Credit Cardholders' Bill Of Rights Act
Floor Speech
Credit Cardholders' Bill Of Rights Act
Mr. DURBIN. Mr. President, we are considering a bill which affects millions of Americans. It is about credit cards. We all have them. We all wonder each month, when we get a monthly statement, what in the world it means. I am a lawyer. I have been a legislator for a while. I couldn't even tell you what the back of my credit card statement says every month. But I know if you end up missing a payment, if you end up being late on a payment, the world can crash down on you, because I have gotten plenty of letters from people around my State and the country about some of the things that happen when it comes to these credit cards.
I thank Senator Dodd and Senator Shelby. This is the first credit card reform legislation in how many years? Ever. That is a long time. It is overdue.
All of us know how much they have become a part of our lives, and all of us know how vulnerable we are when interest rates go through the ceiling, when they end up saying: Because you are a day late on your payment, unfortunately, you have to pay a penalty. Then there is interest on the penalty. And did we tell you there is interest on the interest on the penalty. You think it will never end--$25, $50, $75.
Senator Dodd, in this credit card reform legislation, does one of the most significant things for American consumers we have seen.
I want to offer an amendment. Understand, if you go to your local restaurant in your hometown and have a meal and pay for it with a credit card, the owner of that restaurant has to pay part of your bill to the credit card company and the issuing bank. It is called an interchange fee. So the owner of the restaurant doesn't get the $20 that you put on the counter. That owner may end up paying several percent of that $20 to the credit card company and to the bank.
When we created the original law in this area back in 1981, we said: It is OK for people in restaurants and other places to say to their customers: We will give you a discount if you pay in cash or by check. That is the law; right? It makes sense. The person who owns the restaurant says: I am only going to charge you $18.75 instead of $20 because you are paying in cash instead of with the credit card. That way I don't have to send part of your $20 back to that credit card company.
That was the law, and it seemed to be a pretty good one. The credit card companies weren't happy with that. They didn't want people to get incentives not to use credit cards. They created new, legal entities for credit card companies that didn't quite fit into the 1981 definition so that they wouldn't be covered by the possibility of a consumer discount. And then, for those bold companies like that hometown restaurant that decided they still wanted to offer a cash discount, they piled up the rules on them at the credit card companies and said: If you don't advertise in just the right way, we will fine you. I can tell my colleagues, gas stations are being fined $5,000 because they offered a discount of $1 or $2 to a consumer.
As a consequence, retail merchants came to us and said: Give us a break. If we are going to have a discount for cash or check, say so in the law so that we can offer this to the American consumer.
The credit card companies hate it like the devil hates holy water. It is like old Senator Bumpers from Arkansas used to say: Like the devil hates holy water. They don't want to change.
This bill will change a lot of things they don't like. Thank goodness. I hope the Members of the Senate will accept the amendment I am offering with Senator Bond of Missouri, a Republican, a bipartisan amendment that says: Merchants across America can offer a discount over credit cards for people who pay in cash, check, or with a debit card, which is the new checking account for many younger people.
That discount is going to help that establishment to be able to say to folks: Well, we can give you a break here on the product you just bought or the meal you just bought; and say to the consumers across America who are struggling in this economy: Here is a way to save a few bucks. You can pay in cash, and you will not have to pay as much as you would on a credit card.
I think that is a move in the right direction. I am glad retail merchants, large and small, all across America have rallied behind this amendment. Whether it is your gas station or a little shop in your hometown or the restaurant you go to, they will be able to say to you: If you pay in cash, check, or debit card, we can offer you discounts on your final bill. I think that is a good break for people across America that they can enjoy every single day if they want to, if that is the way they want to make the purchase. If they want to use the traditional credit card, that is up to them.
So this goes back to the original law, knocks away all of the obstacles put in the path of this law by the credit card companies, and basically says, this gives retail merchants across America a way to offer a discount to American consumers.
So I hope my colleagues on both sides of the aisle will join me on that amendment.
I yield the floor.
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