MARKEY PASSES KEY MEASURE TO FREEZE UNFAIR CREDIT CARD RATE HIKES
Amends Expedited Credit CARD Act to include taxpayer protection in time for Holiday Season
Washington,
Nov 4 -
Congresswoman Betsy Markey today scored a key victory in her fight to protect Colorado taxpayers from unfair rate hikes and fee increases from credit card companies, unanimously passing her Credit Card Rate Freeze measure in the form of an amendment to H.R. 3639, the Expedited CARD Reform for Consumers Act of 2009.
“Every day I hear alarming stories from Coloradans across my district that their credit card companies are suddenly and unfairly hiking their interest rates before the Credit CARD Act takes effect,” said Rep. Markey. “I totally opposed bailing out these Wall Street banks, but American taxpayers were still forced to come to the rescue, only to have their credit card companies turn around and stick it to them. I am appalled at the complete and utter disdain with which credit card companies are treating their customers. Passing this amendment and the underlying bill is a great win for Colorado families and businesses, and I’m proud to have led this effort.”
Rep. Markey’s amendment provides a market-based incentive for any card issuer that imposes a moratorium on increases in rates, fees, and terms and conditions of a contract on purchases made between the date of the bill’s enactment and February 22nd, 2010. Card issuers who agree to freeze rates and fees would be exempt from the accelerated date for the provision requiring an issuer to apply a customer's payment in excess of the minimum amount due, to the highest rate balance.
“Our amendment offers credit card companies a choice: abide by the spirit of the law and freeze increases to interest rates or fees on any existing or future balances, or changes to account terms to the detriment of the consumer. In return, credit card issuers will be given until February 22nd to comply with the provision of the Credit CARD Act that requires creditors to apply excess payments to the credit card balance with the highest interest rate,” added Rep. Markey.
Full text of Rep. Markey’s remarks on the floor of the U.S. House:
Mr. Speaker, I rise today to urge my colleagues to support the McCarthy/Markey amendment to HR 3639. I have received an alarming number of reports from my constituents regarding unreasonable credit card rate increases prior to the enactment of the Credit CARD Act reforms. My colleague, Ms. McCarthy and I find this very disappointing.
Two of my constituents from Walsh, Colorado, Mr. Fred and Kay Lynn Hefley, recently received a notice from Citibank that their interest rate is jumping to 29.99%. The Hefley’s have had this credit card account since 1971 and have been responsible consumers. Sadly they are not alone. Taylor Grant from Fort Collins is a small business owner who helps families stay in their homes. He has been a responsible Citibank card holder since 2001 and is now facing similar interest rate increases.
Penalizing consumers for maintaining responsible credit practices is unconscionable. This uncertainty in the credit market makes it especially difficult for families who are facing tough economic times at the start of this holiday season.
Our amendment offers credit card companies a choice: abide by the spirit of the law and freeze increases to interest rates, fees on any existing or future balances, or changes to account terms to the detriment of the consumer. In return, credit card issuers will be given until February 22nd to comply with the provision of the Credit CARD Act that requires creditors to apply excess payments to the credit card balance with the highest interest rate.
The effective date of the original Credit CARD Act legislation was set for February of 2010 to give credit card companies enough time to comply with these new regulations – not additional time to violate the spirit of the law by hiking interest rates on consumers.
While I am deeply disappointed that credit card companies have continued to raise interest rates in advance of the effective date of the Credit CARD Act, I believe this amendment provides an opportunity and an incentive for issuers to demonstrate some goodwill towards American consumers.
Thank you, Mr. Speaker. I would also like to thank Congresswoman McCarthy, Chairman Frank and the Financial Services Committee staff for their collaborative efforts on this amendment.
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