[Congressional Record Volume 153, Number 194 (Tuesday, December 18, 2007)]
[Senate]
[Pages S15819-S15820]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     CREDIT CARD COMPANY DECEPTION

  Mrs. McCASKILL. Mr. President, I first want to comment on what a 
pleasure it was listening to several hours of tribute to Senator Lott. 
I have not served with Senator Lott for very long, but at the point in 
time that I, hopefully, would be allowed to decide to retire from the 
Senate, I could only hope I have such kind things said about me in so 
many different ways.
  I was glad I got an opportunity to listen to 3 hours of Senators 
talking nicely about each other. It is an important thing to do this 
time of year, and I think, frankly, it is an important thing to do more 
often, and we do not do enough of it around here, particularly across 
the line.
  I rise today to speak as in morning business for a few minutes about 
something that is on everybody's mind this time of year; that is, 
credit cards. Now, I know why it is on my mind, because my fingers are 
having to do the shopping because I cannot get home to Missouri, and so 
I am having to click, click, click on the Internet. I now know my 
credit card number by heart

[[Page S15820]]

because I have entered it so many times in the computer trying to get 
gifts for my family and my children. So I am very aware of my credit 
card this time of year.
  I have spent some time this year in the Senate looking at the issue 
of credit cards, and as we all are wringing our hands and gnashing our 
teeth over the subprime mortgage mess, I think we all need to begin to 
wring our hands and gnash our teeth about some of the credit card 
practices in this country. We have allowed the credit card industry to 
play a little fast and loose with fairness.
  I certainly fundamentally understand that people's obligations in 
terms of their credit, their unsecured credit on a credit card, are 
primarily their responsibility and it is important that people be 
responsible when they enter into debt, and it does not matter what kind 
of debt it is, whether it is credit card debt or any other kind of 
debt. On the other hand, I have spent some time trying to read through 
the fine print on some of these credit card agreements. Frankly, I have 
been trained as a lawyer, I have worked as a lawyer for most of my 
adult life, I have been a State legislator, I have now worked at the 
Federal level legislating, and I can't understand a lot of the fine 
print on some of these credit card statements. If I can't understand 
the fine print on a lot of these credit card statements, what shot does 
someone who has not spent as much time around the law as I have?
  If you look at what is going on with the unsecured credit card 
industry in terms of some of the fast-and-loose play with the rules, 
the kinds of tricks that are being played--I will give you a great 
example. We now know your interest rate can go up if you get near your 
credit limit. We now know you can call and get an authorization to 
charge money on your credit card, and they will let you do it even if 
you go over your credit limit, and then they are going to charge you 
every month an extra fee because you went over your credit limit, which 
they said was okay for you to do. You never know this.
  Imagine my interest when I learned in a hearing this year that they 
can raise your interest rate on your credit card just by getting more 
credit cards. So if you are going into a department store and they say: 
Hey, you can get 15 percent off today if you open a credit card, you 
can get 10 percent off today if you open a credit card, the act of 
opening those credit card accounts can increase your interest on 
another credit card. Now, who would have thunk that? No one ever 
explains that to the American consumer. No one ever explains that 
getting at or near your credit limit on a number of credit cards could 
require your interest rates to go up even if you are paying your bills 
on time, even if you have always paid exactly what you are supposed to 
pay on time every month.
  It is very important that we get a handle on this. This is a great 
example. A member of my staff who knows I have been very interested in 
this brought this in to me this week. We just had a hearing where we 
learned that if you get to your credit limit, it is possible they will 
raise your interest rate even if you paid everything on time. Well, 
what is this? This staff member of mine had several thousand dollars 
left in available credit on one of his credit cards. So what happens? 
He gets checks in the mail from his credit card company, and the first 
one is made out. Guess how much it is made out for. It is made out for 
an amount that will get him very close to his credit limit. So the idea 
here is if you fill them all out, guess what. Bingo. You are over your 
credit limit, and then all the fees and the extra interest rates start.
  Well, I have to tell you--by the way, there is nothing on this that 
says: If you go over your credit limit, not only will we charge you 
fees, but we are probably going to raise your interest rate. That is 
never explained to the American consumer. That is not fair play.
  Make it very clear to your credit card customer exactly what they are 
going to pay for and when. Fifty percent of the people who have credit 
cards in this country right now are paying minimum balances only, and 
they don't understand they are in a hole they can't dig out of.
  The credit card companies say: We have not had that much increase in 
defaults. Well, I will tell you, here is what is different: A lot of 
the credit card debt in this country--hundreds of billions of dollars 
of the credit card debt in this country--has been rolled into home 
equity lines of credit because of this housing boom we were on, and 
everyone was combining their credit cards, and a lot of that debt has 
been transferred to mortgage debt.
  This is stuff that needs to get fixed, it needs to be fair, and the 
rules need to be clear to anyone because I will tell you, if we don't 
get it fixed, we are going to be wringing our hands and worrying about 
the next big problem in our economy, and that is all this unsecured 
credit that goes unpaid.
  I think the credit card is a wonderful tool for Americans. It has 
allowed our country to consume at great levels, has kept our economy 
pumping. But at the end of the day, if we don't require the credit card 
companies to make full disclosure in a way that everyone can understand 
exactly what they are charging for this very expensive form of credit, 
we are going to regret it.
  There are two pieces of legislation. First, Senator Levin and I have 
introduced a Stop Unfair Credit Card Practices Act which prohibits some 
of the most egregious examples I have talked about that unfairly deepen 
or prolong credit card debt held by consumers.
  The other piece of legislation is one I am cosponsoring with Senator 
Kohl that deals with college students. Nothing strikes more fear in the 
heart of a parent who has two children in college than the idea that 
someone wants to send them credit cards right now.
  I love my two children in college very much. I think they are smart 
and wonderful people. But, believe me, neither one of them has the 
resources to handle a credit card right now. The only resources they 
have to handle a credit card right now are mine. If they want to send 
me the credit card, that is fine, and if I want to help my kids, that 
is fine, but the idea that we are now selling lists of college students 
to credit card companies so they can send them--by the way, one of 
these credit card officials actually had the nerve to say in a hearing 
that he found college students to be a very good risk. Well, yes, 
because their parents pay it off because they do want not want them to 
have bad credit when they get out of college. But college students do 
not have the wherewithal to take on unsecured debt. They are having a 
hard enough time just getting to class and getting everything done, 
much less taking on unsecured debt.
  We need to stop some of these practices that are victimizing the 
American consumer. We can do it. We can do it in the Senate. I look 
forward to working with my colleagues in the new year to see if we 
can't make it a better year for middle-class America that is buried 
under credit card debt without the playbook to show them how to get 
out.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I relinquish my right to be recognized at 
this moment as I have another commitment.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BENNETT. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BENNETT. I ask unanimous consent to speak as in morning business 
for up to 10 minutes.
  The PRESIDING OFFICER. The Senator is recognized.

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