Washington, DC—Senate Majority Leader Harry Reid made the following statement today on the floor of the U.S. Senate on the Credit Card Accountability, Responsibility and Disclosure Act. Below are his remarks as prepared for delivery:
“What do you do when you play by the rules, but the rules change in the middle of the game?
“There is a woman in Nevada named Shelley. Like millions of Americans, she pays her credit card bill in full every month. She has never been late. She is the model of what credit card companies call ‘in good standing.’
“But Shelley recently was told that the interest rate on her card was going from 9.5 percent to 17.5 percent. Her rate was almost doubling, for reasons unknown to her. Understandably, Shelley asked to close the account. But the bank told her that the time to opt out of her contract had ended, before she even knew it had started.
“Shelley played by the rules, but the rules changed in the middle of the game. If we are to truly get our economy back on its feet, we must protect people like Shelley and the millions of Americans who use credit cards for everything from buying a pack of gum to paying for college.
“Chairman Dodd and Ranking Member Shelby have drafted a bill that puts fairness and common sense back into credit cards. It protects consumers from excessive fees, ever-changing interest rates and complex contracts seemingly designed to do one thing above all – to keep people in the dark and in debt.
“In short, this bill cleans up the fine print so consumers can’t get blind-sided by their credit card companies.
“More and more Americans sign up for and use credit cards every day. Three in five credit card users carry a balance on their card – and that balance averages more than $7,000.
“But they are using credit cards that have misleading terms and confusing conditions. A recent study by the Pew Charitable Trusts found that 100 percent of credit cards came with policies that the Federal Reserve has determined cause substantial harm to consumers. That’s 100 percent.
“And 93 percent of those contracts said the credit card company could raise the interest rate at any time, for any reason.
“Here are just a few of the things the responsible legislation that will come before the Senate today does to fix that:
- First, it protects consumers by establishing fair and sensible rules for how and when credit card companies can raise interest rates. Card companies must give 45 days’ notice before increasing rates, and can no longer do so on existing balances.
- Second, it cracks down on abusive fees. For example, consumers no longer will have to pay a fee just to pay a bill. And credit card companies must mail statements 21 days before the bill is due, so cardholders can avoid hefty late fees.
- Third, it protects consumers by making credit card statements understandable and protects college students from predatory marketers.
- And it strengthens oversight of the credit card industry to keep it in line.
“For every greedy executive and devious con artist, there are millions of honest, hardworking Americans who struggle every day to make ends meet. They worry every morning about how much longer their job will be there, and every night about how to keep their families healthy and keep a roof over their heads. They worry about troubles they did not create, but which they alone cannot cure.
“Too many hardworking Americans have already lost too much in this recession. It is our job to protect them from losing even more.
“This bill will not only level the playing field and keep the rules consistent from beginning to end – it can also save families thousands of dollars a year.
“Shelley, the Nevada woman who told me about her frustrations with her credit card company, wrote: ‘I feel like I am being robbed by a company that my tax dollars are trying to bail out.’
“We must protect those who play by the rules because it’s not just their credit at stake – it’s our country’s credibility.”