Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 1\1/2\ minutes to a very important member of our committee, the gentleman from Minnesota (Mr. Ellison).

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as I may consume to close. I want to begin by addressing the role of small business. The gentleman from Texas said this would be unfair to small business. The gentleman from Alabama said this credit card bill, the underlying bill and the speedup, would be a problem for small business. On April 30 of this year when we voted on the underlying bill, we received the following letter from the National Federation of Independent Business, generally considered to be the most representative and forceful advocate for small businesses: ``On behalf of the NFIB, the Nation's leading small business advocacy organization, I urge you to support H.R. 627, the Credit Cardholders' Bill of Rights. While credit cards provide an important source of credit for many small business owners, our members are troubled by some of the business practices utilized by card companies.'' ``H.R. 627 ends unfair penalties on cardholders who pay on time, requires 45 days' notice of interest rate increases, prohibits arbitrary interest rate increases, and establishes industrywide definitions for common terms to deter deceptive marketing advertising. These provisions can protect small business owners' credit by giving them enough notice to pay off debt and shop for competitive credit.'' ``While our members favor the credit card reforms in H.R. 627, we are mindful that credit cards pay for approximately $1 of every $6 of sales small businesses make. We believe this legislation does not unduly punish credit card companies in these tough economic times but limits business practices that harm small business credit cardholders.'' I wonder how we could be told how bad this is for small business when the National Federation for Independent Business says it would, in fact, do exactly the opposite and protect credit cardholders. We also heard, of course, some debate on other issues such as health care, and the gentleman from Alabama in particular blamed the Obama administration for bailouts. I don't want to dwell too much on things not before this bill, but let me reiterate a point that I do not think can be even debated, certainly not refuted. Every single activity of the Federal Government now being carried on that some people have characterized as a bailout was initiated by the administration of President George Bush. President Bush's Secretary of the Treasury and his chairman of the Council of Economic Advisers, his appointees, and the President himself were the ones who initiated the funding of AIG by the Federal Reserve. They came to us and asked for the TARP program. They were the ones who first gave money to General Motors and to Chrysler. There is literally nothing now going on called a bailout that the Obama administration did not inherit from George Bush. Now, I suppose the Obama administration could have just pulled the plug on all these ongoing operations and caused chaos and blamed the previous administration. It did not do that. But literally everything going on now that is called a bailout is an inheritance from the Bush administration. Now, the gentleman from Alabama also quoted the Federal Reserve in saying don't speed it up. And he said, well, people sometimes quote Mr. Bernanke one way or another. Well, he just did it. In the first place, the gentleman from Alabama and the gentleman from Texas have their major quarrel with the Federal Reserve because the Federal Reserve, on its own, under its regulatory power, promulgated regulations very similar to this bill. The sequence is interesting. The gentlewoman from New York, as she often is, was the first one out of the box on the consumer protection here, but after the gentlewoman from New York began discussions on this bill in our committee, the Federal Reserve moved. So it seems odd to cite the Federal Reserve and say you believe them when they say there are difficulties in speeding it up when you are fundamentally opposed to the Federal Reserve's basic action here. The Federal Reserve agreed with this House that regulations were needed to protect consumers. It is a set of regulations promulgated by the Federal Reserve that are as strongly opposed by the other side as are our regulations. By the way, in quoting the Federal Reserve even on the speedup, they did express some concerns. They also said, however, the board cannot predict how an effective date of December 1 would affect credit card interest rates and credit availability. However, moving the CARD Act's effective date to December 1, 2009, would mean that consumers would receive important benefits and protections earlier. So they invoke the Federal Reserve and they invoke small business despite the protestations of both of these organizations that they disagree fundamentally with the Republican position. Now let's talk about substance. The single biggest piece of this--and they say it prevents the poor credit card companies, the poor beleaguered banks. They warned us that if we tried to stop them from behaving irresponsibly, they would speed irresponsible behavior. Yes, they did. But that should not be allowed to be a deterrent against stopping them from doing things. And what this fundamentally does, the single best, biggest thing, is it says this: If you have used your credit card to buy things at a rate that you were told was binding and you have made all your payments on time for years and you have been running a credit card balance, as the credit card companies want you to do--I know if you have a credit card and you pay it off every month, they don't like that because they're not getting the interest. But at any rate, if you have fully complied with all the terms of the credit card and you have made purchases and incurred debt at a given interest rate and you have made every payment you were supposed to make on time, they have retained the right unilaterally and retroactively to raise the interest rate on what you already owe them. It is the single unfairest economic transaction I can think of that doesn't involve a pistol. The fact is that they decide they can make more money that way. We're told they have to deal with risk management. What's the risk on debt already incurred on the part of someone who's always made the payments? This isn't risk management. This is hostage taking. This is raising money after the fact. Now, it's true they told you that when they sent you the contract. It is true that if you have very good vision and a very high boredom threshold and nothing else to do but read pages and pages of small print, you might have figured that out if you spoke lawyerese. But for most people, the notion that you take your credit, you were told that this is the interest rate, you buy things at that interest rate, you incur debt, and they then say, oh, by the way, you know that rate that was at 8 percent, retroactively it's now 12 percent. This bill doesn't prevent them from going forward with appropriate notice for raising rates. It absolutely does not. It says they can't do it retroactively and they have to give you some notice so they cannot trap you. It also says that if you mail the bill at a certain time, you are not subject to their saying, oh, by the way, something happened to your payment, we don't know what, and you're going to have to pay extra. All the burden of any misplaced bill falls on you, the payer, not them, the payee. Let me last say here's a problem. We have had a pattern of abuse. The National Federation of Independent Business and the Federal Reserve agreed with us that there was a pattern of abuse. Members on the other side said, oh, no, these credit card companies, wonderful people. They're just trying to help you out and they are simply trying to give you credit, and if they raise your rates retroactively, that's in your own best interest. Trust us. That's so you don't have to pay higher rates down the road. So we said we're going to stop these practices. They then said you can't do it right away, it's very complicated, give us some time. So we gave them time, more than I wanted to at the time. They then used that time not to calibrate so they would be ready for the effective date but to start to jack up the rates. But I reject the notion, first of all, that people who are engaging in abusive practices, as the credit card companies were, according to us, according to the National Federal of Independent Business, according to Federal Reserve, hardly radical Obamaistic organizations, they should not be allowed to stop it by saying but if you try to make things better, we're going to blow things up in advance. We should not give into those kinds of facts. In fact, I reject the notion that we caused any of this. Nothing they have done couldn't have been done without the bill, and they were doing it. All they did was to use this bill as an excuse for doing what they were trying to do anyway. So we have here a reasonable bill that will prevent them from imposing things retroactively, that will require some notice going forward, that will fairly allocate the risk of a late payment, and that's what we are talking about. And we are talking about speeding up the date. They have many months to get ready for this. And let me say this: They tell us, oh, my goodness, it's so hard to recalibrate. But you know what? They have very odd computers over there. Maybe they've got great software. They've got software that works perfectly when they want to raise rates, but if they want to hold rates constant, the software goes berserk. Maybe we can implore the software makers to give them some software that works both ways, because they are able to raise people's rates retroactively in violation of what people thought were their contractual rights, very quickly, but they aren't able to get ready to be giving people a 45-day notice before they raise their rates going forward. And the 45-day notice is so that you can say, okay, I will go through one more billing cycle and I don't want them anymore. I will go to shop. What we have here is what we had in April. By the way, I don't want to be unfair to the entire Republican Party. Individual Members--it's okay, but not to the entire party. Many Republicans voted for this bill. Those who were speaking in opposition to it clearly were not representative of their whole party last time. And what we have, though, is the leadership from the Financial Services Committee of the Republican Party coming firmly to the defense of the credit card firms, telling us that what they were doing was out of economic necessity. They really don't want to raise these rates but they are just forced to do it by sound risk management. We believe, along with the National Federation of Independent Business and the Federal Reserve and every consumer group that's looked at it, that exactly the opposite is the case. They have abused the time that they asked for because they said it was for getting ready and they used it to do precisely the things the bill will stop them from doing. I, therefore, very much hope that this bill is adopted. Mr. Chairman, I yield back the balance of my time.

Mr. FRANK of Massachusetts. Madam Speaker, I demand a recorded vote.

Mr. FRANK of Massachusetts. Mr. Chairman, if there is anybody opposed to this amendment, I would yield. But in the absence of anybody who is opposed, I will take the time.

Mr. FRANK of Massachusetts. Mr. Chairman, demonstrating that we bear no ill will to those who have deserted us, I yield 2 minutes to a former member of the committee, the gentlewoman from California (Ms. Lee).

Mr. FRANK of Massachusetts. I yield the gentlewoman 1 additional minute.

Mr. FRANK of Massachusetts. Would the gentleman yield?

Mr. FRANK of Massachusetts. The point is this: Given the context of all these amendments, this one doesn't have great effect. But as Members filed amendments, it wasn't clear all the amendments that were there. I think if the gentleman knew everything else that was going to be done, it might not have appeared.

Mr. FRANK of Massachusetts. I yield 3 minutes to an active Member, who also filed a very good piece of legislation to this bill, the gentlewoman from New York (Mrs. Lowey).

Mr. FRANK of Massachusetts. Would the gentleman yield? That's not a bad question. I don't have as good an answer to that question as I had to the one before.

Mr. FRANK of Massachusetts. Mr. Chairman, I recognize for 4 minutes the prime mover of this bill, the gentlewoman from New York (Mrs. Maloney).

Mr. FRANK of Massachusetts. Mr. Chairman, I intend to close and I have no further speakers, so I reserve my time.

Mr. FRANK of Massachusetts. Madam Speaker, I rise in opposition to the recommit motion.

Mr. FRANK of Massachusetts. Would the gentleman yield?

Mr. FRANK of Massachusetts. He stops reading inexplicably. He's got to work on his attention span because it goes on to say, Except----

Mr. FRANK of Massachusetts. Yes, Madam Speaker.

Mr. FRANK of Massachusetts. I apologize, because the part that we were probably both going to read--and we will work on doing it in unison--says, Except as permitted under subsection 171(b). That is, it imposes no new restrictions. It does revert back to those that are already enacted into law.

Mr. FRANK of Massachusetts. If the gentleman would yield, someone on our side who said she wanted to speak has since come on the floor. I just wanted to alert the gentleman that I will not be the final speaker. I will be yielding one more time before I close.

Mr. FRANK of Massachusetts. I support the amendment. The gentleman from Texas is a very careful legislator. We disagree a lot. And there were times when I had wished he wasn't as careful as he is, but he is absolutely right in this case. Let me go a step further: this may get entangled, this bill and broader things. If that should happen, I would be prepared, if nothing else worked, to break out this particular amendment at a later date and do it by suspension and hopefully do it unanimously because it, clearly, shouldn't be that way. So I thank him for calling it to our attention, and I hope the amendment is adopted. Let me just say that I will be asking for a roll call. Mr. Chairman, I am intending to vote for it; but as you know, one doesn't always ask for roll calls simply because one has an issue on that amendment. I will yield to the gentlewoman from New York.

Mr. FRANK of Massachusetts. Would the gentleman yield?

Mr. FRANK of Massachusetts. How much time remains on the other side?

Mr. FRANK of Massachusetts. Madam Speaker, first, I will acknowledge--and the gentleman from Delaware was quite civil--I will acknowledge that this is a moderate approach. I only hope, given the current situation, he is not in political trouble for taking a moderate approach in his party, but that's a matter for another day. The issue for me here is the extent to which many of my colleagues on the other side are engaged in an on-again/off-again love affair with the Federal Reserve. The Federal Reserve has often been the object of their scorn, but when it comes to consumer protection, the Federal Reserve is sometimes a convenient bulwark against that. For example, when the committee passed the Consumer Financial Protection Agency Act, which transfers more power from the Federal Reserve than any other group of Federal entities, many of my Republican colleagues ran to the defense of the Federal Reserve by quoting the Chairman of the Federal Reserve as saying, Don't take this away from us. We have this on-again/ off-again. What this bill does is really quite remarkable. It empowers the Federal Reserve to cancel an act of Congress. We are hoping to get this bill passed, and there was some concern in the Senate from the Senate chairman. And thanks to the amendment that was offered by the gentlewoman from New York (Mrs. McCarthy) and the gentlewoman from Colorado (Ms. Markey), we have accommodated his concerns. We think we have a workable proposal here. What the recommit says is, if the bill passes the House and passes the Senate and is signed by the President, we will then wait for the permission of the Federal Reserve Board of Governors to implement it; and if they say it's not feasible, then the bill dies. In fact, they did write us, however, and say that if they had to do it by December 1--we wrote to them a couple of weeks ago--here is this problem that they wouldn't be able to get full comments in. But they also note the Administrative Procedures Act does provide a good clause exception when the notice and comment period would be impractical, unnecessary, or contrary to the public interest. So what they say is, if the effective date for these provisions were moved to December 1, the board would have to issue final regulations without waiting for comments. But the point is that they've had a lot of time for comments. The Federal Reserve proposed this earlier after the gentlewoman from New York initiated it. The President signed the bill, the underlying bill, the effective date of what we're trying to do in advance, on May 22. They've had--what is that, 5\1/2\ months to study it. This is not the most complicated thing in the world. And by the way, if this was so complicated to figure out, how did the banks manage to be able to increase so quickly? Apparently, the banks have this problem: when it comes to implementing the law, they're working with typewriters. When it comes to raising your rates retroactively--remember, the biggest single part of this bill is that it says, if you've got a credit card and are abiding by the terms of that credit card, you bought things and you are charging them at the interest rate you were told would apply, and you make every payment you were obligated to make, they can retroactively raise your rates. That is the biggest single thing we stopped. I don't see why it is going to take them 8 or 9 or 10 months or a year to figure it out. I thought February was too much time in the first place. But here is the basic point: several of us said, okay, we will reluctantly agree to February for a bill that is passed in May, to do something that's not that complicated. But if you abuse it, if you use the time to raise rates and then blame us for it, adding insult to injury, then we are going to speed it up. So I think our credibility is at issue here. We in good faith said, take some time to implement it. May 22 until February. Many of you have heard what they did was to speed this up. There is an element of fairness here. And, yes, the Federal Reserve will have to forgo some public comments. I think I would say to people, You know, we have until December 1. If you are out there and you think the Federal Reserve is going to listen to you-- Madam Speaker, let me violate the rule, please, and address people who aren't here. If you're listening, and you really need to talk to the Federal Reserve, write them a letter, send them an email, call them up. You don't have to wait. So we can get your comments in now, and we can go into effect by December 1. We should certainly never set the precedent that any agency, and certainly not the Federal Reserve, which has become so controversial, should be given the power to suspend an act of Congress before it goes into effect. That is what this does. It says that we will pass this law; but unless it is certified as feasible by the Federal Reserve, it doesn't go into effect. I have a lot of respect for the Federal Reserve, but they're not in charge of what we think is feasible. They're not in charge of telling us that we have to wait more for public comments when our constituents, we believe, are being mistreated. So I hope the motion to recommit is defeated.

Mr. FRANK of Massachusetts. The bill does not impose any restrictions other than those in the underlying bill. What it says is, section 4(a) in general, during this period and ending 9 months after the date, it says no creditor may increase any annual percentage rate fee or finance charge except as permitted under subsection 171(b) of the Truth in Lending Act, the CARD Act. So it does have restrictions, but it only reaffirms those that were already in there with the 9-month date. It does not do any new restriction on the ability to raise rates.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks on H.R. 3639 and insert extraneous material thereon.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, this is a sad day for me because it is close to the anniversary of the death in Iraq of a very brave young man, Corey Shea, whose picture is here. He was killed in Iraq just the day after Veterans Day of last year, and I went to the funeral, along with my colleague Senator Kerry, to the town of Mansfield, Massachusetts. Like I think most Members, I try very hard to attend the funeral of every young man and woman who is killed in the service of the country. It's the least we can do. It's not a great deal, but it's the least we can do to show a small piece of the gratitude we feel to those people and our obligation to their families. Also, it seems to me, anybody in our position who has to vote on going to war needs to fully understand the consequences of those votes, and going to the funerals of the young people killed in those wars ought to be mandatory for any of us who vote. That doesn't mean you don't vote for the war. I voted for the war in Afghanistan. I've been to funerals of people killed there. But it is an important thing to hammer home. In this case at the funeral I met an extraordinary woman, Denise Anderson, the mother of Corey Shea, who was, in her grief at the loss of her wonderful young son, further concerned because he would be buried alone. His country took him when he was too young to have married or raised a family. So under the rules of eligibility for burial at a veterans cemetery, he was to be buried alone. His mother said as bad as it was for her to lose her son, the thought that he would be alone forever added greatly to her pain. So she had asked if she could be buried with him, and she was turned down. Now, under the rules a member of the military eligible to be buried in a national cemetery who has a spouse with children can have up to three parts used. So we're not taking anything away from someone. In Corey Shea's case, this wonderful young man who lost his life has three parts available, and his mother simply asked to be allowed to use one of them. She was turned down. At that point Senator Kerry and I decided to see what we could do. So we filed legislation to alleviate that, and I am enormously grateful to all members from both parties in the Committee on Veterans' Affairs for the speed with which they acted and the grace they showed to this brave, grieving mother. And I am very pleased that the bill which we would dare concur in, called the Corey Shea Act, is going to be included in this package. Mr. Speaker, rather than go further myself, I'm going to read the testimony that Denise Anderson, the mother of Corey Shea, presented to the Committee on Veterans' Affairs. We obviously exhausted our remedies, I should say. She applied. Only after it was clear that only legislation would work did we file a bill. And, of course, I should point out, as a tribute to Denise Anderson, this isn't a bill just for her and her son who lost his life. It's a bill for any parent of any young member of the military who will know at least that that's available to him or to her. So nearly a year after her son was killed in Iraq, she had the opportunity to address the committee, and here's what she said: ``I stand before you humbly asking you to pass or amend this bill number H.R. 761. This would allow me to be interred with my son, who was killed in action in Mosul, Iraq on November 12, 2008. He sacrificed his life for his country, and I sacrifice every day being without him. ``My son, Corey, had a heart as big as the world. He would be the first one to volunteer or help someone in need. But he would always hesitate to ask for help. He was a lot like me in that way, but today I show my passion for this bill by standing in front of you asking for your help. If you knew my son, you would understand what kind of person he was. He was a very respectful young man who would do anything for anybody. He was my heart and soul, and I cannot express the bond between us. If you have children, you might understand, but losing a child is against nature and he should be burying me. ``I was a single parent until Corey was about 8 years old. His biological father was not around. In fact, he was in prison. He never paid child support, and I worked over 60 hours a week just to support him and make sure he had everything he needed. Jeff took over the job of stepfather and Corey gladly accepted him. When he came home on leave, we would stay up until the sun came up. I did not want to miss a minute with him. ``My son was killed by an Iraqi soldier. These soldiers are supposed to be working with our troops over in Iraq. He was an Iraqi soldier for 4 years before turning on our soldiers. On that terrible day, he killed two soldiers, including my son, and wounded six other American soldiers. ``I was not home when the Army came to my door, but my 18-year-old daughter was there. She is a very intelligent person and knew why they were there. She called me, not telling me what was going on, which was probably a good thing. But when I arrived home, the Mansfield police and the Army vehicle were parked in front of my home. My son had only a month left on his first tour, and he would have been home. After passing out, the police called the paramedics, who took me to the hospital. ``The whole town came together for Corey. They were so involved with his funeral, and it was very heartfelt. My son was the only and hopefully the only soldier who passed away during this war in Mansfield. He is a Mansfield hero. I belong to the VFW in Mansfield, Massachusetts, and I have spoken to many veterans that are members there, and they don't have a problem with me being interred with my son. In fact, everyone I spoke with doesn't haven't a problem. ``This amendment would not be taking up any other deserving space for other veterans. My son has three extra plots, but he was not married nor did he have any dependents. He did not have time, since, like I said, he was a child himself. ``I could speak all day regarding my son and what a wonderful and respectful young man he was. But I am here to ask you to amend the bill number H.R. 761. If you decide to pass this, it would give me some peace in my life to which I can pay more attention to my husband and daughter, whom I feel I have been neglecting. I could finally be able to move forward in my life just knowing I can spend eternity with my son. ``Please listen with your hearts and amend this bill. I appreciate your time listening to me today. This may be a minimal issue with you, but it means everything to me. ``Thank you for your attention in this matter. ``Denise Anderson, proud mother of Specialist Corey Shea, my warrior hero and wonderful son.'' I would only say the one difference I would have with Mrs. Anderson is no one here takes this as a minimal issue. We are grateful to her for giving us one more chance to show in a small way how much we honor those who have lost their lives. I will just repeat one thing I said, Mr. Speaker, in the testimony. I cannot think of a greater disproportion than what Denise Anderson gave to us, her son, and what she has asked us to give in return. I am pleased that at least the House will be doing that today.