As we prepare to tackle the many challenges of our health care system, let's take the time to make sure that nursing schools are in a position to teach and train a new generation of nurses and nurse…
As we prepare to tackle the many challenges of our health care system, let's take the time to make sure that nursing schools are in a position to teach and train a new generation of nurses and nurse educators. Today, I am introducing the Nurse Education, Expansion, and Development (NEED) Act to provide schools of nursing with grants for faculty, equipment, and clinical laboratories. The proposed grants give colleges of nursing the flexibility to use federal funds to address the very problems that keep nursing schools from hiring more teachers today.
The healthcare crisis is complicated and the challenges are immense, but the runaway costs and inefficiencies in our health care system are no longer sustainable. So as we begin to look at healthcare reform in this Congress, let's keep in mind one lesson we learned from Massachusetts' recent experience. After a landmark healthcare reform law to extend healthcare coverage to every person in the State, the sudden demand for primary care professionals outpaced the supply.
Nurses can help fill that primary care gap. Today, nurse practitioners are already taking over at the helm of primary care in many areas that don't have any primary care physicians. Nurses are staffing health care clinics, and many are opening their own practices. Increased standards of training have opened new doors for nurses who want to further their careers but do not want to attend medical school. The numbers tell the story. In 2000 there were roughly 90,000 nurse practitioners in the U.S. By 2015, it is estimated there will be as many as 135,000.
Unfortunately, the number of nurses is not keeping pace with the growing health care needs of our Nation. In 2000, the U.S. Department of Health and Human Services found that the U.S. is 110,000 short of the number of nurses we need. By 2005, the shortage had doubled to 219,000. By 2020, it is expected we will be more than 1 million nurses short of the need.
Contributing to this shortage is a lack of faculty to teach and train future nurses. In a survey of more than 400 schools of nursing last year, the American Association of Colleges of Nursing found that 63 percent of the schools reported vacancies on their faculty. An additional 17.8 percent said
they were fully staffed, but still needed more faculty to handle the number of students who want to be trained. Last year, nursing colleges across the Nation denied admission to 49,948 qualified applicants because there were not enough faculty members to teach the students.
Statistics paint a bleak picture for the availability of nursing faculty now and into the future. The median age of a doctorally prepared nursing faculty member is 56 years old. The average age of retirement for faculty at schools of nursing is 65 years. It is expected that 200 to 300 doctorally prepared faculty will be eligible for retirement each year from 2005 through 2012, reducing faculty even though more than 1 million replacement nurses will be needed.
The number of qualified students turned away from nursing schools in Illinois reflects the national trend and continues to grow. In 2002- 2003, 502 qualified students were rejected from Illinois nursing schools. In 2008, 2,523 students were turned away because of lack of faculty and resources--over 1600 more students than in 2007. To avoid the vast shortage HHS is projecting, we have to figure out how to make a significant increase that we can sustain in the number of nurses graduating and entering the workforce each year.
My hope is that the bill I am introducing today can be part of the answer. Nursing schools need the resources to teach and train a new generation of nurses and nurse educators. Let's not take on health care reform without considering the more than 2.9 million nurses in our country today who are critical to our health care system. And as we look at improving our health care system, let's start by investing in the nursing pipeline today for the health care needs of tomorrow.
I ask unanimous consent that the text of the bill be printed in the Record.
As the Congress tries to help Americans overcome the most serious economic crisis since the Great Depression, we face two urgent yet conflicting priorities. We have to increase demand for American products to resuscitate our economy. And we have to reduce the financial burden that our children will assume. We need to let consumers keep more of their own money without reducing the revenues that the government needs to pay for essential services.
In addition, we need to stop the reckless lending that brought us this economic disaster.
Today, I introduce the Protecting Consumers from Unreasonable Credit Rates Act to try to get at each of these goals. My bill sets a ceiling of 36 percent annualized interest rates on consumer credit.
Consumers spend approximately $27 billion every year on predatory payday loans, high-cost overdraft loans, and hugely expensive refund anticipation loans. Imagine if a portion of that $270 billion 10-year cost of credit could be redirected towards buying American goods and services. The Center for Responsible Lending estimates that a strong federal usury cap would save low-income borrowers $5 billion each year.
And, in an era that has called for trillions of taxpayer dollars to bail out banks and jumpstart economic demand, this proposal costs the taxpayers nothing.
The Protecting Consumers from Unreasonable Credit Rates Act would establish a new Federal annualized fee and interest rate calculation-- the FAIR--and institute a 36-percent cap for all types of consumer credit.
In 2006, Congress enacted a Federal 36 percent annualized usury cap for certain credit products marketed to military servicemembers and their families, which curbed payday, car title, and tax refund lending around military bases. My bill would expand on that premise to include all types of credit for all borrowers.
If a lender can't make money on 36 percent interest, then maybe the loan shouldn't be made.
Although I hope to gain widespread support for this bill from responsible lenders, I understand that some of the financial service firms in this country will be uneasy with a broad bill establishing a high interest rate cap. I hope this bill can open an honest conversation about consumer credit rates.
My opening question in that conversation is this: what services do you provide for which you can justify charging your customers more than 36 percent in annual interest?
Fifteen States and the District of Columbia have already enacted broadly applicable usury laws that protect borrowers from high-cost payday loans and many other forms of credit, while 34 States and the District of Columbia have limited annual interest rates to 36 percent or less for one or more types of consumer credit.
But there is a problem with this State-by-State approach. Those limits can sometimes be evaded by out-of-State lenders that are based in States that have weaker usury laws.
Various Federal and State loopholes allow unscrupulous lenders to charge cash-strapped consumers pay 400 percent annual interest for payday loans on average, 300 percent annual interest for car title loans, up to 3500 percent annual interest for bank overdraft loans, between 50 and 500 percent annual interest for loans secured by expected tax refunds, and higher than 50 percent annual interest for credit cards that charge junk fees.
Consider 66-year-old Rosa Mobley, who lives on Social Security and a small pension.
The Chicago Tribune reports that Ms. Mobley took out a car title loan--a type of payday loan in which the borrowers put up their cars as collateral--for $1,000. Ms. Mobley was charged 300 percent interest.
She wound up paying more than $4,000 over 28 months and at the time of the report was struggling just to get by.
This bill would require that all fees and finance changes be included in the new usury rate calculation and would require all lending to conform to the limit, thereby eliminating the many loopholes that have allowed these predatory practices to flourish.
It would not preempt stronger State laws, it would allow State attorneys general to help enforce this new rate cap, and it would provide for strong
civil penalties to deter lender violations.
I included in this bill the flexibility for responsible lenders to replace payday loans that some borrowers once relied on with reasonably priced, small-dollar loan alternatives. The bill allows lenders to exceed the 36 percent usury cap for one-time application fees that cover the costs of setting up a new customer account and for processing costs such as late charges and insufficient funds fees.
The Protecting Consumers from Unreasonable Credit Rates Act would eliminate predatory lenders, but it also would help borrowers make smarter choices.
Congress established the Truth in Lending Act over 40 years ago to help consumers compare the costs of borrowing when buying a home, a car, or other items by establishing a standard Annual Percentage Rate that all lenders should advertise.
My first mentor in politics, the late Senator Paul Douglas from my home State of Illinois, said all the way back in 1963 that too often lenders:
compound the camouflaging of credit by loading on all sorts
of extraneous fees, such as exorbitant fees for credit life
insurance, excessive fees for credit investigation, and all
sorts of loan processing fees which rightfully should be
included in the percentage rate statement so that any
percentage rate quoted is meaningless and deceptive.
That was before anyone had ever heard of ``subprime lending.''
Unfortunately, as the use of credit has exploded and as the complexity of the credit products offered by lenders has become mind- boggling, Congress and the Federal Reserve have taken several actions since the passage of Truth in Lending to weaken the APR as a tool for comparison shopping. Today, many fees can be excluded from the rate that is given to borrowers. The APR no longer gives consumers the convenient and accurate information it once did. One payday lender in Pennsylvania used the various exclusions to disclose what was really a 400 percent APR as 6 percent.
This bill would give consumers a way to accurate compare credit options, by requiring that the new FAIR calculation be disclosed both for open-end credit plans such as credit cards and for closed-end credit such as mortgages and payday loans.
The bill is supported by 100 groups at the national and local levels, including the Consumer Federation of American, the National Consumer Law Center, the Center for Responsible Lending, USPIRG, and Consumers Union, and I include a copy of their letter of support for the Congressional Record.
As Congress considers some very complicated economic challenges, I urge my colleagues to also consider simple solutions. We can help give more money to American consumers today without borrowing money that must be repaid tomorrow. Let's start by eliminating some of the worst abuses in lending by establishing a reasonable fee and interest rate cap.
I urge my colleagues to support the Protecting Consumers from Unreasonable Credit Rates Act.
I ask unanimous consent that the text of the bill and the letter of support be printed in the Record.