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Press Release
For Immediate Release
November 04, 2009 |
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Floor Statement on Expedited CARD Act |
Madam Speaker, I rise in support of H.R. 3639, the Expedited Card Reform for Consumers Act of 2009.I want to thank Chairman Frank for joining with me and moving this so
quickly. Thanks also to Senators Dodd of Connecticut and Udall of
Colorado for taking action in the Senate.
This bill would simply move up the effective date of the remaining
provisions of the Credit Card Act from February and August 2010 to
December 1, 2009. It would exempt both small card issuers and gift card
issuers (keeping those implementation dates in February, 2010).
It is truly unfortunate that we have to be here discussing this today. But the card companies brought this on themselves.
Rather than use the nine months of implementation time—time that the card companies asked for—between the bill’s signing last May and February 2010 to adapt their systems and learn to compete under the new rules, the card issuers have continued the practices which the Federal Reserve declared “unfair”, “deceptive” and “anti-competitive.”
Just last week, the Pew Charitable Trust reported that of nearly 400 credit card products offered by the 12 largest banks and the 12 largest credit unions, interest rates have spiked by an average of 20% on credit cards representing more than 90% of outstanding credit card balances in the first two quarters of 2009. That bears repeating: an average 20% increase in interest rates.
The Pew report also found that 100% of bank cards used practices labeled “unfair or deceptive” by the Federal Reserve, and that none of these cards would meet the requirements of the Credit CARD Act.
This troubling information follows report after report in the press of card issuers raising rates and fees on customers with perfect payment histories. NBC News reported that one cardholder, who had never been late on a payment, had his rate double from 8 to 16%, then almost double again to 30%-- just since January.
My office, and I am sure all of yours, have received scores of calls from constituents complaining that their interest rates have gone up “for no reason.”
The original implementation date on my Credit Cardholders’ Bill of Rights, as drafted, was 90 days after enactment. But as the bill moved through the legislative process, many members wanted to move the implementation back to give card companies the time they claimed they needed to comply with the law. In order to pass the legislation, we had to compromise.
We ended up with three stages of implementation: August 2009 for increased notice of rate hikes and payment dates, February, 2010 for the bulk of the provisions, and August, 2010 for a few small remaining provisions—including a review of all interest rate hikes since 2009.
The extraordinary breadth and depth of the interest rate hikes point to the need for faster consumer protections. Moving up the implementation date for the bulk of card issuers to December 1st, just in time for the Holiday shopping season, is both warranted and wise.
Madam Speaker, I urge my colleagues to support this legislation and I yield back the balance of my time.
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