[Congressional Record Volume 146, Number 5 (Monday, January 31, 2000)]
[Senate]
[Pages S140-S144]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           AMENDMENT NO. 2747

    (Purpose: To make an amendment with respect to consumer credit 
                             transactions)

  Mr. FEINGOLD. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Wisconsin [Mr. Feingold] proposes an 
     amendment numbered 2747.

  Mr. FEINGOLD. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place in title XI, insert the following:

     SEC. 11____. CONSUMER CREDIT TRANSACTIONS.

       (a) Definition.--Section 1 of title 9, United States Code, 
     is amended--
       (1) in the section heading, by striking ``and `commerce' 
     defined'' and inserting ``, `commerce', `consumer credit 
     transaction', and `consumer credit contract' defined''; and
       (2) by inserting before the period at the end the 
     following: ``; `consumer credit transaction', as herein 
     defined, means the right granted to a natural person to incur 
     debt and defer its payment, where the credit is intended 
     primarily for personal, family, or household purposes; and 
     `consumer credit contract', as herein defined, means any 
     contract between the parties to a consumer credit 
     transaction.''.
       (b) Agreements To Arbitrate.--Section 2 of title 9, United 
     States Code, is amended by adding at the end the following: 
     ``Notwithstanding the preceding sentence, a written provision 
     in any consumer credit contract evidencing a transaction 
     involving commerce to settle by arbitration a controversy 
     thereafter arising out of the contract, or the refusal to 
     perform the whole or any part thereof, shall not be valid or 
     enforceable. Nothing in this section shall prohibit the 
     enforcement of any written agreement to settle by arbitration 
     a controversy arising out of a consumer credit contract, if 
     such written agreement has been entered into by the parties 
     to the consumer credit contract after the controversy has 
     arisen.''.

  Mr. FEINGOLD. Madam President, I rise today to introduce an amendment 
to the bankruptcy reform bill that will protect and preserve the 
American consumers' right to take their disputes with creditors to 
court. There is a troubling trend among credit card companies and 
consumer credit lenders of requiring customers to use binding 
arbitration when a dispute arises. Under this system, the consumer is 
barred from taking a dispute to court, even a small claims court.
  While arbitration can certainly be an efficient tool to settle 
claims, it is credible and effective only when customers and consumers 
enter into it knowingly, intelligently, and voluntarily. Unfortunately, 
that is not what is happening in the credit card and consumer credit 
lending business. One of the most fundamental principles of our civil 
justice system is each American's right to take a dispute to court. In 
fact, each of us has a right in civil and criminal cases to a trial by 
jury. A right to a jury trial in criminal cases is contained in the 
sixth amendment to the Constitution. The right to a jury trial in a 
civil case is contained in the seventh amendment, which provides, ``In 
suits at common law where the value and controversy shall exceed $20, 
the right of trial by jury shall be preserved.''
  It has been argued that Americans are overusing the courts. Court 
dockets across the country are said to be congested with civil cases. 
In response to these concerns, various ways to resolve disputes, other 
than taking a dispute to court, have been developed. Alternatives to 
litigating in a court of law are collectively known as ``alternative 
dispute resolution,'' or ADR. Alternative dispute resolution includes 
mediation and arbitration. Mediation and arbitration can resolve 
disputes in an efficient manner because the parties can have their 
cases heard well before they would have received a trial date in a 
court. Mediation is conducted by a neutral third party, the mediator, 
who meets with the opposing parties to help them find a mutually 
satisfactory solution. Unlike a judge in a courtroom, the mediator has 
no independent power to impose a solution. No formal rules of evidence 
or procedure control mediation. The mediator and the parties mutually 
agree on how to proceed.
  In contrast, arbitration involves one or more third parties--an 
arbitrator or arbitration panel. Unlike mediation but similar to a 
court proceeding, the arbitrator issues a decision after reviewing the 
merits of the case as presented by all parties. Arbitration uses rules 
of evidence and procedure, although it may use rules that are simpler 
or more flexible than the evidentiary and procedural rules that a party 
would follow or be subjected to in a court proceeding. And arbitration 
can be either binding or nonbinding.
  Nonbinding arbitration means the decision issued by the arbitrator or 
arbitration panel takes effect only if the parties agree to it after 
they know what the decision is.
  In binding arbitration, parties agree in advance to accept and abide 
by the decision, whatever it is. In addition, there is a practice of 
inserting arbitration clauses in contracts to require arbitration as 
the forum to resolve disputes before a dispute has even arisen.
  Now, this is called mandatory arbitration. This means that if there 
is a dispute, the complaining party cannot file suit in court, and 
instead is required to pursue arbitration. It is binding, mandatory 
arbitration, and it therefore means that under the contract the parties 
must use arbitration

[[Page S141]]

to resolve a future disagreement, and the decision of the arbitration 
panel is final. The parties have no ability to seek relief in court or 
through mediation. In fact, if they are not satisfied with the 
arbitration outcome, they are probably stuck with the decision. Even if 
a party believes the arbitrator did not consider all the facts or 
follow the law, the party cannot file a lawsuit in court. A basis to 
challenge a binding arbitration decision exists only where there is 
reason to believe the arbitrator committed actual fraud, which is a 
pretty unlikely scenario.
  In contrast, if a dispute is resolved by a court, the parties can 
potentially pursue an appeal of the lower court's decision.
  Madam President, because binding mandatory arbitration is so 
conclusive, this form of arbitration can be a credible means of dispute 
resolution only when all parties know and understand the full 
ramifications of agreeing to it. I am afraid that is not what is 
happening in our Nation's business climate and economy in a variety of 
contexts ranging from motor vehicle franchise agreements, to employment 
agreements, to credit card agreements. I am proud to have sponsored 
legislation addressing employment agreements and motor vehicle 
franchise agreements. In fact, I am the original cosponsor, with my 
distinguished colleague from Iowa, Senator Grassley, the manager of the 
bankruptcy reform bill, of S. 1020, which would prohibit the unilateral 
imposition of binding, mandatory arbitration in motor vehicle 
dealership agreements with manufacturers. Many of our colleagues have 
joined us as cosponsors.

  Similar to the problem in the motor vehicle dealership context, there 
is a growing, menacing trend of credit card companies and consumer 
credit lenders inserting binding, mandatory arbitration clauses in 
agreements with consumers. Companies such as First USA Bank, American 
Express, and Green Tree Discount Company unilaterally insert binding 
mandatory arbitration clauses in their agreements with consumers, often 
without the consumers' knowledge or consent.
  The most common way the credit card companies have done so is often 
through the use of a ``bill stuffer.'' Bill stuffers are the 
advertisements and other materials that credit card companies insert in 
envelopes with the customers' monthly statements. Some credit card 
issuers such as American Express have placed fine-print, mandatory 
arbitration clauses on bill stuffers. Let's take a look at what I am 
talking about.
  I have in my hand a monthly statement mailing from American Express. 
Let's look inside.
  First, we have the return envelope to pay your bill. And look at what 
is on the envelope. They have attached an advertisement.
  So before you can mail your payment, you have to tear this 
advertisement off the back of the envelope. Otherwise you won't be able 
to seal it shut.
  Then, if you look at what else is in the envelope, here is the 
monthly statement. It is a multipage printed form, front and back.
  On this occasion, even though there was very little activity on this 
particular account--one charge and one credit--the statement is six 
pages long. The first page contains information about how much you owe 
American Express, charges made, payments received, finance charges 
applied, and so on. The reverse side of the first page also contains 
some fine print information about the account.
  Then, if you look at pages 3 and 4 they contain additional fine-print 
information about the account; for example, what to do if your card is 
stolen or lost, and a summary of your billing rights.
  If you keep reading at this point, you look at pages 5 and 6. They 
are chock full of advertising material. Target stores urge you to shop 
with them. The State of North Carolina encourages you to plan your next 
holiday in North Carolina.
  This past spring, in addition to an American Express cardholder being 
bombarded with all of this information, American Express cardholders 
also received this--For Your Information, ``FYI, A Summary of Changes 
to Agreements and Benefits.'' The summary is 10 pages long.
  In addition to the multipage statement of charges, terms, and 
advertising material, the cardholder received another multipage 
document with fine-print terms and conditions.
  If my colleagues are like me and most Americans, I review the 
statement of charges for accuracy, look at how much I owe, rip off the 
bottom portion, stick it and my check in the return envelope, and mail 
it to American Express. I don't spend a lot of time reading all of the 
fine-print information about the account or the ad. I certainly would 
not spend time reading a 10-page summary of changes to my statement. At 
most, I might scan these other pages and bill stuffers, but I would not 
spend time reading them in detail.
  Let's look at the summary of changes. As I said, it is called, ``FYI, 
A Summary of Changes to Agreements and Benefits.'' When you look at 
their summary, there are two things that hit you: The cartoon in the 
middle and the big letters, ``FYI'' in the upper left side of the first 
page. FYI, for your information, to me and most Americans means that it 
contains some information that may be of interest to me but nothing 
that requires serious thought or action from me. In reality, however, 
the summary of changes is a complex, fine-print document that almost 
reads like a legal document. It talks about changes to various 
privileges of the American Express card membership, American Express 
Purchase Protection Plan, Buyer's Assurance Plan, Car Rental Loss and 
Damage Insurance Plan, and Credit Protection Plan.

  In addition, the summary contains an arbitration provision on page 2. 
Even though the document contains changes to the terms of the agreement 
with the cardholder--it actually changes the contract between the 
parties--it is simply labeled as an FYI, for your information, 
document. I find that troubling.
  If we take a closer look at the arbitration provision, this 
arbitration provision is in condensed, fine print, to say the least. It 
is not exactly easy to read, even though this is an enlarged version of 
the original. The key clause in this arbitration provision is the 
following:

       If arbitration is chosen by any party with respect to a 
     claim, neither you nor we will have the right to litigate 
     that claim in court or have a jury trial on that claim.

  I will repeat that.
  If the cardholder has a dispute with American Express, the cardholder 
cannot take the claim to court or have a jury trial on the claim. This 
provision took effect on June 1 of last year. So if you are an American 
Express cardholder and you have a dispute with American Express, as of 
June 1999, you can't take your claim to court--even small claims court. 
You are bound to use arbitration, and you are bound to live with the 
final arbitration decision.
  In this case, you are also bound to use an arbitration organization 
selected by American Express, the National Arbitration Forum.
  Unfortunately, American Express isn't the only credit card company 
imposing mandatory arbitration on its customers. First USA Bank, the 
largest issuer of Visa cards, with 58 million customers, has been doing 
the same thing since 1997.
  Here is the bill stuffer distributed by First USA. This is the inside 
of a folded, one-page insert. As you can see, similar to the American 
Express summary, this is another fine-print, condensed set of terms and 
conditions. It covers a wide variety of topics, including information 
on finance charges, termination and foreign currency transactions. Here 
in the last column are the three paragraphs on the arbitration 
provision. The language is similar to the American Express language and 
states that the cardholders' dispute will be resolved by arbitration. 
The cardholder will not be able to go to a court to resolve the claim. 
No ``if's,'' ``and's,'' or ``but's'' about it. Just plain and simple. 
The cardholder, by virtue of continuing to simply use the First USA 
card, gives up the right to go to court, even small claims court, to 
resolve the dispute.
  Unfortunately, this problem also extends beyond credit cards. It is 
also a growing practice in the consumer loan industry. Consumer credit 
lenders such as Green Tree Consumer Discount

[[Page S142]]

Company are inserting mandatory arbitration clauses in their loan 
agreement. The problem is these loan agreements are usually adhesion 
contracts, which means that the consumer must either sign the agreement 
as is or forego a loan.
  In other words, the consumer lacks the bargaining power to have the 
clause removed. More importantly, when signing on the dotted line of 
the loan agreement, the consumer may not even understand what mandatory 
arbitration means. The consumer in all likelihood does not understand 
that he or she has written away his or her right to go to court to 
resolve a dispute with the lender.
  Arbitration in some ways, of course, is an efficient way to settle 
disputes. But it has to be entered into knowingly and voluntarily. That 
is not what is happening in either the consumer loan or credit card 
industries.
  You might say that if consumers are not pleased with being subjected 
to a mandatory arbitration clause, consumers can cancel their credit 
card, or not execute on their loan agreement, and they can take their 
business elsewhere. Unfortunately, that is easier said than done. As I 
mentioned, First USA Bank, the Nation's largest Visa card issuer, is 
part of this questionable practice. In fact, the practice is becoming 
so pervasive that consumers may soon no longer have an alternative 
unless they forego use of a credit card or a consumer loan entirely. I 
think that is kind of a hefty price to pay to retain the longstanding 
right to go to court.
  In my opinion, this is a decision that consumers should not be forced 
to make. Companies such as First USA, American Express, and Green Tree 
argue that they rely on mandatory arbitration to resolve disputes 
faster and cheaper than court litigation. The claim may be resolved 
faster, but is it really cheaper? Is it as fair as a court of law? I 
don't think so.
  Arbitration organizations can charge exorbitant fees to the consumer 
who brings a dispute--often an initial filing fee plus hourly fees to 
the arbitrator or arbitrators involved in the case. These costs to 
consumers can be higher than bringing the matter to small claims court 
and paying a court filing fee.
  For example, the National Arbitration Forum, the arbitration entity 
of choice for American Express and First USA, the National Arbitration 
Forum charges fees that are likely greater than if the consumer brought 
a dispute in small claims court. For a claim of less than $1,000, the 
National Arbitration Forum charges the consumer a $49 filing fee. In 
contrast, the consumer could have brought the same claim, in small 
claims court here in the District of Columbia and would have paid a fee 
of no more than $10. In other words, the consumer pays a fee to the 
National Arbitration Forum that is nearly five times more than the fee 
for filing a claim with small claims court.

  That is bad enough, but the National Arbitration Forum's competitors 
are even worse. The American Arbitration Association charges a $500 
filing fee for claims of less than $10,000, or more if the claim 
exceeds $10,000, and a minimum filing fee of $2,000 if the case 
involves three or more arbitrators. In addition to the filing fee, they 
also charge a hearing fee for holding hearings other than the initial 
hearing--$150 to be paid by each party for each day of hearings before 
a single arbitrator, for $250 if the hearing is held before an 
arbitration panel. The International Chamber of Commerce requires a 
$2,500 administrative fee plus an arbitrator's fee of at least $2,500, 
if the claim is less than $50,000. These fees are greater if the claim 
exceeds $50,000. This $5,000 or more fee could very well be greater 
than the consumer's entire claim. So, as you can see, the consumer's 
dispute is not resolved more efficiently with arbitration. It is 
resolved either at greater cost to the consumer or not at all, if the 
consumer cannot afford the costs, or the costs outweigh the amount in 
dispute.
  The unilateral imposition of mandatory arbitration also raises 
fairness concerns. As I demonstrated earlier, typical cardholders are 
not likely to ever notice the arbitration provision. But even if they 
notice the provision and read the fine print, consumers nevertheless 
may not understand that their right to court has just been stripped 
away. So, what we have here is a small number of people who will 
actually read the bill stuffer and an even smaller number who will 
understand what it means.

  Another problem with mandatory, binding arbitration is that the 
lender gets to decide in advance who the arbitrator will be. In the 
case of American Express and First USA, they have chosen the National 
Arbitration Forum. All credit card disputes with consumers involving 
American Express or First USA are handled by them. What does this mean? 
If you think about it, the arbitrator has a financial interest in 
reaching an outcome that favors the credit card company. If the 
National Arbitration Forum develops a pattern of reaching decisions 
that favor the cardholder, wouldn't American Express or First USA 
strongly consider taking their arbitration business elsewhere? I think 
there is a very good chance, I would say there is a significant chance 
that would happen.
  There has been one important ruling on the enforceability of 
mandatory arbitration provisions in credit card agreements. That ruling 
involved a mandatory arbitration provision announced in mailings to 
Bank of America credit card and deposit account holders. In a 1998 
decision by the California Court of Appeals, which the California 
Supreme Court refused to review, the court ruled that the mandatory 
arbitration clauses unilaterally imposed on the Bank's customers were 
invalid and unenforceable. As a result of that decision, credit card 
companies in California cannot impose mandatory arbitration in their 
disputes with customers. In fact, the American Express notice 
recognizes this fact and notes here at the bottom that the provision 
will not apply to California residents until further notice from the 
company. I think that was a wise, well-reasoned decision by the 
California appellate court, but Americans have no assurance that all 
courts will reach the same fair and reasonable decision.
  My amendment extends the wisdom of the California appellate decision 
to every credit cardholder and consumer loan borrower in the country. 
It amends the Federal Arbitration Act to prohibit the unilateral 
imposition of mandatory, binding arbitration in consumer credit 
transactions. Let me be clear. I believe that arbitration can be an 
efficient way to settle disputes. I agree we ought to encourage 
alternative dispute resolution. But I also believe that arbitration is 
a fair way to settle disputes only when it is entered into knowingly 
and voluntarily by both parties to the dispute. My amendment does not 
prohibit arbitration of consumer credit transactions when entered into 
voluntarily and knowingly. It merely prohibits binding, mandatory 
arbitration imposed unilaterally without the consumer's knowledgeable 
and/or voluntary consent.

  Credit card companies and consumer credit lenders are increasingly 
slamming the courthouse doors shut on consumers, often unbeknownst to 
them. This is grossly unjust. Let's restore fairness to the resolution 
of consumer credit disputes.
  At some point I hope that my colleagues will join me in keeping the 
doors to the courthouse open to all American credit card users and 
consumer credit borrowers. At this time, however, I will not push for a 
vote on this issue. I have agreed to withdraw this amendment with the 
understanding from my friend from Iowa, Senator Grassley, the manager 
of this bill and the chair of the Judiciary Subcommittee on 
Administrative Oversight and the Courts, that the issue of mandatory 
arbitration in consumer credit agreements will be part of a hearing to 
be held in the Courts Subcommittee on March 1. That hearing will 
address the Federal Arbitration Act and the problem of mandatory 
arbitration clauses inserted in contracts unilaterally. I appreciate 
Senator Grassley's leadership and cooperation in reaching this 
accommodation. I look forward to working with him on this issue, as 
well as the broader issue of the growing, problematic trend of the 
unilateral imposition of mandatory arbitration in a variety of 
contracts.
  I admire the leadership of the Senator on the overall issue in 
addition to the fact it has come up and is a serious problem in the 
consumer credit agreement area.
  Mr. GRASSLEY addressed the Chair.

[[Page S143]]

                      Amendment No. 2747 Withdrawn

  Mr. FEINGOLD. Madam President, I withdraw the amendment and yield the 
floor.
  The PRESIDING OFFICER. Without objection, the amendment is withdrawn.
  The Senator from Iowa is recognized.
  Mr. GRASSLEY. Madam President, I have had a chance to discuss this 
issue with the Senator from Wisconsin over a long period of time, both 
at the subcommittee level, the committee level, and during floor action 
on this bill which has been going on now since last October, with a 
long interim for a holiday break.
  I appreciate what the Senator from Wisconsin is trying to do. We have 
joined together on a bill dealing with one aspect of this problem and 
that happens to be a bill which deals with arbitration in the 
automobile industry. As the lead Member of the Senate on alternative 
dispute resolution issues, I certainly do not want alternative dispute 
resolution to be used in unfair ways. So following up on the request of 
the Senator from Wisconsin that if we could make some sort of 
arrangement for his not offering his amendment at this time--and he has 
withdrawn it--I have scheduled a hearing in my judiciary subcommittee 
on our bill. I hope to air some of these other problems the Senator has 
raised.
  I do have a great deal of sympathy for what the Senator from 
Wisconsin is attempting, but I think more groundwork needs to be done 
so we all have a better understanding of these issues before moving 
ahead at this time.
  The bottom line, I say to the Senator from Wisconsin--and I hope he 
will answer yes or no--is that I wish to make sure he is working with 
us between now and our hearing so every commitment I have made in 
regard to his offering or not offering his arbitration amendment to 
this bill at this time is to his satisfaction.
  Mr. FEINGOLD. Madam President, it is very much to my satisfaction. I 
am delighted to know we are going to look at a variety of contexts at 
this hearing, including this one with the credit card companies but 
also the one my colleague and I have had so much interest in regarding 
motor vehicles and also the employment discrimination area. To me, 
although I would be pleased to have this amendment on this bill, I 
think that is a good opportunity to point out the overall problem we 
have had, what my colleague described as the possibility arbitration 
would be used in a way that neither of us would like, that it would 
somehow become a method of unfairness instead of what we both hope, 
which is a way to resolve disputes more efficiently or economically, 
sometimes, than when you go to court. I think it is an excellent idea.
  I look forward to working with the chairman in preparation for the 
hearing. I think it is a good way to work out all these issues, and, 
again, I thank the Senator from Iowa for being very easy to work with 
on this and being very serious about getting something done.
  Mr. SARBANES. Madam President, I express my appreciation to the 
managers of the bankruptcy bill, Senators Leahy, Torricelli, Grassley, 
and Hatch, for accepting and including an amendment I had planned to 
offer on the floor as part of the managers' amendment to S. 625. My 
amendment requires that a simple yet important disclosure be made on 
credit card bills to help protect consumers.
  During the bankruptcy reform debate in the last Congress, the Senate 
examined whether the increased rate of consumer bankruptcies in the 
Nation resulted solely from consumers' access to an excessively 
permissive bankruptcy process, or whether other factors also 
contributed to this increase. Ultimately we concluded that the record 
increase in bankruptcy filings across the nation was due not only to 
the ease with which one can enter the bankruptcy system, but also to 
the unparalleled levels of consumer debt--especially credit card debt--
being run up across the country. As Senator Durbin noted, and as the 
CBO, FDIC, and numerous economists have found, the rate of increase in 
bankruptcy filings paralleled the rate of increase in consumer debt.
  This is not a coincidence. Rather, increased bankruptcies proceed 
directly from the fact that Americans are bombarded daily by credit 
card solicitations that promise easy access to credit without informing 
their targets of the implications of signing up for such credit.
  During our debate in the last Congress, the Senate also concluded 
that irresponsible borrowing could be reduced, and many bankruptcies 
averted, if Americans were provided with some basic information in 
their credit card materials regarding the consequences of assuming 
greater debt. A consensus emerged that credit card companies have some 
affirmative obligation to provide such information to consumers in 
their solicitations, monthly statements, and purchasing materials, in 
light of their aggressive pursuit of less and less knowledgeable 
borrowers.
  As a result of this consensus, the Senate's bankruptcy bill in the 
last Congress--S. 1301--contained several provisions in the managers' 
amendment addressing credit card debt, and requiring specific 
disclosures by credit card companies in their payment and solicitation 
materials. These provisions, which I sponsored along with Senators Dodd 
and Durbin, were vital to the Senate's success in adopting balanced 
bankruptcy reform legislation by the overwhelming margin of 97-1.
  Unfortunately, the House-Senate conference committee struck these 
disclosure provisions from its final conference report, leaving the 
bankruptcy bill again a one-sided document that failed to account for 
the role credit card companies play in the accumulation of credit card 
debt and in increased consumer bankruptcy rates. As a result of the 
conference committee's actions, the conference report died in the 
waning days of the 105th Congress.
  As we again debate bankruptcy legislation, it remains my firm belief 
that Congress must address both sides of the consumer bankruptcy 
equation--both the flaws in the bankruptcy system that make it easy for 
people to declare bankruptcy even if they have the ability to pay their 
debts, and the lending practices that encourage people with limited 
financial resources to accumulate debts that are beyond their ability 
to repay.
  Last year, the Senate adopted an amendment to S. 625 that requires 
credit card issuers to give customers on their billing statements three 
disclosures: (1) warning that paying just the minimum monthly amount 
will increase the interest they pay and the time it takes to repay 
their balances; (2) a generic example; and (3) a toll-free number a 
customer can call for an estimate of how long he or she has to pay the 
minimum payment and the total payment to pay off his balance. However, 
the amendment contained an exception for certain credit card issuers 
that provide actual, instead of estimated, payment information. Such a 
credit card issuer would not have to disclose the warning, an example, 
or even the telephone number. This situation subverted the purpose of 
this section and distorted the balance contained in the original 
amendment.
  My amendment would restore this balance by requiring some disclosures 
to be given by certain credit card issuers that have a toll-free number 
for informing customers of the actual number of months it takes to 
repay outstanding balances using minimum monthly payments requirement. 
It requires such credit card issuers to make two disclosures: (1) the 
telephone number and (2) a warning. My amendment requires the credit 
card bill to contain the statement, ``Minimum Payment Warning: Making 
only the minimum payment will increase the interest you pay and the 
time it takes to repay your balance. For more information, call this 
toll-free number: __________.''
  If we are going to make it harder for individuals to file for 
bankruptcy, we need to make certain that they are informed about their 
credit decisions. The minimal warning contained in my amendment helps 
credit card customers who pay the minimum monthly amount on their 
credit card bills better understand how long it will take and how much 
they will pay to work off the balance. The Financial Literacy Center 
has calculated that a consumer who, for example, has a $5,000 loan 
balance outstanding on which 17% interest is charged and who is paying 
2% of the balance each month, will take 50 years to pay off the entire 
loan and end up paying $33,447. That is a very long time and a 
significant burden that, with the disclosures in my amendment, debtors 
will be able to better appreciate.

[[Page S144]]

  My amendment helps consumers get important information that will 
enable them to analyze how to manage their credit card borrowing more 
effectively.

                          ____________________