Mr. SANDERS. Mr. President, I wish to take just a very few moments to speak about an issue I think is resonating and causing great concern all over our country; that is, the outrageous escalation in credit card interest rates.
I note that the House and the Senate will soon be addressing the issue of credit cards, but I hope very much that both bodies will include within their legislation something that is long overdue; that is, a cap on interest rates. We need a national usury rate law. It is totally unacceptable to me--and I think the vast majority of the people in our country--that credit card companies are charging people 25, 30, and 35 percent rates of interest on their credit cards. This is usury. This is wrong. From a biblical perspective, this is immoral, and it is time we got a handle on it.
The truth is that a number of years ago, many States had usury laws which prohibited very high interest rates. As a result of a Supreme Court decision, those State laws were essentially made null and void and companies that moved to States such as South Dakota and Delaware could essentially charge the American people any rate they wanted. Within the last 20 years, we have seen a huge increase in interest rates. About one-third of the American people are paying 20 percent or more. It is time we got a handle on that issue.
What I would like to do this afternoon, very briefly, is read some of the e-mails that are coming to my office from the State of Vermont but, in fact, from all over this country. On late Friday afternoon, I sent out an e-mail to our e-mail list, and within 2 days' time we have had 900 responses from people who have expressed to me what is going on in terms of their relationship with their credit card companies. The stories I am hearing are absolutely appalling--in some cases, unbelievable. What is particularly disturbing is that at a time when the taxpayers of this country have provided hundreds of billions of dollars to bail out failing financial institutions--which, because of their greed, their recklessness, and their illegal behavior, caused them to collapse--these same financial institutions are now saying to the taxpayers who bailed them out: Thank you very much; now we are going to raise your interest rates substantially.
So what I will be doing in the coming weeks is coming here to the floor and reading stories from Vermont and from all over this country. Let me start off with one that comes from Poultney, VT. This is what the gentleman says:
I owned and operated a summer business in excess of 43 years. My business credit card was with Avanta at 7.9 percent for years. Last year, my payment jumped about $400 per month. I thought there was fraud involved. Upon checking, I found my interest had been raised from 7.9 to 28.8 percent. I always paid more than the minimum and always on time. When Avanta was contacted and asked why, I was told it's a floating interest. I asked to speak to a manager and was advised that's the way it was and they could do nothing to lower it. I got a line of credit loan from Heritage credit union at 1 percent over prime, paid them off, and shut down my business. After 43 years of business, it took usury to shut me down.
That is just one story.
Somebody writes from Virginia--the State of our Presiding Officer--and says:
Explain to me, do the banks/credit card companies feel that the only way to make money is to cheat us or manipulate us into taking part in an endless Ponzi scheme? How much profit is to be expected in an honest deal? Even 15 percent seems high to me.
This goes on, Mr. President. We have one from Barre, VT:
I only have one thing on my credit card every month. It is the Internet access charge of $10.95. My credit card is a Visa from Capital One. I received a letter stating that the rates were almost double what I agreed to pay if a payment was late, but it also stated if I did not agree to their term, they would cancel my credit card. Let's not only do something about credit card fees, let's stop banks in their tracks with all fees they access on customer accounts they have.
From Castle Rock, CO, another individual writes:
I have excellent credit. Nearly 780 last time I checked. I had a ``fixed'' interest rate with Capital One at 4.9 percent since 2002. In 2007 the rate was raised to 7.9 percent. I received a letter in early April of this year that it will rise to 17.5 percent for no particular reason, except that it was a company decision. I am outraged! This is really unfair for everyone but I think especially unfair for those who really pay attention to maintaining good credit.
That person had a 780 credit number, which is very good.
Here is one from Bennington, VT:
I'd been on time every month and one day I got my statement and wow my interest rate had more than doubled. I called and they did put it back to the rate I had and said it would be good for only 9 months and then they would up it again and I would have to call again. This is hard for the families who aren't using their credit cards anymore and they are on a budget and factor in the credit card payment, and then all of a sudden one month it's gone up a lot and you didn't factor that in.
I am tired of being the one who has to pay! The executives of these credit card companies mess up and the little people pay. The government messes up and the little people pay. Now my oldest child is going off to college and I can't even get financial help except for loans. Yes, more interest. So now I have to pay more interest on my credit cards. When will I get help? I pay my bills, I pay my taxes. If I pay late I get a finance charge and it hurts my credit rating. When these big companies fall behind, they get my tax money, and I get to pay it back for them.
This is from Bridport, VT:
On my Bank of America cards I made purchases at 9.9 percent which was not a variable rate. I assumed I had that interest rate because I have never had a late payment and have never made just the minimum payment. This month I received notice that my interest rate is going to jump to 15.65 percent and be a variable rate. I do have steady income and I don't want to damage my credit rating by paying the balance off in a few months then cancel the card.
Here is another, from West Burke, VT:
My husband sustained severe brain trauma in 2000. We managed to not file bankruptcy and to pay off all credit cards. I now find that we were idiots to do this. Our credit is ruined by going a year without income. Ruined, because we paid any credit card debt we owed.
Here is one from Little Rock, AR:
I am 67 years old and had the card since the year of the flood. I was on vacation and out of the country and did not make my card payment on time. I had always kept my account up. When I went to charge a flight on line it was denied. I called them and they replied that since I was a ``late payer'' I had to pay off my account every 30 days as it used to before they allowed extended payments for large purchases. I paid off the card that day and cut up the card.
From West Newberry, VT:
I send my payment by mail and sometimes the postal service is slow and the card company got payment one day late and has changed my interest rates from 16 percent to 29.9 percent, and now if I pay the minimal payment the charges are more than what I paid on the bill.
One day late, and their rate went from 16 percent to 29 percent.
As I mentioned, in 2 days we have gotten about 900 e-mails, significantly from Vermont but from all over the country. So I have introduced legislation which would cap interest rates on credit cards at 15 percent, with some exceptions going up to 18 percent. That legislation is cosponsored by Senators Durbin, Leahy, Whitehouse, Harkin, and Levin. The legislation is based on longstanding law which regulates credit unions, which under normal circumstances cannot charge more than 15 percent.
The American people are hurting. We are in a recession because of the greed of a small number of banks on Wall Street, and now these very same banks are hitting the middle class and working families of this country with outrageously high interest rates. Enough is enough. We need to establish a national usury rate, so I ask my colleagues to support this legislation.
Mr. President, with that, I yield the floor.