[Congressional Record Volume 154, Number 153 (Thursday, September 25, 2008)]
[Extensions of Remarks]
[Page E1918]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             CREDIT CARDHOLDERS' BILL OF RIGHTS ACT OF 2008

                                 ______
                                 

                               speech of

                        HON. SHEILA JACKSON-LEE

                                of texas

                    in the house of representatives

                      Tuesday, September 23, 2008

  Ms. JACKSON-LEE of Texas. Madam Speaker, I rise today in strong 
support of H.R. 5244, the Credit Cardholders' Bill of Rights Act. This 
legislation is timely and necessary, and importantly, it should 
alleviate the economic woes that consumers are experiencing during 
these tough economic times. The purpose of this bill is to provide 
crucial protections against unfair, but unfortunately common, credit 
card practices.
  While the Federal Reserve will likely issue regulations on this same 
topic, it is important that we as legislators do not abdicate our 
responsibility to the Administration. As members of Congress, we must 
do all that we can to ensure that the credit interests of the American 
people are well taken care of. Any regulation passed by the Federal 
Reserve will likely be the subject of judicial challenge. Thus, 
legislation will be needed.
  H.R. 5244, ends unfair, arbitrary interest rate increases by 
preventing card companies from unfairly increasing interest rates on 
existing card balances. The bill makes clear that retroactive increases 
are permitted only if a cardholder is more than 30 days late, if a pre-
agreed promotional rate expires, or if the rate adjusts as part of a 
variable rate. Under this bill, a credit card company has to give 45 
days notice of all interest rate increases so consumers can pay off 
their balances and shop for a better deal elsewhere.
  This bill is the first of its kind to stop excessive ``over-the-
limit'' fees and it ends unfair penalties for cardholders who pay their 
balances in full on time. H.R. 5244 also protects cardholders from due 
date gimmicks and prevents companies from using misleading terms and 
damaging consumers' credit ratings. Perhaps, most important is that the 
bill protects vulnerable consumers from high-fee subprime credit cards 
and it bars issuing credit cards to minors. This bill should help 
Americans and will require credit companies to employ fair credit card 
practices.

  I recognize that the credit card industry and other members of the 
financial services community may oppose this bill. They argue that the 
limits this legislation would place on the competitive market come with 
unintended consequences, such as higher costs for consumers and reduced 
access to credit. The legislation would also result in the elimination 
of policies that benefit consumers, and disregards efforts by Federal 
regulators to complete and promulgate new credit card regulations.
  Opponents of H.R. 5244 claim that the bill includes a number of 
prescriptive mandates that will increase costs and/or limit options 
that consumers have today. For example, the cost associated with 
requirements that dictate how a customer's payment can be attributed to 
their outstanding balance will likely result in the end of promotional 
rate offers. Importantly, these opponents do not indicate that the 
consumers will be provided with more disclosure and fair and accurate 
information on rates that will not likely be changed by the credit card 
companies.
  It is immaterial that the Federal Reserve will be issuing regulations 
that govern credit card practices. It is the purview of this Congress 
to legislate and it is by legislative authority that agencies 
promulgate regulations. I do not find the arguments in opposition to 
this bill to be persuasive.
  The credit card market is highly competitive. Although we are 
experiencing tough economic times and the credit card companies are 
feeling economic pressure, so too, are the American consumers. The 
consumers are merely working-class people. If the credit card companies 
think they are squeezed, imagine the plight of the American people. 
Something must be done.
  H.R. 5244 is balanced and is a step in the right direction. I support 
the bill and I look forward to working with the credit card industry 
and the consumers on this very important issue.
  I urge my colleagues to support this bill.

                          ____________________