Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I wish to propound a unanimous consent request. I will try to explain it in layman's terms. I ask unanimous consent that the Sanders…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I wish to propound a unanimous consent request. I will try to explain it in layman's terms.
I ask unanimous consent that the Sanders amendment move from first place to second place and that the amendment offered by Senator Vitter, from Louisiana, be offered first, under the same conditions.
Mr. President, if my colleague wants to proceed a little longer, this is a very important amendment. If he wants to spend another minute or so talking about it, that is fine because I will need probably more than a minute to respond. Would he like additional time?
Mr. President, I rise in opposition to the amendment. I will explain why. The basic identity verification recordkeeping requirement in this amendment is already included in section 326 of the USA PATRIOT Act. It is redundant and not necessary on this amendment.
This bill is designed specifically to deal with credit card reform. A matter such as this obviously belongs in a more appropriate place. Also, the amendment would require card issuers to verify an applicant's identity by obtaining a Social Security card, photo ID, driver's license, and a card issued by a State in compliance with the REAL ID Act.
There are legitimate issues about terrorism and illegal immigrants in the country, but it seems to me when you already have provisions in the law that are specifically designed to protect the issues being raised by my friend--to add redundancy to a credit card bill, when we are trying to make sure people can have credit, and make sure it is provided in a way that is not abusive, with interest rate hikes, penalties, fees, and the like.
I say, with respect, to my friend that, presently, applications for credit cards are currently taken by mail, by telephone, and on the Internet. This would force all applicants to physically go to the bank and present the required documents, which would cause a huge inconvenience to customers. I don't think that is in our best interest at this time. We are not trying to make it more difficult for people to have access to credit cards. We want adequate information so decisions can be made about their ability to repay, but we don't want to burden them with unfair fines, penalties, fees, and high interest rates. This idea runs contrary to what we are trying to achieve with this bill.
I say, respectfully, that I oppose this amendment and ask my colleagues to do so as well.
Mr. President, I ask unanimous consent for 15 more seconds.
Mr. President, it is not my opinion that this would require people to show up physically. This is the opinion of the Treasury Department. We asked them to comment on this, and they told us that. The elderly, the handicapped, and those in rural areas are going to be adversely affected if this were to be adopted. It is duplicative, redundant, and unnecessary. It adds tremendous burdens on certain segments of this country. Credit cards are valuable instruments during difficult economic times.
I am happy to.
It is not the length of the amendment. Sometimes one or two words can have huge implications. We asked Treasury how they would interpret this, and they claim this would require the physical presence of an applicant. That is one of their concerns.
As long as that is a concern and it raises that possibility, adopting this, which could result in that, it seems to me would be an irresponsible action for this body to take.
I yield back my time.
Mr. President, I ask for the yeas and nays.
Mr. President, I move to reconsider that vote and move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 1062
Mr. President, what is the business before the Senate?
Amendment No. 1085
Mr. President, there are very few Members for whom I have more affection or respect than Judd Gregg of New Hampshire. But I think this amendment, first of all, has no place on this bill. It is unnecessary and raises some very serious, legitimate issues. Let me point them out.
First of all, it is going to be costly to do this: every agency to report what the national debt is. The number is absolutely worthless by the time you publish it because the national debt rises, of course, every nanosecond. So to have that idea what it is also gives you a false illusion of actually where we are.
The level of public cynicism about this issue is getting almost insurmountable. It seems to me we need to be far more realistic. There are other costs, as well, in addition to the debt that people care about. Why not have a tuition cost clock? Why not have a health care cost clock? These matters go up all the time as well. It seems to me that by adding something such as this, we are just adding to that illusion, adding to that cynicism at a time when there are plenty of places where you can get this information--certainly the Congressional Budget Office as well.
So while this amendment has been adopted in the past because it seems relatively harmless, the fact is, I think it is an idea that can actually raise costs and create false illusions. Certainly consumers ought to have some idea about some of these other costs, which I would object to. If you had a health care cost clock, a tuition cost clock, an energy cost clock, it could contribute to those problems. So I urge that the amendment be defeated.
Mr. President, let me make a couple of comments, if I can, regarding previous debates.
Our colleague from Vermont offered an amendment to deal with caps on interest rates and that failed on a point of order. I know there are others who have various ideas about this issue. It is a legitimate issue, and I want my colleagues to know this. It is a complicated issue, because dealing with credit cards, dealing with payday lenders, dealing with all sorts of different entities, the matter of what is an excessive interest rate is one that many Americans care deeply about and one where they wish to see some restraint.
It is legitimate to point out that there are interest rates being imposed today that you would have gone to jail for imposing not many years ago. In fact, it would make a loan shark blush, some of these interest rates that are being charged. So what I intend to do at some point, because I realize when you look at the votes, there were only about 30 votes dealing with the point of order dealing with the motion of the Senator from Vermont. But I think a lot of my colleagues do not feel his desire was illegitimate; they were concerned about whether the rate was too low or how it would apply.
So I am going to propose--I hope along with my friend and colleague from Alabama--to ask either the Federal Reserve, or whatever else is the appropriate place, to come back and give us a comprehensive review of what national rates there ought to be.
This idea that you can end up charging in effect 200, 300, or 400 percent interest rates, which is what has happened in some cases, is offensive, to put it mildly. It ought to be wrong and illegal, and people ought not to be able to get away with it.
I think it is difficult for my colleagues to determine what is that level and what institutions, and under what financial circumstances, do you apply it to. I realize a payday lender lends money for a week or two, not annually. So the interest rate will be different than on a credit card, on a home mortgage, or what it is apt to be with a credit union. With various institutions, under various circumstances, rates can differ.
It is confusing, except that most constituents and millions of Americans would like to see some restraint. I don't know how you can possibly explain why some institutions can get away with rates that are literally triple digits in some cases. I don't think we are going to resolve that matter on this bill. But we ought to have some clear idea of how to put some restraints on national usury laws. I am not a Bible scholar, but for those who are, I am sure they can recite chapter and verse in the Old and New Testaments when it comes to the usurious rates that were being charged by money changers and the like.
At the appropriate time, I will propose an amendment that will allow us to get back to people in a short period with some analysis of how to impose some meaningful restraints on what is charged to consumers for the privilege of borrowing money when they need it, as so many do, to pay tuition, pay mortgages, keep the business operating and deal with the health care crisis, or just to survive week to week. People have been taken advantage of under circumstances that are deplorable, in my view, when the rates are particularly beyond excessive.
I think one should not read the outcome of the Sanders vote as a rejection of the idea that applying some standards of fairness is unacceptable to this body. I believe a lot of Members voted against waiving the budget point of order not because they disagreed with what he is trying to do. I would not want that vote to reflect that. I support Senator Sanders, as I did on the budget debate, not because I necessarily agreed with the number he had in mind, but because it is an important debate and he should have had the right to be able to proceed with his amendment. I wanted to make that point overall. I think it would be a false impression to walk away and say
the Senate rejected any idea of considering some sort of a national usury rate because they rejected the waiver of the point of order that Senator Sanders offered.
I see my colleague from Louisiana, who I think wants to speak.
I yield the floor.
Mr. President, before our colleague from Colorado departs the floor, I want to thank him. I mentioned Senator Bennet earlier today in my comments about some new additional Members: Senator Merkley and Senator Warner.
I say to the people of Colorado, as I did earlier about our colleague from Oregon, we are so fortunate to have the Senator in the Chamber at this time. I feel particularly fortunate to have the Senator as a member of the Banking Committee. I served on the committee for some years. I have never been chairman before 2007, the last Congress. I have served under a lot of people on that committee over the years.
I hope not just the people of Colorado but the people of the country understand how fortunate we are indeed to have someone of Michael Bennet's talents and background to be a member of this committee. He is a junior member of the committee, but his ideas, his thoughts, his questions, and his participation qualify him as a senior member of that committee because of the contribution he has already made in little more than 100 days of being on the committee.
So I thank him for his involvement on this bill. He is thoughtful. We have some major issues to grapple with in the coming weeks. The modernization of our financial regulatory structure and the architecture of that is going to be one of the largest and most important debates this committee and maybe this Congress will have engaged in in years, considering how important financial services are to our economy and the world's financial stability.
Michael Bennet brings to that chair he sits in as a junior member of the committee years of valuable experience in helping us decide what steps we should take, the configuration that architecture should be, so that we can move ahead with thoughtfulness and with a certain amount of care and caution as we try to set up a system that will avoid the pitfalls that created the problems we are in today.
So I am particularly grateful to him for his involvement on this bill. But I would be remiss if I did not say to my colleague, Michael Bennet, he has been a significant contributor to the work of this committee since the moment he arrived. I thank him for that and appreciate his continuing involvement. I am grateful to the Senator for his support of this bill. I look forward to working with him for a long time to come on these and other matters before the committee. I thank the Senator.
I want to also kind of review the bidding a bit as to where we are this evening. I will begin by thanking the majority leader, Senator Harry Reid of Nevada, who has created the possibility for us to bring up this important piece of legislation.
While my name and that of Senator Shelby are at the top of the page as the authors of the substitute, that is an unfair characterization because so many people have been involved on our committee, and others in this Chamber, who care about these issues and have for a long time.
I am very grateful to Senator Shelby, with whom I work very closely on the Banking Committee, and his staff and how well they work with mine in helping to shape a bill like this, a substitute like this.
We are dealing with some very egregious violations of consumer protection. They did not happen overnight; they have been growing over the years; and they reached a point where I cannot think of anyone who has not been either affected directly themselves or had family members or children or their parents or neighbors and friends adversely affected by these practices by the issuing community generally.
There are some who do a very good job. I probably should say this more frequently. We talk about the credit card issuers, the credit card companies. The behavior is not only unacceptable, it is not only irresponsible, it is offensive. There are other ones that do a good job.
Like all matters before us, when we talk about an industry, there are those who perform admirably and well and care about the people they serve, and there are others who could care less what happens as long as they get money out of the pockets of those to whom they have lent some money.
But we write laws to protect those people against those who would do them harm. So we are trying to shut down a practice that goes on too often: when there are 70 million accounts whose rates have gone up in an 11-month period; when there are fees and penalties that have brought in billions of dollars, exorbitant fees and penalties, way beyond any proportionality to the offense committed--of being a day late, an hour late, in some cases, for the first time ever.
Samantha and Don Moore from Guilford, CT, were here today to talk about their experience. I have listened to them in the past. It showed courage for them to step up. For 40 years--40 years--Don Moore has been doing business with his credit card company, 40 years. Without any violation, any late fees whatever, one time 3 days late, around the Christmas season, the Moores found that their interest rate went from 12 percent to 27 percent; their credit limit from $32,000 to $4,000.
The Moores run a small business in my State. They use their credit card as a way to function in their small business. They pay their employees; they buy inventory. Without any real violation other than to be a few days late for the first time in 40 years, the Moores watched their rate double, more than double, from 12 percent to 27 percent and watched their credit limit drop from $32,000 to $4,000.
That is the kind of behavior that is not the rare exception. Virtually every one of my colleagues can tell similar stories about people in their States.
I know the Presiding Officer could as well from the State of Illinois. May 13, as we gather a day or so away from adopting legislation that will prohibit those practices, that you cannot change these rates arbitrarily. You get notice of 45 days. These introductory rates have to be in place for at least 6 months before you can change them. You must notify a person of late penalties or fees 21 days in advance, giving people opportunity to respond; no charging higher interest rates on existing balances the way they do today; no raising rates because you may be late on a utility bill or a car payment having nothing to do with your credit card; no continuing to charge rates when you have paid off a substantial part of your balance and a small amount remains and yet the card applies that interest payment on the entire amount you owed earlier.
For example, you owe $1,000, you pay off $900, the credit card companies were actually charging interest rates not based on the $100 that remains but on the full $1,000 until all of it is paid off. Those are not isolated examples of abuses by credit card companies. They are widespread. There are other such examples that go on that have been very harmful to consumers.
In this legislation, we give the consumer the power to decide what the circumstances are as to whether they want a credit limit or whether they want that limit to be exceeded. I remember the days not long ago when if you exceeded your credit limit, the clerk in that store or that waiter in the restaurant might politely suggest the credit limit has been exceeded and you might want to return the product. It is more difficult in a restaurant since the bill usually arrives at the end of the meal, but, nonetheless, I am sure many who may be listening can recall similar instances. That is no longer the case because the issuing companies have discovered they make a lot more money by charging exorbitant fees and penalties because you might be $10 or $20 or $50 over your limit.
The point there is a legitimacy in their mind to absolutely load you up with penalties and fees. In fact, they welcome the opportunity that you may be a little bit over your credit limit,
rather than being responsible and giving you the opportunity to decide whether you want to actually acquire that particular good or purchase. Today we have changed that. We let the consumer decide. We begin by saying there will be credit limits. If you want to opt out of that, you can. But it gives you the opportunity to be notified when you are going to exceed that limit so you don't find yourself behind the 8 ball and paying penalties you would rather not pay and would like to be notified when that is the case.
Imagine this: Here we are a decade into the 21st century. My 7-year- old runs a computer at home. My 4-year-old is trying to figure it out. Credit card companies want to charge fees if you pay your bills electronically. You can file your income taxes, you can engage in all sorts of economic behavior through the Internet today. But credit card companies want to penalize you if you pay your bills electronically or by phone or by some other means other than mail. Again, it is a further egregious example of an industry that is more interested in trying to trip you up, trying to make it more costly for you to use their cards than they are trying to assist you economically.
I could go on for the entire rest of the evening citing story after story in my State, as I am sure every other Member could, examples of abusive, outrageous behavior.
We have spent a long time over these last number of weeks and months talking about what needs to be done to get banks and other financial institutions in shape. I don't regret that. That was the right thing to do. But it is long overdue that we also try to do something on behalf of the people who utilize these services, whether it is trying to mitigate foreclosure of their homes or trying to see to it they don't get ripped off by a credit card company. In the next 48 hours, we are going to do that for the first time in the history of this body.
Twenty years ago, I started on this issue. I never got much more than 30 votes. When the bankruptcy reform bill was up, I tried to deal with credit cards. It got 32 votes. I tried to do some of the things for which I believe we will have an overwhelming vote in the next day or so. I believe our constituents will welcome the fact that the Senate of the United States, along with the other body which has acted on this issue already, is responding to their concerns. They are talking about it every day. They are wondering whether their interests will be part of this debate. This bill may not do everything everyone would like, but I believe it is a major step in the right direction. It addresses many of the major concerns raised over these many weeks and months and years that these matters have been growing in terms of their impact on people and their ability to survive on a daily basis economically.
Again, I thank my colleagues from the Banking Committee, Democrats and Republicans, Senator Shelby, former chairman of the committee. We got it out of committee by one vote. The Presiding Officer is a member of the committee. By a vote of 11 to 12 we happen to be here. We would have lost this issue had we lost one other vote. But our colleagues in the committee stood with us and, by the thinnest of margins, we were given the right to be here tonight to talk about this.
The vote of this body will be far greater than a one-vote margin when it comes to passing this legislation. We have an American President who has been utilizing the Office of the Presidency to talk about this issue. He has had press conferences, met with consumers. He talked about it on his radio broadcast on Saturday. He is creating the kind of environment where this legislation will become the law of the land.
I may not get many more opportunities, with the amendments to be considered tomorrow, to address the overall consideration of this bill.
Let me say that to the card companies as well, I appreciate the fact that they have been at the table as we have worked through this. I have not isolated them. I allowed them to make their cases where we were doing things that may have gone further in terms of serving the needs of our consumers and constituents. This is a bipartisan bill. That is something I try to achieve on every matter I am involved in directly. I don't think you can do much in this Chamber without having to reach out to each other and listen. We have done that.
To Senator Shelby's great credit, he has joined in this effort so we have the bipartisanship our colleagues seek. I believe we will pass this legislation and provide some relief for the people of our country at a time when they need it desperately. There has never been a moment in recent past history when constituents and the citizens of this country needed more help from their Government, whether it is home foreclosures, a loss of jobs, tuition, health care problems--all of those issues are affecting millions of people. While this bill will not solve all the problems, for the first time ever it will provide some relief in a very important area--the availability of credit and the use of credit cards and the need that people have on a daily basis to have access to that credit to provide for themselves and their families.
I see my good friend and colleague from Nebraska.
I yield the floor.