Supplemental Appropriations Act, 2009

Floor Speech

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Mr. DODD. Madam President, I wish to speak off the bill. I know my colleagues are talking about the supplemental appropriations bill. But I wish to take a few minutes, if I could, with the permission of the managers of the legislation, to talk about the credit card legislation that passed this morning. I did not have the opportunity, given the time constraints, to express some brief thoughts about the passage of that legislation.

So I rise to thank my colleagues. By an overwhelming vote of 90 to 5, this body voted earlier today to adopt the credit card reform legislation. I am very grateful to my colleagues. I am grateful to Senator Shelby, my cochair, if you will, the former chairman of the Banking Committee, for his work.

Obviously, this was a bipartisan effort, with a vote of 90 to 5. The final conclusion was one that was embraced by an overwhelming majority of our colleagues. I thank them for that.

Twenty years ago, many of my colleagues who are still in this Chamber will recall how we stood to try to get the credit card industry to respond to some of the activities that began then. In those days, they were not quite as pernicious as they have become. But, nonetheless, you could see the handwriting on the wall as to where these issuers were headed. We did not engage as effectively then as we probably should have. We said then that too many of these companies were starting to cross a line, starting to engage in abusive, deceptive, and misleading practices that were trapping their customers into far more debt than certainly they, the customers, ever agreed to.

But that was more than two decades ago, and since that time, we have all seen what has happened across our Nation: penalty fees that are increasingly common, for infractions that are increasingly ridiculous--for paying by phone or by e-mail or by check, which are ways you get penalized today; anytime, any reason under contracts, where interest rates could be raised that can turn a few hundred dollars of obligation into a lifetime of debt; disclosures that you need a microscope to read and a lawyer's degree to understand.

For too long, credit card companies have resorted to tactics that drive families deeper and deeper and deeper into debt.

Well, today the Senate let them know that those days are coming to an end. I am grateful to my colleagues for their votes.

I wish to take a few minutes to thank fellow Senators and staff who have worked diligently to help me improve this legislation.

As I mentioned earlier, Senator Shelby of Alabama played an important role, and I am grateful to him for agreeing to work on this bill. It came out of the committee on an 11-to-12 vote--the narrowest of margins. It was after that time that we worked to develop a bipartisan bill.

In all, I believe this was an inclusive process--striking a very good balance that ensures we provide tough protections for consumers while making sure to maintain the flow of credit into our economy that is so essential to our long-term economic recovery.

I wish to thank Senators CARL LEVIN of Michigan and CLAIRE MCCASKILL of Missouri, who led the charge to restrict overlimit fees and deceptive marketing of free credit reports.

Senator BOB MENENDEZ of New Jersey has been a champion from the very beginning on issues impacting young people--requiring credit card companies to consider consumers' ability to pay when issuing credit cards, increasing protections for students against aggressive credit card marketing, and more transparency in affinity arrangements between credit card companies and universities.

With respect to affinity cards and protection of students, I also wish to thank Senator Casey of Pennsylvania, Senator Feinstein of California, Senator Corker of Tennessee, and Senator Grassley of Iowa for their leadership as well.

Let me also thank several of our colleagues with whom we worked to include protections regarding small business--Senator BEN CARDIN of Maryland, Senator Johanns of Nebraska, and Senator MARY LANDRIEU of Louisiana. They strove mightily to include a study and report on the use of credit cards by small businesses.

Senator OLYMPIA SNOWE of Maine worked with our Senate colleague from Louisiana to include the establishment of a Small Business Information Security Task Force in this legislation.

Several additional measures were included at the behest of my colleagues that I think strengthen the legislation.

Senator CHARLES SCHUMER of New York authored the provision to scale back abuses on prepaid gift cards, and that provision is now included in the bill that passed.

Senator DAN AKAKA of Hawaii wisely suggested we seek a clarification of the certification process for credit counselors--something I believe will prove extremely valuable given the clear need for greater financial literacy among consumers.

Senator SUSAN COLLINS of Maine, with my colleague, Senator Lieberman of Connecticut, asked that we include provisions to prevent money laundering through the use of what they call stored value cards which are being increasingly used by drug cartels to smuggle money across our borders. I am happy we were able to include those provisions in the bill as well.

My colleagues from California and New Hampshire, Senator Feinstein and Senator Gregg, worked with us to include a study and report on emergency PIN technology that would allow banking customers to signal for help when forced to withdraw cash from ATMs.

Another study and report on which we worked with Senator Kohl of Wisconsin to include is on the marketing of products such as debt cancellation agreements, which some have long argued are of questionable benefit to consumers.

Finally, I wish to thank the President of the United States, President Obama, for stepping up and stepping in, and for using the bully pulpit of his Presidency to help us gain public awareness of these issues as well.

As we cross the finish line today and the House considers what we have sent them, I believe the victory will not be, of course, for our President or for the Congress or for the authors of this legislation or even for the Members I have mentioned in these remarks. Truly the victory will be for people such as Don and Samantha Moore of Guilford, CT, and their three daughters; or Kristina Jorgenson of Southbury CT; and Phil Sherwood, a member of the city council, of New Britain, CT. All of these constituents of mine came to me with stories about how they had seen abuses by the credit card industry.

In the case of Don and Samantha Moore: 40 years of credit card allegiance, one 3-day-late payment resulted in an increase from 12 to 27 percent in interest rates and reducing their credit limit from $32,000 to $4,000. They run a small business. It probably put them out of business--just for being 3 days late for the first time in 40 years.

In the case of Kristina Jorgenson in Southbury: She watched her rates go from 5 percent to 24 percent for being 3 days late--the first time ever--in a credit card payment. One of those days was a Sunday, by the way. She had taken out the credit card debt to pay off her student loans. They charged her because of the retroactive fees, the 24 percent, making it almost impossible for her to ever meet those obligations. To meet that criteria, she dipped into her individual retirement account which she had saved. She was in retirement and she has now cut that retirement down to 45 percent of its value in order to pay off the credit card debt. Three days late, one time, 5 percent to 24 percent. Phil Sherwood didn't do anything at all. He paid his bills every month, never a day late, and watched his rates skyrocket, he and his wife.

These stories I tell could be repeated over and over all across the country. More than 70 million accounts in one 11-month period, affecting one out of four families, saw interest rates skyrocket. For the life of me, I don't quite understand what the industry was thinking of, having just overreached time and time again. But as a result of the bill we passed today by the vote I mentioned, we have made significant inroads into the kind of practices the people I mentioned here were afflicted with.

Unfortunately, it doesn't happen overnight. The bill has a period of time before the new restrictions go into effect. I would have liked to have had a much shorter period, but these bills require compromise, and they don't become the fulfillment of the wishes of any one Member of this body. It requires working with each other and, as a result of that effort, we ended up with a longer period of time than I liked but, nonetheless, less than the official period of the Federal Reserve Board's regulations, which would be a year and a half from now.

So American consumers have a responsibility. That needs to be said over and over. But they also have rights, and those rights ought to be that they can count on a contract they enter into. I know of no other contractual relationship, whether it is purchasing a home, buying an automobile or an appliance, where the one party can virtually unilaterally change the terms of the contract. Yet that goes on every day with credit card issuers.

Madam President, 20 to 25 percent of students now have over $7,000 in credit card debt--25 percent of our student body at the university and collegiate level. The average college graduate owes over $4,000, a major factor of some students dropping out of school.

The average family in our country, with credit cards, now has what they call revolving debt--the bulk of which is credit card debt--well in excess of $10,000 per family. So, clearly, with those kinds of obligations and debts, something needed to be done. That is what we have done with this legislation.

So the industry has obligations. Consumers have the right not to be taken to the cleaners, and they have a right to expect that they will be treated fairly when they enter into a contractual agreement; that they won't be the only ones required to uphold their end of the bargain. Certainly, consumers have a right not to live in fear that a clause buried in the fine print of their credit card contracts might someday be their financial undoing, and they should have a right to trust that their child won't be saddled with debt before they have turned 21.

Standing up for those families and their children and forcing those rights is what this legislation was designed to do, and we accomplished that goal.

So I wish to thank my colleagues again for their efforts, their diligence, their commitment to ensuring that we pass a strong bill that will benefit consumers across the country.

I wish to thank majority leader HARRY REID, and I wish to thank the minority leader, the Republican leader. HARRY REID provided the time and space for the consideration of this bill which would not have happened if the leadership didn't decide to make that time available for something as complicated as this, with many different ideas that were brought to the table. I wish to thank the floor staff that is here for their work, both the majority and minority side as well. They were very patient. It has been over 2 weeks now.

We dealt with the housing bill last week, and now the credit card bill this
week, and they had to put up with me for 2 straight weeks on the floor of this Chamber. I am very grateful to them. I wish to thank my staff as well.

LINSEY GRAHAM, who is on the Banking Committee staff, has done a magnificent job over the years and in working on this legislation. Amy Friend, Charles Yi, Colin McGinnis, along with other members of the staff, but they were the principal ones who spent long hours and nights over the weekends over the past several weeks to pull this legislation together.

Bill Duhnke and Mark Oesterle of Senator Shelby's staff as well worked very hard, and I am very grateful to them.

I wish to thank the staff here as well. Certainly, the majority leader's staff, Gary Myrick and Randy Devalk, who did a great job, and I thank them. I can't say enough about Lula Davis and about Tim Mitchell. Trish Engle and Jacques Purvis did a wonderful job. I thank them. I thank David, as well, on the minority staff. They were just wonderful.

I tried their patience, I know, on more occasions than I care to remember, but without their involvement over these past several days we would not have been able to achieve this accomplishment today. That also includes Joe Lapia and Brandon Durflinger, Meredith Mellody and Esteban Galvan as well from the cloakroom staff who worked so hard.

I am sure I have left some people out, and I apologize if I have done so in thanking them for their work. But all of these people in their own way contribute to what happens here. They don't often get mentioned. Those of us who have the right to speak in this Chamber are the ones who are seen and heard, but I want my constituents and people in this country to know there are people every day whose names you will never know, whose faces you will never see, who contribute mightily to the products that get produced in this body. It takes cooperation on the part of all of us, regardless of where we come from, what party affiliation we are, what ideological leanings we may have. They are wonderful, remarkable people who give their time and their professional careers to this institution and who make these kinds of events and these kinds of results achievable.

So I thank them all, and I thank all of my colleagues again.

I look forward to a day in the hopefully not too distant future when President Obama will sign this legislation into law.

I yield the floor.

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