the gentlelady from new york. mrs. maloney: i rise in strong support of h.r. 3639, the expedited credit card reform for consumers act of 2009. i thank the chairman of the financial services committee, barney frank, for his leadership on this issue and so many other, and senator dodd for championing this issue in the senate. this bill will simply move up the effective date of the remaining provisions of the credit card reform act which we passed earlier this year from december -- from february 2010 to december 1, 2009, just in time for the holiday shopping season. it is truly unfortunate that we are on the floor today having to take this step, but the credit card companies brought it on themselves. rather than use the month after the date that it was signed into law in may, update their systems, to get ready for the new reforms, they have used this time to raise interest rates unfairly, any time, any reason, on consumers, retroactively on their balances, capture manage of them in never-ending cycles of debt. they are practicing the double cycle billing, charging rates on interest that has already been paid, raising rates for unrelated reasons, and the consumers are justly outraged and they have come to their congressmens and to this congress asking -- congress members and to this congress asking for relief. just last week, the pugh foundation issued -- the pew foundation issued a report that showed that interest rates have shot -- have shot up by 20%. the average interest rate is 20% and 90% of all credit card debt that is out there has had an interest rate increase since the president signed the bill into law. the pew report also found that 100% of bank cards used by the -- issued by the issuers were using practices that the federal reserve has called unfair, deceptive, and anti-competitive. this troubling information followed report after report from other not for profits from other members of congress, and from our constituents and from the news media that have shown that interest rates have climbed 18%, in some cases 30%, for absolutely no reason. for customers that are paying on time and not going over their limit. the original implementation date for the bill that i proposed was 90 days after enactment. but many members of this body wanted to give the credit card companies more time to implement the reforms to get their systems in place. yet they have used this time to gouge consumers and to raise rates. we had ended up in the deliberations with the bill with a staged implementation rate, that in august of 2009, a notice would go in of 45 days of any rate increases, but the bulk of these reforms would go into place in february of 2010. what we are doing is moving this date up by five months, giving relief and protection to consumers, and working to help them. the extraordinary breadth and depth of the interest rate hikes that consumers are suffering from speak to the importance of passing this important bill. i thank my colleagues on both sides of the aisle that have been supportive and especially to the chairman. the chair: the gentlelady yields back her time. the gentleman from texas. mr. hensarling: thank you, mr. chairman. i would yield -- mr. chairman, in that case, i yield myself as much time as i may consume. the chair: the gentleman is recognized. mr. hensarling: i do not believe there is ever a good time to enact a bad law. and unfortunately, though there are some good provisions in the underlying credit card legislation, ultimately, many of us predicted that if it passed, credit would become more expensive, less available, to millions of americans, and that's exactly what we see. now the good part of the bill is, clearly, there have been misleading and deceptive practices by some credit card companies. we need to have better disclosure, more effective disclosure so people understand the credit relationships in which they enter. mr. chairman, we're in the midst of a huge credit contradiction that's taking place today. jobs are being lost, people are having trouble accessing credit for their personal lives for small businesses and unfortunately, ultimately, this underlying legislation on two of the three effective dates are moved up will simply exacerbate that trend. in many respects, mr. chairman, i hate to say i told you so, but we told you so. so again, all we're going to do is make a bad situation worse. already, we have seen, for example, a recent article in "usa today," let me quote for a minute, october 23, quote, curtis arnold, founder of creditratings.com, said he expected credit card issuers to raise annual fees after the legislation was enacted. sure enough, mr. chairman, that's exactly what we see. let me quote from "the wall street journal." other issuers, such as bank of america, j.p. morgan, chase card services, and discover, recently converted customers' fixed rates to variable ones. "new york times." now congress is moving to limit the penalties of riskier borrowers which is what the underlying legislation did, mr. chairman, let me continue on, who have become a prime source of billions of dollars in fee revenue for the industry and to make up for the lost income, the card companies are going after those people with sterling credit. so now we also find out, again from "usa today," starting next year, bank of america will charge a number of customers an annual fee ranging from $29 to $99. we see that in this same article from "usa today," citigroup has started charging annual fees to cardholders. again, mr. chairman, we have the testimony. many of us predicted this. as i said, way back in march, make no mistake about it if this bill passes, it's going to be a lot harder for people to access the credit they need to pay their bills, cover medical emergencies or finance large purchases. so all over america, people are getting these notices in the mail, including the hensarling family of dallas, texas, where all of a sudden, i've seen our own interest rates skyrocket from 15% to 23%. with very few exception, my wife and i pay our balance in full at the end of the month. it's the half of america that pays their bills on time in full that are now having to subsidize those who don't through an act of congress, so i think we all agree, nobody likes what's happening in america but the question is, who is responsible? i believe this underlying piece of legislation is exacerbating a huge credit contraction already taking place in the economy. mr. chairman, it just couldn't come at a worse time. i mean, as we know, apparently, on friday or saturday, this body will vote on a huge government takeover of our health care bill which could cost easily, even according to c.b.o., over $1 trillion that ultimately has to be paid for by the american people. we've seen estimates again that premiums will rise, particularly for young, healthy people. young, healthy people who may be getting these notices in the mail today that all of a sudden maybe their credit cards have been yanked. maybe their interest rates have gone up. at the same time, when we're staring in the face of a -- of over a $1 trillion health care bill a bill that could impose a 2.5% penalty, again on young people, who may not be table afford insurance, they could be penalized 2.5%. if you take away their credit cards, how are they going to be able to pay the 2.5% tax if they don't buy the government approved health insurance. mr. speaker, how about small businesses? if small businesses find that their credit cards have their interest rates skyrocket or taken away, how are they going to be able to pay the 8% pay or play tax, which is in the pelosi government takeover of health care bill? how about the other surcharge that would go to a number of small businesses, supposedly raising a half trillion dollars. again we know a lot of small businesses access credit through credit cards. so if we take an underlying bad bill that's exacerbating a credit crunch and all we do is accelerate the effective date, how, again, are tens of thousands of small businesses going to be able to pay the 8% new pay or play tax in the pelosi takeover of our health care system bill? how about the 2.5% medical device tax? the 2.5% what some are calling the wheelchair tax? a number of our seniors relie on credit cards. they have medigap policies and need those credit cards for medical expenses, especially if the majority is about to impose a 237b95% wheelchair tax on the american people, why are we going to pass a bill, again in the middle of a huge credit contraction, that's only going to exacerbate the matter, make matters worse, take away credit cards, make interest rates go up, make it -- make credit less available and more expensive, at a time when we're threatened with this trillion-dollar government takeover of health care legislation? again, i want to emphasize, mr. chairman, that is at least one good part of the legislation. we do need effective disclosure. we need competitive markets. but when you start taking away the ability of companies to price for risk, the people who do it right end up bailing out a number of people who don't and those who don't, some of whom may not be through any fault of their own, find they no longer have credit opportunities at a time when many are facing a 2.5% tax if they don't buy the government approved health insurance, a 2.5% tax if they need a wheelchair, maybe even a replacement hip. i suppose that's also a medical device under the pelosi government takeover of our health care system legislation. small businesses, they face the 8% pay or play tax. again, even if you thought, even if you thought the underlying legislation was good, how could the timing not be worse? and if you ask the american people, number one, those who pay their bills on time shont be punished for those who don't. . those with credits cards being taken away from them wouldses choose the higher interest rate but congress has taken that action away from them. if we choose to enact this bill which will simply again hasten what is already a bad process that's making credit less available and more expensive to thousands of small businesses and millions of americans as we are facing a government takeover of our health care system. i reserve the balance of my time. the chair: the gentleman reserves the balance of his time. the gentleman from massachusetts. mr. frank: mr. chairman, demonstrating that we bear no ill will to those who have deserted us, i now yield two minutes to a former member of the committee, the gentleman from california. the chair: the gentlelady is recognized for two minutes. ms. lee: thank you very much. let me thank the gentleman for yielding and say i do miss you and serving on your committee. i want to thank you for your leadership and everything you're doing to try to help shepherd our economy economic recovery. let me just say how pleased i am to support h.r. 3639, the expedited card reform for consumers act. i have to thank congresswoman maloney and yourself for following through on the promise that you made. i don't know if you remember this, mr. chairman, but on the floor you made a promise to congressman watt and myself on april 30 when the house passed these critical protections for credit card holders. i had gone to the rules committee to actually put this 90-day deadline back into the card legislation via an amendment, but i did withdraw my amendment based on the assurances of the chairman that if, in his words, banks are using the time, this is what you said, mr. chairman, to take advantage of consumers and try to get in some last licks before the rule goes into effect, we would speed up the date. the banks are certainly getting in some last licks. i want to thank you, mr. chairman, for following up on your promise and your commitment because this is really desperate -- the situation is desperate for so many people. we all have constituents who have been really shocked by their bank suddenly raising, or credit card company, raising their rates on already existing balances without notice and without any negative activity on a consumer's credit report. we have allred the news reports about -- all read the news reports on new fees on transactions charging consumers who are paying their bills on time. these inactivity fees when they -- i guess they charge you for doing nothing at all. clearly the bank which pleaded for just a little extra time to fully -- thank you very much. thank you, mr. chairman. clearly they pleaded for just a little extra time to fully implement these new reforms. they are using that time to pad their profits at the expense of american families. this is unconscionable. it really is immoral and we should totally be outraged about this practice. i have to thank you again, chairman frank, congresswoman maloney, and mr. watt for their commitment to consumer rights and for their hard work on this very vital reform. hopefully consumers now will get the justice that they deserve. thank you again. i yield the balance of my time. the chair: the gentlewoman yields back the balance of her time. the gentleman from texas. mr. hensarling: mr. chairman, in order to help equalize the time, i'll continue to reserve. the chair: the gentleman reserves his time. the gentleman from massachusetts. mr. frank: i yield three minutes to an active member who also filed urgeent of this bill, the gentlewoman from new york, mrs. lowey. the chair: the gentlelady is recognized for three minutes. mrs. lowey: i rise in strong support of the bill and i want to thank chairman frank for bringing this very important bill to the floor. deceptive credit card practices allow one hidden fee to snowball into ballooning interest rates and thousand dollar balances that many families struggling to get by cannot afford. when the president signed the credit card act into law, some companies tried to beat the clock by imposing considered as readtory finance charges on consumers. that's why i am so pleased that working with chairman frank, congresswoman maloney i introduced legislation accelerating the implementation date. enactment of this bill will protect our constituents who cannot afford to be hit with abusive new fees or interest rate hikes. it will also accelerate other consumer protections, including a provision i co-sponsored, to require additional disclosure on the dangers of making only minimum payments. so i really do want to commend the chairman, the gentlelady from new york, for their important work. i urge your support. this bill couldn't be passed soon enough as far as my constituents are concerned. i yield back. thank you. the speaker pro tempore: the gentlelady yield back her time. the -- the chair: the gentlelady yields back her time. the gentleman from texas. mr. hensarling: i would like to yield to the ranking member, mr. baucus from alabama, as much time as he may consume. the chair: the gentleman is recognized. mr. baucus: mr. chairman, i rise today in opposition to this legislation. let me start by saying that during consideration of the underlying bill, and this bill moves up the effective date on the underlying credit card bill, and that credit card bill is not a major bill. unlike the health care bill, unlike the climate control or the cap and tax bill, unlike the systemic regulation bill, this bill addressed one thing and one thing only, and that was credit cards. and we passed it five months ago. and when we passed it, there were all these prophecies of wonderful things that were going to happen to consumers, but we republicans stood on the floor of this house and we said there needs to be changes in this bill. and we said that if this bill passed in its present form, which it did, that the cost of credit would increase for consumers. we said there would be limits placed on their credit lines. sure enough, and i take no pleasure in saying this, sure enough five months later after president obama signed this legislation the so-called credit card act into law, credit's tightened. consumers every day are facing notices in the mail that their credit rates are going up from 6% and 8% to 20-something percent. american express and others have said we are going to start charging $100 fees. so we see some consumers as a result of this legislation, these are so-called unintended consequences, we are seeing many facing cancellation of their credit cards. millions in fact. regrettably those wanting -- wangs have come true. small businesses which rely heavily on consumer credit are also feeling the credit crunch. that's the main creator of jobs in our country. small business. they need credit, but according to the national small business association, 79% of those small businesses surveyed just recently said that credit card lending standards have tightened dramatically in the last few months and that their credit lines are being decreased materially. the new credit card restrictions are exacerbating the economic crisis and the loss of jobs and causing the shut down of a key source of financing for small businesses. therefore job creation. small businesses are the engine of our economy. they are the number one job creator. and of all businesses they rely the most on credit cards and on credit lines from those credit cards. we shouldn't have restricted their ability to obtain credit. they needed to expand and to create jobs. and this original bill came at just the wrong time. we could have stopped the abusive practices, but at the same time when we went beyond that and restricted the ability of credit card companies to protect themselves from people who didn't pay their credit card bills, and that's really the essence of why this bill is not working because we protected those who don't pay their credit card payments. that's who was protected. we did some other good things, but we did that and that was a mistake. now, don't take my word for it. to the fact that this present legislation -- let me say this. it's very unlikely, this is sort of a charade because i think most of us realize that this legislation is not going to become enacted into law. it's december 1 now. it takes effect december 1. the senate i don't think will even pick it up by december 1. but maybe they will. maybe they will. and if they do, i think the warning of chairman bernanke is appropriate. when asked about the feasibility of enacting the provisions of the bill we are now considering, here's what chairman bernanke said. and chairman bernanke is often quoted by the members on the other side of the aisle. the board continues to believe that given the breadth of changes required by the credit card act and regulation, card issuers must be afforded sufficient time for implementation to allow for an orderly transition and avoid unintended consequences. compliance difficulties and potential liblets. we are seeing those unintended consequences. no credit cards where people had credit cards. a country in which we had the most ability to have credit cards and the choices in credit cards at the lowest interest rate, and that is beginning to change before our eyes. all of us share the goal of protecting consumers from unfair and deexceptive credit card prack -- deceptive credit card practices. and credit card holders receive complete disclosures. they have sufficient time to pay their cards. they aren't subjected to double cycle billing. but we must be careful and let this bill be a lesson to us that in trying to protect consumers or the government intervening into these practice that is we do not impose new cost on them or the u.s. economy as a whole. just like the health care plan of speaker pelosi's health care plan, we may consider later this week, this bill limits choice, it rations credit, it increases cost, and strangles innovation. according to recent studies as many as 114 million americans will lose their current health insurance coverage under the democrats' health plan. that's even more serious than the few million that have lost their credit cards under this legislation. likewise, several million consumers will lose their credit cards or see their credit lines severely restricted by this legislation. if there's one common denominator in congress this year, it's the substitution of the government for the individual. with the stimulus, with the multi-- multiple bailouts, with the climate change legislation, with this credit card bill, with financial reform, and now later this week with health care instead of you making the choice, the government's making the choice for you. the u.s. -- the united states, america, is the world's largest economy. it's three times larger than our closest competitor, japan. and it's larger than the economies of japan, china, germany, and great britain combined. and we got there through innovation. we got there through choice. we got there through competition. we got there through individual initiative and responsibility. not government control and management. as we have seen time after time, when you substitute a government controlled and run program for individual choice, the cost goes up, the quality goes down. and when it comes to health care, there's nothing more important than quality and choice. given the choice, i'll always place my faith in the individual not the government and this time is no different. no different with the credit card legislation, no different with the health care legislation. mr. chairman, let me conclude by saying many of my colleagues in this body, both republicans and democrats, are going to come in and they are going to vote for this legislation today. they are going to do so really, many of them, because of the underlying legislation and the animosity and bad feelings it has created on -- with the american people who are seeing their credit lines limited and their interest rates raised. . the american people are upset and this bill is an attempt, i think, almost to cloud why those interest rates are going up. we need to help families. we need to help businesses that are struggling in this economic recession. we need to create jobs. and as we said five months ago, that's exactly the wrong time to saddle them with additional fees, higher interest rates, and limit their credit lines. and add significant new compliance burdens to our community bank. that's -- that was true five months ago on credit cards, we've seen the unintended results. we're going to vote on health care. those results will even be more serious and more drastic, you'll see -- you'll see greater cost of health care, you'll see a diminished quality, you'll see rationing of care. we've warned about unintended consequences five months ago, those warnings weren't heeded. we're warning again, but this time, we're dealing with a far more serious issue. and that's the quality of health care in america, the affordability of health care, and the ability to get services in this country that's not offered in other country ares. thank you, mr. chairman. the chair: the gentleman from massachusetts. mr. frank: i intend to close and i have no further speakers, so i reserve. the chair: the gentleman from texas. mr. hensarling: mr. chairman, i assume the chairman of the full committee has the right to close. the chairman said he had no other speakers. in that case, i will close for our side, mr. chairman. again, we have no great pleasure in saying, i told you sew. but i think it's important before this body decides to accelerate a problem that is exacerbated by this body, they should take full import of their actions and the consequences. as i said back in -- back in june we must remember that every restriction, every limit, every regulation has a high probability of making credit less accessible, less affordable, and more costly. unfortunately, mr. chairman, that's exactly what we see today. a recent carl in the "wall street journal," we read, quote, in the past two year, credit card lines have been cut by over $1.25 trillion. in the same time, 10% of all credit card accounts have been canceled. again we know, mr. chairman, that our constituents are feeling this pain as they get these notices in the mail. i'm going to go back to the article. quote, according to the most recent federal reserve data, small business lending is down 3% or $113 billion from fourth quarter 2008. i'd be happy to yield to the gentleman. mr. frank: someone on our side wanted to speak. i will not be the final speaker, i'll be yielding one more time before i close. mr. hensarling: reclaiming my time, i appreciate the chairman keeping me informed. again, mr. chairman, what we've seen is what i believe to be a number of unintended consequences of that -- that have taken place in this legislation. we were warned about this. we heard from, for example, the a.b.a. who testified in committee back in march, quote, restrictions on repricing higher risk accounts means two things, number one that higher risk customers will likely see less credit available to them, and two, since the higher risk customers do not bear the full cost of the risk they pose, lower risk customers will bear some of the added cost. unquote. we heard back in december of 2008 from oliver ireland of the morrison and courser law firm. quote, the effects of this will be pretty severe. people will see some combination of rising prices or reduction in the availability of credit by either cutting lines or not making credit available. again, mr. chairman, we have been warned. julie williams, chief counsel for the o.c.c. who testified before our committee back in april of 2008, quote, the risk mitigation tools used by credit card lenders to address changes in the credit risk profile customers may include freezing or reducing credit card lines, closing accounts, shortening account expiration dates and repricing for outstanding balances on the account. i could go on and on. we have been warned, mr. chairman, we see it happening, we hear the anecdotal evidence. we see the statistical evidence. i fear that although there are some good aspects of the legislation that ultimately, ultimately in the midst of a huge credit contradiction that what we will see is credit become even less available, more expensive at a time when many of our constituents needed -- need it most. again, this has to be put into the context of the larger legislation that this body will consider this week according to the speaker of the house and that is the government takeover of our health care system. we know that on page 297, section 501 of that bill, there's a 2.5% tax imposed on all individuals who do not purchase the government-approved health insurance. which clearly applies to people making less than a quarter million dollars a year, which seems to contravene a campaign commitment that was made by our president. we also see that if there are new taxes on medical devices a 2.5% excise tax, many call this the wheelchair tax, but as our constituents are finding it, more and more difficult -- are finding it more and more difficult to access credit cards, when they're having credit cards canceled, when they're seeing interest rates rise, how are they going to be able to pay the 2.5% medical device tax in this trillion-dollar piece of legislation. mr. chairman, i hear from my constituents, i hear from the farmer family of athens, who wrote to me, dear congressman, more than once we put medical bills on our credit cards. two years ago, my middle son had to have cervical surgery. i split the cost of the surgery, doctors, and hospital, it took my husband and me about a year to pay off that particular debt, but we did it at a low rate of interest since our credit is good. i'm just thankful for having the means to help my son. what do i go back and tell this family, that although your credit is good, you'll have to start pay manager for people whose credit isn't good? the next time you have a medical emergency or challenge in your family, i don't know if that credit card will be there for you. and that's a tragedy, mr. chairman. as again we continue to have this huge credit contradiction and again, when we're -- credit and again, when we're -- credit contraction and again, when we're looking at this government takeover of health care legislation, on page 336, section 551, imposes a half trillion dollar surcharge supposedly just on the wealthy, but if you read the fine print, you find out half of that is going to be paid by small businesses. so you could have a $534 billion surtax imposed in this government takeover of health care legislation and as you impose it, how, again, how is small business going to be able to afford to pay this surcharge if their credit cards, their interest rates don't rise, their availability to access credit continues to erode? i don't understand it. then the more visible tax on small business, page 313, section 512, of the government takeover of health care bill, imposes an 8% tax on employers who can't afford to purchase the government-approved health insurance. now according to the national federation of independent business, such a man cate could cost 1.6 million jobs in the next five years. so if you lose your job and we're making credit more expensive and less available, mr. chairman, i just ask the question, how is this supposed to improve the nation's health care? so we have to take a look at the underlying credit card legislation and how it's going to impact our constituents as we go forward, perhaps on friday or saturday, to vote on this other legislation. we also know, mr. chairman, that in the government takeover of our health care bill, that there are at least 100 -- i'm