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Credit Cardholders' Bill Of Rights Act of 2009

Floor Speech

Location: Washington, DC

CREDIT CARDHOLDERS' BILL OF RIGHTS ACT OF 2009 -- (Extensions of Remarks - April 30, 2009)

The House in Committee of the Whole House on the State of the Union had under consideration of the bill (H.R. 627) to amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes:

* Ms. HIRONO. Mr. Chair, I rise in strong support of H.R. 627, the Credit Cardholders' Bill of Rights Act.

* Last year, I was an original cosponsor of a similar bill, which passed overwhelmingly in the House by a bipartisan 312 to 112 majority (including 84 Republicans). I was disappointed that this legislation languished in the Senate.

* Since last year's action in the House, many American families and businesses have been particularly hard hit by the economic crisis, including those who rely upon credit lines, who, through no fault of their own, have been subjected to predatory lending or abusive credit card practices that make it difficult for them to end the cycle of costly debt. Hundreds of constituents in my district have contacted me to express support for this critical legislation.

* In 2008, credit card issuers imposed $19 billion in penalty fees on families with credit cards, and this year card companies will break all records for late fees, over-limit charges, and other penalties, amounting to more than $20.5 billion for the industry. Credit card debt in the United States has reached a record high--nearly $1 trillion--with almost half of American families carrying a balance averaging $7,300 in 2007. One-fifth of those carrying credit card debt pay an interest rate above 20 percent.

* H.R. 627 prohibits credit card issuers from raising rates retroactively on existing balances. The bill also requires a 45-day notice of any rate increase and prohibits companies from charging interest on balances from more than one billing cycle.

* Members of the House have collaborated with President Obama to strengthen the bill by mandating that card issuers apply payments beyond the minimum to debts with the highest interest rate, requiring card companies to inform customers about the long-term costs of paying only the minimum balance, and allowing consumers to opt whether or not they want to go over their credit limit and be charged a fee for doing so.

* This legislation codifies Federal Reserve rules prohibiting unfair or deceptive bank practices related to credit card accounts and overdraft services and goes further by banning the marketing and issuance of credit cards to minors under the age of 18, banning credit card companies from imposing unfair and arbitrary fees when customers pay their bills, and allowing customers to set a lower credit card limit.

* The Credit Cardholders' Bill of Rights will level the playing field between card issuers and cardholders.

* I urge my colleagues to support this measure.


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