Extending Effective Date of Gift Card Provisions of Credit Card Law

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Mrs. MALONEY. Mr. Speaker, I rise in support of H.R. 5502 and commend my colleague Representative DAN MAFFEI for his leadership on this bill.

The gift card provisions were part of the Credit Card Act that I sponsored and the President signed in May, 2009. The Fed was directed to promulgate rules associated with the provisions and I fully support the rules that the Fed adopted. However, many companies that issue cards whose funds do not expire will have to remove gift cards from store shelves that will be out of compliance starting August 22 when the provisions become effective.

Replacing these cards entails not only the production of sufficient new cards to replace in-store inventory, but the additional cost of restocking retailers and pulling all noncompliant cards off the shelf and destroying them.

A short transition period will allow the companies who issue cards with non-expiring funds to sell through their existing card stock on store shelves during the holiday season without having to discard and destroy 100 million cards. It is estimated that this volume would take up more than eight football fields buried 12 feet deep in such cards.

I wrote to the Fed, along with several of my colleagues, asking that they extend the compliance date to January of 2011. However, the Fed felt that since they had been directed to promulgate the rules, they did not want to preempt Congress's authority. This bill will codify the request I made to the Fed in my letter.

Mr. Speaker, I urge my colleagues to vote in favor of this bill so that it can become law before the August 22 implementation date.

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