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Mr. SANDERS. I thank my colleague from Vermont. I wish to congratulate him for bringing forth a very important piece of legislation.
Clearly, if we are going to begin to address the crisis in our financial institutions, we need the manpower to go out there and do the investigations. We do not have it and this legislation does that.
I wished to say a few words in the midst of this debate on an issue. I am not bringing forth an amendment, but I did wish to say a few words on that; that is, in my office--I suspect in every Senate office--we are being deluged with e-mails and letters and telephone calls expressing outrage at the high interest rates people all across this country are being forced to pay by these very same financial institutions we are in the process of bailing out.
What is going on now is that while we spend hundreds of billions of dollars bailing out our friends on Wall Street, and while they receive zero interest loans from the Fed, what they are saying to the American people is: Thanks very much for the bailout. We are going to raise your interest rates from 15 to 20, to 25, to 30 percent. Pure and simply, that is called usury within Biblical terms. In fact, that is immoral. That is the type of action we should be eliminating right now.
I have introduced legislation which is very similar to the type of legislation that regulates credit unions right now. We would have a maximum interest rate of 15 percent, with some exceptions going to 18 percent, so the American people who are now on under great financial stress, who are buying groceries with their credit cards, who are buying clothes for their kids with credit cards, who are paying for college expenses with their credit cards, are not forced to pay 25 or 30 percent interest rates.
What I would like to do, rather than relate what I believe, is read a few of the e-mails I have received from the constituents. We are receiving a lot of them. Let me read one that comes from the northern part of our State. It says:
I, like so many others, am appalled at the hikes in credit card rates. Everywhere in our small town of Montgomery everybody is talking about the latest surge in interest rates. People who are never late in payments have seen their rates climb overnight. I, for one, used to overpay on my payments but can't afford to now. In addition, I am a founding member of a small agricultural co-op and we have a shop and studio. Today we found out that the charge for using credit cards has increased. How are people supposed to buy things when small businesses can't afford to process credit cards and people can't afford the interest rates if they use cards? No one has any money for anything anymore. The outrage, which I am sure doesn't surprise you, is building. Doesn't anyone get it?
Well, doesn't anyone in the Senate get it? I hope we do.
Here is another one that comes from the largest city in our State, Burlington:
I signed up with MBNA (at the time) for a credit card with an interest rate of 7.9 for the life of the credit card (as long as I adhered to terms such as paying on time, not going over limit, etc.) I received a notice yesterday that the interest rate is going to 13% on May 1. I called them and they said it had nothing to do with my credit. Bank of America, due to the economic situation, is raising its rates ``for business reasons only.'' One option they gave me is to pay down my balance at 7.9 but not use it on any future purchases. I now appreciate more than ever your fight against this sort of action. Basically they can do whatever they want.
That is quite right. They can do whatever they want.
Dear Senator Sanders, we just received a note from Bank of America in which they tell us that they are raising our credit rate: 15.74 percent on new and outstanding purchases ..... using a variable rate formula. I know you have been working on a cap for credit cards and are very concerned about big banks profiting so highly at the expense of consumers.
Here is another one:
Senator Sanders, there is a lot of news this week on how the credit card companies are trying to recoup their losses by raising interest rates on our credit cards. That is what my husband and I have just experienced. Two months ago I ran my husband's credit report, and between three credit bureaus we ranked around a 800 credit score. We have never been late on a payment and have been married 41 years.
Then she talks about the impact these high credit rates are going to have on her.
Dear Bernie, yesterday in the mail I received notification from Bank of America that they were hiking up the interest on my Visa card from 7% to over 12%. This seems arbitrary and in a time when I am extremely worried about my ability to pay my bills because my workload has gone way down. I am furious and scared.
The bottom line is, I am receiving dozens of e-mails from people in my State and from all over the country. They want to see whether the Congress has the guts to stand up to the financial institutions which have poured $5 billion in lobbying and campaign contributions into Washington in the last 10 years.
What the American people are saying is that 30-percent interest rates--arbitrary and huge increases in interest rates for people who have always paid their bills on time--is not only unfair, it is immoral. People should not have to pay 30 percent to borrow money in the United States.
I hope very much the time will come, sooner rather than later, when we will pass a national usury law that will put a cap on interest rates for large financial institutions similar to what exists for credit unions, which is 15 percent with some exceptions.
I yield the floor and look forward to working with the senior Senator from Vermont in passing this legislation.
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