[Congressional Record Volume 155, Number 156 (Monday, October 26, 2009)]
[Senate]
[Page S10737]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DODD (for himself, Mr. Reed, Mr. Schumer, Mr. Menendez, 
        Mr. Brown, Mr. Tester, Mr. Merkley, and Mr. Udall, of 
        Colorado):
  S. 1927. A bill to establish a moratorium on credit card interest 
rate increases, and for other purposes; read the first time.
  Mr. DODD. Mr. President, I rise today to offer legislation that would 
freeze interest rates on existing credit card balances until the full 
protections of the Credit Card Accountability, Responsibility, and 
Disclosure Act go into effect in February.
  It is clear that credit card companies see gouging consumers as a 
viable means of padding their profits. When they realized that we were 
serious about ending these abusive practices, they unfortunately 
decided to make one last grab for the pocketbooks of American consumers 
before the law goes into effect.
  Even before the Credit CARD Act passed, I heard from Connecticut 
residents who had seen their interest rates double or even triple with 
little warning and no explanation. As the law's implementation 
approaches, credit card companies have continued to jack up their 
customers' interest rates to get ahead of provisions in the Credit CARD 
Act that will permanently prohibit them from arbitrarily raising rates 
on existing balances.
  To those of us who have worked to rein in credit card abuses, this 
greedy behavior is disturbing, although not surprising. But to the 
families in my home state of Connecticut and around the country who are 
struggling to make ends meet these days it is something worse.
  Debt can crush families, driving them into bankruptcy and shattering 
the financial foundation they have worked so hard to build. It is 
impossible to get ahead when you're falling further and further behind 
each month. The anytime, any-reason rate hikes that credit card 
companies have used to enrich themselves have destroyed too many 
American families.
  That is why we took action to stop unjustified rate hikes, and why it 
is an outrage that credit card companies are trying to jam consumers 
one last time before our law stops them.
  I am not about to let this stand. In April, Senator Schumer and I 
wrote to the Federal Reserve, the Office of Thrift Supervision, and the 
National Credit Union Administration, calling on them to use their 
existing authority to implement an emergency freeze on interest rates.
  The regulators, unfortunately, did not act. Therefore, on behalf of 
our constituents, we must. This legislation will immediately freeze 
interest rates to ensure that Americans are protected until the full 
Credit CARD Act goes into effect.
  When it does, a provision I included in the legislation will hold 
credit card companies accountable for their recent behavior. Every 6 
months, card companies will be required to review each account that 
they hit with a rate hike since January 1, 2009, and reduce the rate if 
the customer has become less of a credit risk or the circumstances that 
warranted the increase are no longer present.
  I have directed Federal regulators to notify all credit card 
companies that they will be required to comply with this provision and 
to draft regulations that provide clear, strict rules to govern the 
reviews. Customers that did not deserve to have their rates raised in 
the first place should not have to be stuck with the higher rate after 
the Credit CARD Act takes effect.
  Consumers have a responsibility to spend within their means and to 
pay what they owe. But credit card companies have a responsibility to 
deal with their customers honorably. And they most certainly do not 
have the right to rip off American families, especially when this 
Congress has already gone on the record opposing those actions.
  Struggling middle class families won a huge victory when we passed 
the Credit CARD Act. Let us help them win another by ensuring that the 
credit card companies' reign of greed does not continue for even the 
short time before the law is implemented. I urge my colleagues to join 
me in this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1927

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Credit Card Rate Freeze Act 
     of 2009''.

     SEC. 2. MORATORIUM ON RATE INCREASES.

       During the period beginning on the date of enactment of 
     this Act and ending 9 months after the date of enactment of 
     the Credit Card Accountability Responsibility and Disclosure 
     Act of 2009, in the case of any credit card account under an 
     open end consumer credit plan--
       (1) no creditor may increase any annual percentage rate, 
     fee, or finance charge applicable to any outstanding balance, 
     except as permitted under subsection 171(b) of the Truth in 
     Lending Act (as added by Public Law 111-24); and
       (2) no creditor may change the terms governing the 
     repayment of any outstanding balance, except as set forth in 
     section 171(c) of the Truth in Lending Act (as added by 
     Public Law 111-24).

     SEC. 3. DEFINED TERMS.

       For purposes of this Act--
       (1) the term ``annual percentage rate'' means an annual 
     percentage rate, as determined under section 107 of the Truth 
     in Lending Act (15 U.S.C. 1606);
       (2) the term ``finance charge'' means a finance charge, as 
     determined under section 106 of the Truth in Lending Act (15 
     U.S.C. 1605);
       (3) the term ``outstanding balance'' has the same meaning 
     as in section 171(d) of the Truth in Lending Act (as added by 
     Public Law 111-24); and
       (4) the terms used in this Act that are defined in section 
     103 of the Truth in Lending Act (15 U.S.C. 1602) and are not 
     otherwise defined in this Act shall have the same meanings as 
     in section 103 of the Truth in Lending Act.

     SEC. 4. REGULATORY AUTHORITY.

       (a) In General.--The Board of Governors of the Federal 
     Reserve System may issue such rules as may be necessary to 
     carry out this Act.
       (h) Date of Enactment.--The provisions of this Act shall 
     take effect upon the date of enactment of this Act, 
     regardless of whether rules are issued under subsection (a).

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