[Congressional Record Volume 158, Number 148 (Monday, November 26, 2012)]
[Senate]
[Pages S6895-S6896]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. BLUMENTHAL:
S. 3636. A bill to provide increased consumer protections
for gift cards; to the Committee on Banking, Housing, and
Urban Affairs.
Mr. BLUMENTHAL. Mr. President, as consumers shop for the holidays,
more and more consumers are buying, giving, and receiving gift cards.
By one estimate, Americans spent over $100 billion on gift cards in
the 2011 holiday shopping season, and that nearly $2 billion of that
value went unused.
Today I am introducing legislation to help substantially remedy that
problem and to ensure that consumers receive the full value that is
stored on their gift cards.
Whether it is a bankrupt company that refuses to honor a gift
certificate, a gift card with hidden fees that slowly withers down to
nothing, or a ``promotional'' gift card that expires in the virtual
blink of an eye, consumers in Connecticut and across the nation are in
danger of seeing the value of their gift cards disappear.
The Gift Card Consumer Protection Act will stop these abusive
practices.
This bill uses as a model or blueprint the Connecticut law that I
advocated and helped write while serving as Attorney General, but it
adds to protections provided by that state law and others.
This new measure enhances and expands gift card safeguards,
particularly when gift card sellers become legally insolvent and seek
bankruptcy status.
It will add strong new protections for consumers when a company goes
bankrupt. Under this bill, a company that files for bankruptcy must
immediately
[[Page S6896]]
stop selling its gift cards and is required to honor existing gift
cards until it goes out of business.
First, this bill will ban expiration dates and inactivity fees.
Connecticut gift card consumers have the benefit of clear and robust
protections: their gift cards do not expire, and they do not carry any
non-use or dormancy fees. These protections apply whether the gift card
is purchased by a consumer or obtained as a rebate or bonus for the
purchase of another product because in both situations, the consumer is
relying on an expectation that the funds on the card will not expire
and will not be depleted by fees.
As a U.S. Senator, I have often advocated for bringing Connecticut's
strong consumer protection laws to the rest of the Nation, and that is
what this bill does.
Under current Federal law, gift cards may expire after 5 years, and
they be charged inactivity fees after 1 year. And loyalty, award, and
promotional cards are not covered at all.
This bill would eliminate expiration dates and inactivity fees for
gift cards, and it would include those protections for loyalty, award,
and promotional gift cards.
This bill will give peace of mind and security to consumers when they
purchase gift cards. They can shop with confidence, knowing that the
money on their gift cards will not expire, will not diminish over time,
and will not be refused if a company goes out of business.
I am grateful that many in the industry already follow these
practices. Best Buy, for instance, doesn't charge fees on their gift
cards and they do not expire. When you get a bonus card for a purchase,
that card doesn't expire or carry fees, either. The same is true for
Barnes and Noble, and others.
These practices should prevail uniformly for every company.
Unfortunately that is not the case. Some large companies assess
inactivity fees after a year, others issue promotional gift cards that
expire very quickly, sometimes as soon as forty days from the card's
issuance.
The result is confusion and a lack of consumer confidence. ``Does
this company's gift card have hidden fees? Does the money on this $20
bonus card last until I use it, or will it expire next month? This ad
says I get a promotional gift card when I buy a new TV: does that mean
it won't expire for five years, or will it expire in 30 days?''
The Gift Card Consumer Protection Act will address and dispel such
doubt and confusion and make it clear that consumers who receive or buy
gift cards whether by purchasing them directly or as part of a rebate
or promotion need not worry about the cards expiring or being depleted
by inactivity fees. It provides protections for gift card holders when
a company files for bankruptcy protection.
The Gift Card Consumer Protection Act assures that consumers get
their money's worth, no matter when they use the gift card.
I invite my colleagues to cosponsor the Gift Card Consumer Protection
Act and ensure that gift card consumers do not see the value of their
gift cards disappear due to unfair fees or expiration dates or a
company bankruptcy.
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By Mr. REID:
S. 3637. A bill to temporarily extend the transaction account
guarantee program, and for other purposes; read the first time.
Mr. REID. 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 teh Record as follows:
S. 3637
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. INSURED DEPOSITORY INSTITUTION TRANSACTION ACCOUNT
GUARANTEE PROGRAM.
(a) Extension.--Notwithstanding any other provision of law
that would repeal subparagraphs (B) and (C) of section
(11)(a)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1821(a)(1)) on January 1, 2013, such subparagraphs shall
remain in effect until December 31, 2014.
(b) Prospective Repeal.--Effective on January 1, 2015,
section 11(a)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1821(a)(1)) is amended--
(1) in subparagraph (B)--
(A) by striking ``deposit.--'' and all that follows through
``clause (ii), the net amount'' in clause (i), and inserting
``deposit.--The net amount''; and
(B) by striking clauses (ii) and (iii); and
(2) in subparagraph (C), by striking ``subparagraph
(B)(i)'' and inserting ``subparagraph (B)''.
(c) Cost Recovery.--The Federal Deposit Insurance
Corporation (in this section referred to as the
``Corporation'') shall fully offset, in each calendar year,
any estimated losses to the Deposit Insurance Fund
established under section 11(a)(4) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)(4)) that may occur as a
result of the amendments made under subsections (a) and (b)
of this section, by--
(1) estimating the losses, if any, that are expected to
occur for each calendar year; and
(2) collecting an amount equal to such estimated losses by
September 30 of such calendar year, which shall be in
addition to the assessments that would otherwise be collected
by the Corporation with respect to such year for insured
depository institutions (as defined in section 3(c)(2) of
that Act (12 U.S.C. 1813(c)(2))) pursuant to section 7(b) of
that Act (12 U.S.C. 1817(b)).
SEC. 2. INSURED CREDIT UNION TRANSACTION ACCOUNT GUARANTEE
PROGRAM.
(a) Extension.--Notwithstanding any other provision of law
that would repeal subparagraphs (A) and (B) of section
207(k)(1) of the Federal Credit Union Act (12 U.S.C.
1787(k)(1)) on January 1, 2013, such subparagraphs shall
remain in effect until December 31, 2014.
(b) Prospective Repeal.--Effective on January 1, 2015,
section 207(k)(1) of the Federal Credit Union Act (12 U.S.C.
1787(k)(1)) is amended--
(1) in subparagraph (A)--
(A) by striking ``(A) In general .--'' and all that follows
through ``paragraph (2), the net amount'' in clause (i), and
inserting the following:
``(1) In general.--Subject to the provisions of paragraph
(2), the net amount''; and
(B) by striking clauses (ii) and (iii); and
(2) in subparagraph (B), by striking ``subparagraph
(A)(i)'' and inserting ``subparagraph (A)''.
(c) Cost Recovery.--The National Credit Union
Administration (in this section referred to as the
``Administration'') shall fully offset, in each calendar
year, any estimated losses to the National Credit Union Share
Insurance Fund established under section 203(a) of the
Federal Credit Union Act (12 U.S.C. 1783(a)) that may occur
as a result of the amendments made under subsections (a) and
(b) of this section, by--
(1) estimating the losses, if any, that are expected to
occur for each calendar year; and
(2) collecting an amount equal to such estimated losses by
September 30 of such calendar year, which shall be in
addition to the assessments that would otherwise be collected
by the Administration with respect to such year for insured
credit unions (as defined in section 101 of that Act (12
U.S.C. 1752)) pursuant to section 202 of that Act (12 U.S.C.
1782).
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