Mr. Chairman, I have an amendment at the desk. I thank you, and I yield myself such time as I may consume. I would like to thank both Congresswoman Maloney and Chairman Frank for bringing this bill to protect consumers from the egregious…
Mr. Chairman, I have an amendment at the desk.
I thank you, and I yield myself such time as I may consume.
I would like to thank both Congresswoman Maloney and Chairman Frank for bringing this bill to protect consumers from the egregious practices being engaged in by credit card companies to the floor and for their support of this amendment.
In May, Congress overwhelmingly passed major credit card reform legislation to end the many unfair and deceptive practices that credit card companies have been legally perpetrating for some time. But many of these protective provisions do not go into effect until February 2010 or later. So what are credit card companies doing?
Rather than preparing to implement these new consumer protections, the credit card industry saw this as a window of opportunity to squeeze more money out of consumers. They are raising interest rates and minimum payments while lowering credit limits. They are instituting fees of all shapes and sizes. I am sure that every Member of Congress has heard from constituents who have suffered under these practices. I know I have.
The bill before us today, H.R. 3639, will move up the effective date for credit card reforms to December 1, 2009. I am proud to be an original cosponsor of this bill, and I urge its final passage.
The amendment I am offering tackles the dilemma faced by consumers who receive notice of new fees on their
credit card accounts. As credit card companies search for new ways to make money, they are looking to charge fees where there were none before: new annual fees, inactivity fees, fees for failure to carry a monthly balance. Yes, now some credit card companies are indicating they will be charging a fee to consumers who pay off their balances every month. Can you imagine?
I find it outrageous, but the credit card companies argue that if the consumers don't like it, they can close their account. The choice is, pay the fee or close your account. The problem is that closing your account can hurt your credit score, and credit scores and credit reports play a large role in our society and can really impact people's lives. They are used by mortgage lenders, employers, landlords and insurance providers. This amendment is about leveling the playing field.
This amendment protects consumers by preventing the closure of a credit card account because of new fees from negatively impacting a consumer's credit report or credit score. It will allow consumers to cancel their card or shop around for another card with terms without taking a hit on their credit score. I urge a ``yes'' vote on this amendment.
I reserve the balance of my time.
I appreciate the inquiry, and I believe it would.
I thank the gentleman for yielding. And yes, that would be the understanding because that fee is a new fee to the consumer. They would then have the opportunity to either continue to engage in using that account with that new fee imposed, or they would have a chance to shop around in the free market to find an account that would be more compatible with their interests. They should not be penalized on their credit report for doing so.
That is not a problem that would result from what this amendment is striving to do. This would just protect the imposition of a negative credit score because when you cancel a card, it will limit the amount of credit you have available, and then that is used by credit scorers.
Mr. Chairman, I would inquire how much time we have remaining.
At this time I yield 90 seconds to the distinguished gentlewoman from New York (Mrs. Maloney).
Mr. Chairman, I appreciate the gentlewoman from New York's remarks. I do indeed feel better when we protect consumers. This amendment is all about leveling the playing field, giving the consumer a fair shake, an opportunity to evaluate whether or not they want to continue with an account that imposes whatever fee has been dreamed up. In this case, the one that really struck a chord was imposing a new fee on credit card users who pay down their balance every month. So we have to think about that. First, they impose all kinds of interest rate increases. Then they impose all kinds of other new fees, and now they are going to actually impose a fee on people who pay down their balances every month.
I yield to the gentleman.
I thank the gentleman, and I yield back the balance of my time.
Mr. Chairman, I demand a recorded vote.
Mr. Chairman, as the designee of Mr. Stupak, I have an amendment at the desk.
Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, as the designee of Mr. Stupak, I am calling up this amendment on behalf of my good friend, the Congressman from Michigan, Mr. Stupak, who is unable to be here with us today due to a death in his family.
Many of our Nation's largest banks received assistance through the Troubled Assets Relief Program, TARP, and these same banks are some of the largest issuers of credit cards. While executives on Wall Street are paid millions of dollars in executive bonuses on the government's credit line, they continue to engage in deceptive and misleading practices that take advantage of consumers and force them to accumulate more debt.
I and 356 of my colleagues supported the Credit Cardholders' Bill of Rights, H.R. 627, passed by Congress earlier this year. Unfortunately, the reforms put into place by this law are being circumvented, as we heard here today, by credit card companies. Card issuers are raising interest rates, raising minimum payment amounts, and charging extra fees before the bill takes effect.
In this economic crisis, far too many families are forced to rely on short term, high interest credit card debt to pay for food, for housing, and other basic necessities. In Congressman Stupak's district in northern Michigan, unemployment ranges from 6 to 28 percent. In Ohio, the unemployment rate is 10.1 percent. Families are falling behind on their payments and have fallen victim to the predatory practices of the Nation's credit card companies. Moving the enforcement date forward is critical to helping families across this country.
This amendment will immediately freeze interest rates on existing credit card balances until the Credit Cardholders' Bill of Rights goes into effect. For too long, the credit card industry has preyed upon consumers through omission of honest billing practices and through loopholes in credit regulation that are common among banking institutions.
On behalf of Congressman Stupak, I urge my colleagues to support my amendment.
I reserve the balance of my time.
This amendment gives immediate protection to the consumer and will end any manipulation of existing credit card contracts by companies prior to the December 1 date. It's as simple as that.
With that, Mr. Chairman, I yield back the balance of my time.
Mr. Chairman, I demand a recorded vote.