Statement on Credit Card Reform Bill
Mr. President, it is a mark of the difference between the Senate’s agenda last year and the new Senate’s agenda this year that we finally are able to debate and move toward a vote on the Credit Card Accountability, Responsibility and Disclosure Act, which I strongly support.
I thank and commend both Senator Dodd and Senator Shelby for their hard work on this important legislation. The Banking Committee has faced a number of extraordinary challenges this year – stabilizing our financial institutions, rescuing our housing market, rooting out bad actors in the financial system, and restoring consumer confidence in our economy – and I applaud Chairman Dodd for the initiative he has taken in tackling these issues and helping ordinary Americans most affected by the current economic downturn.
Over the past six months, hundreds and hundreds of Vermonters have contacted my office voicing concerns about deceptive practices by the credit card industry. People have shared stories about credit card companies raising interest rates arbitrarily, charging usurious fees, and refusing to work cooperatively with their clients. Most troubling, the biggest offenders appear to be large, national banks that gladly accepted the mercy of taxpayer bailout money when they were in trouble yet show little compassion now when their customers are struggling.
In today’s economy, Americans need credit that is accessible, affordable, and dependable. Unfortunately, our current credit card system disadvantages many Americans and makes it harder for them to pay off their debt. Credit card contracts have been growing increasingly complicated, deceptively worded, and unfairly stacked against consumers. The time is long overdue for more transparent and equitable credit card practices – which I why I was an early cosponsor of this bill and why I am very pleased that the Senate at last is able to move forward in considering and voting on it.
This bill puts fairness and common sense back into the credit card system by changing several unfair billing, marketing, and disclosure practices. Among its many important provisions, the bill prohibits interest charges on credit card debt that is paid on time; requires a 45-day notice of any fee or interest rate changes; prohibits interest charges on credit card transaction fees such as late fees; prohibits overlimit fees unless a consumer opts-into the program; requires enhanced disclosure to consumers regarding the consequences of making only minimum payments; protects younger consumers from alluring and usurious credit card offers; and requires promotional rates to last at least six months.
I also am gratified that we now have a President who is taking consumers’ needs to heart and who has supported our efforts to move this bill forward. These significant credit card reforms will protect consumers from excessive penalties, ever-changing interest rates, and complex contracts. So once again, I want to thank Chairman Dodd and Ranking Member Shelby for bringing forward this important, bipartisan legislation. I believe it will go a long way toward relieving Vermonters who, like Americans everywhere, have had to endure the dictates of credit card issuers when it comes to the onerous and unfair terms in these contracts.
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Press ContactDavid Carle: 202-224-3693
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