you this is yet another piece of bailout legislation. Over 50 percent of Americans who have credit cards pay their bills in full and on time. There's another huge percentage who at least make the minimum payment on time. Why, why are we going to punish those----

I yield myself 1 additional minute.

Why, Mr. Speaker, do we want to punish those people on behalf of those who don't do it right?

Now, some don't do it right because of circumstances beyond their control, but the way to address that is not to take away the rights and opportunities of others. That can be addressed through social safety net legislation. But others don't pay their bills simply because they're irresponsible. Why do the responsible have to bail out the irresponsible?

And we already see that we are in the midst of a huge credit contraction, Mr. Speaker. At a time when Americans are struggling to pay their mortgages, to pay for their groceries, to pay their health care costs, why, why would we want to make credit more expensive and less available? It is the completely wrong policy.

Now, again, I want to agree with the disclosure provisions. I also want to agree with the provisions in the bill that say that consumers ought to have a reasonable amount of time to close out their accounts under their old provisions and old interest rates, but otherwise, we need to reject this legislation.

I reserve my time.

Mr. Speaker, at this time I would like to yield 3 minutes to the gentleman from Washington (Mr. Hastings).

Mr. Speaker, at this time I would like to yield 3 minutes to the gentleman from Utah (Mr. Bishop).

Mr. Speaker, I yield myself 5 minutes.

Mr. Speaker, I think, for the moment, I do wish to return to the credit card debate.

Again, Mr. Speaker, I fear that the legislation before us is going to be riddled with unintended consequences. Again, there are portions of the bill to which I think almost every Member of this body would agree. Consumers have been taken advantage of by misleading claims, by deceptive disclosures, and we must have effective disclosure written in legalese not voluminous disclosure. Rather, we need effective disclosure written in English, as opposed to voluminous disclosure written in legalese.

But we don't need to take away consumer's credit opportunities at a time when the market is already contracting from the economic recession. I mean, these credit cards are needed.

And again, Mr. Speaker, I fear that this legislation will take us back to a

bygone era, an era that most of us, frankly, don't want to revisit.

Now, in my earlier remarks I alluded to this New York Times piece, again, not exactly known as a bastion of conservative thought, but it is certainly a third-party validation to what many of us have been saying in this debate. But I allude to this New York Times article of May 19. And it talks about this bygone era, and in part of this article it says: ``Banks used to give credit cards only to the best customers and charge them a flat interest rate of about 20 percent, and an annual fee.'' Well, once certain usury laws have been relaxed, once there were technological innovations allowing this thing called risk-based pricing, something happened, Mr. Speaker, and that was, people who previously had no access to credit finally got access to credit.

Something else happened, Mr. Speaker. That is that those debtors who paid their bills on time, who were less risky, managed to pay a lower interest rate and managed to get rid of the dreaded annual fees. This is a piece of legislation that will take us back to a bygone era that most of us want to leave bygone. It is a step into the past.

The article in the New York Times goes on to say, ``The industry says that the proposals will force banks to issue fewer credit cards at greater cost to the current cardholders.''

Now, some may view that to be a good thing. Well, it's not necessarily the struggling families of the Fifth Congressional District of Texas. They want their credit cards. They want choices to be had. They want there to be honest disclosure that they understand, but they want choices in the marketplace.

Now, I may view this legislation differently, Mr. Speaker, if I thought there weren't competition in the marketplace, but we've heard testimony throughout this debate that there are over 10,000 different issuers of credit cards--10,000. We've seen contraction in the market due to the economic recession, and all this legislation is going to do is exacerbate that phenomenon.

So, again, this is a bailout bill. It's asking those who pay their bills on time and in full to bail out those who don't. So, again, we'll hear all of the rhetoric that we're slapping around the big credit card companies. Frankly, there are a number of their practices that deserve slapping around, but somebody else is going to get slapped around, and that is the borrower who pays his bill in full and on time. He is going to be punished. He is going to get slapped around by this legislation at a time when they can ill, ill afford it.

We've seen this before. We've heard testimony from, for example, community banks that tell us, if this legislation is passed--and I've heard this from banks in my own district--that ultimately the credit card portfolios of the smaller institutions are going to be ended or that they're going to be sold to the larger institutions. Less competition. Less opportunities.

We've heard from academics in this debate, like Professor Todd Zywicki from George Mason University. The increased use of credit cards has been a substitution for other types of consumer credit. If these individuals are unable to get access to credit cards, experience and empirical evidence indicates that they will turn elsewhere for credit.

Mr. Speaker, I yield myself an additional minute.

They will turn elsewhere for credit, such as to pawnshops, to payday lenders, to rent-to-own or even to loan sharks. In some respects, maybe we ought to call this the Payday Lenders and Pawnshop Relief Act, because that will be the consequence. Now, I'm not trying to cast aspersions on their business models. Many consumers turn to them. That's not the point.

The point is this legislation is going to constrict consumer choice. We've seen similar legislation in the United Kingdom. They passed a law that capped default fees. What happened? Well, two of the three largest issuers promptly imposed annual fees on their cardholders. Nineteen of the largest raised interest rates, and by one independent study, 60 percent of new applicants were rejected. That's what happened in the

Mr. Speaker, at this time, I would like to yield to the distinguished ranking member of the Financial Services Committee for as much time as he may consume, the gentleman from Alabama (Mr. Bachus).

Mr. Speaker, may I inquire how much time is remaining on both sides.

Mr. Speaker, I yield myself the balance of our time.

First, Mr. Speaker, I don't spend all of my time observing the processes and procedures and ways of the other body so I don't know how these two particular issues managed to get commingled. Having said that, I can't think of any bad time to stand up for the Second Amendment rights of our citizenry. Again, it appears to me that one lone, perhaps rogue Federal judge has tried to put a dent into the Second Amendment rights of our citizens.

I was happy in the last Congress to introduce H.R. 5434, the Protecting Americans from Violent Crime Act, that would have taken care of this issue. Again, this is a bedrock principle embedded in our Constitution. The citizens need to have their right to keep and bear arms protected, even on this Federal property, particularly when incidences of violence at Federal parks has shown increases, upticks. But regardless, we cannot allow the Constitution of the United States to be amended in such an unconstitutional fashion. So I'm happy to raise my voice in support of that.

Back to the credit card issue at hand--and I will try not to use the entire 4\1/2\ minutes. We have had testimony from the Congressional Research Service, we have had testimony from academics, we have had testimony from community bankers. We have seen the history. We have seen the history of what has happened in Great Britain.

There are huge unintended consequences associated with this legislation. The people who pay their credit card bills in full, on time, are about to be punished. They will be forced to bail out those who don't. They will end up paying annual fees. They will end up paying higher interest rates. They will see such things as member rewards programs contract.

I believe this to be patently unfair, Mr. Speaker, and it will be caused by this legislation. Again, I think the intentions are pure. I think the intentions are noble. But such will be the consequences of this legislation.

In the middle of a huge credit crisis we will take credit cards away from people who desperately need them. We will end up taking them away from families like the Blanks family of Fruitdale in the Fifth District of Texas, who wrote to me, ``Congressman, my new business would not have been started if not for my credit and credit cards. My existing job will be gone, and it is forcing me to do what I really want to do anyway.'' He goes on to say, ``I couldn't have achieved the American Dream without credit cards.''

I fear under this legislation that families like the Blanks family of Fruitdale will lose their credit cards.

I heard from the Vehon family in Rowlett, also in the Fifth District of Texas. ``In the fall of 2004, my wife and I were laid off from our jobs at the same time. Needless to say, the layoff was quite a shock, and without access to our credit cards at the time, frankly, I don't know what we would have done.

``Due to the flexibility that credit cards can supply to responsible people in challenging times like I have described, we were able to stay pretty current on our bills.''

I heard from the Juarez family in Mesquite, Texas, that I have the honor of representing in Congress. ``I oppose this legislation, as I have utilized my credit cards to pay for some costly oral surgeries. I do not want to get penalized by this legislation for making my payments on time.''

Again, Mr. Speaker, this legislation is not fair to the Juarez family, it is not fair to the Vehon family, it is not fair to the Blanks family, it is not fair to millions of other families across our land who desperately need their credit cards. And I urge that we reject this conference report.

I yield back the balance of my time.

Will the gentleman yield?

Was that not already embedded in the legislation, in that one of the four opportunities for credit card companies to raise interest rates retroactively is when people don't meet their workout plans. Would that not be one of the reasons?

Mr. Speaker, pursuant to House Resolution 456, I take from the Speaker's table the bill (H.R. 627) to amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes, with the Senate amendment thereto, and I have a motion at the desk.

Mr. Speaker, to begin the debate, I recognize the major author and chief advocate for the credit card bill, dating back several years, and it is her diligent effort that is paying off today for the American consumer, the gentlewoman from New York (Mrs. Maloney) for 4 minutes.

Mr. Speaker, I yield myself 1 minute.

The gentleman referred to money added to the budget. He talked about the bailout, et cetera.

I would remind Members that the $700 billion was asked for by the Bush administration, and it passed with Democratic support and the support of a significant minority on the Republican side, including the Republican leadership and a very heavy majority of Republican Senators. So, yes, that $700 billion was voted at the request of the Bush administration, with substantial bipartisan support.

There was, of course, also the matter of another $700 billion-or-so in the war in Iraq which I voted against. So I do regret some of these extra expenditures, but the responsibility is hardly that of one party.

And now I yield 2 minutes to the gentleman from Texas (Mr. Hinojosa).

Mr. Speaker, I yield 2 minutes to the gentlewoman from New York (Mrs. McCarthy).

Mr. Speaker, I now yield 2 minutes to a member of the committee who is one of the coauthors of this important bill, the gentleman from New York (Mr. Maffei).

I yield 2 minutes to the gentleman from California (Mr. Farr).

Mr. Speaker, I yield myself such time as I may consume. Let me begin by responding to the gentleman from Texas' reference to small business. The National Federation of Independent Business supports this bill. So the suggestion that this will somehow have a negative effect on small business is repudiated by the active support for the bill of the organization that has generally been identified as the major spokes-organization for that, the National Federation of Independent Business.

Secondly, there was a premise here that I find very faulty. The gentleman from Texas quoted the New York Times and others, and they have said--Mr. Speaker, I'm going to interrupt myself at this point, if I may. The chairman of the Appropriations Subcommittee on the Interior has come in. I assume he wanted to speak.

I will now yield 2 minutes to the gentleman from Washington (Mr. Dicks).

I yield myself such time as I may consume. I repeat, the National Federation of Independent Businesses says this is good for small businesses, this bill, because they have been victimized. It will in no way cause there to be a failure to offer a credit card to a business that can pay it back. Nothing in this bill remotely suggests that.

There was also, as I said, a somewhat implausible argument. The New York Times quoted people in the credit card industry saying, If you do this, we won't like it, and we may raise rates.

The notion that if we pass this bill rates will be raised on the great majority makes this mistake. The assumption is that there is money now laying on the table that the beneficent credit card companies voluntarily forgo. Under the principles of free enterprise, the business is legally entitled and motivated to charge as much as it can. That argument only makes sense if you think they are voluntarily reducing money that they could get from some of the customers. Of course, they're not. No one expects them to.

But the most important thing here is the conflict that I see in my friend on the other side. The gentleman from Alabama repeatedly said what we should do is stick with the Federal Reserve's rules. The gentleman from Texas, as I heard him, didn't say that.

There's a difference here. This is a case--and maybe they caught it, and maybe not. It may be one of those cases where the right hand doesn't know what the far-right hand is saying. Because to the extent that there is any restriction on rates, it is identical in the Federal Reserve's rules as in this bill.

So there is a fundamental difference between the approach taken by the

gentleman from Alabama and the gentleman from Texas. The gentleman from Alabama says, Adopt what the Fed said. The gentleman from Texas specifically objected to that provision in our committee. And what the New York Times article is aimed at--the quotes from the credit card people--is that provision that's in the Federal Reserve.

By the way, it does nothing to cap interest rates going forward. That is a straw argument. The only restriction on rates here, on interest rates, is to say that you cannot raise them retroactively.

Now the Federal Reserve also says that. So the gentleman from Alabama agrees. The gentleman from Texas, who's an honest believer in no restrictions, says ``no.'' In fact, in our committee debate he cited an example of when he thought a company would be justified in raising rates retroactively.

He said, Suppose someone owes a company interest on debt already incurred and has been meeting the regular scheduled payments, but either goes to prison or loses his or her job. The gentleman from Texas said, If you have been paying the credit card company on a regular basis, and you lose your job, they should be legally allowed to raise the rates on what you already owe them.

We disagree. So does the Federal Reserve. So, apparently, does the gentleman from Alabama, because he supports what the Federal Reserve says.

I will yield to my friend from Texas.

The gentleman is quite wrong. I said--and he didn't listen, as he may not have listened to the gentleman from Alabama, because he didn't express disagreement with him--I said, If people are meeting their obligation under the bill that we put forward and under the Federal Reserve's rules, if you're meeting your obligations, if you're making your payments on time, they cannot raise your rates retroactively.

I see members of the staff checking it out. They will find out what I'm saying is accurate.

If you are meeting your obligations, you cannot have the rate raised. What the gentleman from Texas said is, Suppose you lose your job. Well, losing your job, if you are otherwise meeting your obligations, should not mean that they can raise your rate retroactively. We are only talking about in this bill retroactive raises. There is no limitation going forward.

Now the gentleman from Alabama also said, Well, if the Federal Reserve is right--the gentleman from Texas doesn't like what the Federal Reserve did--the gentleman from Alabama said, If the Federal Reserve is right, why don't you stop there?

Because we do some things the Federal Reserve doesn't do, one. Two, because many of us believe--and I have to say, my conservative friends flip-flop on the Federal Reserve issue with a speed that dazzles me. Sometimes the Federal Reserve is this undemocratic institution which people worry about. Other times we should delegate significant legislative authority to them.

I'm glad they acted. By the way, the Federal Reserve only acted after party control of the Congress changed. In 2007 we began to move on this, and then they acted.

There's another side point. Let me say this. Several of my colleagues said, Well, this has got good stuff in it. It's got disclosure. You know, if the Republicans, when they were in the majority, had broken out of this absolute slavish assumption that no regulation is ever any good, in effect--they don't say it quite like that, but that is the practical effect--if they had, when they were in power from 1995 to 2006, passed something that had the good parts of this bill, we might have not been here today on this bill because that might have chastened the companies. So they now find things in this bill that they like, but they refuse to do them. The gentleman from New York was pushing for some of this.

During their 12 years--and by the way, that's a pattern. During the 12 years of Republican rule, there were no financial regulations. There was some deregulation. There was nothing about the subprime or credit cards. We came to power and have begun to deal with it. We are dealing with the negative consequences of lack of regulation.

But to go back to the point, we go beyond the Federal Reserve. There is one area where, regrettably, we don't go beyond the Federal Reserve. The gentleman from Alabama correctly noted that our colleague from Illinois (Mr. Schock) had a good amendment involving your credit rating. Unfortunately, while we accepted that amendment, it was left out of the final bill because of the objections of the ranking Senate Republican, the gentleman from Alabama, Mr. Shelby.

I fought for the inclusion of the gentleman from Illinois' amendment. I spoke to him. I urged him to join in, but it was reported to me by the leadership of the committee that that amendment from the gentleman from Illinois was unfortunately rejected by the objections of Mr. Shelby. So we didn't get that one.

We did get a very good amendment that the Federal Reserve didn't have, sponsored by the gentleman from North Carolina (Mr. Jones), to require that the estate of a decedent be correctly done. We also have some rules in here about not sending credit cards to people under 18.

By the way, the notion that this market works perfectly is somewhat rebutted by the fact that we're told that one of the crises now coming is credit card debt that's going to be a problem, securitized credit card debt because there were some imprudent things. So if this bill means that there will be some credit cards that won't be issued, good. Because they have been imprudent in doing that. But people who pay will not have a problem.

So just in summary, this bill does not restrict credit card interest going forward. Maybe that's what they did in the United Kingdom. It does not interfere with small business, in the opinion of the National Federation of Independent Business. It agrees with the Federal Reserve that you should not raise rates retroactively. On that one, it's the gentleman from Alabama, the Federal Reserve, and myself; the gentleman from Texas and some others who are on the other side, a legitimate difference of opinion. But we also have some consumer protections not in what the Federal Reserve did.

I would also say, this notion that we should leave public policy to the unelected Federal Reserve and that Congress should not step in also and act I think is one that underestimates the role of elected officials and democracy in our country.

Now I disagreed with the gun amendment. I wish it hadn't been in there. I don't control the rules in the Senate. I intend to vote against it. In my judgment, the value of the credit card bill outweighs the harm that I think that would do. I would say, some Members on the other side may have a dilemma. Many of them strongly welcomed the amendment of the gentleman from Oklahoma. But understand that unless both pieces pass, nothing passes. So no matter how strongly you support the gentleman from Oklahoma's amendment, if Members succeed in defeating the credit card part of it, that fails.

I do have to caution them that the Federal Reserve cannot come to their rescue, as they are prone to have it do. They may want to delegate legislative powers to the Federal Reserve. I don't. But I do not think the Federal Reserve, in the most expansive reading of section 13(3), can mandate that you carry a gun in a national park.

So, Mr. Speaker, I hope that the credit card part passes, that the gun part does not; but in any case, I hope that this bill is sent to the President.

I yield back the balance of my time.

Mr. Speaker, I demand a recorded vote.

Mr. Speaker, I think all of us in this body have had constituents call and complain that what they saw were unfair and deceptive credit card practices, and in many cases, these practices were not fair.

As a result of that, the Financial Services Committee, working with the Federal Reserve, proposed--and the Federal Reserve has now adopted--changes. The things that have been talked about by Members of this body in the debate last week and in the debate today are taken care of in the Federal Reserve's requirements. In fact, they went through a long public process. They had over 60,000 public comments about the issues, and they issued, actually, 1,200 pages of changes in our credit card regulations. This included going up on balance fees. This included double-cycle billing. This included giving people a longer period of time from the time their statement was mailed to the time they had to get a payment in--all of the things, I think, that most of us have received calls on.

One matter that we raised when this bill was before us--and I want to commend the Senate, and I want to commend the Democratic majority in the House--was this idea in the original legislation that you could apply for a number of credit cards, but it would not go on your credit report until you activated that card. I think, as a result of the debate 2 weeks ago, we took a closer look at that, and we did pass an amendment by Aaron Schock, which, I think, will close the door to a lot of fraud in that regard. I appreciate the majority's support on that. I think the Senate further closed that loophole, and I think we've struck the right balance there.

As for the supporters of this bill, I don't question their sincerity, and I don't question their motivation. They and the American people want credit card reform. What we had said is there is tremendous reform in the Fed's proposals, in the Federal Reserve's proposals, and we felt like those ought to have a chance. We expressed why we were for those reforms which were going into effect next July and not for this bill.

One of our concerns--and I think that this bill will do this, and I hope I'm wrong--is that this legislation, I believe, will restrict credit for those who don't have the best credit reports. They're really the people who probably need credit the most. In fact, the subcommittee ranking member, Mr. Hensarling, referred to a New York Times article. Now, that article and an article that appeared in today's Washington Post really express some of the same concerns that the gentleman from Texas and I expressed 2 weeks ago, which is that we are going to have several things happen as a result of this bill.

One is we're going to have a restriction of credit. The Washington Post article does quote from the Financial Services Roundtable, but they say that they believe that credit could be reduced by as much as $2 billion. That's not very good timing if that's done, ladies and gentlemen of the House.

As I have said and as I said yesterday in the Rules Committee, I fear that many Americans will not be able to renew their credit cards or I fear that their credit card lines will be reduced. Sometimes maybe this is good, but I think, in a time of economic crisis, it's going to be somewhat ill-timed.

The New York Times and The Washington Post both mention that they believe, as a result of this legislation, you are not going to see any offers to transfer balances at zero percent. They also say the most creditworthy customers, those who pay every month and who haven't had to pay interest, will probably have to as a result of these changes. They probably will be charged interest. There are predictions in here that there will be the return of higher fees. I hope these predictions don't pan out.

[From the New York Times, May 19, 2009]

Credit Card Industry Aims To Profit From Sterling Payers

(By Andrew Martin)

Credit cards have long been a very good deal for people who

pay their bills on time and in full. Even as card companies

imposed punitive fees and penalties on those late with their

payments, the best customers racked up cash-back rewards,

frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier

borrowers, who have become a prime source of billions of

dollars in fee revenue for the industry. And to make up for

lost income, the card companies are going after those people

with sterling credit.

Banks are expected to look at reviving annual fees,

curtailing cash-back and other rewards programs and charging

interest immediately on a purchase instead of allowing a

grace period of weeks, according to bank officials and trade

groups.

``It will be a different business,'' said Edward L.

Yingling, the chief executive of the American Bankers

Association, which has been lobbying Congress for more

lenient legislation on behalf of the nation's biggest banks.

``Those that manage their credit well will in some degree

subsidize those that have credit problems.''

As they thin their ranks of risky cardholders to deal with

an economic downturn, major banks including American Express,

Citigroup, Bank of America and a long list of others have

already begun to raise interest rates, and some have set

their sights on consumers who pay their bills on time. The

legislation scheduled for a Senate vote on Tuesday does not

cap interest rates, so banks can continue to lift them,

albeit at a slower pace and with greater disclosure.

``There will be one-size-fits-all pricing, and as a result,

you'll see the industry will be more egalitarian in terms of

its revenue base,'' said David Robertson, publisher of the

Nilson Report, which tracks the credit card business.

People who routinely pay off their credit card balances

have been enjoying the equivalent of a free ride, he said,

because many have not had to pay an annual fee even as they

collect points for air travel and other perks.

``Despite all the terrible things that have been said,

you're making out like a bandit,'' he said. ``That's a third

of credit card customers, 50 million people who have gotten a

great deal.''

Robert Hammer, an industry consultant, said the legislation

might have the broad effect of encouraging card issuers to

become ever more reliant on fees from marginal customers as

well as creditworthy cardholders--``deadbeats'' in industry

parlance, because they generate scant fee revenue.

``They aren't charities. They have shareholders to report

to,'' he said, referring to banks and credit card companies.

``Whatever is left in the model to work from, they will start

to maneuver.''

Banks used to give credit cards only to the best consumers

and charge them a flat interest rate of about 20 percent and

an annual fee. But with the relaxing of usury laws in some

states, and the ready availability of credit scores in the

late 1980s, banks began offering cards with a variety of

different interest rates and fees, tying the pricing to the

credit risk of the cardholder.

That helped push interest rates down for many consumers,

but they soared for riskier cardholders, who became a

significant source of revenue for the industry. The recent

economic downturn challenged that formula, and banks started

dumping the riskiest customers and lowering their credit

limits in earnest as the recession accelerated. Now,

consumers who pay their bills off every month are issuing a

rising chorus of complaints about shortened grace periods,

new hidden fees and higher interest rates.

The industry says that the proposals will force banks to

issue fewer credit cards at greater cost to the current

cardholders.

Citigroup and Capital One referred comments to the A.B.A.

Discover and American Express declined to comment. Bank of

America intends to ``provide credit to the largest number of

creditworthy customers possible, while also remaining prudent

in our lending practices,'' said Betty Riess, a spokeswoman.

Together with JPMorgan Chase, which has said the changes will

force it to limit credit availability and raise fees, these

banks account for 80 percent of the credit card industry.

Banks are not required to publicly reveal how much money

they make from penalty interest rates and fees, though

government officials and industry consultants estimate they

constitute a growing portion of revenue.

For instance, Mr. Hammer said the amount of money generated

by penalty fees like late charges and exceeding credit limits

had increased by about $1 billion annually in recent years,

and should top $20 billion this year.

Regulations passed by the Federal Reserve in December to

curb unexpected interest charges would cost issuers about $12

billion a year in lost fees and income, according to industry

calculations. The legislation before Congress would build on

the Fed rules and would further squeeze banks' revenue when

they are being hit with a high rate of credit card charge-

offs. The government's stress tests showed that the nation's

19 biggest banks will take on $82 billion in credit card

losses in the next two years.

A 2005 report by the Government Accountability Office

estimated that 70 percent of card issuers' revenue came from

interest charges, and the portion from penalty rates appeared

to be growing. The remainder came from fees on cardholders as

well as retailers for processing transactions. Many retailers

are angry at the high fees and plan to pass them on to

shoppers once the Congressional legislation takes effect.

Consumer advocates say they have little sympathy for credit

card issuers, arguing that they have made billions in recent

years with unfair and sometimes deceptive practices.

``The business model will change because the business model

doesn't work for the public,'' said Gail Hillebrand, a senior

lawyer at Consumers Union.

``In order to do business under the new rules, they'll

actually have to tell you how much it's going to cost,'' she

said.

With many consumers mired in debt and angry at what they

consider gouging by credit card companies, the issue of

credit card reform has broad populist appeal. Members of

Congress and the Obama administration have seized on the

discontent to push reforms that the industry succeeded in

tamping down when the economy was flying high.

Austan Goolsbee, an economic adviser to President Obama,

said that while the credit card industry had the right to

make a reasonable profit as long as its contracts were in

plain language and rule-breakers were held accountable, its

current practices were akin to ``a series of carjackings.''

``The card industry is giving the argument that if you

didn't want to be carjacked, why weren't you locking your

doors or taking a different road?'' Mr. Goolsbee said.

Mr. Speaker, I yield myself such time as I may consume.

(Mr. DREIER asked and was given permission to revise and extend his remarks.)

Mr. Speaker, let me begin by expressing my appreciation to my very good friend from Fort Lauderdale, my Rules Committee colleague, Mr. Hastings, for yielding me the customary 30 minutes.

And let me say that the American people are hurting. We know that. And Mr. Hastings has alluded to some of the challenges that we have. We're dealing with one of the most serious economic challenges that we've faced in modern history.

And while the American people are facing their economic challenges, I think it's very important for us as an institution, especially as the body of the people, to realize that it's incumbent upon us to set an example.

We all know that the Federal Government is filled, riddled with tremendous waste, fraud and abuse. It's a high level of frustration for Americans. And regardless of political party, people regularly talk about the challenge of dealing with waste, fraud and abuse.

And I will say that one of our important responsibilities that too often is forgotten is our responsibility for oversight. We have to oversee the multifarious programs that have been put forward and established by this Congress.

Now, from my perspective, we have way too many programs. The reach of the Federal Government is far beyond what it should be. And as we look at the budget which we're going to be debating later this week, the notion of having this dramatic increase in spending as a percentage of our gross domestic product is something that I find to be extraordinarily troubling. And we need to get our economy back on track. We need to make sure that we have in place an economic policy that will do that.

And so the American people are clearly looking to this institution, they're looking to Washington, to make sure that we set policies that will allow them to, once again, keep their homes, meet the obligation of paying tuition for their children who are going to college, to pay their other bills. That is something that, on a regular basis, we as Members of Congress hear from the American people. So this issue of committee funding is an important one.

And I will say that there is some concern that has been voiced on this side of the aisle. My California colleague, the ranking member of the Oversight Committee, is troubled over the fact that there have been increases in a number of other committees, and yet the Oversight and Government Reform Committee has not had the kind of increase that he believes is important.

I also want to say that we should take our hats off to the chairman of the Administration Committee, Mr. Brady of Philadelphia, as well as my California colleague, Mr. Lungren, the gentleman from Sacramento, who is the ranking member. We have seen chairmen and ranking members of all of the committees go before their committee, and they have been deliberative and very thoughtful in this package that they have put together. But I do believe that there are, again, concerns that have been voiced by a number of our colleagues.

I want to say that if we look at what has happened in the last couple of months, one particular entity that I think needs to have very, very, very close scrutiny paid to it when it comes to this issue of oversight is the Department of the Treasury. We know there have been programs that began last fall with the Troubled Asset Relief Program, the so- called TARP program, and since that period of time we've had the 1,100- page stimulus bill, which we know has been flawed.

And I think it was demonstrated when, the week before last, we had the issue of trying to deal with the $167 million in bonuses that have been provided in the stimulus package for the executives of AIG. And so we have unintended consequences that stem from a dramatic expansion of the Federal Government. And everyone acknowledges that that's the case. And that's why we, on our side, are regularly trying to, again, limit that reach because no one knows exactly what the unintended consequences will be.

Now, Mr. Lungren, the ranking member, informed me yesterday that we are going to, in this resolution, have a scrutiny over the action of every committee when it comes to the issue of oversight. And I do congratulate the members of the Administration Committee for ensuring that we do have more scrutiny put into place.

I also want to mention an item that is included in this measure that is, I think, very, very important, and that is funding for a commission which I was privileged to found when we were in the majority, and now serve as the ranking member under our colleague, David Price, the gentleman from North Carolina, who has chaired this commission. It's known as the House Democracy Assistance Commission. And our commission has basically taken the challenge of building democratic institutions in new and re-emerging democracies around the world and worked to share our example of the United States Congress with these new and re- emerging democracies. I mean, we are in Afghanistan, Timor-Leste, Indonesia, Haiti, Colombia, Lebanon, Liberia, Kenya, Macedonia, Georgia, and Ukraine. I mean, we have worked closely with the parliaments to try and, again, share our example of the work of the United States Congress.

And I regularly argue, Mr. Speaker, that we clearly don't have the answer, because we know that democracy is a work in progress. And I've often quipped that if some of these countries see the United States Congress in operation they may want to go back to totalitarianism. But the fact is we do have a 220-year example to which we can point as our work in progress. And this commission is, I believe, making great strides in trying to help build the parliaments in these countries so that, as we pursue economic growth and the rule of law in those countries, this commission is going to remain on the cutting edge of that very important work.

So I will say that, again, there are concerns that have been voiced about the level of funding, and I think that there are a number of issues that we still do want to ensure that we address.

But as the American people deal with the economic downturn that we're facing today, I think it is imperative that we, as an institution, do all that we can, Mr. Speaker, all that we can to ensure that we utilize those taxpayer dollars just as cost effectively as possible and, at the same time, redouble our efforts when it comes to overseeing this massive expansion of the Federal Government that has taken place.

I reserve the balance of my time, Mr. Speaker.

If the gentleman would yield, I would say to my friend, if he would like me to talk for another 15 or 20 minutes, I would be more than happy to.

Mr. Speaker, with that, I will yield back the balance of my time.

Would the gentleman yield?

I thank my good friend for yielding.

Mr. Speaker, I would simply say that I completely concur with my friend on those two issues that he has just mentioned. Ensuring that we have access to quality health care in this country is, I believe, a right that needs to be pursued, number 1.

Number 2, education is going to be critical. As we deal with our emergence from this economic downturn, the United States of America must remain on the cutting edge. The argument that one would get is regarding the exact role the Federal Government should play in every one of these things--in dramatically expanding the number of programs to deal with it or, in fact, in incentivizing those in the private sector. Do we do everything we can to, again, encourage greater access to health care and to quality education?

I thank my friend for yielding.

Will my friend yield?

I thank my friend for yielding.

Mr. Speaker, let me just say, by incentivizing, I believe that we as an institution, through tax policy, can do everything that we possibly can.

For example, in the area of health care, just to touch on that, I believe that a dramatic expansion of medical savings accounts--of which we have been on the cutting edge--of encouraging people to put dollars aside and to save and plan for their health care needs is a better way to go rather than dramatically expanding a government program to deal with it. That is the response, I would say, as far as incentivizing.

I thank my friend for yielding.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 294 and ask for its immediate consideration.

For the purpose of debate only, I yield the customary 30 minutes to the distinguished gentleman, my friend from California (Mr. Dreier). All time yielded during consideration of the rule is for debate only.

I yield myself such time as I may consume.

General Leave

I also ask, Mr. Speaker, unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on House Resolution 294.

Mr. Speaker, H. Res. 294 provides for consideration of the 111th Congress committee funding resolution. As my colleagues may know, clause 7 of rule X provides for the interim committee funding until the permanent funding resolution is in place. That temporary funding expires today. Therefore, it is very important that we consider and pass this rule and the underlying resolution today.

The committee funding resolution before us is the result of a bipartisan effort between Chairman Brady and Ranking Member Lungren of the Committee on House Administration. It was reported from the committee by a voice vote, and included an amendment by the ranking member to help increase transparency and accountability in the committee funding process.

This is a very fair and modest funding resolution which seeks to keep costs down, but still allow committees to fulfill their duties. This resolution recommends to the House an authorization to expend approximately $149.6 million in the first session and $154.9 million in the second session. This totals approximately $12.4 million below the combined levels requested by each of the committees.

It further reflects the commitment of Democrats to fairness and bipartisanship. The resolution incorporates an amendment by Ranking Member Lungren and carries forward the ``one-third'' rule in which a third of committee resources are used to support the work of the minority.

Rather than blindly tying committee funding to inflation or some other arbitrary number, this resolution is tailored to meet the unique challenges and circumstances facing this Congress.

As we work to implement the sweeping agenda of Democratic leadership and the new Democratic administration while simultaneously addressing seemingly unprecedented challenges, this resolution sensibly provides targeted increases to the Committees on Energy and Commerce, Financial Services, Small Business, and Standards of Official Conduct, among others.

The 12 percent increase recommended for the Committee on Financial Services is vital, considering the committee's stewardship of our Nation's financial recovery. It ensures that the committee not only has the resources to develop the legislation necessary to further our economic recovery, but also ensures that the committee has the capacity to adequately oversee the execution of these policies.

This increase, as well as the increase in funding for the Committee on Small Business, will help ensure that hard-earned taxpayer dollars are going into the right hands and helping the right people.

Additionally, with health care reform a priority for this Congress and our new President, H. Res. 279 provides an increase of 11 percent for the Committee on Energy and Commerce so we can continue our efforts to provide health care for every single American, in addition to working to finally achieve energy independence.

And while Congress continues to take on the task of overseeing our Nation's financial industry and the execution of our recovery initiatives, this body is ever-more scrutinized by the watchful eye of the American public. In order to ensure public trust in Congress, this resolution provides for an increase of 10 percent for the Committee on Standards of Official Conduct.

This resolution provides a pragmatic, fiscally prudent approach to committee funding, increasing total funding in 2009 by less than 5 percent, an amount within the D.C. cost of living adjustment.

Further, it provides a 3.9-percent increase in 2010, to accommodate the increased legislative and oversight work load typically seen in the second session.

It also assures adequate oversight by requiring committee chairs and ranking members to return to the Committee on House Administration by February of 2010 to report on committee spending.

This funding resolution strikes a responsible balance between the expanded oversight duties of the 111th Congress and the realities of our current economic climate. It will help this Congress adequately meet our economy's pressing needs, while working toward implementing the policies that will drive our Nation into the 21st century.

Mr. Speaker, I urge passage of this rule and of the resolution, and I reserve the balance of my time.

Mr. Speaker, I inquire of my good friend from California if he has any remaining speakers?

I am the last speaker for this side, so I will reserve my time until the gentleman has closed for his side and has yielded back his time.

Mr. Speaker, I would like to address one of the concerns that my good friend raised with reference to Oversight and Government Reform.

It remains the second best-funded committee in the House with the second largest staff, and Oversight and Government Reform did not use $700,000 of their funding last year, showing that they have a good cushion of additional funding to use this year.

Mr. Speaker, H. Res. 297 is a practical resolution that reflects the new pressing priorities of the 111th Congress. The funding levels authorized in this resolution will provide our committees with the resources necessary to carry out Congress' increase in oversight responsibilities and to implement the sweeping legislative initiatives of the President's and Democrats' in Congress, referencing yet one more item raised by my good friend as he references the things that are being done.

When people tell me that we are trying to do too much, I always ask: What is it that they would leave out that we should not be doing? Would they leave out education? Do they think that energy independence is not particularly critical? Is there anyone in this body or anywhere in this country who does not understand the critical need for health insurance for all Americans?

One thing is certain: When we are talking about the economy, we are talking about health care, and if we do not do things with reference to health care, then we are not going to be able to solve our economic crisis.

Of course, I will yield.

Reclaiming my time, I am putting a question to my colleague, and I will then reference time for him.

When you said we should incentivize the private sector, who is the ``we'' that you are talking about?

Yes.

Reclaiming my time, it is still the government as an institution that you refer to that is going to do these things. It is just that somehow or another, I guess, ideologically, my good friend and I are opposites when it comes, not only to health care, but to a variety of issues of major consequence.

If this Nation does not face up to its responsibilities having to do with Social Security, if we do not significantly address the issues of Medicare and Medicaid, then somehow or another, I think we are leaving the least of us out of this process. It is one thing to believe that if we incentivize the Tax Code that it is going to solve the problem, but that is not going to reach those persons at the very bottom.

For example, I hope that this budget addresses community health facilities. I believe this resolution represents the vital first step toward adequately addressing health care reform, energy policy and climate change, financial regulation and oversight, job growth and the recovery and long-term stability of our Nation's economy.

Now, in spite of the criticism from our friends on the other side, if they feel about this rule that it is unfair, perhaps unprecedented, our only intention today is to ensure that this resolution is considered in a timely manner so that our committees may be adequately funded and so that we may continue to do the work of the American people.

Mr. Speaker, I urge a ``yes'' vote on the previous question and on the rule.

I yield back the balance of my time, and I move the previous question on the resolution.

The previous question was ordered.