[Congressional Record Volume 147, Number 1 (Wednesday, January 3, 2001)]
[Extensions of Remarks]
[Pages E2-E3]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   RE-INTRODUCTION OF THE COLLEGE STUDENT CREDIT CARD PROTECTION ACT

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                     HON. LOUISE McINTOSH SLAUGHTER

                              of new york

                    in the house of representatives

                       Wednesday, January 3, 2001

  Ms. SLAUGHTER. Mr. Speaker, today my colleague Representative John 
Duncan and I are proud to re-introduce the College Student Credit Card 
Protection Act.
  I drafted this legislation in 1999 in response to a growing number of 
horror stories about young people and credit card debt. For example, I 
heard from a constituent whose stepson filed for bankruptcy at the age 
of 21. He was $30,000 in credit card debt. According to a University of 
Indiana administrator, we lose more students to credit card debt than 
to academic failure.
  Credit card companies are aggressively marketing their cards to 
college students. We all receive credit card solicitations at home. In 
just one year, one of my employees received a shopping bag full of 
credit card solicitations. Now, magnify that number exponentially for 
college students.
  I remember when an unemployed student was not able to get a credit 
card limit without a parent as a co-signer. Now, students are not only 
targeted through the mail and by phone, but also in person through 
booths set up on

[[Page E3]]

campus that promise a free t-shirt or mug for every completed 
application. As fundraisers, student groups can earn $5 for every 
application they get their friends to fill out. Most of the time, all 
they require for approval is a student identification card.
  The easy access to credit allows students to make costly purchases 
that would not have been possible under a typical student budget. 
Students then no longer make the connection between earnings and 
consumption--needs and wants. Students can go from getting the card 
just in case of an emergency to charging entertainment expenses such as 
nights out with their friends and then to extravagances like a spring 
break trip to Cancun.
  While many college students are adults who are responsible for the 
debt they charge, the credit card industry's policy of extending high 
lines of credit to unemployed students needs to be reviewed. The 
College Student Credit Card Protection Act would require the banks to 
determine if a student can even afford to pay off a balance before the 
companies approve a card. My bill would limit credit lines to 20 
percent of a student's annual income without a cosigner. Students could 
also receive a starter credit card with a lower credit limit, allowing 
increases over time for prompt payments. Another provision would 
eliminate the fine print in credit card agreements and solicitations, 
where fees and penalties are hidden. If a parent cosigns for their 
child's credit card, my bill would require the credit card company to 
notify the parent in writing of any credit line increase.
  So before the credit card statements with Christmas purchases arrive, 
the message to credit card companies should be simple: determine if the 
student can afford to pay off a balance before approving a card.

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