[Congressional Record Volume 155, Number 68 (Tuesday, May 5, 2009)]
[House]
[Pages H5101-H5102]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               STRICTER OVERSIGHT OF CREDIT CARD ISSUERS

  The SPEAKER pro tempore. The Chair recognizes the gentleman from New 
York (Mr. Maffei) for 5 minutes.
  Mr. MAFFEI. Mr. Speaker, last week, the House passed the Credit 
Cardholders' Bill of Rights with an overwhelming bipartisan vote. This 
week the House will take up anti-predatory lending and mortgage fraud 
legislation. These bills are the next step as we work to rebuild our 
economy in a way that is fair and consistent with our values.
  The Mortgage Reform and Anti-Predatory Lending Act of 2009 will curb 
abuse in predatory lending, a major factor in the Nation's highest home 
foreclosure rate in 25 years. The bill would outlaw many of the most 
egregious industry practices that have marked the subprime lending 
boom, and it would prevent borrowers from deliberately misstating their 
incomes to qualify for a loan.
  But I would also like to get back to the Credit Cardholders' Bill of 
Rights, because that is such an important piece of legislation. As I 
mentioned, it passed 357-70 in this body, and I do urge that the other 
body take up this legislation as rapidly as possible.
  The Credit Cardholders' Bill of Rights has had such broad bipartisan 
support because these credit card issuers and companies have benefited 
from an uneven playing field for so long. Regular people across the 
country and across my district have been victimized by these unfair and 
abusive practices, and Congress has now finally heard their stories. 
One of their stories was featured today in an editorial in the Syracuse 
Post-Standard, my hometown newspaper.
  ``Temple Baptist Church in Baldwinsville is the kind of customer that 
credit card companies used to reward with lower interest rates, not 
higher ones. The church paid its credit card bill on time and always 
paid at least the minimum due.
  ``But without explanation, Advanta Bank raised the church's interest 
rate from 18 percent to a whopping 36.9 percent. The higher rate had 
already been applied to $8,000 in new purchases, according to the 
Reverend Aaron Overton. He was shocked, just like thousands of citizens 
who have found themselves in similar positions.
  ``Fortunately for Overton and other consumers, their outcry was loud 
enough for Congress to pay attention. Last week, the House of 
Representatives approved the Credit Cardholders' Bill of Rights, which 
would prohibit sudden and retroactive rate hikes.''
  Then the editorial goes on to say later that this bill is good, we 
need to do more, and that ``Congress needs to carefully examine how 
credit card companies conduct business, the kinds of interest rates 
they charge and what other schemes are being practiced that hurt 
customers. Overton says he probably could have gotten a better deal 
from the Mafia than from his credit card company. It does appear that 
some companies are shaking down customers as the economy worsens.''
  Mr. Speaker, I will include the full editorial for the Record.
  The point is this: We cannot any longer allow these kind of practices 
to occur. The model that makes this occur is the fact that at one point 
in our country, all lending, including credit card lending, was based 
on the fair principle that a bank or other institution would lend out 
money and then would make money on the interest and then the principal 
would be paid back.
  But these credit card companies have now targeted people that cannot 
afford to pay back that principal and instead continue to get higher 
and higher fees. Yet they are too responsible, like Reverend Overton, 
to run away. He is not going to go anywhere. That church is not going 
to go anywhere. So there is no excuse to raise those rates and to have 
those fees, except that the company wants to make more money.
  My concern, the concern of my newspaper at home and the concern of 
many of us, is that these credit card companies, before this bill fully 
takes effect, before the Senate is able to pass it, will take advantage 
of this all the more. But to them, Mr. Speaker, to them I have a clear 
message, and that is we have got our eyes on you and you shouldn't try 
it, because if you do, we are going to put this into effect much, much 
earlier, as our Chairman Barney Frank has said.
  I do not believe that you should have a lawyer to get a credit card. 
We have lawyers to get a new house, often when you have a house 
closing. But when it comes time to get a credit card, you shouldn't 
need a lawyer. These 30 page contracts, frankly, that people don't 
read, but I tell you, if you did read them, there is only a couple of 
sentences that matter. Those are the sentences that say the credit card 
issuer can do everything and the consumer can do nothing. This has to 
end. This practice has to end. We must assure fairness, and that means 
getting the Senate to pass a strong credit cardholders' bill of rights, 
and in both Houses and down the street at the

[[Page H5102]]

White House we have to keep an eye on this industry and make sure they 
don't take advantage of the customers further during this recession.
  Mr. Speaker, I include the editorial from the Syracuse Post-Standard 
for the Record.

                               Bad Credit

       Temple Baptist Church in Baldwinsville is the kind of 
     customer that credit card companies used to reward with lower 
     interest rates not higher ones. The church paid its credit 
     card bill on time and always paid at least the minimum due.
       But without explanation, Advanta Bank raised the church's 
     interest rate from 18 percent to a whopping 36.9 percent. The 
     higher rate had already been applied to $8,000 in new 
     purchases, according to the Rev. Aaron Overton.
       He was shocked just like thousands of citizens who have 
     found themselves in similar positions.
       Fortunately for Overton and other consumers, their outcry 
     was loud enough for Congress to pay attention. Last week, the 
     House of Representatives approved the ``Credit Card Holders' 
     Bill of Rights,'' which would prohibit sudden and retroactive 
     rate hikes.
       The Senate is expected to pass similar legislation, 
     according to Sen. Charles Schumer, D-N.Y., who said the 
     Senate bill would contain ``important protections for 
     consumers and is a giant step forward for anyone who uses a 
     credit card.''
       Let's hope so.
       The credit card companies have been allowed to ride 
     roughshod over their customers, employing jaw-dropping 
     practices in a nation that supposedly operates by fair and 
     transparent financial rules.
       In fact, Congress needs to go farther than the House did in 
     its bill.
       As Rev. Overton pointed out, credit card companies should 
     be made to refund the money they received from the outrageous 
     fees.
       State Attorney General Andrew Cuomo was able to work out 
     such a deal recently with JP Morgan Chase & Co. It refunded 
     $4.4 million to 184,000 cardholders Cuomo said were wrongly 
     charged a monthly $10 fee.
       Most of the regulations in the Credit Card Holders' Bill of 
     Rights will not take effect until next year. But Rep. Dan 
     Maffei, D-DeWitt, and Rep. Carolyn Maloney, D-Manhattan, 
     sponsored an amendment that would ensure that one crucial 
     provision takes effect within 90 days of signing that 
     companies give customers 45 days notice before raising rates.
       Maffei says the House bill is just the beginning of 
     stricter oversight of credit card issuers. As a member of the 
     House Financial Services Committee, he says he has heard 
     complaints about credit company practices throughout his 
     district. He plans to hold hearings in Syracuse this summer.
       That's good. Congress needs to carefully examine how credit 
     card companies conduct business, the kinds of interest rates 
     they charge and what other schemes are being practiced that 
     hurt consumers.
       Overton says he probably could have gotten a better deal 
     from the Mafia than from his credit card company. It does 
     appear that some companies are shaking down customers as the 
     economy worsens.
       Lawmakers must put an end to such practices immediately.

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