Today Congressman Dan Maffei offered an amendment to the Expedited CARD Reform for Consumers Act. This Act builds off of the Credit Cardholder’s Bill of Rights, which was passed and enacted earlier this year. Since that bill was enacted, many credit card companies have rushed to raise interest rates on consumers before all the reforms from the Card Bill of Rights act take effect.
When Congress was initially considering the Credit Cardholders’ Bill of Rights, banks and card issuers pleaded that they needed months or years to make all of the necessary changes to be in compliance with the Cardholders’ Bill of Rights. However, as soon as it passed the same card companies managed to quickly raise interest rates on consumers across the country. Rep. Maffei’s amendment would make all the reforms off the Credit Cardholders’ Bill of Rights effective immediately, instead of waiting weeks or months as currently proposed.
Below is the text of the statement Rep Maffei delivered:
“Thank you Mr. Chairman, I want to thank Chairman Frank and Representative Maloney for all their work on this pressing issue. Today I am offering a simple amendment to make all provisions of the Credit Cardholders’ Bill of Rights effective immediately upon enactment, instead of waiting till December 1st. Why should we care about enacting the bill immediately instead of waiting a matter of weeks?
“Earlier this year, we worked diligently to pass the Cardholders’ Bill of Rights. It was a necessary piece of legislation to protect consumers from the abusive practices that many banks had made standard practice. While we were working on that legislation, I heard from banks that they could not possibly enact all the changes by the deadlines we proposed. The banks claimed that to ensure quality customer services, they would need months, or even years, to make the proper changes.
“Well, that was just last May, and I’m frankly disappointed to have to address this situation again today. Since we passed and enacted the Credit Card Holder’s bill of rights, credit card companies have attempted to fleece customers and hope that Congress didn’t have notice or time to act. The same companies that were in my office that claimed they needed months at least to make changes to their systems, apparently only needed in some cases days to find ways to raise interest rates and decrease credit limits on customers across the country.
“One caseworker in my Syracuse office watched her card go from 6.9 percent last year, to 13.9 percent earlier this year, to a whopping and punitive 29.9 percent in the past few weeks. She carries a balance on the card, but with an interest rate that is suffocating her finances she almost certainly will not be able to pay that off, so she can’t even close the card. Every day I hear from more and more constituents who have good credit, that they pay their bills on time, but the card issuers have found a way to raise the rates to extraordinarily high levels.
“That is why I want to make all provisions of the Credit Cardholders’ Bill of Rights effective immediately. Consumers, especially in this economy, cannot wait any longer for these protections. The card companies, apparently, are able to make any on changes interest rates and procedures instantaneously so why not we demand that of them today? If we give them a week or two, they will slam our constituents, even with high rates, trying to squeeze more blood from a stone in the middle of a recession. We are not allowed to pass legislation retroactively, even though card companies are retroactively raising interest rates on consumer balances. What we can do is ensure we make sure we enact this legislation immediately.”
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You can watch video of Rep Maffei delivering his remarks here or by entering the following link into your browser:
Rep Maffei is also a cosponsor of the Credit Cardholders Bill of Rights and the Expedited CARD Act
