Congressman Cohen's Statement on the Passage of the Credit Cardholders' Bill of Rights

As an original cosponsor of the Credit Cardholders’ Bill of Rights, I was proud to vote this legislation through the House of Representatives this afternoon with a large, bipartisan majority of my colleagues. This landmark legislation will help protect families in the 9th District who are suffering from unfair lending practices from the credit card industry.

Credit card debt in the United States has spiraled out of control, reaching a record high of nearly $1 trillion. The average American household’s debt from credit cards has risen from $2,966 in 1990 to $9,840 in 2007. As the economy slows down, the unemployment rate grows and the price of groceries and gasoline skyrockets, more and more Americans are unable to keep up with their credit card payments.

We are in arguably the most serious financial crisis since the Great Depression 80 years ago, a result of the deregulation efforts and lack of oversight championed by the Bush Administration. In my conversations with constituents at Town Halls and in private meetings, I’ve heard over and over again how people in the 9th District are hurting from excessive fees and sky-high interest rates that they did not anticipate because of unfair, incomprehensible agreements that credit card companies change and revise at will.

This bill will put into law a number of regulations proposed by the Federal Reserve Board earlier this year. The Fed has recognized that abusive credit practices distort the free market and competition.

H.R. 5244 will provide crucial protections against many common credit card practices that take advantage of consumer, including: ending arbitrary interest rate increases by requiring ample notice before rate hikes, ending penalties on cardholders who pay on time (like charging interest on already paid debt, for example), protecting consumers from due date gimmicks by requiring credit card companies to mail bills sooner, and ending the practice of applying consumer payments to lower interest debt.

This bill will give working families the fair lending laws they need, while ensuring that credit card companies can continue to make the loans on which many of us rely. It is time to make sure that the market works for the American people with common-sense regulations of the financial services industries.

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Contact:
Marilyn Dillihay, Press Secretary, 202-225-3265
Charlie Gerber, Communications Assistant, 202-225-3265