September 23, 2008
 
 

Credit Cardholders' Bill of Rights Statement

 
 

Madam Speaker,  I rise in strong support of H.R. 5244, the Credit Cardholders’ Bill of Rights Act.  As a cosponsor of this legislation, I believe it is a sensible approach to reforming major credit card abuses and improving consumer protections for cardholders.

Credit cards have become an integral part of the American economy, offering consumers instant access to a convenient, flexible source of financing.  Unfortunately, more and more Americans are turning to their credit cards to help pay medical and utility bills, buy groceries, and make ends meet in this troubled economy.  Credit card debt now consumes a sizeable portion of the average family’s income.  To make matters worse, the playing field between card companies and consumers has become very one-sided in recent years.  A credit card agreement is a contract between a card company and a cardholder, but these companies have taken advantage of their customers with deceptive billing practices and hidden fees.  Meanwhile, money that families are forced to devote to these unfair rates and charges is money that is not being spent on goods and services that could help bolster our struggling economy.

Cardholders deserve more bargaining power, and the Credit Cardholders’ Bill of Rights Act helps level the playing field.  Cardholders are entitled to accurate information and the right to make decisions about their own credit. This bill will ban interest rate increases on an existing balance unless the borrower is 30 days overdue and require card companies to give cardholders notification 45 days before any interest rate increase.  This legislation also protects vulnerable consumers from fee-heavy subprime cards and prohibits issuing cards to minors.  H.R. 5244 would also ban “universal default”, where a card company raises the interest rate on one card if the cardholder misses a payment on a separate credit card or their credit score lowers.  All of the provisions in this bill are the result of careful study and analysis over the past year, and I believe this deliberative approach has produced a very balanced and moderate bill.

Madam Speaker, instead of looking the other way while Americans fall deeper into debt, Congress must protect their financial interests and put an end to the tricks and traps made by credit card companies that undermine a competitive market.  The balanced reforms in the Credit Cardholders’ Bill of Rights will help do just that, while also helping to foster fair competition and the values of the free market.  I encourage all my colleagues to vote for H.R. 5244. 

Thank you, Madam Speaker.   


Speech/Op-Ed            Speech/Op-Ed List            Speech/Op-Ed