Credit Cardholders' Bill of Rights Act of 2009--Continued

Floor Speech

CREDIT CARDHOLDERS' BILL OF RIGHTS ACT OF 2009--Continued -- (Senate - May 13, 2009)

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Mr. BAYH. Mr. President, as you may have observed in our time together in the Senate, I do not come to the floor of the Senate to speak very often. I try to reserve my comments for matters of particular importance and urgency, matters where I think we can make a real difference and where the debate will matter. We are debating one such issue today, when it comes to the important need, the critical need to rein in the abusive practices of credit card companies that are harming thousands of middle-class families across my State and millions of middle-class families across America.

Just this last weekend I received more than 500 letters and e-mails from my constituents, middle-class people across Indiana who are outraged because they rightly believe they have been abused by the predatory practices of credit card companies. These are decent hard-working people who ask nothing more than for a fair shake in life and, too often, they are not getting it because of the these abusive practices.

I wish to take the opportunity to share with you a couple of these stories. Many of them are heartfelt. I will give an example. This one is from a single mother. She writes me:

Dear Senator Bayh, I am a single mother of a teenage boy, and I work 50 hours per week--

She is not some deadbeat, she is a hard-working, middle American--at a job I've had for 14 years. My ex-husband quit his job out of the blue a couple of years ago and did not pay any child support for over a year.

Unfortunately, I had to turn to using my credit cards for things like groceries, gas and other bills just to keep up. If you are even 1 or 2 days late in paying your bill, these credit card companies increase your percentage rate to astronomically high amounts. Because I was struggling and a few days--not months, just a few days--late on some of my credit card payments, the percentage rates on my credit cards are now between 28 and 32 percent. I will never pay off these bills with interest rates like this!

So many people out there, including myself, are at the mercy of these unscrupulous credit card companies that can do whatever they please. There needs to be laws regulating how much these companies can charge. Americans are mired in credit cards debt that will never be paid off, no matter how hard they work and no matter how hard they try if the current practices do not change.

My economic situation will be so much better if it were not for my credit card bills. I owe probably $15,000 now on all of my credit card bills combined, but it will take me a lifetime to pay those off because of the practices to which I have been subjected. Please fight for hard working people everywhere who just want a chance to get out from under their debt and better their financial circumstances.

I also heard from a woman in Carmel, IN, just north of Indianapolis, a few weeks ago. She had an $8,000 balance on a closed--a closed credit card account. She was not buying anything. She had always paid her bill on time. And out of the blue one day--she had done nothing wrong--her credit card company doubled her minimum payment. She is a woman of modest means and she could not make the higher payment. She called the bank and they would not work with her, even though she had never missed a payment or been late, not once.

Soon the credit company started adding late fees and compounding her interest. Over the course of 2 years, her balance tripled from $8,000 to $24,000, without making a single purchase. She had bought nothing. She had done nothing wrong. And she is getting gouged like this. This is the kind of thing that has to stop.

I heard from another constituent from Middlebury, IN, another basic middle-class middle American, who received an offer from her credit card company to consolidate her balance on all of her credit cards at 4 percent.

Well, that sounded like a pretty good rate, so she accepted the offer. She never missed a payment. She had paid off half her debt, when suddenly they raised the monthly minimum payment by 60 percent. So she is paying on time, she is paying down her debt, and her monthly minimum rate goes up by 60 percent without cause or any notice.

She called customer service to complain. They said they would lower her monthly minimum payment if she would agree to have her interest rate doubled. This woman from Middlebury is a mother. She is trying to keep her head above water, and her credit card company is making life more difficult with practices like that.

Those are the kinds of things we have to stop. And those are the kinds of things I hope we will stop yet this week here in the Senate.

Here is what she wrote:

I don't know that our government can do a thing about this, but I just wanted to be heard.

Well, here is the place where her voice can be heard. Here is the place where thousands of middle-class families like hers can come for some relief. Here is the place where over 500 people who wrote about the abuses to which they have been subjected can come for some relief.

This recession has caused millions of middle-class families to resort to using their credit cards a little bit more, not because they wanted to but because they had to try to make ends meet. They are working hard, trying to get out from under this situation, and it does not make life any easier when they are running uphill because of these abusive practices.

You know, bills are sent out so late. They arrive in our mailbox and you have got 24 or 48 hours to pay the thing off or you are subjected to a late fee. That is not right. Then they start charging interest on the late fee. Interest rates can literally, because of the fine print in these bills--you know, back in the day, you applied for a credit card, it was about a one-page thing. Now it is 20 or 30 pages of fine print. And buried in there in the fine print are the provisions where companies can raise your interest rates any amount, anytime, for any reason, or for no reason whatsoever. Those are the kinds of things that need to be stopped.

Then, finally, when you are making your payments, they take the payment
you make, and rather than applying it to the most expensive part of your debt with the highest interest rate, they apply it to the lowest interest rate. Why? Because it is more profitable for them, even though it would be better to do it the other way around for you. Those are the kinds of things we have to correct.

You know me pretty well, Mr. President. I am a free enterprise person. I believe in the right of companies to make a profit, and credit card companies are no exception. But they ought to make it the legitimate, old-fashioned way, not on the backs of consumers through abusive practices. That is what we are talking about here.

This also goes to something else I am concerned about, and that is the deepening skepticism and cynicism about government in general, and about Washington, DC, in particular. They think we are all under the thumb of a bunch of special interests. Everybody sold out and nobody cares about the average person or the middle-class family anymore. This gives us an opportunity to show, to demonstrate that that is not true, to stand up for millions of ordinary people, to do what is right, to say that the free market should be allowed to operate, but you should not scam people, you should not bury fees in fine print, you should not do a bait and switch.

That is not the way you make a decent profit. That is something that ought to be against the rules. That is what this legislation would provide for. For the sake of middle-class families across States such as Indiana and New Mexico and elsewhere across America, for the sake of folks who are working hard trying to get out from under the consequences of this recession, for the sake of trying to restore some faith and trust in our system of self-government, it is important that we pass this credit card bill, to restrain these abusive practices, to stand up for middle-class families, to do right by our citizens, and to let people know that when their voices are heard, we will answer.

That is why I have risen today on this bill. I urge my colleagues to join with us in acting. I hope we will have an opportunity to do that before the week is out.

I thank you for your leadership, as well as my colleagues.

Seeing none of our colleagues present, I suggest the absence of a quorum.

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