Providing for the consideration of the Senate amendment to 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.

Mr. Speaker, I want to thank the gentlewoman for yielding the appropriate time.

Mr. Speaker, I rise today in opposition to this rule and to the underlying legislation. This closed rule does not call for the open and honest debate that has been promised time and time again by my Democrat colleagues. Today's action by my friends on the other side of the aisle is yet another example of the Federal Government overstepping its boundaries into the private marketplace.

Mr. Speaker, today I will inform you of the parliamentary games that my Democratic colleagues are playing on this bill with a gun provision adopted by the Senate. We will discuss why Congress is pushing a bill that already exists in Federal statute, which not only limits credit and raises interest rates to responsible borrowers today. Small business will feel the impact also; and, finally, to review Congress' need to regulate every sector of the economy while they refuse to manage their own gross spending habits of the taxpayer dollar.

The Senate managed to add a provision in this legislation that would allow visitors of national parks and refuges to legally carry licensed firearms by a large bipartisan majority of 67-29. While this does not add power to the overregulated credit bill, it does provide an important legislative victory for Second Amendment rights. Yet my Democratic colleagues have separated the vote on this bill in two separate sections, one vote on the gun provision and one vote on the credit card bill.

Mr. Speaker, I would like to know why is this? Why is this that we take a piece of legislation from the Senate and because it is not liked by the Democratic leadership here, we separate that bill? Have my friends on the other side of the aisle split this vote to increase government regulation while voting against constitutional rights?

Not even 6 months ago, the Federal Reserve passed new credit card rules that would protect consumers and provide for more transparency and accountability in our credit market. These new regulations are set to take effect in July of 2010, an agreed-upon date to ensure the necessary time for banks and credit card companies to make the crucial adjustments to their business practices without adversely hurting consumers. With the growing Federal deficit, the current economic crisis and the growing number of unemployed, why is Congress now passing legislation that already exists in Federal statute?

This legislation allows for the Federal Government to micromanage the way the credit card and the banking industry does its business. If enacted into law, it is not credit card companies that will suffer. It will be everyone that has a credit card and, I might add, those who would like to have a credit card in the future. Every American will see an increase in their interest rates. And some of the current benefits that encourage responsible lending will most likely disappear, for example, cash advances and over-the-limit protection.

My friends on the other side of the aisle not only remove any incentive for using credit cards responsibly, but they punish those who manage their credit responsibly to subsidize the irresponsible.

Mr. Speaker, the Democrats also want to limit the amount of credit available to middle and low-income individuals, the very Americans who need to take most advantage of credit. A Politico article written last Friday discusses that the changes in this bill ``will dramatically raise the costs of extending loans to cardholders and cause the riskiest cardholders to be dropped altogether.'' It goes on to mention how bad this bill is in regard to the current economic downturn and how restricted access to credit cards will make it increasingly harder to purchase the essential family staples while dealing with job layoffs and temporary unemployment.

Additionally, the strain of this legislation could have a direct and adverse impact on small business. Small businesses are critical to this economy in making sure that we have economic and job growth in this country. For individuals starting a small business, this legislation will increase their interest rates, reduce benefits and shrink the availability of credit, potentially limiting their options even to succeed in the marketplace.

Meredith Whitney, a prominent banking analyst, predicts, in a Wall Street Journal article from March, a $2.7 trillion decrease in credit will be available by the year 2010 out of the current $5 trillion credit line available in this country. That means it will almost be cut well in half. Mr. Speaker, with the current state of the economy, we urgently need to increase liquidity and lower the cost of credit to stimulate even more lending, not raise rates and reduce the availability of credit. This is not a solution for the ailing economy.

This type of government control of private markets is all about what our Democratic colleagues and this administration have been exploring. Whether it is federalizng our banks, credit markets, health care or energy, the list goes on and on. That said, this administration has taken their power grab a step further. Now they are considering a take- over of the financial industry. Converting preferred shares into common equity signals a dramatic shift towards a government strategy of long- term ownership and involvement in some of the Nation's largest banks.

Millions of Americans are rightfully outraged at the mismanagement of TARP and the reckless use of their tax dollars. And I believe that taxpayers are increasingly uneasy with the Federal Government's growing involvement in the financial markets. Bloomberg.com had an article yesterday which highlighted that three of our large banks have applied to repay $45 billion in TARP funds. That means they had to tell the government we would like to pay back the money, is that okay, largely due to these burdensome regulations that the Treasury Department continues to place on them. But just last week, Secretary Geithner announced that he is considering reusing bailout repayments for smaller banks. This is completely unacceptable, and why I have repeatedly called for a solid exit plan for American taxpayers to be repaid by these TARP dollars. TARP dollars were never set up to be used as a revolving fund for struggling banks.

To preempt de facto nationalization of our financial system, on February 3, 2009, the House Republican leadership, including myself, sent a letter to Secretary Geithner regarding what was called the ``range of options'' this administration was considering in managing the $700 billion of taxpayer moneys.

Mr. Speaker, I will insert into the Record a letter that was sent to Secretary Geithner at that time.

Congress of the United States,

Washington, DC, February 3, 2009.

Hon. Timothy F. Geithner,

Secretary, U.S. Department of the Treasury,

Washington, DC.

Dear Secretary Geithner: Recent reports indicate that the

Administration is considering a ``range of options'' for

spending the second tranche of the Troubled Asset Relief

Program (TARP) released last week and that the Administration

is considering whether to ask the Congress for new and

additional TARP funds beyond the $700 billion already

provided. We are writing to raise serious questions about the

efficacy of the options being considered and to ask whether

the Administration is developing a strategy to exit the

bailout business.

Because the Administration has committed itself to

assisting the auto industry, satisfying commitments made by

the previous Administration, and devoting up to $100 billion

to mitigate mortgage foreclosures, it has been reported that

President Obama might need more than the $700 billion

authorized by the Emergency Economic Stabilization Act

(``EESA'') to fund a ``bad bank'' to absorb hard-to-value

toxic assets. In light of these commitments--which come at a

time when the Federal Reserve is flooding the financial

system with trillions of dollars and the Congress is

finalizing a fiscal stimulus that is expected to cost

taxpayers more than $1.1 trillion--it is not surprising that

the American people are asking where it all ends, and whether

anyone in Washington is looking out for their wallets.

Indeed, a bipartisan majority of the House--171 Republicans

and 99 Democrats--recently expressed the same concerns,

voting to disapprove releasing the final $350 billion from

the TARP. As we noted in our December 2, 2008 letter to then-

Secretary Paulson and Chairman Bernanke, we realize that

changing conditions require agility in developing responses.

However. the seemingly ad hoc implementation of TARP has led

many to wonder if uncertainty is being added to markets at

precisely the time when they are desperately seeking a sense

of direction. It has also intensified widespread skepticism

about TARP among taxpayers, and prompted misgivings even

among some who originally greeted the demands for the

program's creation with an open mind. Accordingly, we request

answers to the following questions:

1. How does the Administration plan to maximize taxpayer

value and guarantee the most effective distribution of the

remaining $350 billion of TARP funds?

2. How is the Administration lending, assessing risk,

selecting institutions for assessing, and determining

expectations for repayment?

3. Will the Administration opt for a complex ``bad bank''

rescue plan? How can the ``bad bank'' efficiently price

assets and minimize taxpayer risk? Will financial

institutions be required to give substantial ownership stakes

to the Federal government to participate in the program?

4. Is a ``bad bank'' plan an intermediate step that leads

to nationalizing America's banks?

5. Can you elaborate on your plans for the use of an

insurance program for toxic assets? Specifically, will you

seek to price insurance programs to ensure that taxpayer

interests are protected? If so, how will you do so?

6. What is the exit strategy for the government's sweeping

involvement in the financial markets?

Thank you for your consideration of these important

questions.

Sincerely,

John Boehner; Mike Pence; Cathy McMorris Rodgers; Roy

Blunt; Eric Cantor; Thaddeus McCotter; Pete Sessions;

David Dreier; Kevin McCarthy; Spencer Bachus.

This letter outlined a host of questions that deal with ensuring that the taxpayers would be paid back and also having an exit strategy for the government's sweeping involvement in the financial markets. Today is May 20, and over 3 months later, there has been no response by Secretary Geithner to the Republican leadership letter.

A couple of weeks ago, the Special Inspector General for the Troubled Asset Relief Program, TARP, published a report that reveals at least 20 criminal cases of fraud in the bailout program and determined that new action by President Obama's administration are ``greatly increasing taxpayer exposure to losses with no corresponding increase in potential profits.'' This is why you see the Republican leadership asking questions. This administration has not responded to our letter.

This administration is not above oversight and accountability. The American people deserve answers for their use of tax dollars and an exit strategy from taxpayer-funded bailouts, including how their investment in TARP will be returned. That is why I sent another letter to Secretary Geithner on April 23 of this year expressing grave concern to the recent reports of the Treasury moving taxpayer dollars into riskier investments in banks' capital structures.

Mr. Speaker, I will insert into the Congressional Record a copy of this letter dated April 23 to Secretary Geithner.

House of Representatives,

Washington, DC, April 23, 2009.

Hon. Timothy Geithner,

Secretary, Department of the Treasury,

Washington, DC.

Dear Secretary Geithner: I am greatly concerned by recent

news reports that the Administration is considering

converting the government's preferred stock in some of our

nation's largest banks--investments acquired through the TARP

program--into common equity shares in these publicly-held

companies.

As you are aware, these investments were originally made to

their recipients at fixed rates for a fixed period of time--

signaling that their intent was to provide these banks with

short-term capital for the purpose of improving our financial

system's overall position during a time of crisis. Converting

these shares into common equity, however, signals a drastic

shift away from the Administration's original purpose for

these investments to a new strategy of long-term ownership of

and involvement in these companies.

I am concerned that converting these preferred shares into

common equity would have two serious and negative effects.

First, it would bring the banks whose shares are converted

closer to de facto nationalization by creating the potential

for the government to play an increasingly activist role in

their day-to-day operations and management.

Second, I am concerned that moving these investments

further down the bank's capital structure into a riskier

position puts American taxpayer dollars at increased risk of

being lost in the event of a recipient's insolvency.

To date, no Administration official has provided the House

Republican Leadership wish any comprehensive answers to the

serious questions raised in our February 2, 2009 letter to

you about the Administration's exit strategy for the

government's growing involvement in the financial markets.

In absence of the Administration's response to that letter,

I would appreciate your prompt assurance that converting

these preferred shares to common equity--thereby taking these

companies closer to nationalization and putting taxpayers'

money at increased risk--is not a part of the

Administration's yet-to-be-articulated strategy on getting

out of the bailout business.

Thank you in advance for your prompt attention to this

issue of critical importance to me, the residents of Texas'

32nd District and the entire taxpaying American public. If

you have any questions regarding this letter, please feel

free to have your staff contact my Chief of Staff Josh

Saltzman.

Sincerely,

Pete Sessions,

Member of Congress.

As this Democrat Congress continues to tax, borrow, and spend American's hard-earned tax dollars, we move even closer to nationalizing our banks and credit systems, which will only deepen our current economic struggle. The Federal Government's interference in hindering our progress is apparent, while they should be there to help solidify making our system stronger and better. When Congress or the administration changes the rules, it should be in the best interest of the American public. But I can honestly say that this is not the case today.

Mr. Speaker, it is appropriate to consider new ways to protect consumer credit and consumers from unfair and deceptive practices and to ensure that Americans receive useful and complete disclosures about terms and conditions. But in doing so, we should make sure that we do nothing to make credit cards more expensive for those who need this credit or to cut off or hinder access to credit for small business with those less-than-perfect histories.

While reading the Wall Street Journal a few weeks ago, I came across an op-ed called ``Political Credit Cards'' discussing this very issue. It states: ``Our politicians spend half their time berating banks for offering too much credit on too easy terms, and the other half berating banks for handing out too little credit at a high price. The backers should tell the President that they'll start doing more lending when Washington stops changing the rules.'' This speaks to exactly what happened with TARP, health care, welfare, taxes, and lots of other legislation, including that underlying legislation today.

Mr. Speaker, the American people deserve better from their elected officials. I encourage my colleagues to vote against this rule.

And I reserve the balance of my time.

Mr. Speaker, we spoke just a minute ago about how banks had accepted these TARP funds and accepted them because it was necessary at the time to ensure the financial success of the banking system. And yet now here we are a few months later and the banks have undergone their stress tests. The banks understand more about the risk that is out there. And yet even as companies like JPMorgan Chase want to refund $45 billion or give it back to the government, the government is balking at them doing that.

The reason why is, as this article in Bloomberg.com states, because the government has a methodology that they want to follow which would cause banks to be in a different position because--in other words, not run their business the way they want--because government wants to tell them what the rules and regulations would be. And it appears as though that that is what this Treasury Department wants to do, that they have delayed banks paying back the money so that they can then put rules and regulations industrywide on anyone that took this money.

Mr. Speaker, what should happen is we should have a Treasury Department that eagerly, gleefully wants to get back money that was given to them on behalf of the taxpayer. And instead what happens is we have a Treasury Department that is delaying this. It is making it, I believe, more difficult, all under the guise, then, of trying to make sure that they get what they want, and that is exacting more rules and regulations on these banks.

I think that the Treasury Department should respond back to our letter. They should tell us what the exit strategy is, how people should pay back the money, and let the free enterprise system go about its job of creating not only a better economy, but also creating an opportunity to raise stock prices and employment in this country by doing their job in the free enterprise system.

I will include this article from Bloomberg.com as part of our testimony today.

Morgan Stanley, JPMorgan, Goldman Said To Apply To Repay TARP

(By Christine Harper and Elizabeth Hester)

May 19 (Bloomberg)--Goldman Sachs Group Inc., JPMorgan

Chase & Co. and Morgan Stanley applied to refund a combined

$45 billion of government funds, people familiar with the

matter said, a step that would mark the biggest reimbursement

to taxpayers since the program began in October.

The three New York-based banks need approval from the

Federal Reserve, their primary supervisor, to return the

money, according to the people, who requested anonymity

because the application process isn't public. Spokesmen for

the three banks declined to comment, as did Calvin Mitchell,

a spokesman for the Federal Reserve Bank of New York.

If approved, the refunds would be the most substantial

since Congress established the $700 billion Troubled Asset

Relief Program last year to quell the turmoil that followed

the bankruptcy of Lehman Brothers Holdings Inc. Banks want to

return the money to escape restrictions on compensation and

hiring that were imposed on TARP recipients in February.

``It really is a way for them to break from the herd,''

said Peter Sorrentino, a senior portfolio manager at

Huntington Asset Advisors in Cincinnati, which holds Goldman

Sachs and JPMorgan shares among the $13.8 billion it

oversees. ``It's a great way to attract customers, personnel,

capital.''

Treasury Secretary Timothy Geithner said on April 21 that

he would welcome firms returning TARP funds as long as their

regulators sign off. He added that regulators will consider

whether banks have enough capital to keep lending and whether

the financial system as a whole can supply the credit needed

to ensure an economic recovery.

Geithner's ``Broad Constraints''

One of the people familiar with the efforts by the banks to

repay TARP said he anticipates that the government would

prefer to issue industrywide compensation guidelines before

allowing any major banks to repay TARP money.

Geithner said yesterday that he would like to establish

``some broad constraints'' on compensation incentives in the

financial industry instead of setting limits on pay. A law

that went into effect in February sets a cap on the bonuses

that can be paid to the highest-paid 25 employees at banks

that have more than $500 million of TARP funds. Banks are

awaiting guidance from the Treasury on how to implement the

rules, such as how to determine which people to count in the

top 25.

JPMorgan, Goldman Sachs, and Morgan Stanley were among nine

banks that were persuaded in mid-October by then-Treasury

Secretary Henry Paulson to accept the first $125 billion of

capital injections from the TARP program to help restore

stability to the financial markets.

Stress-Test Results

The refunds would be the first by the biggest banks that

participated in the program. As of May 15, 14 of the smaller

banks that received capital under the program had already

repaid it, according to data compiled by Bloomberg.

The 19 biggest banks were waiting for the conclusion

earlier this month of so-called stress tests to determine

whether they would require additional capital to withstand a

further deterioration of the economy.

Goldman Sachs and JPMorgan, the fifth- and second-biggest

U.S. banks by assets, were found not to need any more money.

Morgan Stanley, the sixth-biggest bank, raised $4.57 billion

by selling stock this month, exceeding the $1.8 billion in

additional capital the regulators said the bank may require.

``Wrong Time''

While executives at Goldman Sachs and JPMorgan have

expressed a desire to repay their TARP money for months,

Morgan Stanley Chairman and Chief Executive Officer John Mack

told employees on March 30 that he thought it was ``the wrong

time'' to repay the money.

Morgan Stanley, which reported a first-quarter loss, also

slashed its quarterly dividend 81 percent to 5 cents. On May

8, when the company sold stock, it also sold $4 billion of

debt that didn't carry a government guarantee. Selling non-

guaranteed debt is a prerequisite for repaying TARP money.

The banks will also have to decide whether to try to buy

back the warrants that the government received as part of the

TARP investments. The warrants, which could convert into

stock if not repurchased, would add to the cost of repayment.

JPMorgan, which has $25 billion of TARP money, would need

to pay about $1.13 billion to buy back the warrants,

according to a May 14 estimate by David Trone, an analyst at

Fox-Pitt Kelton Cochran Caronia Waller. Morgan Stanley's

warrants would cost $770 million and Goldman Sachs's would

cost $685 million, Trone estimated, using the Black-Scholes

option-pricing model.

Bank Shares

Goldman Sachs and Morgan Stanley shares have climbed since

Oct. 10, the last trading day before the banks were summoned

to a meeting by Paulson and informed of the government's

plans to purchase preferred stock in them. Goldman Sachs,

whose stock closed today at $143.15 in New York Stock

Exchange composite trading, is up 61 percent. Morgan Stanley,

which closed today at $28.28, has almost tripled from $9.68.

JPMorgan shares, by contrast, are 11 percent lower at

today's $37.26 closing price than they were on Oct. 10, when

they closed at $41.64.

Banks could open themselves up to lawsuits if they repay

the money too quickly and end up needing to ask the

government for help in the future, James D. Wareham, a

partner in the litigation department at Paul

Hastings Janofsky & Walker LLP said last week.

CNBC on-air editor Charlie Gasparino reported on May 15

that Goldman Sachs and JPMorgan believe they have been given

permission to exit the TARP. He reported yesterday that

Morgan Stanley is seeking preliminary assurances that it can

exit the program.

Mr. Speaker, at this time I would like to reserve the balance of my time.

Mr. Speaker, I appreciate the gentlewoman letting me know that she has no further speakers.

Mr. Speaker, one of the things that we spoke about earlier was the letters that the Republican leadership has sent to Secretary Geithner asking questions about Treasury's plans now about not only the use of TARP funds, how they will be paid back, what that process is, and finally, the exit strategy from the TARP program.

The Republican leadership in this House sent a letter to Secretary Geithner months ago. We have not heard anything back, certainly not in writing. So we have looked across the news media for releases that came from the Secretary, and among other things, we have seen things that disturb us greatly. One of those is that the Secretary has openly talked about the wanting to have this Federal Government change the investment that was made in these banks from, in essence, one type of instrument to another. In this case, it was from preferred stock to common stock.

In other words, since they put the money in the system, in the banks, and they cut a deal about what they would do, they now want to change the rules of the game. I believe that is not only unhealthy, I think it would absolutely be against the spirit of the law that we passed about the intent.

What happens when you do this is now the Federal Government would then become a common shareholder, meaning that the government would be investing in the stock market. The government would become a partner in that effort, meaning that the government, as such a large player, could determine the stock price up and down. I think that is a bad deal. I think that's a bad deal not just for the free enterprise system, but I think that's a bad deal for this government. It puts them into a position where the government helps control the stock market and the stock price.

We've asked Secretary Geithner what he thinks about that. Secretary Geithner has not responded except to say that that is reserved as an option. And now on May 13, we see that Secretary Geithner announces that the bailout repayments will be reused for smaller banks. That means that the money that was lent as part of the TARP program, when the money comes back in, Secretary Geithner is now going to reallocate that to smaller banks.

It should be noted that what happened is a number of these banks have already received the money. But the TARP program, by the way it was set up, it said that when the money comes back in, it will go back into general funds. In other words, it was taken out of general funds. It was expected that it would be paid back plus interest and would come back to us.

Despite what Secretary Geithner says, there are some Members of this body who are very clear about what they think about that. And as this ABC News, off their Web site, dated May 13 article said, Despite the warm welcome Geithner's announcement received from the assembled bankers, some Capitol Hill lawmakers are none too happy with the plan to repay taxpayer money back out to smaller banks.

And it talks about Representative Brad Sherman, who is a Member of this body and a Democrat from California, ``blasted Geithner on the House floor today, citing part of the original TARP bill--Section 106D--that he said meant that these plans were `illegal.'

``It is being widely accepted in the press and on Wall Street and in Washington that whatever the Secretary gets back from the banks will instead be part of some revolving fund from which the Secretary of the Treasury may make additional bailouts in addition to the first $700 billion of expenditures.''

It says, ``Sherman went on, `Well, the statute is very clear to the contrary, whatever is returned to the Treasury,' '' it is returned to the Treasury. It goes into the general fund.

Mr. Speaker, what we're talking about is the Secretary of the Treasury has the authority and the responsibility to manage these funds. I do recognize that as these funds were given, there was a change of administration. I believe, and I think this Congress believes, that Secretary Geithner was a part of that transition. But now that the Secretary has been in office and he has assembled his team, it's time that the Secretary be very plain and write back at least those people who are writing letters, including the Republican leadership, asking what the plan is.

Seeing press releases as they come out one at a time as the Secretary chooses to do this is not a plan. We're after a thoughtful idea and process now that we've been through the stress test about how the American taxpayer can be paid back. And I think the $700 billion plus interest is what needs to come back to the Treasury and go into the general fund.

Mr. Speaker, at this time I would like to yield 4 minutes to the gentleman from Roswell, Georgia, Dr. Price.

I thank the gentleman for his thoughtful comments.

Mr. Speaker, at this time, I'd like to yield 4 minutes to the gentleman from Lubbock, Texas (Mr. Neugebauer).

I yield the gentleman 2 additional minutes.

I thank the gentleman for not only coming to the floor but for his thoughtful ideas.

Mr. Speaker, in closing, I'd like to stress that while my friends on the other side of the aisle claim to be protecting consumers with this legislation, in reality, they're going to limit credit, reduce benefits, and raise interest rates for every single consumer, whether they were a good consumer or a risky consumer.

I think the American taxpayer, really, the American public, including small businessmen and -women, really deserve the same accountability and transparency with their dollars to be used in a way that they see fit.

Mr. Speaker, we as a Nation have a real problem, and we need real solutions, and passing this legislation today when we already have a statute that will take place is simply a waste of time.

We need to protect jobs. We need to provide more jobs. We need to encourage economic growth. And we need to restore the American public's faith in their Members of Congress.

And I believe today you have heard very succinctly the Republican Party come down and talk about how this bill is a big overreach that will impact and cause problems to a system rather than making it better.

With that, I encourage a ``no'' vote on this closed rule.

I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

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, by direction of the Committee on Rules, I call up House Resolution 456 and ask for its immediate consideration.

Thank you, Mr. Speaker.

For the purpose of debate only, I yield the customary 30 minutes to the gentleman from Texas (Mr. Sessions). 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 unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on House Resolution 456.

Mr. Speaker, House Resolution 456 provides for consideration of the Senate amendment to H.R. 627, the Credit Cardholders' Bill of Rights Act of 2009. The rule makes in order a motion by the chairman of the Committee on Financial Services to concur in the Senate amendment. The rule waives all points of order against consideration of the motion except clause 10 of rule XXI and provides that the Senate amendment and the motion shall be considered as read. The rule provides 1 hour of debate on the motion controlled by the Committee on Financial Services. The rule provides that the question of adoption of the motion shall be divided for a separate vote on concurring in section 512 of the Senate amendment.

Mr. Speaker, we have heard a lot about the deceptive practices of credit card companies over the last 2 weeks here in Washington. My friends here in the House of Representatives have highlighted the nearly $1 trillion credit card debt in the United States.

President Obama has stressed the need for ``credit card forms and statements that have plain language in plain sight.'' My colleagues in the Senate have equated the deceptive practices used by credit card companies to loan sharking. Small business groups have drawn attention to the one in three businesses where credit card debt accounts for at least 25 percent of the company's overall debt.

Family and consumer groups have highlighted the more than 91 million United States families who are subject to unfair interest rate hikes and being taken advantage of by hidden penalties and fees. These statistics are certainly shocking, and meaningful legislation is necessary. However, this is not a new issue to the American people. This is a problem that they understand all too well and deal with each and every day.

Credit cards have gone from being a luxury to being a convenience to being a necessity. Whether it is paying for your gas at the pump or placing an order online, our modern economy almost requires you to have a credit card. Unfortunately, the tough economic times we are in mean that more and more Americans are turning to credit cards to pay for basic necessities or to make ends meet when something unexpected comes along.

Last weekend in Maine, I was talking with one of my constituents who told me something I hear frequently, that a credit card is the only way she can pay her medical bills. And last winter, with skyrocketing heating oil prices, a credit card was the only way many people in my State were able to stay warm.

But while credit cards have gone from luxury to necessity, credit card

companies have undergone a transition too. There was a time when a credit card agreement was reasonably straightforward and fair. It was an agreement to provide a basic service for a reasonable fee. But all that has changed. Credit card agreements are a tangle of fine print with complicated provisions that almost seem designed to keep the cardholder in debt forever. Everywhere you turn, it seems the credit card companies have dreamed up a new fee or another clever scheme to raise your interest rate. Basic fairness has been replaced by deception and greed.

These days using a credit card is like going to a Las Vegas casino. No matter how clever or responsible you are, nine times out of ten, you are going to lose, and the company is going to win. Managing your finances shouldn't be a gamble. The deck shouldn't be stacked against you.

Americans have a lot to worry about these days: a weak economy, a broken health care system and rising energy prices. And that is on top of all the responsibilities we face on a daily basis like raising a family and going to work. The last thing people need to worry about is whether or not their credit card company is going to suddenly double their interest rate or surprise them with an unexpected fee they can't afford.

Mr. Speaker, this bill will bring back basic fairness to the credit card industry and level the playing field for Americans to take responsibility for their finances. Credit card companies have been getting away with too much for too long.

I urge my colleagues to join me today in passing this important bill and sending it directly to the President.

I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentleman from New Jersey (Mr. Holt).

Mr. Speaker, I yield 2 minutes to the gentleman from Arizona (Mr. Grijalva).

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

Mr. Speaker, in spite of all the debate this morning on the TARP, on Secretary Geithner, on guns in the national parks, I just want to remind my colleagues that we're here today to talk about the rule on H.R. 627, the Credit Cardholders' Bill of Rights.

Mr. Speaker, this is an opportunity for us to prove to nearly 175 million Americans with credit cards that we understand their frustration and we recognize that they are the target of unfair, unreasonable, and deceptive practices. Late fees, over-the-limit fees, arbitrary increases in interest rates, the credit card companies have gotten away with far too much for far too long. It's time we level the playing field now for small businesses, for families and for individuals across this country.

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.