Senate Proceeding on May 11th, 2009 :: 2:40:00 to 2:57:15
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2:39:41 to 2:40:02( Edit History Discussion )

Carl Levin: objection is mr. dodd: madam president, i would note that the objection that i registered earlier was on behalf of senator i wou likehe record to reflect that. the presiding officer: the record will so note. the senator from michigan. mr. levin:

2:40:00 to 2:57:15( Edit History Discussion )
Speech By: Carl Levin

2:40:03 to 2:40:23( Edit History Discussion )

Carl Levin: strongly support the dodd-shelby substitute to the house bill on credit card reform. before i proceed with my statement, i just want to say how appreciative i am. the country will be to efforts -- through the efforts of chris dodd and senator

2:40:24 to 2:40:45( Edit History Discussion )

Carl Levin: shelby. this is an going on for a long time. it is a difficult context that he has he's taken this under his wing. if we could get this passed by the end of may as the president requested, i think there will be a very strong feeling across

2:40:46 to 2:41:07( Edit History Discussion )

Carl Levin: this country the congress has finally acted to correct some of the abuses which have cost our consumers so many hundreds of billions of dollars in unfair charges by some credit card cpanies. millions of americans, madam president, today are facing the worst economic crisis of their their hardship is being

2:41:08 to 2:41:28( Edit History Discussion )

Carl Levin: mpounded by unfair credit card fees and interest charges. and it's long past time for u to do something about it. the cred responsibility and disclosure act of the -- of 2009, which is senate bill 414, introduced earlier this year by senator

2:41:29 to 2:41:51( Edit History Discussion )

Carl Levin: dodd, myself, and a tphupbl of -- and a number of our colleagues to combat credit card abuses, is the best chance that we have to do just that. and n we're going to be able, i believe, on a bipartisan basis, with hopefully enough support in the senate, to accomplish our goal. with home prices falling and unemployment rising, millions of americans who are still managg

2:41:52 to 2:42:13( Edit History Discussion )

Carl Levin: to pay their credit card bills on time have nonetheless been subjected to hiked up interest rates. they have been hit with a double whammy. hard economic times and abusive credit card interest rates and fees. it is simply wrong for america's themselves out of a hole which

2:42:14 to 2:42:36( Edit History Discussion )

Carl Levin: they themselves -- which they put american families into a deeper hole with sky-high interest charges and fees which are often retroactively applied. even as the prime rate of interest has gone down, some credit card companies interest rates on millions of

2:42:37 to 2:42:58( Edit History Discussion )

Carl Levin: customers who play by the to add insult to injury, banks that receive bailouts are the ones frequently who are punishing the very taxpayers that they came to for rescue. credit card companies have used a host of unfair practices. they unilaterally hike the interest rates of cardholders who pay on time and comply with credit card agreements that they

2:42:59 to 2:43:19( Edit History Discussion )

Carl Levin: entered into. they imposed interest rates as high as 32% and they apply higher interest rates retroactively to existing credit card debt. they pile on excessive fees and then charge interes es. and they engage in a number of other unfair practices that are bearing american consumers -- that are burying american

2:43:20 to 2:43:40( Edit History Discussion )

Carl Levin: consumers in a mountain of i received thousands of letters from people who have been treated unfairly by their credit card companies and feel they are powerless to do anything about it. the letters come from people from all over the country, from all walks of life. letter after letter, each more poignant than the next. those voices.

2:43:41 to 2:44:04( Edit History Discussion )

Carl Levin: he's made clear his support for ending abusive practices wch cause so much damage t he's called on congress to send him a bill by the end of this month. we can and we should meet that deadline. the house has acted. their version of this bill passed the

2:44:05 to 2:44:25( Edit History Discussion )

Carl Levin: a ve of 357-70. it garnered support from a majority of both parties. a similar senate vote -- a similar vote in the senate on this act will send a strong message that standing up for american taxpayers and consumers is a bipartisan under this bill, card issues

2:44:26 to 2:44:46( Edit History Discussion )

Carl Levin: will no longer be able to engage in the abu practice -- card issuers will not be able to engage in the abusive business practice of first extending credit card at one interest rate

2:44:47 to 2:45:07( Edit History Discussion )

Carl Levin: and then the interest rate after the money is owing. our bill lending. it only affects credit card companies which engage in unfair and irresponsible lending practices that bury people unfairly in debt, the sort of debt that the companies often

2:45:08 to 2:45:29( Edit History Discussion )

Carl Levin: don't even expect to fully recover but profit from nonetheless through the extr some argue it is the role of regulators, not congress, to combat unfair lending practices. for years federal regulators have not taken up that task. instead regulators stood largely

2:45:30 to 2:45:51( Edit History Discussion )

Carl Levin: by silently while deceptive and unfair practices became entrenched in tri. the federal reserve -- industry. the federal reserve charged with credit card regulations, failed to take action until congressional hearings and public outrage forced attention on credit car six months ago the federal reserve and other bank

2:45:52 to 2:46:13( Edit History Discussion )

Carl Levin: regulators finally acted issuing a regulation to stop some of the unfair practices. for example, the new regulation would stop banks retroactively raising interest rates on cardholders who meet their obligations, requires banks to mail credit card bills at least 21 days before the payment due date, enforces banks

2:46:14 to 2:46:35( Edit History Discussion )

Carl Levin: to more fairly apply consumer payments. but the regulation, regrettably, leaves in place many blatantly unfair credit card practice that's meyer families in debt. -- mire families in debt. it fails to stop charging interest on debt that on time, charging people a fee who pay their bills, hiking

2:46:36 to 2:46:57( Edit History Discussion )

Carl Levin: interest rates on a card because of a misstep on an unrelated debt. it doesn't stop the charging of interest on fees. so legislation is needed not only to end those abusive practices, which are not prohibited by the federal reserve regulation, but also to provide a statutory foundation for the new credit card

2:46:58 to 2:47:19( Edit History Discussion )

Carl Levin: regulation so that it cannot be weakened or withdrawn in the future. the bill before us will not only help protect consumers and ensure their fair it would also make certain that credit card companies willing to do the right thing are at a competive disadvantage by companies continuing unfair

2:47:20 to 2:47:40( Edit History Discussion )

Carl Levin: practices. in 2006 americans used -- excuse me. americans used 700 million credit cards to buy about $200 trillion services. the average family has five credit cards.

2:47:41 to 2:48:03( Edit History Discussion )

Carl Levin: they're used to pay for mortgages and even taxes. they are saddling people from college students to seniors with a mountain of debt. latest credit card debt is approaching $1 trillion. credit card holders are routinely subjected to unfair practices that squeeze them

2:48:04 to 2:48:24( Edit History Discussion )

Carl Levin: forever more money money sinking -- ever more money sinking them further into debt. i commend senator dodd for taking action to move the credit card bill through the committee despite some opposition, and i commend senator shelby for joing him in the substitute. it is time for the full senate to act to resolve any

2:48:25 to 2:48:47( Edit History Discussion )

Carl Levin: differences with the house, send a has said that he is ready to sign credit card legislation. for years now we've bee combating abusive credit card practices on our permanent subcommittee on investigationings -- investigations, which i chair. the subcommittee had two

2:48:48 to 2:49:09( Edit History Discussion )

Carl Levin: investigative hearings exposing those practices. i stop the unfair practices of credit cards act. i'm pleased at that time we had so many co-sponsors, including senators mccaskill, leahy,

2:49:10 to 2:49:31( Edit History Discussion )

Carl Levin: cantwell, kennedy, and sanders and we followed with a bill called the dodd-levin bill, incorporated much of the previous senate bill that i referred to and added other important protections as well. then that introduced supporting senator dodd provided a foundation for the dodd-shelby substitute,

2:49:32 to 2:49:52( Edit History Discussion )

Carl Levin: which was introduced today. senator dodd has already outlined most of the important provisions in the current act. so i just want to highlight three provisions that i believe are critical to delivering relief to american families and returning common sense to the credit card business. first, the bill will prohibit interest charges on any portion

2:49:53 to 2:50:13( Edit History Discussion )

Carl Levin: of a credit card debt which the cardholder paid on time during a virtually all credit cards provide a grace period, so-called, in which a credit incurred -- without incurring interest charges. what most people don't realize is that the credit card industry

2:50:14 to 2:50:36( Edit History Discussion )

Carl Levin: restricts this grace period to people who pay off balance in full. if a cardholder repays only part of the balance during the grace period, even though more than the minimum amount, the issuer charges interest on the entire balance even the portion that was repaid on time.

2:50:37 to 2:50:57( Edit History Discussion )

Carl Levin: so if i charge $5,000 in a month, pay off $2,500 by the due date, again, an amount which is far more than the minimum payment required, i will still be charged interest on the ful full $5,000 balance starting from the first day of the that policy is unfair. it is counterintuitive.

2:50:58 to 2:51:21( Edit History Discussion )

Carl Levin: it is unknown to a vast majority of cardholders who pay the added interest. the act will return a commonsense interpretation of the grace period and simply prohibit the charging of interest on debt that is paid on time. another key provision would limit the circumstances under which a credit card company can hike the interest rate

2:51:22 to 2:51:43( Edit History Discussion )

Carl Levin: applicable to a cardholder's isting debt. right now credit card are the only time of loan i know of whose terms changed after the loan is incurred. even the toughest market conditions, for example, car companies cannot increase the interest rate on a car loan. even if a borrower pays late.

2:51:44 to 2:52:04( Edit History Discussion )

Carl Levin: but credit card companies can unilat interest rate at any time for just about any reason or no reason at a violates accepted practice in the lending field outside of credit cards and the bill will put an end to that. the pending

2:52:05 to 2:52:27( Edit History Discussion )

Carl Levin: retroactive rate hikes for existing balances except in limited important of which is that it would ban such interest rates -- interest hikes for cardholders who pay on time and would allow them only for cardholders who pay more than 60 days late. even then it will require banks

2:52:28 to 2:52:48( Edit History Discussion )

Carl Levin: to restore the if the cardholder follows with six months of now, why our dodd-levin bill would have gone further and ban retroactive rate hikes, period, the substitute offers a reasonable compromise that

2:52:49 to 2:53:12( Edit History Discussion )

Carl Levin: provide greater protection than the federal reserve regulation or the house bill, both of which rate hikes if a person paid more than 30 days late. finally, while the substitute befo us does not go as far as our prohibit universal default, the

2:53:13 to 2:53:34( Edit History Discussion )

Carl Levin: limits on how card companies can raise rates when cardholders have met their obligations and paid their credit card bills on time. right now credit card companies can unilaterally hike cardholder's interest rate if the company receives information indicating that the cardholder is at increased risk of not

2:53:35 to 2:53:56( Edit History Discussion )

Carl Levin: paying his or her debts, even if the cardholder has year-long records, year after year after year, of on-time payments and has never paid a bill late to that company. and the companies can apply the new higher rate to cardholder's existing debt as well the substitute would put an end to that practice as it applies

2:53:57 to 2:54:18( Edit History Discussion )

Carl Levin: to existing balances. it provides if a cardholder meets the obligations of the card agreement by payin and staying limit, the credit card company must hold its end of the bargain and honor the terms of the agreement. in other words, it cannot raise the interest rate applicable to

2:54:19 to 2:54:40( Edit History Discussion )

Carl Levin: the cardholder's existing debt. the substitute would, however, allow the credit card company to increase the inter applicable to future debt, meaning debt not yet incurred. in addition, under the substitute, if a card company increa cardholder because of credit risk or market conditions, the

2:54:41 to 2:55:02( Edit History Discussion )

Carl Levin: company would be required to review the increase after six months and reverse it if conditions warrant. my preference woulde to prohibit united ral increases -- unilateral rate increases. this is an improvement over current law. it would ban unilateral interest

2:55:03 to 2:55:24( Edit History Discussion )

Carl Levin: rate hikes on pesting debt for consumers who play by the rules. the case histories presented at our hearing illustrate only a small portion of credit card practices going on today. since subcommittee has received letters and e-mails from

2:55:25 to 2:55:45( Edit History Discussion )

Carl Levin: thousands of credit describing sometimes unbelievable credit card practices and asking for help to stop them. these are more complaints than i've received in any other investigation that we've conducted and that subcommittee or an earlier subcommittee which i chaired in more than 30 years in congress.

2:55:46 to 2:56:07( Edit History Discussion )

Carl Levin: the complaints all income levels, all ages, and all areas of the country. the bottom line abuses have gone onor far too long. in fact, these practices have been around for so many years that they have in many cases become the industry norm. and our investigations have shown that many of the practices

2:56:08 to 2:56:28( Edit History Discussion )

Carl Levin: are profitable and too immune to consumer confidence that the companies will change them on their own. for these reasons i hope our colleagues will pass the substitute before us. it's time to return common sense, responsibility, and fairness to the industry.

2:56:29 to 2:56:49( Edit History Discussion )

Carl Levin: and, again, i unanimous consent that the balance of my statement be inserted in the record. the presiding officer: without objection. mr. levin: and with banking committee, senators dodd and shelby, for the initiative they've taken and for courage taking on difficult and

2:56:50 to 2:57:13( Edit History Discussion )

Carl Levin: entrenched practices. and, with that, i yield the floor. the presiding officer the presiding officer: the clerk