Runaway Credit Card interest Rates

Floor Speech

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Mr. SANDERS. I thank my colleague, and I applaud his introducing this amendment.

The issue of credit card companies charging Americans outrageously high interest rates is something that has concerned me for a number of years. We have another amendment which approaches this issue from a different level, but I am going to work with Senator Whitehouse, and I think this is a very important amendment.

The bottom line here is that usury and loan-sharking is immoral, it is wrong, and it has got to be prohibited. I know Senator Whitehouse and Senator Merkley are more than aware, there are even Biblical references in both the Old and New Testament to the immorality and the condemnation of usury. We know as a Nation, people look askance at loan sharks.

Let's be honest. What are we talking about here? If a financial institution is charging people who are desperate enough to be buying their groceries, in many cases their basic necessities, on their credit card, 25- or 30-percent interest rates, if that is not usury, if that is not loan sharking, then I don't know what is.

We have introduced legislation that would cap credit card interest rates at 15 percent. Senator Whitehouse is approaching it in another way, which is an interesting way. But the bottom line is that we have to deal with the absurd Marquette ruling which essentially nullifies what every State in the country has done. I think in Vermont we have usury rates at 12 percent. But it doesn't mean anything because of the Marquette decision.

So all over this country, when we have 20 percent of the people in America now paying at least 20 percent interest rates on their credit cards, those people want action. And when we talk about Wall Street reform and we talk about consumer protection, yes, of course, we need a strong, independent financial services consumer protection agency but, more importantly, we need to address this outrage of high credit card interest rates, and the amendment of the Senator from Rhode Island would do that.

I think the American people want to see action, and I hope we can work together on the amendment and on my amendment and give people some relief.

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Mr. SANDERS. If I can pick up from the Senator from Oregon, the reason, for thousands of years, that religious leaders and philosophers have condemned usury, which is what we are talking about today, is that it is basically immoral, according to every major religion on Earth, to tell a desperate person who is in need of a loan that I am going to give you this loan but I am going to charge a very high interest rate. That is condemned by every major religion on Earth as well as every great writer I can think of who addressed that issue.

What I wish to do, I suggest to my friend from Rhode Island, is I want for a moment to read some of the e-mails I received from Vermont dealing with this issue we are attempting to address. You are dealing with it one way. I am trying to deal with it more on a national way. But we both, together, are trying to address this.

Let me give a couple of e-mails that came to me over the last couple of months. This is from Jeffrey, from the State of Vermont:

I was one of those guys who failed to read the fine print. A couple of years ago my credit card payment got lost in the mail. By the time I had realized what had happened, they charged me a $45 late fee and then spiked my interest rate up to 35 percent. At the time I was in good standing with them. I desperately tried to get this back on track but after 10 or 12 months of making these crazy payments I had to make a choice--lose my transportation to work, lose my house--I am a father of four beautiful children--or stop paying on the credit card. Now my credit card report has suffered greatly and, even though it has been over a year, they still harass me almost daily. This situation has affected every part of my family and my life.

That is the end of the quote from Jeffrey from Vermont.

This is Ronald from Colchester, VT:

I am writing about my Citi credit card.

I should point out, as my friend from Rhode Island knows, that the four largest financial institutions in this country issue 66 percent, two-thirds, of the credit cards in the country.

I am writing about my Citi credit card. My interest rate went from 12 percent to 29.9 percent overnight. I phoned them and was told it was not just myself paying that rate, but everyone pays that rate. How can credit card companies let you make purchases on your account for a moderate interest rate and just mysteriously move to 29.9 percent overnight? I hope you are able to pass your law to restrict credit card companies from abusing their power over their customers.

I have gotten many e-mails and I am sure you have as well. The bottom line is what we are saying is we intend to end this outrageous practice on the part of huge banks that are ripping off the American people. What Senator Whitehouse is trying to do is say let us go back to the federalist principles of this country where States have established their own interest rate caps, and let's enforce that.

We are taking a little bit different position. But both of us are going to do everything we can to end this outrage and I applaud the Senator from Rhode Island for his hard work on this.

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