[Congressional Record (Bound Edition), Volume 156 (2010), Part 8]
[House]
[Pages 10576-10577]
[From the U.S. Government Publishing Office, www.gpo.gov]




  EXTENDING EFFECTIVE DATE OF GIFT CARD PROVISIONS OF CREDIT CARD LAW

  Mr. HINOJOSA. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 5502) to amend the effective date of the gift card 
provisions of the Credit Card Accountability Responsibility and 
Disclosure Act of 2009.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5502

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

     SECTION 1. DELAY OF EFFECTIVE DATE.

       Title IV of the Credit Card Accountability Responsibility 
     and Disclosure Act, is amended by striking section 403 and 
     inserting the following:

     ``SEC. 403. EFFECTIVE DATE.

       ``(a) In General.--Except as provided under subsection (b) 
     of this section, this title and the amendments made by this 
     title shall become effective 15 months after the date of 
     enactment of this Act.
       ``(b) Exception.--
       ``(1) In general.--In the case of a gift certificate, store 
     gift card, or general-use prepaid card that was produced 
     prior to April 1, 2010, the effective date of the disclosure 
     requirements described in sections 915(b)(3) and (c)(2)(B) of 
     the Electronic Funds Transfer Act shall be January 31, 2011, 
     provided that an issuer of such a certificate or card shall--
       ``(A) comply with paragraphs (1) and (2) of section 915(b) 
     of such Act;
       ``(B) consider any such certificate or card for which funds 
     expire to have no expiration date with respect to the 
     underlying funds;
       ``(C) at a consumer's request, replace such certificate or 
     card that has funds remaining at no cost to the consumer; and
       ``(D) comply with the disclosure requirements of paragraph 
     (2) of this subsection.
       ``(2) Disclosure requirements.--The disclosure requirements 
     of this subsection are met by providing notice to consumers, 
     via in-store signage, messages during customer service calls, 
     Web sites, and general advertising, that--
       ``(A) any such certificate or card for which funds expire 
     shall be deemed to have no expiration date with respect to 
     the underlying funds;
       ``(B) consumers holding such certificate or card shall have 
     a right to a free replacement certificate or card that 
     includes the packaging and materials, typically associated 
     with such a certificate or card; and
       ``(C) any dormancy fee, inactivity fee, or service fee for 
     such certificates or cards that might otherwise be charged 
     shall not be charged if such fees do not comply with section 
     915 of the Electronic Funds Transfer Act.
       ``(3) Period for disclosure requirements.--The notice 
     requirements in paragraph (2) of this subsection shall 
     continue until January 31, 2013.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Hinojosa) and the gentleman from Tennessee (Mr. Roe) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Texas.

                              {time}  1430


                             General Leave

  Mr. HINOJOSA. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on this legislation and to insert extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HINOJOSA. Mr. Speaker, I yield myself such time as I may consume.
  I rise in strong support of H.R. 5502, legislation that extends the 
effective date of the gift card provisions of the Credit Card Act of 
2009 to January 31, 2011, 15 months after enactment of the Credit Card 
Act.
  On March 23, 2010, the Federal Reserve Board issued final rules 
implementing the gift card provisions of the Credit Card Act of 2009. 
These rules, which appropriately restrict gift card fees and expiration 
dates, offer important protections for consumers. The rules become 
effective on August 22, 2010, just prior to the start of the 2010 
holiday season. Because of the timing of the effective date of the 
rules and the approaching holiday season, as well as the technical 
disclosure requirements set forth in the Credit Card Act of 2009, 
millions of gift cards currently in the stream of commerce will be out 
of compliance with this law's disclosure provisions unless we pass this 
bill.
  The challenges presented to retailers who rely on the sales of gift 
cards would be significant, as they would likely be faced with empty 
gift card displays for a period of time while the cards are removed, 
while they are destroyed and reproduced and redisplayed. And most 
importantly, Mr. Speaker, customers would be inconvenienced and 
dissatisfied.
  Several of us here in Congress believe this is contrary to 
congressional intent contemplated when Congress passed the Credit Card 
Act of 2009 or when the Federal Reserve Board issued its final rules. 
Such waste and destruction is unnecessary, especially in light of the 
fact that there is an existing rule in place that the industry would be 
compliant with as it sold off existing inventory. A reasonable 
transition period is needed to sell through current card inventory and 
comply with the disclosure provisions in the final rules to serve 
consumers, to mitigate environmental impact, and reduce substantial 
costs incurred by the prepaid card industry and sellers, many of which 
are small businesses. Extending the gift card provisions by 15 months 
will address all of these concerns.
  I want to take this opportunity to commend my colleague Congressman 
Dan Maffei of New York, as well as Jillian Martin on his staff, for 
authoring this important legislation and ensuring that it complies with 
all the other requirements in the Credit Card Act of 2009.
  I urge my colleagues to support this legislation.
  I reserve the balance of my time.
  Mr. ROE of Tennessee. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, H.R. 5502 is a commonsense change to the CARD Act, which 
passed last year. This bill would provide a short extension for certain 
disclosure requirements associated with gift certificates, store gift 
cards, and general-use prepaid cards produced prior to April 1, 2010. 
It is important to note that nothing in this bill rolls back or changes 
any of the underlying CARD Act protections.
  The thrust behind H.R. 5502 is to avoid unnecessary waste, both in 
terms of time and the environment, which would occur if the 
implementation date for certain disclosure requirements is not shifted 
from August 2010 until January 2011. Without this sensible change, 
issuers would have to recall hundreds of millions of cards that they 
have already produced.
  It is a virtually incomprehensible amount of waste. But to try to 
understand the amount of waste that would result without this change, 
picture eight football fields that are 12 feet deep full of unused and 
unusable cards. There is no reason to allow such a result. Insisting on 
such an unreasonable implementation date is just inappropriate, 
especially when there is something we can do about it.
  I urge my colleagues to support the adoption of H.R. 5502, and thank 
the gentleman from Texas for bringing this to the floor.

[[Page 10577]]


  Mrs. MALONEY. Mr. Speaker, I rise in support of H.R. 5502 and commend 
my colleague Representative Dan Maffei for his leadership on this bill.
  The gift card provisions were part of the Credit Card Act that I 
sponsored and the President signed in May, 2009. The Fed was directed 
to promulgate rules associated with the provisions and I fully support 
the rules that the Fed adopted. However, many companies that issue 
cards whose funds do not expire will have to remove gift cards from 
store shelves that will be out of compliance starting August 22 when 
the provisions become effective.
  Replacing these cards entails not only the production of sufficient 
new cards to replace in-store inventory, but the additional cost of 
restocking retailers and pulling all noncompliant cards off the shelf 
and destroying them.
  A short transition period will allow the companies who issue cards 
with non-expiring funds to sell through their existing card stock on 
store shelves during the holiday season without having to discard and 
destroy 100 million cards. It is estimated that this volume would take 
up more than eight football fields buried 12 feet deep in such cards.
  I wrote to the Fed, along with several of my colleagues, asking that 
they extend the compliance date to January of 2011. However, the Fed 
felt that since they had been directed to promulgate the rules, they 
did not want to preempt Congress's authority. This bill will codify the 
request I made to the Fed in my letter.
  Mr. Speaker, I urge my colleagues to vote in favor of this bill so 
that it can become law before the August 22 implementation date.
  Mr. JOHNSON of Georgia. Mr. Speaker, I rise today to support H.R. 
5502, a bill to amend the implementation date of the gift card 
provisions of the Credit Card Accountability Responsibility and 
Disclosure (CARD) Act of 2009. I would like to thank Rep. Maffei for 
introducing this bill to correct and improve H.R. 627.
  This amendment would change certain parts of Title IV of H.R. 627 
passed by Congress on May 22, 2009. Due to the timing of the date of 
implementation of new rules and those already preparing for the holiday 
season, as well as the technical disclosure requirements set forth in 
the CARD Act, lots of gift cards already made and distributed will be 
in violation of the CARD Act disclosure provisions. Instead of 
requiring that the disclosure provisions be implemented, in August, 
2010, 15 months after the bill's passing, the amendment would extend 
this date to January 31, 2011. A reasonable transition period is 
necessary for small businesses to avoid high costs by reissuing prepaid 
cards and destroying already-made and shelved cards.
  This bill will help countless Americans, including many who live in 
the 4th Congressional District of Georgia, by preventing the 
implementation of burdensome rules which could disrupt the use of gift 
cards. Passing this bill will remove an unintended obstacle to the use 
of gift cards and will ensure that consumers have the ability to use 
their gift cards as they choose. I urge my colleagues to support this 
legislation.
  Mr. MAFFEI. Mr. Speaker, I rise to introduce the Environmentally 
Conscious Option Gift Card Act, or ECO-Gift Card Act. This bill gives 
gift card producers until January 31, 2011, to comply with several 
provisions of the Credit Card Accountability Responsibility and 
Disclosure, CARD, Act that we passed last year. The current deadline is 
August 22, 2010, and producers have found that the quick deadline 
presented many issues.
  If the deadline remains the same, most gift cards on the shelves of 
stores and in warehouses, which were produced before the law passed, 
will have to be removed and destroyed, and issuers and merchants will 
have to produce new cards that comply with the Fed rules.
  In addition to being an onerous burden on gift card issuers and 
merchants who sell the cards, the forced destruction of tens of 
millions of noncompliant cards would also result in needless 
environmental waste. The industry estimates that over 100 million gift 
cards would need to be destroyed and replaced, a waste volume that 
would take up more than eight football fields buried 12 feet deep in 
such cards.
  This extension of the deadline will give issuers and merchants a more 
reasonable transition period, and prevent a significant amount of 
environmental waste.
  I urge my colleagues to support this bill and look forward to its 
passage.
  Mrs. McCARTHY of New York. Mr. Speaker, I rise in support of H.R. 
5502, a bill I was proud to cosponsor. I commend Mr. Maffei for his 
leadership on this important bill, allowing for a short transition 
period for gift card issuers to comply with disclosure requirements 
that were part of the CARD Act that became law in May 2009.
  This bill would provide a short extension for certain disclosure 
requirements associated with gift certificates, store gift cards, and 
general-use prepaid cards produced prior to April 1, 2010. The 
transition will allow the industry to continue to sell its pre-existing 
gift card inventory that is in compliance with the new CARD Act rules, 
as it becomes compliant with the disclosures that take effect August 
22, 2010. This action will prevent a disruption to consumer access, as 
well as for large business in trying to remove the millions of gift 
cards currently in the stream of commerce.
  I fully respect the time and work of the Federal Reserve Board in 
drafting the final rules governing the gift card industry. However, in 
moving towards compliance, we need to ensure consumers are not 
inconvenienced, and I believe this legislation achieves that 
appropriate balance.
  Mr. ROE of Tennesse. I have no further requests for time, and I yield 
back the balance of my time.
  Mr. HINOJOSA. Mr. Speaker, I also have no further requests for time, 
and I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Texas (Mr. Hinojosa) that the House suspend the rules 
and pass the bill, H.R. 5502.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. HINOJOSA. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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