Floor Statements

Offered By: Mr. Hensarling

Amendment No. 75: At the end of the bill, before the short

title, insert the following new section:

Sec. 535. None of the funds made available by this Act may

be used to enforce section 526 of the Energy Independence and

Security Act of 2007.

Offered By: Mr. Hensarling

Amendment No. 76: At the end of the bill (before the short

title), insert the following:

Sec.--.None of the funds made available by this Act may be

used the Maine Department of Marine Resources, Augusta, ME,

for Maine Lobster Research and Inshore Trawl Survey.

Offered By: Mr. Hensarling

Amendment No. 77: At the end of the bill (before the short

title), insert the following:

Sec.--. None of the funds made available by this Act may be

used by the Marine Mammal Center, Sausalito, CA, for

Emergency Response and Health Investigations for Endangered

and Threatened Pinniped Populations in the Pacific.

Offered By: Mr. Hensarling

Amendment No. 78: At the end of the bill (before the short

title), insert the following:

Offered By: Mr. Hensarling

Amendment No. 79: At the end of the bill (before the short

title), insert the following:

Madam Speaker, I rise today to honor the life of William C. ``Dub'' McCarty, and recognize his commitment and service to his community, the State of Texas and to our great Nation.

Dub, a resident of Athens, Texas, passed away last month. He was a loving husband of 58 years to JoAnn. He was a proud father to daughters Cynthia and Mary Lou. He was a devoted grandfather of Cole, Kyle, and Michelle, and great grandfather of Kristen, Preston, and Daniel. And finally, Madam Speaker, he was my dear friend.

Dub was born in 1929 in Scurry County, Texas, and graduated from Lamesa High School. After graduation, Dub proudly, proudly defended our Nation during the Korean war by serving in the United States Army.

When his service ended, Dub began what became a legacy of leadership in our free enterprise system and service to his community.

Dub returned to Lamesa to work and eventually own his own clothing business. He gave back to his small West Texas community by shaping the lives of younger men as an Order of DeMolay Dad and as a longtime Boy Scout leader in Lamesa.

Dub then moved to my hometown of Dallas, Texas, where he began a long career in corporate group insurance management. After that though, he set his sights eastward to the pine trees and lakes of East Texas, and began a fire and casualty insurance business in Henderson County.

As a business owner, he helped countless members of his community achieve their American dream, and he took great pride in his community. His record of service today is still unmatched in East Texas. He served as the Cedar Creek Chamber of Commerce president. He helped establish the Cedar Creek Library. He was a charter member of the library's board of directors, and he and his wife, JoAnn, worked tirelessly to support and grow that library. He led the Cedar Creek Kiwanis Club and was Division 26 lieutenant governor for over two years.

He served as secretary treasurer of the Athens Kiwanis Club. He took a leadership in their annual pancake breakfast. He was an active member of the Athens Rotary Club. And, Madam Speaker, the list of community service goes on and on.

Now, we all know across America that the Rotary motto is ``service above self.'' Dub lived those words every day of his life. He led by example, and his example represents the best of the American character.

Madam Speaker, Dub was not indifferent to the direction of his State and Nation either. He cared passionately about faith and family and free enterprise and freedom, and he chose to put his principles into action by serving as chairman of the Henderson County Republican party for 8 years. That's where I first met Dub McCarty, this kind, giving, caring individual. He was always upbeat. He always had a smile on his face and he always knew that if we worked together, that America's best days would lay ahead of her. He made a difference.

As the congressman for the Fifth District of Texas, I'm honored and, frankly, humbled to recognize my good friend, Dub McCarty. On behalf of all the constituents of the Fifth District of Texas, and a grateful Nation, I would like to extend our heartfelt condolences and prayers to JoAnn and the family.

Dub will be greatly missed, but I take solace in knowing that his contributions will live on, and that the people who had their lives touched by Dub McCarty will never forget.

Madam Speaker, I am one of those people.

Godspeed to Dub McCarty. He has left us, but he has gone on to now hear those words in a different place, ``Well done, good and faithful servant.''

I thank the gentleman for yielding.

Madam Chair, I rise in opposition to this legislation. It offers a new $1 billion benefit to Federal workers. I have no doubt that the Federal workers deserve this benefit, but to non-Federal workers, they don't deserve having their paychecks docked $1 billion to pay for it. That's what we're talking about. That's if the non-Federal Government workers are fortunate enough to still have their jobs in this troubled economy. Again, it's a great benefit. I wish every new parent could have that. I want to create a more prosperous economy in America so that every American could enjoy it, but this is absolutely nothing more than a wealth transfer of $1 billion from non-Federal Government workers to Federal workers. It is just patently unfair.

Why would you want to dock the pay of everybody else in this troubled economy to pay for this?

Already, if you look at the benefits that Federal Government employees receive--and listen, there are great Federal employees, and I want to keep them, and many of them are incredibly dedicated public servants. Yet look at the annual leave of the Federal Government versus the annual leave, on average, in the private sector. Federal workers are already receiving a better deal.

Look at the annual sick leave of the Federal Government compared to the average sick leave in the private sector. The Federal Government worker is already receiving a better deal.

Look at the family medical leave. You can see that Federal Government workers already receive, on average, a better deal than those in the private sector.

So, again, on average, when they're enjoying greater benefits and when they're enjoying greater job security, what a slap in the face to every worker in America who doesn't receive a government paycheck to see that, all of a sudden, they're going to have to pay for a new benefit for Federal workers.

This is on top of the fact that, today, the Federal Government is already having to borrow, Madam Chair, as you well know, 46 cents on the dollar. We are awash in red ink. Already, this body, under Democratic control, passed a budget that will triple the national debt in 10 years, costing taxpayers $148,926 per household. It will triple the national debt in the next 10 years. We are about to see more debt placed on this Nation, more debt in the next 10 years than in the previous 220.

You know, Madam Chair, there was a time in America's history where you worked hard today so that your children could have a better life tomorrow. Instead, a bill like this is saying: You know what? Let's go ahead and let the government work easy today so that our children have to work even harder tomorrow. Again, it's just unfair to everybody who doesn't receive that Federal Government paycheck.

At some point, Madam Chair, you have to ask: When does the debt and the spending stop?

We will never run out of good ideas. We will never run out of opportunities to take money away from one group of citizens and give it to another group of citizens. Those opportunities are there each and every day. Again, if you care about all of the children in America, you will quit placing an unconscionable burden of debt upon them.

So this bill must be rejected out of fairness and out of fiscal responsibility.

Madam Speaker, I rise today to honor Chief Ron Shields of the Brownsboro Police Department and recognize his exceptional service and contributions to his country, the State of Texas and his community.

His exemplary career in law enforcement has touched communities throughout Texas. As an instructor with the East Texas Police Academy at Kilgore College, Chief Shields has helped train more than 500 peace officers. Chief Shields represents public service in the highest regard.

Before his career in law enforcement, Chief Shields served his country honorably as a member of the Army National Guard.

As the Congressman for the Fifth District of Texas, I am honored to recognize Chief Ron Shields for his many years of public service and innumerable contributions to his country, state and community. Chief, on behalf of all the constituents of the Fifth District, I would like to extend our most sincere thanks.

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. Chairman, I have an amendment at the desk.

Mr. Chairman, the subject of mortgage reform is a very serious subject. And although there are certain laudable aspects of the underlying legislation, I fear that although it is a serious subject, it is difficult to take the legislation seriously.

How can you have mortgage reform when you leave out the single biggest root cause of the economic debacle we find ourselves in, and that is reform of Fannie and Freddie? How can you seriously deal with mortgage reform and be absolutely silent to at least half of the fraud equation, and that is those who lied about their income, lied about their occupancy, lied about their net worth?

The underlying legislation, Mr. Chairman, unfortunately, is going to ensure that consumers lose their choices. It will make interest more expensive. It will protect--``protect,'' a term we hear from our friends on the side of the aisle--protect people out of their homes and effectively take away the American Dream from millions and millions of Americans.

Now, we need effective disclosure. We need effective policing of fraud and misrepresentation. We also need some personal responsibility, and we need to quit bailing out failed institutions, and

we shouldn't force people who are struggling to pay their own mortgages to pay their neighbors' as well.

Now, Mr. Chairman, one particularly bad and onerous aspect of this legislation is something called assignee liability. What this means is that once the mortgage is entered into, that those who securitize the mortgage, those who may invest in the mortgage, that all of a sudden new legal liability will attach to them as well.

The bill introduces legal liability for the originator. It doesn't introduce any new legal liability on behalf of the borrower, but introduces new legal liability saying that, with respect to refinancing, that there must be a ``net tangible benefit''; and, if the lender fails this standard, he has legal liability. On all financing, there must be a ``reasonable ability to pay.''

Well, what do these standards mean? Net tangible benefit. So if somebody decides to refinance, take equity out of their home and start a small business, is that a net tangible benefit? Or does it depend on how successful the small business is?

How about if an individual refinances their home, they take out equity, and they decide to put a swimming pool in the backyard? Well, maybe that is not a net tangible benefit. Maybe it is, maybe it isn't. I don't know.

Maybe they refinance, because in their particular situation they need a lower monthly payment but yet they are willing to pay a larger sum. Is that a net tangible benefit?

I would be happy to yield to anybody on the other side of the aisle who could tell me if those examples constitute net tangible benefits. Hearing nobody on the other side of the aisle take me up on it, it kind of proves my point: We don't know what these terms mean, nor do we know about reasonable ability to pay.

So all of a sudden, if a lender figures out that there is a tragic divorce going on in a family, does he have a legal obligation now to deny homeownership opportunity because maybe there is no longer a reasonable ability to pay?

How about if somebody has the tragic discovery that they have breast cancer? All of a sudden, is there a legal obligation that maybe this person can no longer have a reasonable ability to pay?

We don't know what these legal standards are, Mr. Chairman. And so now they are getting passed on to the assignees, these fuzzy, muddy, cloudy, amorphous terms. It is a plaintiff's lawyer's dream, and so we will have an explosion of liability exposure. Why would people want to invest? Why would people want to securitize?

You know, when people invested in the stock of Enron, they were the victims. They weren't the victimizers. And now, all of a sudden, we are turning this on their head, and at the end of the day there is going to be less mortgage money available to anybody who wants to have their American Dream realized.

I reserve the balance of my time.

I yield myself such time as I may consume.

To my friend from North Carolina, there are many reasons not to support the bill. I didn't say I wasn't supporting it for these reasons. I said it was hard to take a mortgage reform bill seriously that didn't treat this.

At the end of the day, Mr. Chairman, again, what is going to happen is that we are functionally outlawing certain types of loans here, and we know particularly subprime, with these amorphous legal standards, applying them to securitizers, applying them to investors, functionally, you are outlawing this.

Well, that hurts people. It hurts the Taylor family of Forney, Texas, that wrote to me, ``If it hadn't been for subprime lending, I wouldn't have my house now. My credit was destroyed because of a divorce. I worked hard for 5 years to clean up bad credit.''

These people still ought to have an opportunity to realize their American Dream, and we ought to quit protecting them out of their homes.

I urge adoption of the amendment.

Mr. Chairman, I demand a recorded vote.

Mr. Chairman, I thank the gentleman for yielding.

Mr. Chairman, this is a very, very serious topic. Unfortunately, it is being addressed with a very, very disappointing bill.

I heard several of my colleagues on the other side of the aisle say this is all about protecting consumers. It is a piece of legislation, Mr. Chairman, which will protect them right out of their homes. I don't think that is the type of protection that the consumers or America are looking for.

What this bill will do, if this Chamber passes this and ultimately if it is signed into law, it means the Federal Government will functionally be taking away homeownership opportunities from the American people. It will cause an increase in interest rates for people as they seek to either buy a home or keep the homes they have. It changes the rules to where once again those who follow the rules will end up having to bail out those who do not.

Now, in the previous debate on the rule I heard the distinguished chairman of the full committee and others give us a history lesson about the cause, and it is important to learn the lessons of history. They were a whole lot less focused upon how this bill will impact the future.

But if we actually look at our history lesson, there is no cause that looms larger--looms larger--in the mortgage crisis meltdown than the abuses of the government-sponsored enterprises, Fannie and Freddie, where government gave them a functional monopoly to go out, make profits that could not be achieved in a competitive market, and told them to finance loans to people who could not afford them.

The demand for the subprime mortgage skyrocketed when Fannie and Freddie, the government-sponsored enterprises, demanded them. Many on the other side of the aisle wanted to roll the dice. Yes, the dice were rolled, and the American people lost.

This is called the Mortgage Reform and Anti-Predatory Lending Act. There can be no mortgage reform, Mr. Chairman, without reforming Fannie and Freddie. And for those who claim that this has already been accomplished, well, now that they have been effectively nationalized, when their market share of new mortgages has gone from 50 percent to almost 90 percent, when the taxpayers are on the hook for hundreds and hundreds and hundreds of billions of dollars, which makes the bailout of AIG look cheap, I don't think this is reform, Mr. Chairman.

With respect to the title of ``anti-predatory lending,'' the bill is almost completely silent on predatory borrowing. How can we take this as a serious piece of legislation, when we know that FinCEN, the Financial Crimes Enforcement Network, has said that over half of the mortgage fraud took place with borrowers, those who lied about

their income, they lied about their wealth, they lied about their occupancy; yet, the bill is almost completely silent. It only says, oh, by the way, if you are caught defrauding your lender, we are not going to allow you to sue him.

Otherwise, there is a complete explosion of liability exposure on the lender side. And we know what happens in lawsuit abuse, Mr. Chairman. It gets poked into the price of every single mortgage. People will pay higher mortgages.

Right now, the plaintiffs' trial attorneys, I have no doubt, are licking their chops over this legislation. We have such nebulous terms as ``net tangible benefit,'' ``reasonable ability to repay.'' Well, what is the net tangible benefit? If somebody wants to refinance their home and update their kitchen, is that a net tangible benefit? Maybe it is. How about if they want to refinance their home to put in a swimming pool? Is that not a net tangible benefit?

If there is somebody on the other side of the aisle who would answer those questions, I would be happy to yield time.

Well, seeing none, I think that buttresses my point, Mr. Chairman, that nobody knows how to define these terms.

So, ultimately what we are going to have are fewer mortgages being made. This is Uncle Sam telling you, with a couple of exceptions, if you can't qualify for a 30-year fixed mortgage, then we are going to deny you the homeownership opportunity in America, because we are smarter than you. We know better than you. We have to protect you from yourself.

If we want true protection, we need effective disclosure. Mortgage fraud needs to be treated equally on the borrower's side and the lender's side. And at a time of a national credit crisis, we need to be finding ways to help the American families with more credit for their needs, not less.

This bill needs to be rejected.

Madam Chairman, the part of this amendment that I, perhaps, do not support is one more mandate; but on balance, I wanted to compliment the ranking member, and I wanted to compliment the gentlelady from New York because the approach of this amendment is to provide consumers with tools that they can use to better understand the provisions of their credit card agreements. To me, that's at the crux of the argument.

What we should do is not take consumer choice away. We shouldn't take credit opportunities away, particularly

in a national credit crunch, but we have got to end misleading, deceptive and confusing disclosures where consumers do not have the opportunity or the ability to understand the options that are before them.

So as I look down here, being able to notify customers as to how a credit application can adversely affect their credit rating, this is a good thing. Increasing font sizes, in certain instances where needed, is a good thing. Requiring signage in stores that offer credit cards in order to help consumers to know their terms, this is a good thing.

I have said before--and I don't know if the gentlelady from New York was on the floor--that I applaud her for that portion of her bill that helps empower consumers with greater disclosure. I think that is a huge step forward.

As she well knows, I think her bill takes several steps backwards. I think it ends up eroding risk-based pricing. I believe there are some price controls within the bill. We've had a debate on that, and I assume we will continue to have a debate.

Overall, this amendment is a very good amendment, and it will help empower consumers. I am concerned about some of the pay-to-pay fees. I don't quite understand what's being accomplished there; but otherwise, it's a good amendment, and I applaud the authors for it.

I thank the gentleman for yielding.

Madam Chair, I want to rise in support of the Frank amendment. I appreciate the distinguished chairman of the Financial Services Committee working with me on this.

I do believe that it is an important study to have, and again, I don't know what the results of the study will be. I'll take the chairman up on his challenge. I'll be prepared to take the pop quiz once the study comes out.

The only thing that is a little bit disappointing to me, if I recall right, is I offered a second-degree amendment to the Waters amendment in markup, which I believe was a 6-month study after implementation. This is a 2-year. I wish we didn't have to wait quite that long for the results.

Madam Chairman, one of the big debates that we're having within this body today is ultimately what will the impact be of this legislation. There are those on the other side of the aisle who have maintained that this will have no

adverse impact on credit availability or that there will be no bailout effect with those who have good credit ratings and good practices who ultimately end up bailing out others. Now, some on the other side admitted they just believe there are more benefits to be derived from the legislation than the cost. I do not feel that way.

Number one, the Congressional Research Service, in response to a question regarding this legislation, said: ``Credit card issuers could respond in a variety of ways. They may increase loan rates across the board on all borrowers, making it more expensive for both good and delinquent borrowers to use revolving credit. Issuers may also increase minimum monthly payments, reduce credit limits or reduce the number of credit cards issued to people with impaired credit.''

That was the opinion of the Congressional Research Service. Again, it may prove to be true. It may not prove to be true. I believe it will prove to be true, and I believe that the Federal Reserve study could at least be helpful in determining this.

I've heard from community bankers within my district. They believe, if this legislation is passed, that ultimately smaller banks will be driven out of the market and that only the larger banks will be left offering these cards. If so, that, again, is fewer choices for consumers and reduced credit options.

We've heard from academics on the subject, like Professor Todd Zywicki of George Mason University, who said, ``The increased use of credit cards has been a substitution from other types of consumer credit. If individuals are unable to get access to credit cards, experience and empirical evidence indicates they will turn elsewhere for credit--such as to pawn shops, payday lenders, rent-to-own or even loan sharks.''

Again, I think that, given the expertise of the Federal Reserve--and certainly, I don't agree with everything they come out with, but they are a relevant party. They do have expertise, and I think it is an important portion of the chairman's amendment that they study the phenomena. We know about the experience of the U.K. When a couple of years ago they passed legislation, they ordered that the credit card default fees had to be cut or legal action would be taken. What happened is that two of the three biggest issuers imposed annual fees on their cardholders. Nineteen of the largest raised interest rates. Sixty percent fewer applicants were being able to receive credit.

So we have, number one, historical experience. We have academic testimony. We have testimony from the Congressional Research Service. So I hope there is an acknowledgment that there is at least a chance that those of us who argue the adverse consequences of the legislation may be proven right. I don't think the Federal Reserve are the only people who should study this phenomenon. I'm happy to invite a GAO study and other independent studies.

Again, I think it's a very important point, and although I think the gentlelady from New York's legislation takes a huge step forward with respect to disclosure, with respect to fighting misleading and really deceptive practices, I also fear that those who need credit the most in a credit crunch will be denied those opportunities. I fear that those who pay their bills on time or at least pay the minimum on time, which is over half of America, will end up having to bail out the other half, and we will have more bailout legislation.

So I appreciate the chairman in working with me and at least studying the phenomenon to see if it has any validity. I'm sorry we have to wait 2 years, but it's certainly better than nothing. Again, I appreciate the chairman of the full committee working with me on this.

Mr. Chairman, I certainly appreciate the intent behind the legislation, but I am fearful of what its adverse impact could be.

Like many people across this Nation, probably many people in this institution, I worked my way through undergraduate school. I worked a couple of different jobs in Texas A&M University back in the mid- seventies to get through college. To get to those jobs, I somehow had to keep an old 1965 Mustang running, and it didn't want to run.

For some reason, a credit card company sent me a solicitation, and I got a credit card. And whether I had a transmission problem that I couldn't pay for, I had a water pump go out, that credit card tided me over, made sure I had transportation to get to my job to pay for my undergraduate studies. And I hate to think about all of the college students in America who may be denied that opportunity. I used it the way it was supposed to be used. I used it for emergency purposes. I used it to tide me over until that next paycheck came in.

We're talking about folks over 18 who can vote, who can go to war, in most States can marry, own real property. We shouldn't be paternalistic towards them. We shouldn't deny them what could be an incredibly valuable tool to get them through college in the first place.

So I urge the rejection of this amendment.

I thank the gentleman for yielding.

I fear that what we have here is another form of price controls being applied to credit card availability.

You know, what is going to happen here, as we attempt to protect the consumer, I think we are about to protect him right out of having any opportunity to have an introductory rate. I mean, what is going to end up happening here is, instead of, say, enjoying a 10 percent rate for 3 months and then a 15 percent rate kicks in for the next 9 months, you are going to end up with 15 percent for the whole year.

Again, the answer here is to allow the consumer to have choice. People can understand this if we will write the disclosure in the right way. Yes, there are deceptive practices, but don't hurt the consumer as you clean up deceptive practices, but let the consumer choose. Let the consumer choose. And particularly for those who pay their bill on time at the end of each month, they are going to be hurt every time you take away just a little bit and chip away at the ability for people to have their risk priced because those who are good risk are going to end up subsidizing those who aren't.

I fear, again, that this will be an amendment that has untold, unintended consequences that are going to

ultimately hurt the consumer. I mean, there are a lot of different things that I would love for Congress to do. You know, I don't like to pay extra for the cheese on a cheeseburger; maybe we can somehow pass a law that they can't charge me extra for that. But you know what's going to happen? Either, one, they are going to quit offering me the cheeseburger, or number two, everybody who doesn't offer it is going to have to pay more. If you poke in on one end of the balloon, it pokes out somewhere else.

I know the intention is good, but we are going to protect consumers out of having any opportunity to have introductory rates if they wish them. So we need to reject this amendment.

I thank the gentleman for yielding.

I listened to the gentlelady from New York, who sponsored the bill, talk about this is a trick that credit card companies use.

Well, we don't want credit card companies to use tricks. But, you know what, Mr. Chairman? They can't use tricks if we will strengthen the competitive market and ensure consumer choice. They can't use tricks if we have an elective disclosure and we police it.

Again, I congratulate the gentlelady for that title in her bill, which, I believe, roughly parallels the rules that the Federal Reserve has promulgated after their 3-year study. Indeed, we need better disclosure.

It's better disclosure we need. We need greater consumer choice. We need strength in markets.

Also, tricks can't be used if consumers, who have effective disclosure, will take some, some responsibility to know the terms that they are agreeing to. By definition, if they agreed to accept a credit card, they are opting into terms.

Now, that's not effective today because we don't have effective disclosure. But ostensibly we have a title in this legislation, which I assume will soon be passed. If not, we have the regulations of the Federal Reserve that will ensure that we have effective disclosure, that we empower consumers.

But let's not take their choices away from them, especially when all the evidence we have seen, anecdotal, statistical, tells us that consumers overwhelmingly want this option. They want it.

So if we are already admitting today in some respects that the disclosure isn't there, you know, I don't want to have to tell them that, I am sorry, they wouldn't accept your credit card, but, you know, Congress passed a law that said you had to go read the fine print before you could go get this particular service. Again, I think that we are taking away consumer choice by doing this.

As the gentleman from Texas said, we are trying to micromanage the terms that ought to be managed within the framework of a competitive marketplace, with consumer choice, with informed consumers, with effective disclosure.

But quit protecting consumers from their choices. Quit protecting them from competition. You are making their lot worse, not better, when you do this.

So I would urge rejection of this amendment.

Mr. Chairman, I have an amendment at the desk.

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

Mr. Chairman, this is a fairly simple amendment that is aimed, again, at a form of embedded price controls within this legislation.

The underlying legislation would permit interest rates to rise on existing balances under four narrow options. This amendment would say, again, within the framework that we hope to achieve of protecting the competitive marketplace, of assuring that we have effective disclosure, this amendment would say that interest rates can vary as long as, number one, the issuer has specifically reserved the right to raise rates in its contract and has communicated that to the consumer.

Number two, the issuer communicates this fact to the consumer at

least once a year, and the issuer provides the consumer clear notification 90 days in advance.

Again, this is a facet of risk-based pricing. Now, many of us believe that this has been a good thing. It has empowered consumers who previously didn't have access to credit to have access to credit.

As their circumstances change, if you do not allow risk-based pricing, you are going to take credit opportunities away from them in the middle of a credit crunch when they need it most.

Now, this gives a reasonable time period of 90 days to say, you know what? If you don't want to have this card, you have got 90 days under the old interest rate to pay off this balance and either get rid of the card, find a new card, shop for a new card, do something.

But, ultimately, if we don't pass this amendment one of three things is going to happen. Again, we are going to have a bailout, yet another bailout from Congress. And that is the 50 percent of Americans who are paying their bill on time, making at least the minimum payment at the end of each month, they are going to be punished. They are going to have to subsidize the rates for all.

Again, it's a facet of eroding risk-based pricing that takes us back to an era where interest rates were 25 percent higher, everybody had to pay the same rate. The good credit risk had to subsidize the bad credit risk and everybody had this dreaded annual fee of 20 to $50.

We don't want to go back to that era. Assuming a competitive marketplace, and, unfortunately, this legislation, I believe, in some respects will result in a less competitive marketplace, I fear that some of the smaller issuers will be driven out of the market.

But if we can have a competitive marketplace, and if we can assure effective disclosure, then let's have the full benefits of risk-based pricing. I think some people just don't want it. They want to force those who pay their bill on time to somehow subsidize those who don't.

I fear, Mr. Chairman, that there is a lot at stake here. I mean, I hear from my constituents about how important the credit cards are to their lives, their small businesses.

I hear from a group, the family, Baker family of Rowlett, who said, ``Congressman, credit cards have been my main source of financing for my small businesses for the past 13 years. Without access to this type of instant credit, I would not be able to timely meet payroll.''

I mean, we have to help the small businesses.

I heard from the Weldon family of Garland. ``I use my credit card just about everywhere. When I receive my monthly credit card bill, I pay the full balance. I feel this legislation concerning credit cards would be unfair to me and others who prefer to pay off their credit cards each month. Why should we be punished for having good credit?''

Indeed, Mr. Chairman, it is a good question. Allow risk-based pricing. Don't take credit away.

I reserve the balance of my time.

Mr. Chairman, I yield myself the balance of my time.

Mr. Chairman, I tried to listen very closely to the gentlelady from New York, and what I think I heard was she would rather credit card companies cancel credit cards than allow my constituents to voluntarily agree to increases in their interest rate. That is not what the people of the Fifth District want to achieve. When she says, well, the credit card people are changing the deal, if it is in the agreement, that is the deal. That is the deal that allows many people to get credit in the first place and allows other people to have lower- priced credit.

Again, I believe this legislation is changing the deal on the American people, taking away their credit card options and opportunities.

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

Taking away risk-based pricing, which is disclosed, disclosed in the agreement, is punishing, punishing people like the Juarez family in Mesquite. I urge adoption of the amendment.

Mr. Chairman, I have an amendment at the desk.

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

Mr. Chairman, the underlying legislation here again seeks to erode the ability of consumers to access credit, especially those who may have checkered pasts, especially those who may be of low income. It does it by trying to restrict risk-based pricing.

Again, there was an era in our country's history where a third fewer people had access to consumer credit through credit cards. Everybody had to pay the same universal high rate, 25 percent more than what we are seeing today. We had the dreaded annual fees. There was no such thing as airline miles, cash back, any of this.

The ability for creditors to price for what they view the risk of the consumer has opened a market for people to have credit cards who previously couldn't have them, people who might have had to turn to pawn shops or payday lenders, who, again, serve very valuable functions in our society, but people ought to have options.

The underlying bill functionally outlaws a practice called universal default and a practice called double-cycle billing. Universal default doesn't offend me. Double-cycle billing offends me. But I don't feel a need to outlaw every practice in America that offends me personally, because it may not offend somebody else.

Mr. Chairman, if there is an option out there in the marketplace with 14,000 different issuers, and through every hearing, every markup, there was not one shred of evidence that we didn't have a competitive market and that consumers had choices. Now, they may not understand their choices, and that is the disclosure issue, but they have choices.

So I don't like double-cycle billing. I don't think it is particularly fair and I wouldn't choose a credit card with it. But, Mr. Chairman, you know, out there in the marketplace, people ought to have options. Somebody ought to be able to say I prefer to have a credit card with a 10 percent interest rate that has universal default and double-cycle billing in it as opposed to paying a 13 percent interest rate that doesn't have universal default, doesn't have double-cycle billing.

Why are we taking consumer choices away from them and why do we continue to contract credit when it is already being contracted in this economic recession? I just don't understand that, Mr. Chairman. I do not think it is good practice. Now, universal default, some cards use it, some cards don't. It is a risk management tool for some.

I am not in the credit card business. I don't know what works. I just want consumers to have choices. I want there to be a competitive marketplace. I want there to be effective, fair disclosure, and I want our Federal Government to police it. And there needs to be repercussions for credit card companies that defraud, that mislead, that use deceptive practices. But for us to come in and say subjectively, well, we don't like that practice, we think it is unfair, we think it is offensive. Well, maybe it is unfair and offensive to you, but if it allows somebody a lower interest rate, shouldn't in the land of the free they have that option? They should have that option.

So my amendment is a simple one. It simply says if a credit card company has a credit card and they want to offer this credit card that features either universal default or double-cycle billing, as long as they offer a card that doesn't have these features, which many consider to be unfair, unjust, then they can offer it. As long as all of their customers are offered a card without the feature, then a consumer, if they want to, can opt in to the card with these features if they think the trade-offs benefit them and their family. That is all it says. This is a consumer choice amendment, pure and simple. I urge its adoption.

I reserve the balance of my time.

Mr. Chairman, I yield myself the balance of my time.

Mr. Chairman, again what I see is we are trying to protect consumers from their choices. We are trying to protect consumers from their freedom. The consumer has the option. But I do thank my friend, the distinguished chairman of the subcommittee, for adding some clarity to the debate when he says the people with the good credit ratings will get the better interest rate. That pretty well makes my bailout argument.

That is what is happening. Half of America pays their bill on time at the end of each month. Another 20 to 25 percent at least make the minimum payment. Why should they be punished? Why should they be punished with higher interest rates? Why do they have to be homogenized?

We are getting away from risk-based pricing, and what will happen if we don't pass this amendment is, number one, we will achieve the bailout, and many people who would have received credit will no longer receive credit. I urge adoption of the amendment.

Mr. Chairman, we have no one to claim time in opposition.

Mr. Chairman, we have no one to claim time in opposition.

Mr. Chairman, I claim time in opposition.

Mr. Chairman, I'm somewhat uncertain, frankly, whether I am actually opposed to the underlying amendment. I think the intention is good. I just hope there's not an unintended consequence here. And so, if my friend from Illinois, the chairman of the subcommittee, would yield for a question, my concern would be this: We all know from our constituents how much identity theft is taking place in our society. I, myself, at one time have been victimized by identity theft; and many of our constituents have.

So if there is fraudulent activity, if identity theft is suspected, it at least would appear to me, in a reading of the amendment, that the credit card issuer would have to keep the account open for at least 30 days, and so I was concerned about its impact in trying to combat identity theft. That was my reading of the amendment.

And I'd be happy to yield to the gentleman from Illinois just to see if he could help explain how this would work.

Reclaiming my time, I certainly respect the gentleman from Illinois (Mr. Gutierrez). We do have an excellent working relationship. I don't know that this is a problem. I fear it may be a problem. Given his commitment that we can work on this at our conference, Mr. Chairman, I no longer oppose the amendment.

And I yield back the balance of my time.

Mr. Chairman, I rise to claim time in opposition.

I yield myself such time as I may consume.

Mr. Chairman, I listened carefully to the gentleman, and I appreciate the intent of his particular amendment, but I fear, again, that this will be one more in a series of amendments that may have unintended consequences.

I heard the gentleman, as well as other speakers on the other side of the aisle, say they want to prevent tricks by the credit card companies. I think that is one of the few items, besides renaming a post office, that could receive a unanimous vote in this institution.

Out of, I believe, 1,200 pages of Federal Reserve regulations where they spent 3 years studying the issues, we will have disclosure under the Federal Reserve regulations that will prevent such tricks unless one defines the actual period of a teaser rate to be a trick. I believe a consumer can understand the difference between 1 month, 6 months, 6 years, and 12 years. Let the consumer choose.

Let me tell you what I believe the practical result of this amendment will be. Particularly those who may have a more checkered credit past, consumers, instead of having the ability to have a teaser rate--and I'm just using numbers for an example--at 8 percent for 3 months that then goes up to 15 percent for 9 months--they'll just end up having to pay 15 percent for the whole 12 months. They'll lose consumer choice. They'll lose that opportunity.

Now, some maintain that there are some concepts--and I've heard it said from friends on the other side of the aisle--certain aspects of their credit card agreements that consumers just can't understand. They're just too difficult to understand. Again, I congratulate the gentlelady from New York, yet again, for having a disclosure title, I believe, very roughly equivalent to that of the Federal Reserve's. This is a problem that can be solved with disclosure.

Empower the consumers. Don't take away their options. Empower the consumers with effective disclosure, and let them choose in a competitive marketplace. Let there be competition. Again, today, I can understand how consumers are confused. These forms are so long. They're written in legalese. It's easy to hide it. The answer is effective disclosure. The answer is not an arbitrary date on how long a teaser rate ought to be.

What you are doing is protecting the consumer out of having any opportunity of having a teaser rate. A teaser rate, when averaged with the other rate, again gives you an average of what the interest rate would be for a year. If you pass this, there is going to be a universe of consumers who are going to end up paying more, paying more on average for their credit than they otherwise would. So I urge rejection of the amendment.

I reserve the balance of my time.

Mr. Chairman, one, what I believed I said in my comment is that, for some universe of people, they would lose their teaser rates under this legislation. I listened to the chairman spend a fair amount of his time debating Internet gambling, which I do not believe is on the floor at this time; but if the chairman is so supportive of having consumer choice, I don't understand why we just spent a day and a half in markup in his committee taking away consumers' choice in the mortgage market. So we will continue to have this debate throughout.

Again, it's a simple argument. I believe that we can have effective disclosure and can allow consumers to make choices. If they're not allowed, if this type of arbitrary date is imposed, some universe of borrowers will probably lose their teaser rates and will effectively end up paying more, which will restrict their options. Again, I urge rejection of the amendment.

I reserve the balance of my time.

No.

Mr. Chairman, may I inquire as to who has the right to close.

In this case, I continue to reserve.

Mr. Chairman, I urge rejection of the amendment, and I yield back the balance of my time.

Mr. Chairman, I claim time in opposition to the amendment.

I yield myself such time as I may consume.

Mr. Chairman, I'm not completely certain that I actually oppose the amendment. I do have a couple of concerns.

One, I want to congratulate the gentleman for the thrust of his amendment, and indeed, we want to ensure that our consumers are empowered and that our consumers have proper disclosure.

There are a number of reasons why consumers do not understand the disclosure forms that they have today, one of which is there are misleading and deceptive practices by credit card companies. We all agree on that.

Another reason, though, is that, day after day and with the noblest of intentions, we mandate more disclosures. I'm just somewhat fearful-- and not that this is not necessarily good information--that the combined impact will turn what otherwise might be a 2- to 3-page disclosure that a consumer might actually take the time to read into a 30- to 45-page behemoth that no one will take the time to read.

Again, I congratulate the gentleman for his intent and for his thrust. I'm not going to oppose the amendment, but I do want to articulate the concern again that we really want to emphasize that the most important aspects of a consumer's relationship with his credit card company are disclosed so that we can get focused there. In the average mortgage disclosure, there is so much disclosure, that people see a dizzying array of documents and pay attention to none of them.

I have always been an advocate for the succinct, effective disclosure written in plain English, not necessarily voluminous disclosure written in legalese.

I would also say that particularly for my friends on the other side of the aisle that have been extolling the virtues of the Federal Reserve throughout this debate, that through their rule-making, I believe that they have already addressed this issue. They did spend more time studying it than we did. I personally don't know. I didn't see the evidence of how much demand there is for consumers for this information. I don't know the answer to that.

One other aspect I would bring up besides the fact that we need to ensure that we're having effective disclosure. I am not indifferent as to the increased

regulatory burden on our small community banks. Two Congresses ago, I had the opportunity to be the lead sponsor and write regulatory relief legislation for our small community banks. We have about half of what we had, I believe, 20 years ago. And so I am always a little concerned, too, in making sure that the benefits of an amendment or legislation are worth the cost. I don't want to continue to see more community banks get out of the credit card business because it's an extra cost here, it's an extra cost there. They don't have the personnel, and I just always want to be sensitive to the fact that I do not want to reduce competition down.

I don't see the distinguished chairman of the full committee on the floor today at this moment, but I know that he often jokes about that one day we may change our name to the ``bank committee'' because there will only be one bank left in America.

So, again, I just want to show sensitivity, and I don't know if there is any kind of program for our smaller banks. I know on a number of pieces of legislation there are exclusions for small businesses. I don't see that in the language here. And again, I am not going to oppose this particular amendment, but I did want to articulate concerns that I hope will be taken to heart by the majority, things that they could consider as this goes into conference.

At this moment, I will reserve the balance of my time.

Mr. Chairman, who has the right to close?

Then I will continue to reserve.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I rise to claim time in opposition.

Mr. Chairman, I may be reluctantly opposed to the gentleman's amendment.

First, let me congratulate the gentleman from New Mexico. I have said other times that people had a noble purpose in their amendment. Of all amendments I have seen, this certainly has the most noble purpose, the most noble intent. No one who dons our Nation's uniform and fights for freedom, protects America's security ought to somehow be harmed because they missed a payment while they were taking on their Nation's duty. I certainly agree with the intent of the gentleman's legislation.

I have a couple of concerns, though, because I believe that this would be the first time that we are asking credit card bureaus to hide information.

I am just curious. Is there not another way to protect our brave men and women in uniform than setting the precedent of keeping accurate information away from a credit file which allows people to access credit in the first place? I am not an expert on it, but others who serve on the committee have informed me that this situation has been addressed under the Civil Relief Act. I know that military, Active Duty military, can append to their credit file that they are indeed in harm's way.

I would be happy to work with the gentleman for a program in DOD that would help ensure, again, that whatever type of resources are needed to ensure that people do not default on their

credit obligations while they are in harm's way, that's something I would want to support. I would want to go to the Appropriations Committee and ask them to appropriate funds to assure that this is done.

Clearly, we want to be sensitive to our Active Duty personnel. It's the most important thing we can do in this institution is protect the Nation from all enemies, foreign and domestic.

So I want to achieve the gentleman's goal, but I wonder if it might not have the unintended consequence of, perhaps, making credit even less available to our military personnel if, for some reason, the creditor community started believing that they were no longer receiving accurate information.

So I don't have a solution at my hand, and I admit that. But I do continue to be concerned that there may be unintended consequences here.

I reserve the balance of my time.

Mr. Chairman, how much time do I have remaining?

I will continue to reserve.

Mr. Chairman, I was listening carefully to the previous speakers. And again, I could not agree with them more in sharing their desire to ensure that this is not a problem. No one on Active Duty should be worrying about paying for their credit card bills. But I do continue to ask the question, is this the single best remedy?

Now, I'm not sure that any credit card company in America would be so stupid as to go and consciously ping somebody who is fighting for freedom in Afghanistan or Iraq. Wait until the local newspaper or local television station finds out about that. I would say some PR department would be working overtime.

But again, the thing that disturbs me here--and I want to solve the problem. Again, I admit, I am not an expert on what resources may be available at the Pentagon. I don't know if there couldn't be somehow automatic payment through the paycheck. If we need to set up money to loan our soldiers to ensure their bills are paid when they are overseas, I would be happy to support that.

But in some respects, you are asking credit bureaus to, in some respects, deceive creditors because they have information and you are telling them you are not allowed to give accurate information. Now, I don't want them to act adversely, but the precedent of essentially saying that you can now put misleading information into the market disturbs me greatly. I just would hope that there would be an alternative solution than this particular amendment, again, with the noblest of intentions.

I reserve the balance of my time.

Again, I want to congratulate my friend from New Mexico and his leadership on this issue.

This is absolutely, positively, unequivocally something that the Federal Reserve has to look into. I don't care if it affects only one soldier, sailor or airman in the entire Nation, this problem must be solved.

I continue to have reservations on this particular solution and its potential unintended consequences. I will most reluctantly urge a ``no'' vote at this time and hopefully have a commitment, particularly those who serve on our Armed Services Committee and our Appropriations Committee, to maybe find out if there is a less onerous way to treat what is a very, very serious problem.

I yield back the balance of my time.

I thank the ranking member for yielding.

Before entering into the debate, I certainly want to acknowledge, as I have before throughout this debate, number one, the work of the subcommittee chairman with whom I have served, proud to serve as the ranking member, it has been a very open process, a very good debate. And I certainly want to congratulate the gentlelady from New York who I know has been quite passionate about this issue. And although we certainly disagree with the implications of her legislation, what I believe or I hope to believe are unintended consequences, I certainly share, at least, a number of the goals that she has.

However, I do have great concerns about this legislation.

First, if this was a debate on whether or not there are credit card companies in America that use misleading and deceptive practices, I think we could pass that legislation with unanimous consent.

Now, Mr. Chairman, if this was legislation about whether or not the average consumer can understand their credit card agreement--the average one running 6,691 words, it would take the average American almost an hour to read, much less comprehend--my guess is we could pass that with unanimous consent as well since indeed most Americans cannot understand the provisions in their credit card agreements.

But unfortunately, the legislation before us goes way beyond simply ending deceptive practices. It goes way beyond simply trying to effectuate effective disclosure for the consumer. And although the bill is entitled the Credit Card Bill of Rights, I have great fears that ultimately this will prove to be the Credit Card Bill of Wrongs.

I believe that ultimately three things will happen if this legislation is passed: Number one, because of its prescriptive way in dealing with risk-based pricing, by essentially imposing a form of price controls on late fees, either, number one, the borrowers who do it right--now, Mr. Chairman, that's half of America; half of America either pays their bill off in full at the end of the month or does it almost every month. And then there is about a quarter who miss some. And then there is about a quarter who are always universally late.

But what is going to happen, Mr. Chairman, is the people who are doing it right, who are working hard, trying to pay their bills, are going to be forced to bail out those who don't. This bill will take us back to a previous era, a bygone era where everybody paid higher interest rates, where a third fewer people had access to credit, and we had all of these dreaded annual card fees.

Now, that was a previous era before we had this thing called risk- based pricing, Mr. Chairman, and what is that? It says, you know what, if you have a checkered credit past or maybe you have a lower income, maybe you're having trouble meeting your bills, well, risk-based pricing says you can still get access to credit if you're willing to pay more for the risk of the creditor. The option, of course, is not to have any credit at all, in which case if you lose your credit card, then you're looking at some other option. And in that respect there are provisions of this bill that maybe ought to be called the ``Pawn Shop Owners and Payday Advance Lenders Relief Act,'' because, Mr. Chairman, if you start to take away credit opportunities of those who have checkered credit pasts, those who are low income, they may be forced into options they don't like.

Now, again, I want to make it very clear I think the payday lenders, the pawn shop operators, they serve a very vital function in our economy. Many people use them. That's not my point. My point is the consumer ought to be able to choose. So if you start taking that ability away to risk-based price, you're taking away credit, number one.

Number two, you're going to be forced to this bygone era where the people who did it right have to bail out the people who did it wrong. I mean, does that sound like a fairly consistent theme out of this particular Congress: bailout, bailout, bailout? And that's what this is, Mr. Chairman. Unfortunately, it will force the good credit cardholders to bail out those who aren't.

And you know what, Mr. Chairman. We have now seen out of this Democratic Congress a $700 billion bailout bill costing the average American family over $6,034. We have seen a $1.13

trillion, with a ``t,'' government stimulus plan, costing the average American household $9,810. We've now seen out of this Democratic Congress, Mr. Chairman, an omnibus spending bill $410 billion, costing the average American $3,534. And now just today, just today, a $3.6 trillion budget, which is going to triple the national debt in 10 years.

I mean, Mr. Chairman, isn't it enough that this Congress has taken all the cash out of our wallets? Is it going to take the credit cards out of our wallets as well? I hope not. I don't believe that's the intent of the legislation, but I fear that will be the effect.

Now, again, there are many problems in this credit card market. There are credit card companies, one in particular, that my wife and I absolutely refuse to do business with because we don't like their practices. But throughout this debate, and I challenge Members on the other side of the aisle to show to me, where is it that we don't have a competitive market? Where is it that the consumer doesn't have the choice? Now, up until the recent economic turmoil that we've had, I believe there were over 14,000 different credit card issuers in this Nation with a dizzying array of options for consumers to choose from. It's the competitive market that is the consumer's best friend.

Now, if people don't understand their disclosures, and I believe, again, many of them don't, what we ought to do is not take away the economic opportunities, not take away consumer choice, but ensure that there is effective disclosure written in English, not voluminous disclosure written in legalese. Part of this is the fault of Congress and the regulators. When you disclose everything, you end up disclosing nothing. Part of it is an answer to an explosion of liability exposure to where some of these credit card companies feel, well, if we don't disclose this, we may get sued.

And then last but not least but, again, there are misleading and deceptive practices of credit card companies. That should be stopped, and particularly under the Truth in Lending Act, under the Deceptive Trade Practices Act. Sometimes, Mr. Chairman, the answer is to enforce the laws that we have on the books.

I don't see the gentlewoman from New York on the floor at the moment, but I want to commend her for that portion of the legislation that deals with disclosure. Now it roughly parallels that of the Fed regs that the ranking member spoke of, and I think a lot of good can be done here in informing consumers about what their rights and responsibilities are.

But, again, ultimately I feel that if we enact this legislation, bad things are going to happen. And it's not just a theory that I have. It's not just me personally. I mean, let's listen to our own Congressional Research Service. They said: ``Credit card issuers could respond in a variety of ways,'' speaking of the legislation. They may ``increase loan rates across the board on all borrowers, making it more expensive for both good and delinquent borrowers to use revolving credit. Issuers may also increase minimum monthly payments, reduce credit limits, or reduce the number of credit cards issued to people with impaired credit.'' So it's not my opinion. That's the opinion of the Congressional Research Service.

Now, I'm sure that every Member here has a number of financial institutions throughout their congressional districts. I'm proud to represent a number of community banks in the Fifth District of Texas. It's an informal poll, but I went to three of them--First State Bank in Athens, Texas; East Texas National Bank in Palestine; First State Bank in Mesquite, Texas--and I asked them what's going to happen if this legislation is passed? And what they told me was, you know, at that point the cost of these cards to community banks just become so much to justify continuing the program, the card portfolio ends up getting sold to the big banks and the consumers lose their options in smaller markets. That's what we are hearing from community bankers.

What do we hear from academics? Well, we heard testimony from Professor of Law Todd Zywicki at George Mason University: ``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 such as pawn shops, payday lenders, rent-to-own, or even loan sharks.''

And, indeed, Mr. Chairman, we see this happening in the marketplace now. Pick up the newspaper. Recently in the IndyStar, I read: ``More Middle Class Families Are Seeking Payday Loans As Financial Turmoil Mounts.'' The Boston Globe: ``Tight Credit Drives Consumers Towards Pawn Shops.'' As you begin to take away people's credit cards, you send them elsewhere.

And perhaps the most relevant piece of data, Mr. Chairman, is what happened in the U.K., in Great Britain, when they passed a similar law. They decided credit card default fees were too high, and they ordered the credit card issuers to cut them or face legal action. What happened? You can look at the record. Two of the three largest issuers promptly imposed annual fees on their cardholders. Nineteen of the largest raised interest rates. And by one independent estimate, 60 percent of new applicants were rejected. Those are what I assume to be the unintended consequences of this legislation.

So, Mr. Chairman, as people shoot at credit card companies, and there's a number of them that need to be shot at, I hope they don't end up wounding hardworking, struggling American families who rely on these credit cards to finance their small businesses, to help them with their health care needs, to buy groceries. And I know people can go and high- five each other and say, look, we beat up on the credit card companies today. But if you take away risk-based pricing, you're going to take credit opportunities away from the people who need it most. And if you impose this bill, what you're going to say is to half of America who pays their bill on time, well, folks, you're going to have to bail out somebody again. You know, we're reaching for your wallet. We're going to force you to bail out the people who don't do it right.

That's not right, Mr. Chairman. It is not fair. And because of that, this legislation in its current form needs to be defeated. We need disclosure. People need an adequate amount of time to pay off their balances if their interest rates or terms change, but we cannot restrict in a competitive marketplace the options and opportunities of struggling Americans at a time of a great credit crunch when they desperately, desperately need access to those credit cards today.

So I urge defeat of this legislation.

Mr. Chairman, I was listening very carefully to my colleagues on the other side of the aisle, and, again, I want to say I believe every person in this Chamber would agree that there are misleading and deceptive practices with credit card companies. I have congratulated the gentlelady from New York for that title in her bill that would provide effective disclosure. Consumers need it, they demand it, and they are not receiving it.

But in taking one step forward, her legislation, unfortunately, probably takes 10 steps backwards. And ultimately what is unfair, what is unfair, Mr. Chairman, is in a time of a credit contraction to reach into people's wallets and take their credit cards away. Ultimately, that is what this legislation will do. Regardless of its noble intentions, that is what the legislation will do.

It is not just theory I have. It is history. We have seen similar legislation enacted in Great Britain, and that was the impact.

Now, I have heard in the context of the debate on the budget colleague after colleague on the Democratic side of the aisle decry budget deficits. ``The budget deficit is horrible.'' Well, it was $160 billion when they took it over, and now it is going to $1.8 trillion. They increased it 10-fold.

Now I hear Democratic colleague after Democratic colleague lament the credit contraction. Yes, there is a credit contraction. Why do you want to worsen it? Why do you want to exacerbate it? And when you engage in forms of price controls, and you may come up with all kinds of different names for it, but if you are going to restrict fees for people who pay their bills late--they need to be disclosed, people need an opportunity to pay off their bills--but ultimately in a free market, people ought to have consumer choice and they ought to be able even with a checkered credit past to get credit.

People are counting on these credit cards. Risk-based pricing. You are taking tools away from those who use it and you are leading to two consequences. Either, number one, half of America is paying their bill on time and you are going to force them through this legislation to bail out the portion of America that doesn't; and for those who are struggling, you are going to deny them credit card options.

People need these credit cards for their small business. They need it for personal items. I hear from the people in my district. I hear from the Vehon family of Rowlett, who said, ``We were laid off from our jobs at the same time,'' the gentleman talking about himself and his wife. ``We moved into our first home together in July of that year. 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.'' And yet the legislation before us could take away the credit cards of the Vehon family of Rowlett.

I heard from the Howard family of Canton. ``My wife and I use our credit cards, at times, to pay for medical-related bills. My wife has a heart condition, which between her medical bills and mine we spend out- of-pocket

$18,000. And yes we had to put some of that cost on credit cards.''

I heard from the Juarez family in Mesquite. ``I oppose this legislation. I have utilized my credit cards to pay for some costly oral surgeries. I don't want to get penalized by this legislation for making my payments on time.''

Let's not penalize the people that are doing it right. Let's not penalize the people who desperately need credit in a credit contraction. We need disclosure. We need adequate time to pay off bills. But don't take away credit in a credit contraction.

I thank the gentleman for yielding.

I have listened very carefully to this debate, as short as it is, Madam Speaker. I have listened to my friend, the distinguished vice chairman, the gentlelady from Pennsylvania, say that these budgets are about values more than numbers. I couldn't agree with her more. It is clear that the Democratic budget values spending. It is clear that the Democratic budget values taxing. It is clear that the Democratic budget values debt, debt as far as the eye can see, Madam Speaker.

Now, almost without exception, Democrat after Democrat Member have come to issue a history lesson to Members of this body. Well, I have a history lesson of my own. When Republicans were in control of Congress and budget deficits were $300 billion and falling, the gentleman from Maryland, who is now our majority leader, said, ``They have instigated a dangerous spiral of deficits and debt that constitute nothing less than fiscal child abuse.'' The gentlelady from California, who is now our Speaker--again, when the Republicans controlled the body, we had deficits $300 billion and falling--said, ``This is immoral, irresponsible and just totally immoral to ask for my children and grandchildren to pay for it.'' And now, Madam Speaker, on their watch, the deficit has gone from roughly $160 billion to $1.8 trillion, and there is silence, stone cold silence. Where are the accusations now of fiscal child abuse?

This is a budget that will place more debt on our children than has ever been placed before. This is a budget that in 10 years will triple the national debt, create more debt in the next 10 years than in the previous 220 years of our history. Yet, where are my Democratic colleagues to talk about the fiscal child abuse?

Spending. Increasing spending almost 9 percent. Almost every family budget that pays for the Federal budget is having to cut back, but not the government, no, no, no, no, no, not the government budget.

You know, Madam Speaker, there was a time in our Nation's history where people believed that you work hard today so your children could have a better tomorrow. And this Democratic budget takes that ethic, turns it on its head and says, we will let government live easier today so our children have to work harder tomorrow.

That is not the America I grew up in. It is not the America I want to leave to my 7-year-old daughter and my 5-year-old son. There is a better way.

Madam Speaker, you cannot borrow and spend your way into prosperity. This is a budget that is not solving the Nation's economic crisis; it is exploiting the Nation's economic crisis. It must be rejected.

Mr. Speaker, I thank the gentleman for yielding.

I can think of no greater act of irresponsibility for this House of Representatives here and now than to take this budget to conference. This is a budget that will place more debt, more debt on our Nation in the next 10 years than was run up in the previous 220. That is right, Mr. Speaker. This budget, this budget is laying the framework for more debt to be placed on our Nation in the next 10 years than was placed in the previous 220.

Now, I must admit that I find it somewhat amusing that every time one of my friends from the other side of the aisle, including the distinguished chairman of the Budget Committee, comes to the floor to debate, they always want to play the blame game, Mr. Speaker. They always want to point the finger at somebody else and they speak of, well, there is this problem that was inherited.

Well, maybe there was a problem that President Obama inherited, but he inherited it from a Democratic-controlled Congress. When the Democrats took over Congress, the deficit stood at $161 billion. Now we know in just two short years, two short years, we are looking at a budget deficit of $1.8 trillion, a 10-fold increase, Mr. Speaker.

Yes, that is a challenge inherited by the President from the Democratic Congress. But to be fair to the Democratic Congress, he is really only inheriting about a $1.3 trillion budget deficit from them. He is adding about half a trillion dollars of it himself to get to the $1.8 trillion.

When the Democrats took control of Congress, the unemployment rate stood at 4.4 percent. Now it is over 8 percent, almost double.

When the Democrats took control of Congress, the Dow stood at 12,400. I need not tell anybody in this Chamber that it is down almost 40 percent now.

Now, I don't blame my colleagues for every single woe that our Nation faces today, but they seemingly take no responsibility and seemingly are more interested in pointing the finger than solving the problem. And when they so-called try to solve the problem, all we have is a borrow, tax and spend budget. Borrow, tax and spend, that is what this budget is all about.

If history is my guide, Mr. Speaker, no nation in the history of the world has been able to borrow and spend its way into prosperity. Many have tried, including our own. In the Great Depression, Henry Morgenthau, FDR's Secretary of Treasury, once said, ``We have tried spending money. We are spending more than we have ever spent before and it does not work. After 8 years of this administration, we have just as much unemployment as when we started and an enormous debt to boot.'' That was at the outset of World War II, after 10 years.

Many of us know about Japan's lost decade. An industrialized economy, not unlike our own, they had a real estate bubble burst on them in the early nineties. They passed eight different so-called government stimulus bills in 10 years, and in 10 years they created no new jobs, no new economic growth, and their per capita income went from second, second in the world, to 10th in the world. Now, how many young people in that nation were never able to go to college, never able to start a new business, never able to own a home because of the debt placed on that nation?

As The New York Times wrote about the experience, and let me say again, The New York Times, not Rush Limbaugh, not National Review, in a recent article they said, ``During those two decades, Japan accumulated the largest public debt in the world. This has led many to conclude that spending did little more than sink Japan deeply into debt, leaving an enormous tax burden for future generations.''

The article from The New York Times goes on to say, ``Among ordinary Japanese, the spending is widely disparaged for having turned the nation into a public works-based welfare state, making regional economies dependent on Tokyo for jobs.''

Mr. Speaker, we need to learn from our neighbor's history. We need to learn from our own history. This is a budget that will not only spend too much and tax too much, but place a level of burden of debt on future generations that is absolutely unconscionable.

Even prior to this horrendous budget, we were on track to have to double taxes, double taxes on the next generation just to balance the budget. This is a budget that will triple, triple the national debt in just 10 years, and run up more debt in the next 10 years than in the previous 220.

Now, Mr. Speaker, I rarely use the word ``immoral'' in political debate, but I think placing that level of debt on my 7-year-old daughter and my 5-year-old son and all the children of America is immoral. This budget should not be taken to conference.