Christopher Dodd

Mr. DODD

Mr. DODD. Madam President, would the Senator yield for an observation?

Mr. DODD. I thank the Senator for raising this issue, and I appreciate the time he has put into this and the effort he has expended for what he is trying to accomplish. I know his constituents and mine suffer, as all of us do, from abusive interest rates and fees and believe that broader interest rate reform is something we in the Senate should carefully consider. In fact, a good part of this legislation is designed to do exactly that. The Senator's amendment goes beyond the credit card reform, however, and would affect many varieties of consumer lending beyond just credit cards. I, therefore, would inquire of the Senator from Rhode Island if he would be willing to withhold his amendment and defer consideration of the issue as we are preparing to take up broader financial regulatory reform later this year; in fact, within the next few months. In the interim, I wish to assure the Senator from Rhode Island, Mr. Whitehouse, that he has my personal commitment that the Banking Committee, which I chair, will take a careful look at his proposal. We have held a major series of hearings on regulatory modernization, we are planning a number of others, and this subject will be an appropriate one for consideration in these hearings during the committee's consideration of related legislation. Perhaps the Senator from Rhode Island can recommend a witness or witnesses--I certainly know of several--who would like to testify, including himself or other Members who are cosponsors of his amendment, or like many of us who share his concern about the Marquette decision and what it has done in terms of usury laws. I often point out that both in the Old Testament and the New Testament, while I don't claim to be a Biblical scholar, there was nothing that more outraged Jesus Christ than the money changers in the New Testament. Certainly, there are plenty of examples in the Old Testament of usurious lending practices. It is as old as Biblical times, the admonition regarding charging outrageous interest rates. We have rates today, as I have said before, that would make organized crime blush if they were to see them. Anyway, the Senator has proposed a reform of our system of banking regulation with wide-reaching consequences, and the proposal deserves the full vetting of the Banking Committee. I assure him we will have a full vetting. I ask my colleague and friend from Rhode Island whether he would be willing to entertain this proposal and defer this matter until we deal with a larger set of issues and to also confirm for him my similar concern that he has raised and would have raised with this amendment.

Mr. DODD

Mr. DODD. Mr. President, before the leaders leave the floor, I thank the majority leader and the Republican leader for their tremendous help in putting this agreement together. I look forward to a favorable vote on Tuesday. I wanted them to know how much I and the consumers in this country appreciate immensely the work of the leaders. I thank, particularly, the majority leader, Harry Reid, for his involvement to make it possible for us to get to this moment. I also include Senator Shelby and others. I hoped to be able to complete the bill today. Obviously, that didn't happen. We have reached a framework by which we can vote on Tuesday. There will be a managers' amendment, and we hope to be able to accommodate this agreement in that package. It doesn't suggest that every amendment will be agreed to. Where we can, we will try to do that. This is a strong bill. I thank the members of the Banking Committee-- both Democrats and Republicans--who worked on it. I am grateful to Senator Shelby and his staff for bringing us to this moment in the hopes that on Tuesday we will have the final conclusion of this effort. I thank the other body, as well, particularly Chairman Barney Frank, from Massachusetts, for his leadership. He has done a masterful job in the other body in bringing Democrats and Republicans together with an overwhelming vote in that Chamber in support of credit card reform. We will talk over the weekend, as we usually do, to see if we cannot resolve any outstanding issues that will allow this bill to quickly arrive on the President's desk. The President said he wants it before Memorial Day. I think we can do that. My hope is that we will complete the work on Tuesday and, by the end of next week, maybe we can send the bill to the President for his signature. I cannot think of a better message to the American people. I say that while my colleagues and the President would like a bill, the people we represent need a bill to provide economic relief for them. That was the design of this legislation--to provide needed economic relief for millions of Americans, who have watched rates and fees go through the ceiling. This bill is not going to solve every economic problem. For the first time that I know of in the history of the Congress, despite these cards being available for half a century and more, in some cases, we are taking a step to reform an industry that, frankly, has gotten out of control when it comes to fees and rates, as we have witnessed with 70 million accounts having interest rates raised in the last couple of years, and one out of every four families being adversely affected. Every member of the Chamber can tell an anecdote about constituents who have faced difficulties with credit card fees and interest rate hikes. I think we are all pleased that we are finally doing something in a meaningful way on this. It is not the end of the discussion. There are a lot of other aspects of the industry that need reform as well. My colleagues are anxious to get to those, including the interchange issue, which retailers have talked to me about for years. We can try to provide relief for them. We don't provide real relief in this bill, except a study that Senators Corker, Durbin, and others, including myself, want to be done to get answers on how to reform the interchange fees issue. I hope we can get answers to that and talk about a legislative fix in that area as well. This bill avoids that question, not because we disagree with reforming the interchange fee but we felt it was more than we could take on with this bill. This bill only came out of the Banking Committee with a 1-vote margin, 12 to 11. It is a very delicate balance. We needed to be careful not to tilt this legislation to such a degree that we would have lost the opportunity to provide any reform at all. We are not potentates here; we have to work with each other. We have done that in this case and produced a very fine piece of legislation. I hope my colleagues will lend their support to this legislation when we have the final consideration of it on Tuesday.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Senate go into a period of morning business, with Senators permitted to speak therein for up to 10 minutes each.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate to conduct a hearing on Thursday, May 14, 2009, at 2:30 p.m., in room SD-366 of the Dirksen Senate office building.

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Thursday, May 14, 2009, at 9:30 a.m.

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate to conduct a business meeting on Thursday, May 14, 2009 at 10 a.m. in room 406 of the Dirksen Senate Office Building.

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet, during the session of the Senate, to conduct a hearing entitled ``Delivery Reform: The Roles of Primary and Specialty Care in Innovative New Delivery Methods'' on Thursday, May 14, 2009. The hearing will commence at 10 a.m. in room 430 of the Dirksen Senate office building.

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet during the session of the Senate on Thursday, May 14, 2009, at 10:30 a.m. in room 628 of the Dirksen Senate office building.

Mr. DODD. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on May 14, 2009, at 2:30 p.m.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that privileges of the floor be granted for the remainder of this Congress to the following members of my staff: Monica Feit and Rachel Shoemate.

Mr. DODD

Mr. DODD. Mr. President, I have a series of unanimous consent requests that I wish to propound. Mr. President, I ask unanimous consent that the Senate proceed to executive session to consider Calendar Nos. 40 and 85; that the nominations be confirmed en bloc; the motions to reconsider be laid upon the table en bloc; that no further motions be in order and any statements relating thereto be printed in the Record; that the President be immediately notified of the Senate's action, and the Senate then resume legislative session.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Armed Services Committee be discharged from further consideration of S. Res. 146 and that the Senate then proceed to its immediate consideration.

Mr. DODD. Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed; that the motions to reconsider be laid upon the table; and that any statements relating thereto be printed in the Record.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of S. Res. 149, which was submitted earlier today.

Mr. DODD. I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, and the motion to reconsider be laid upon the table.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration S. Res. 150, submitted earlier today.

Mr. DODD. Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, and the motions to reconsider be laid upon the table, with no intervening action or debate, and any statements be printed in the Record.

Mr. DODD

Mr. DODD. Mr. President, under an agreement reached tonight, the next vote will occur at approximately 10 a.m. Tuesday, May 19. That vote will be a cloture vote on the Dodd-Shelby substitute amendment to H.R. 627, the credit card legislation.

Mr. DODD

Mr. DODD. Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that it adjourn under the previous order. Thereupon, the Senate, at 7:19 p.m., adjourned until Monday, May 18, 2009, at 2 p.m.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand adjourned until 2 p.m., Monday, May 18; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and there be a period of morning business with Senators permitted to speak for up to 10 minutes each.

Mr. DODD

Mr. DODD. Mr. President, I ask for the yeas and nays.

Mr. DODD. Mr. President, before our colleague from Colorado departs the floor, I want to thank him. I mentioned Senator Bennet earlier today in my comments about some new additional Members: Senator Merkley and Senator Warner. I say to the people of Colorado, as I did earlier about our colleague from Oregon, we are so fortunate to have the Senator in the Chamber at this time. I feel particularly fortunate to have the Senator as a member of the Banking Committee. I served on the committee for some years. I have never been chairman before 2007, the last Congress. I have served under a lot of people on that committee over the years. I hope not just the people of Colorado but the people of the country understand how fortunate we are indeed to have someone of Michael Bennet's talents and background to be a member of this committee. He is a junior member of the committee, but his ideas, his thoughts, his questions, and his participation qualify him as a senior member of that committee because of the contribution he has already made in little more than 100 days of being on the committee. So I thank him for his involvement on this bill. He is thoughtful. We have some major issues to grapple with in the coming weeks. The modernization of our financial regulatory structure and the architecture of that is going to be one of the largest and most important debates this committee and maybe this Congress will have engaged in in years, considering how important financial services are to our economy and the world's financial stability. Michael Bennet brings to that chair he sits in as a junior member of the committee years of valuable experience in helping us decide what steps we should take, the configuration that architecture should be, so that we can move ahead with thoughtfulness and with a certain amount of care and caution as we try to set up a system that will avoid the pitfalls that created the problems we are in today. So I am particularly grateful to him for his involvement on this bill. But I would be remiss if I did not say to my colleague, Michael Bennet, he has been a significant contributor to the work of this committee since the moment he arrived. I thank him for that and appreciate his continuing involvement. I am grateful to the Senator for his support of this bill. I look forward to working with him for a long time to come on these and other matters before the committee. I thank the Senator. I want to also kind of review the bidding a bit as to where we are this evening. I will begin by thanking the majority leader, Senator Harry Reid of Nevada, who has created the possibility for us to bring up this important piece of legislation. While my name and that of Senator Shelby are at the top of the page as the authors of the substitute, that is an unfair characterization because so many people have been involved on our committee, and others in this Chamber, who care about these issues and have for a long time. I am very grateful to Senator Shelby, with whom I work very closely on the Banking Committee, and his staff and how well they work with mine in helping to shape a bill like this, a substitute like this. We are dealing with some very egregious violations of consumer protection. They did not happen overnight; they have been growing over the years; and they reached a point where I cannot think of anyone who has not been either affected directly themselves or had family members or children or their parents or neighbors and friends adversely affected by these practices by the issuing community generally. There are some who do a very good job. I probably should say this more frequently. We talk about the credit card issuers, the credit card companies. The behavior is not only unacceptable, it is not only irresponsible, it is offensive. There are other ones that do a good job. Like all matters before us, when we talk about an industry, there are those who perform admirably and well and care about the people they serve, and there are others who could care less what happens as long as they get money out of the pockets of those to whom they have lent some money. But we write laws to protect those people against those who would do them harm. So we are trying to shut down a practice that goes on too often: when there are 70 million accounts whose rates have gone up in an 11-month period; when there are fees and penalties that have brought in billions of dollars, exorbitant fees and penalties, way beyond any proportionality to the offense committed--of being a day late, an hour late, in some cases, for the first time ever. Samantha and Don Moore from Guilford, CT, were here today to talk about their experience. I have listened to them in the past. It showed courage for them to step up. For 40 years--40 years--Don Moore has been doing business with his credit card company, 40 years. Without any violation, any late fees whatever, one time 3 days late, around the Christmas season, the Moores found that their interest rate went from 12 percent to 27 percent; their credit limit from $32,000 to $4,000. The Moores run a small business in my State. They use their credit card as a way to function in their small business. They pay their employees; they buy inventory. Without any real violation other than to be a few days late for the first time in 40 years, the Moores watched their rate double, more than double, from 12 percent to 27 percent and watched their credit limit drop from $32,000 to $4,000. That is the kind of behavior that is not the rare exception. Virtually every one of my colleagues can tell similar stories about people in their States. I know the Presiding Officer could as well from the State of Illinois. May 13, as we gather a day or so away from adopting legislation that will prohibit those practices, that you cannot change these rates arbitrarily. You get notice of 45 days. These introductory rates have to be in place for at least 6 months before you can change them. You must notify a person of late penalties or fees 21 days in advance, giving people opportunity to respond; no charging higher interest rates on existing balances the way they do today; no raising rates because you may be late on a utility bill or a car payment having nothing to do with your credit card; no continuing to charge rates when you have paid off a substantial part of your balance and a small amount remains and yet the card applies that interest payment on the entire amount you owed earlier. For example, you owe $1,000, you pay off $900, the credit card companies were actually charging interest rates not based on the $100 that remains but on the full $1,000 until all of it is paid off. Those are not isolated examples of abuses by credit card companies. They are widespread. There are other such examples that go on that have been very harmful to consumers. In this legislation, we give the consumer the power to decide what the circumstances are as to whether they want a credit limit or whether they want that limit to be exceeded. I remember the days not long ago when if you exceeded your credit limit, the clerk in that store or that waiter in the restaurant might politely suggest the credit limit has been exceeded and you might want to return the product. It is more difficult in a restaurant since the bill usually arrives at the end of the meal, but, nonetheless, I am sure many who may be listening can recall similar instances. That is no longer the case because the issuing companies have discovered they make a lot more money by charging exorbitant fees and penalties because you might be $10 or $20 or $50 over your limit. The point there is a legitimacy in their mind to absolutely load you up with penalties and fees. In fact, they welcome the opportunity that you may be a little bit over your credit limit, rather than being responsible and giving you the opportunity to decide whether you want to actually acquire that particular good or purchase. Today we have changed that. We let the consumer decide. We begin by saying there will be credit limits. If you want to opt out of that, you can. But it gives you the opportunity to be notified when you are going to exceed that limit so you don't find yourself behind the 8 ball and paying penalties you would rather not pay and would like to be notified when that is the case. Imagine this: Here we are a decade into the 21st century. My 7-year- old runs a computer at home. My 4-year-old is trying to figure it out. Credit card companies want to charge fees if you pay your bills electronically. You can file your income taxes, you can engage in all sorts of economic behavior through the Internet today. But credit card companies want to penalize you if you pay your bills electronically or by phone or by some other means other than mail. Again, it is a further egregious example of an industry that is more interested in trying to trip you up, trying to make it more costly for you to use their cards than they are trying to assist you economically. I could go on for the entire rest of the evening citing story after story in my State, as I am sure every other Member could, examples of abusive, outrageous behavior. We have spent a long time over these last number of weeks and months talking about what needs to be done to get banks and other financial institutions in shape. I don't regret that. That was the right thing to do. But it is long overdue that we also try to do something on behalf of the people who utilize these services, whether it is trying to mitigate foreclosure of their homes or trying to see to it they don't get ripped off by a credit card company. In the next 48 hours, we are going to do that for the first time in the history of this body. Twenty years ago, I started on this issue. I never got much more than 30 votes. When the bankruptcy reform bill was up, I tried to deal with credit cards. It got 32 votes. I tried to do some of the things for which I believe we will have an overwhelming vote in the next day or so. I believe our constituents will welcome the fact that the Senate of the United States, along with the other body which has acted on this issue already, is responding to their concerns. They are talking about it every day. They are wondering whether their interests will be part of this debate. This bill may not do everything everyone would like, but I believe it is a major step in the right direction. It addresses many of the major concerns raised over these many weeks and months and years that these matters have been growing in terms of their impact on people and their ability to survive on a daily basis economically. Again, I thank my colleagues from the Banking Committee, Democrats and Republicans, Senator Shelby, former chairman of the committee. We got it out of committee by one vote. The Presiding Officer is a member of the committee. By a vote of 11 to 12 we happen to be here. We would have lost this issue had we lost one other vote. But our colleagues in the committee stood with us and, by the thinnest of margins, we were given the right to be here tonight to talk about this. The vote of this body will be far greater than a one-vote margin when it comes to passing this legislation. We have an American President who has been utilizing the Office of the Presidency to talk about this issue. He has had press conferences, met with consumers. He talked about it on his radio broadcast on Saturday. He is creating the kind of environment where this legislation will become the law of the land. I may not get many more opportunities, with the amendments to be considered tomorrow, to address the overall consideration of this bill. Let me say that to the card companies as well, I appreciate the fact that they have been at the table as we have worked through this. I have not isolated them. I allowed them to make their cases where we were doing things that may have gone further in terms of serving the needs of our consumers and constituents. This is a bipartisan bill. That is something I try to achieve on every matter I am involved in directly. I don't think you can do much in this Chamber without having to reach out to each other and listen. We have done that. To Senator Shelby's great credit, he has joined in this effort so we have the bipartisanship our colleagues seek. I believe we will pass this legislation and provide some relief for the people of our country at a time when they need it desperately. There has never been a moment in recent past history when constituents and the citizens of this country needed more help from their Government, whether it is home foreclosures, a loss of jobs, tuition, health care problems--all of those issues are affecting millions of people. While this bill will not solve all the problems, for the first time ever it will provide some relief in a very important area--the availability of credit and the use of credit cards and the need that people have on a daily basis to have access to that credit to provide for themselves and their families. I see my good friend and colleague from Nebraska. I yield the floor.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.