[Congressional Record (Bound Edition), Volume 155 (2009), Part 9]
[Senate]
[Pages 12121-12125]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                CARD ACT

  Mr. MERKLEY. Mr. President, I rise today to encourage all to join me 
in recognizing the nurses of America and their commitment to addressing 
the needs of patients and their families.
  Today, on the birthday of Florence Nightingale, we celebrate National

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Nurses Day. This is appropriate since Florence Nightingale is known as 
the pioneer of modern nursing. National Nurses Week, which expands May 
6 through May 12, focuses on recognizing the integral role nurses play 
in promoting public health and also highlights the work nurses are 
doing to improve health care for all Americans.
  I know firsthand the critical role that nurses play in providing 
safe, high quality, and preventive health care. My wife Mary is a 
bedside nurse, and I am delighted that she has been able to join me 
today to help put a spotlight on the critical role nurses play in 
health care.
  Whether they work in a hospital, community health center, physician 
practice, school, home health care, a skilled nursing facility, or 
other health care setting, nurses create better outcomes for patients.
  Nurses are the cornerstone of our country's health care system. 
Nearly 3 million registered nurses work today in the United States. But 
even so, our country is facing an 11-year nursing shortage, and that 
shortage is projected to extend for at least a decade longer. Nurse 
faculty shortages and a huge and growing burden of tuition debt for 
nurse training are contributing to the shortage, even as new vacancies 
for nurse positions open every single day.
  The nationwide nursing shortage has caused dedicated nurses to have 
to work longer hours and care for more patients at the same time. That 
does not contribute to quality nursing, and we need to address that 
shortage.
  Quality nursing education is critical to ensuring that we have a 
sufficient number of qualified professionals joining the field. We need 
to ensure we are training not only the best and brightest to help out 
our patients but also bringing those nurses to join the ranks of nurse 
educators.
  Providing adequate Federal funding for nursing workforce development 
programs authorized under title 8 of the Public Health Service Act is 
critical to ensure a sufficient nurse workforce to meet the growing 
demand. I am pleased to join a bipartisan group of colleagues in 
supporting an increased investment in title 8 which has been an 
effective solution with past nurse shortages. These programs support 
the education of registered nurses, advanced practice registered 
nurses, nurse faculty, and nurse researchers.
  Additionally, title 8 programs focus on recruitment and retention, 
two other distinct areas impacting this shortage.
  Over the last 3 years, flat title 8 funding, combined with rising 
educational and administrative costs, as well as inflation, has 
significantly decreased the programs' purchasing power. Subsequently, 
the number of grantees supported by the programs has decreased 43 
percent over the past 4 years.
  As Congress works to improve our health care system and ensure that 
every American has access to quality, affordable health care, we must 
ensure that we have a stable and well-trained nursing force.
  We have an obligation to create a health care system that not only 
works for patients but also works for people at the heart of our 
patient care--our nurses.
  In closing, I want to note that I am soliciting my fellow Senators to 
join me to form a Senate nursing caucus. The caucus will provide a 
forum to address issues affecting the nursing community and recognize 
and advance the important role of nurses in delivering high quality 
health care.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Washington.
  Mrs. MURRAY. Mr. President, mounting debt is taking a big toll on 
families throughout this Nation. That is why over the past few weeks we 
have passed bills to stop mortgage scams and to prosecute corporate 
fraud and to lower fees for homeowners and help them into stable 
mortgages. Today we have an opportunity to continue to put Main Street 
first.
  Over the last several months, I have heard credit card horror stories 
from my families all over the State of Washington. I have heard from 
people who paid their cards on time but saw their supposedly fixed 
rates skyrocket unexpectedly or who had their minimum required payment 
doubled with no notice.
  I have heard from families who are 1 day late on their minimum 
payment, so the card company hiked up their rate and charged them a 
late fee, which put their card over their credit limit and that 
incurred another fee.
  I have heard from people who say their credit card company raised 
their minimum payment, and when they called to complain, they were 
offered their lower minimum payment back but only if they accepted a 
dramatic increase in the rate.
  With so many of our families struggling to make ends meet today, it 
is especially important that we stand up to protect families from 
excessive credit card fees from unexpected hikes in interest rates and 
minimum required payments and constantly changing credit card 
agreements that are designed to make a profit by keeping families in 
debt. That is why we need to implement the Credit Card Accountability, 
Responsibility and Disclosure Act, or CARD Act, to help protect 
consumers from predatory and misleading lending practices.
  The CARD Act we are going to be considering in the Senate today 
requires credit card issuers to give 45 days' notice of rate increases 
and to provide clear disclosure of term changes when accounts are 
renewed. It prohibits the so-called double-cycle billing where interest 
is assessed on the whole debt even when one portion was paid on time. 
It prevents card companies from using a contract clause to raise 
consumers' rates at any time for any reason that they choose. And it 
prohibits companies from issuing credit cards to anyone under the age 
of 21 unless the application is cosigned by a parent or guardian or the 
underage consumer completes a certified financial literacy course.
  We are going to bring fairness back to the system by stopping 
financial institutions from taking advantage of consumers with hidden 
charges and misleading terms. No one should have to be surprised by 
changes to interest rates or their minimum payments. These steps are 
going to help us level the playing field and are going to save families 
thousands of dollars a year.
  This bill addresses a number of things that are keeping credit card 
users in debt, and it is a good start. But at the same time we 
strengthen protections for credit card users, we have to make sure that 
people are empowered to make responsible decisions about their own 
financial future. Put another way, it is not enough to prevent credit 
card companies from changing the rules when too many Americans don't 
even know the rules in the first place.
  The reality is that over the last several years, too many Americans 
have made poor or very often uninformed decisions about their finances. 
Too many overestimated their resources, didn't read the fine print, and 
didn't grasp the terms of their financial responsibilities before they 
signed on that dotted line. In fact, we have to recognize that too many 
Americans, from college students all the way to senior citizens, are 
financially illiterate.
  I recently heard from a constituent of mine in Spokane County whose 
daughter had applied for credit cards shortly after she turned 18 years 
old. She, of course, didn't have much income and had difficulty making 
some of those payments on time. Her mom said one of those cards had a 
$500 limit. But instead of the bank declining purchases that would 
exceed that limit, each purchase she made went through and the bank 
charged a $37 fee for each and every one of them. Another bank charged 
her $7 every day because she had a $20 overdraft. Of course, she didn't 
have any hope of paying down those debts on her own.
  Those are problems that could have been avoided if she had simply 
understood her financial responsibilities and the terms of her 
financial agreements. That is exactly why I have introduced bipartisan 
legislation to make sure we help people develop the skills they need to 
make sound, informed financial decisions, from signing up for credit 
cards to taking out a mortgage to planning for your retirement.

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  The Financial and Economic Literacy Improvement Act of 2009 will 
require the Federal Government to step to the plate and become a real 
partner in helping Americans manage their finances and make good, 
informed financial decisions. It is a bipartisan bill. Senator Cochran 
has cosponsored it with me.
  The purpose of the bill is to give young people the tools to make 
informed decisions about credit cards or student loans, to help them 
understand the importance of saving, and to have the knowledge to plan 
a comfortable and dignified retirement down the road.
  We used to say the three Rs of school were ``reading, writing, and 
arithmetic.'' I think we need to add a fourth R: resource management.
  Under our financial literacy bill, the Federal Government will become 
a strong supporter of making financial literacy education a core part 
of our K-12 education. The bill would authorize $125 million annually 
for our State and our local education agencies and their partnerships 
with organizations experienced in providing high quality financial 
literacy and economic instruction. That funding will help make 
financial literacy a part of our core academic classes. It will help to 
develop financial literacy standards and testing benchmarks and, 
importantly, provide teacher training. It will also help schools weave 
financial concepts into some of their basic classes, such as math or 
social studies.
  The training will not end in high school. This bill makes the same 
investment in teaching financial literacy in our 2- and 4-year schools. 
Whether it is skyrocketing interest rates on credit cards or an 
adjustable rate mortgage you can no longer afford or a retirement plan 
they do not understand, I often hear the same thing from people: I wish 
they had taught me this in school.
  Our financial literacy bill will ensure that we are teaching it in 
school and will help people learn those basic skills that are so 
necessary that will give them a leg up when they deal with their banks 
or credit card companies.
  Let me be clear, credit is not a bad thing. When used correctly, 
credit can be a lifeline to the American dream. It can provide our 
entrepreneurs with the startup funds to become small business owners. 
It can help small business owners with the capital to grow into bigger 
businesses. And it provides families with the financial security to 
plan for their future.
  But at this important time in our history, as we reflect on financial 
practices, it is very important that we work to restore our credit card 
responsibility for lenders and for consumers. That is why I am working 
to support this bill and my financial literacy legislation.
  Just as families and consumers cannot afford unforeseen rate hikes 
and exorbitant card fees, we cannot afford for our young people today 
to not understand their own finances.
  I congratulate Chairman Dodd on crafting the CARD Act, and I hope the 
Senate passes it quickly this week. I look forward to continuing to put 
priorities of Main Street first and following through with that next 
step that is so important: passing the Financial and Economic Literacy 
Improvement Act.
  I yield the floor and suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. DURBIN. Mr. President, in our home State of Illinois, we are 
losing about 2,000 jobs a day. It is an indication of the economy going 
through a recession and the hardships that are being created across 
this country. There is some good news, in the sense that perhaps we are 
turning a corner. I hope that is true. But let's not forget the victims 
and those who are casualties in this economic recession.
  I recently received a letter, which I would like to read into the 
Record, from one of my constituents in Illinois--from Hodgkins. This is 
what she wrote:

       Dear Senator Durbin: I am a 61 year old female. I have 
     raised 6 children without the benefit of welfare, except for 
     6 months. The State of Illinois was unable to collect court 
     ordered child support. At one time I was working three jobs 
     to support us. I am not bragging but stating a fact that I am 
     not afraid to work. My children are now adults and I was, up 
     to August able to support just myself and finally live on my 
     own. For the last 23 years I have worked full time at a dry 
     cleaners. I now find myself downsized to part-time, hourly 
     instead of salary and in a position of real fear. I do not 
     have a pension. I no longer can afford health insurance. My 
     question to you is, ``What is going to happen to me and those 
     like me?'' Thank you for letting me vent and for listening.

  I read this letter and saw my response. The staff prepared a good 
response about the issues of health insurance and the President's 
stimulus package and what we are trying to do. And I thought it just 
isn't enough. I handwrote a response to her and let her know I had not 
only read her letter, but I was moved by this letter.
  Many of the issues we debate on the floor of the Senate relate 
directly to this woman who has struggled through her entire life to 
provide for her children and take care of herself without leaning on 
the Government, and now she finds herself, at 61 years of age, in a 
very vulnerable position. She has to wait 4 more years before she 
qualifies for Medicare. She has no health insurance. She is totally 
vulnerable to an accident or a diagnosis that can literally wipe out 
any meager savings she has put together and put her in a terrible 
position.
  People who face this do desperate things trying to keep things going. 
Many of them turn to credit cards, if they are lucky to have one. Too 
often they get too deeply into debt to those credit cards, and the 
outcome is not good. That is why the debate we are starting today on 
the floor of the Senate about credit card reform is one that is very 
timely. People across America are using these credit cards in an effort 
to try to stay afloat when they face a recession.
  I receive countless letters, in addition to the one I just read into 
the Record from Illinois, with stories about credit card companies 
specifically. One woman wrote that she opened her statement recently to 
find her credit card rate had jumped from 3.9 percent interest to 26.9 
percent interest. She phoned her credit card company, and she was told 
her last payment had been posted 2 days late because of a technical 
problem at her bank, which automatically pays her credit card bill each 
month. She did nothing wrong. Yet she was treated on the phone like a 
criminal, in her words, and faced this dramatic increase in the 
interest rate she had to pay on her credit card.
  Another gentleman wrote that he paid $7 less than his minimum payment 
1 month and was immediately fined an $85 fee. Another wrote that his 
credit card interest rate was increased from 8\1/2\ percent to 22\1/2\ 
percent. Yet he had never made a late payment or done anything else to 
justify the rate increase.
  These people who wrote to me are totally at the mercy of the banks 
and these credit card companies. President Obama was right to call on 
the credit card companies to stop this sort of outrageous behavior. 
Chairman Dodd reported a very good credit card bill out of the Banking 
Committee, and I am pleased the Senate is going to take up a version of 
that bill this week.
  The bill would bar many of the most abusive credit card practices 
that banks have dreamed up over the years, including harmless sounding 
policies such as universal default and double-cycle billing, which in 
fact are terrible for credit card borrowers.
  The bill includes a provision that I have been promoting for nearly 
10 years. The bill would require that each credit card statement 
include, in clear terms, the cost of paying only the minimum amount due 
each month. Credit card statements would have to include two things: 
how many months it would take to pay off the full balance if no more 
purchases were made on the card

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and if you just made the monthly payment, and how much interest the 
borrower would need to pay during that period. If people better 
understood just how expensive it is to pay only the minimum amount due 
each month, many people would save huge amounts of money over the long 
term by paying a bit more on their balances.
  There are many good provisions in the bill such as the one I just 
mentioned, and I might add this is not a new idea. This is an idea I 
brought to the Senate 8 or 9 years ago during the debate on bankruptcy 
reform. I said we are talking about people getting in debt and ending 
up in bankruptcy court and that they should at least be given fair 
notice on their monthly credit card statements about what a minimum 
monthly payment means. Tell them how much interest they would pay and 
how long it would take to pay them off.
  The banks and the credit card companies came back and said: Durbin, 
it is impossible to calculate; too difficult to calculate; we just 
can't do it. They fought me and defeated my amendment. That was about 9 
years ago. Thank goodness we hung in there, and thank goodness Chairman 
Chris Dodd on the Banking Committee took this provision which I had 
offered so many years ago, put it back in the bill, and this time the 
banks have had to accept it.
  I also wish to make this bill a little better, if I can, by setting 
limits on the credit card industry going forward. I plan to file three 
amendments this week. One would establish a new regulator, whose sole 
purpose would be to look out for the best interest of the consumers of 
financial products.
  Understand what happens: If you go to the store today and buy a toy 
for your child, you fully expect that somewhere, someone is taking a 
look at it to make sure it is safe. You don't expect it to have lead 
paint that an infant or toddler might chew on, swallow, and have a 
negative health outcome. You wouldn't expect the toaster you bought to 
be faulty and catch fire in your kitchen. You wouldn't expect the 
television set to blow up when you take it home. These are things you 
assume somewhere along the way someone has done some basic inspection 
of the product.
  Well, we found a few years ago that our inspection services were not 
good enough. The Consumer Product Safety Commission was not doing its 
job effectively. Those lead-based painted toys were coming in, and 
other dangerous toys, and so now we have completely reformed the law 
governing that commission, given them more authority and more power and 
more staff to protect American consumers. It is a minimum that we 
expect as consumers in America, that somebody is keeping an eye on 
these products before they hit the shelves so that we can go ahead and 
shop with some confidence.
  But what about financial instruments? How many Federal agencies keep 
an eye on credit cards to see if they are doing something with their 
new practices which are abusive and shouldn't be allowed in this 
country? How many of them are taking a look at mortgage instruments to 
see if there is a provision in the mortgage instrument that is being 
offered in America that is dangerous for consumers?
  Let me give an example of one: prepayment penalty. Know what that 
means? You enter into a mortgage agreement, and if you are not careful, 
and you don't have somebody helping you, you might miss in one 
paragraph in that stack of papers you get at closing which says, if you 
decide to prepay the mortgage, there is a penalty. It turns out that 
started in 2004. And because of a prepayment penalty, which many 
consumers weren't even aware of, they were hooked into mortgages where 
the interest rates exploded. So instead of being able to say, oops, I 
am going to push this old mortgage aside and get a new one at a lower 
interest rate, you can't do it without paying a significant penalty--a 
prepayment penalty. So people were trapped into expensive high-interest 
mortgages.
  You would think that somewhere along the way someone would have waved 
the red flag and said to consumers across America, watch for this; 
prepayment penalties can become a hardship on you if you have one of 
these adjustable mortgages. But that wasn't done. Despite the fact 
there were Federal agencies that had the responsibility to keep an eye 
out for it, they didn't blow the whistle, and of course didn't have the 
authority to stop it from happening.
  What we are creating here is the Financial Product Safety 
Commission--a commission which would play the same role when it comes 
to financial instruments that the Consumer Product Safety Commission 
does when it comes to the toys and appliances and cars and other things 
we buy, so we would have an agency not only with the authority to look 
at what is happening out there but to do something about it.
  Trust me, as good as this credit card reform bill is--and I am hoping 
we can pass it, and I am hoping the banks won't stop it when it gets to 
conference committee, and I am hoping the President will be able to 
sign it--the next day the people in this industry will sit down and 
say, how do we get around it? What is the next thing we can do that 
they didn't cover? Trust me, that is what is going to happen. You know 
it. So wouldn't it be good to have a watchdog agency that keeps an eye 
on the financial industry and credit card industries on behalf of 
consumers?
  There are 10 different Federal agencies which are supposed to have 
that responsibility, but few, if any, actually exercise it. Few, if 
any, say there are certain practices that are unacceptable, illegal, 
and we are going to stop them.
  The second amendment I will file will be a Federal usury cap at a 
very high level. What is a usury law? It is a limit on interest rates. 
There was a time in America when that was considered normal; States 
would have usury caps. The Federal government had a usury cap. But then 
they went away in the interest of competition and free markets. We 
decided we were not going to put a cap on interest rates, and so it has 
reached the point where there are very few usury caps left. What I have 
established, as the maximum, is 36 percent.
  Nobody in their right mind would pay 36 percent on a mortgage, or 36 
percent on a credit card. I mean, you would have to be out of your head 
to get into that kind of a predicament--a 36-percent annual interest 
rate. But the fact is Americans right and left are paying much higher 
interest rates today and don't know it--payday loans, title loans, 
installment loans. Sit down and do the math and figure out to borrow a 
hundred dollars and what you end up paying, whether you are going to 
one of those places and putting up the title of your car or letting 
them have access to your checking account, which is a deadly thing to 
do from a credit point of view. You end up paying interest rates that 
go through the roof. I have actually had people sit in my office and 
say, Senator, this 36-percent cap on interest rates will put us out of 
business. I said: Well, how much do you charge? Well, somewhere between 
58 percent and 400 percent a year. I said: I hope you do go out of 
business, because, quite frankly, they used to call that a juice loan 
when the syndicate and gangs were involved in it, but now it is 
legitimate. It is legal.
  So this 36-percent cap on interest is something which I know will be 
resisted by banks and title loans and payday loans and all the rest of 
these folks, but it is about time we got real here. If we are not going 
to protect the American consumers when it comes to some of these 
interest rates, they are going to be very vulnerable to some bad 
practices.
  The third amendment would allow retailers--the department stores, 
convenience stores, restaurants--to offer consumers discounts if they 
use less expensive methods of payment. For example, they would say: If 
you give us a credit card, here is your bill; but if you pay in cash, 
if you pay by check, or if you pay by a debit card, we will give you a 
discount. I don't think that is unreasonable. Because when it gets down 
to it, the extra charges the establishment has to pay for the use of a 
credit card are kind of hidden inflaters in the cost of the product you 
buy. If you can get a discount, I think it would be very helpful.

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  Ultimately, I believe these three amendments would move us toward a 
better bill. We are going to work with the sponsors of the legislation 
to see the best time and place to consider these amendments, and I am 
certainly open to any good-faith effort to give us our day in court, as 
we say here in the Senate, to debate these issues.
  I might say that when it comes to the Financial Product Safety 
Commission, it has the support of the Consumer Federation of America, 
the Center for Responsible Lending, Leadership Conference on Civil 
Rights, and a wide array of groups that try to look out for the average 
person in America who can't afford high-paid lobbyists to try to 
protect them against some abuses and exploitations.
  I think this is a move in the right direction. I commend this bill to 
my colleagues. I hope we can add some significant amendments to it and 
I hope at the end of the day we will do something for the lady who 
wrote me, who now has seen her hours at the dry cleaners reduced, faces 
some of the hardships of this economy, and is hoping that somewhere, 
someone on Capitol Hill will be keeping her interests in mind when we 
consider this significant and historic legislation.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Gillibrand). The clerk will call the 
roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DODD. Madam President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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