Luis Gutiérrez

Mr. GUTIERREZ

Mr. GUTIERREZ. I yield to one of the sponsors of the bill, Mr. Carney from Pennsylvania, 2 minutes.

Mr. GUTIERREZ. Mr. Chairman, I yield myself 2 minutes. The bill prohibits a creditor from providing information about a new credit card to consumer reporting until the consumer uses or activates the card. I think the intention is excellent. I don't know that you are going to reach it through this amendment. I am going to look forward to speaking to the gentleman. And as the chairman of the Subcommittee on Financial Institutions, I look forward to working with him to make sure that we actually reach your goal. I think credit card companies should be able to allow that information to be removed. Moreover, the reporting agencies should remove that information, and it should be done quickly and swiftly, and we should look at measures to do that. I am not going to oppose or ask people to oppose this particular amendment here this afternoon. I just want to share with the gentleman that I am going to vote ``yes'' on it--and hopefully we won't have a recorded vote and it will become part of the bill. We can then work on it. And if we can't, I would suggest to the gentleman that we sit down and figure out a way to get there, just in case I'm wrong, you're right; you're wrong, I'm right. We should continue this conversation. I reserve the balance of my time.

Mr. GUTIERREZ. Mr. Chairman, I yield back the balance of my time.

Mr. GUTIERREZ. I yield 2 minutes to the gentlelady from New York, Carolyn Maloney.

Mr. GUTIERREZ. First of all, this is really a simple, commonsense practice for consumers. It says, you had an interest rate of 10 percent on the first $100 you took, and then the credit card company raises it to 20 percent when you take another $100. And the minimum payment is $30 on that $200, but you make a payment of $50. What happens with that extra $20 over the minimum payment? It goes to reduce the debt on the highest interest rate first. So, therefore, the consumer is protected from the hike. I just want to say that this amendment comes after conversations with the President and the White House and the credit card industry. It was sent over here to the House. I am proud to join the gentlelady from Maryland in proposing this commonsense amendment to protect consumers. Just think, you have a chance to put consumers first by allowing them to pay down the debt at the highest interest rate after the credit card company changed the rate on you. That is all this really does. It is very consumer-oriented, and that is what I think we should be all about here today.

Mr. GUTIERREZ. I yield back the balance of my time.

Mr. GUTIERREZ. Mr. Chairman, I yield myself 3 minutes. Mr. Chairman, this amendment, which includes language that was requested by the White House, addresses how credit card companies allocate payments when a consumer is carrying balances on their credit cards at several different interest rates. Under existing law, when different portions of a consumer's credit card balance have different interest rates, the credit card insurer may allocate payments in excess of the minimum payment in any manner they choose. Many insurers allocate these excess payments to the portion of the balance with the lowest interest rate, ensuring that the highest interest portions remain on the debtor's account longer. H.R. 627, as reported, requires payments in excess of the minimum payment to be allocated either, one, to the portion with the highest interest rate first and then other portions based on descending order of APR, or, two, on a pro rata basis. The Gutierrez-Peters-Edwards amendment would eliminate the pro rata option in H.R. 627 and require credit card insurers to allocate payments in excess of the minimum payment to the portion of the consumer's remaining balance with the highest interest rate first, and then by any remaining balances in descending order. This amendment would prevent the credit card insurers from abusing the introductory rates they offer by allocating payments to the lowest rate balance first, while the industry makes their profits from keeping the highest interest rates balance on the consumer's account, which is common practice today. Our consumers need every tool we can give them to pay down their existing credit card debt and avoid getting caught in the cycle of debt. This amendment would dramatically shift the balance of power from credit card companies to our consumers. I thank the two wonderful freshmen Members who cosponsored this amendment, Mr. Peters from Michigan and Ms. Edwards from Maryland. I strongly urge my colleagues to support this amendment. Mr. Chairman, I reserve the balance of my time.

Mr. GUTIERREZ. Mr. Chairman, I yield myself the remaining time.

Mr. GUTIERREZ. I want to thank the gentleman from Texas (Mr. Hensarling) for his words. It's the second time we'll have a manager's amendment that we're going to be together on. I look forward to working with him more.

Mr. GUTIERREZ. I have an amendment at the desk made in order under the rule.

Mr. GUTIERREZ. I yield myself 3\1/2\ minutes. Madam Chairwoman, this amendment contains several provisions that both sides have either agreed to or believe are noncontroversial. First, it amends section 8 of the bill, which prohibits credit card issuers from charging consumers who choose to pay their bill by phone, over the Internet, or by other means of electronic funds transfer. It allows credit card companies to charge consumers for expedited payments by telephone when consumers request such an expedited payment. In current practice, many credit card issuers charge their customers a substantial fee to pay their monthly bill over the phone or online. These fees, known as pay-to-pay fees, are assessed regardless of whether a customer's payment is made on time. Pay-to-pay fees don't exist to recoup the costs incurred through processing phone or online payments. Processing an electronic payment certainly does not cost as much as the $15 fee which some credit card companies assess to their customers. This bill would end the discrimination against payment methods by prohibiting the companies from charging a consumer to pay their bill. This amendment retains that prohibition, but permits an exception to the ban when the consumer wishes to have the convenience of an expedited payment. This would include any expedited payments made by the consumers within 24 hours of when the bill is due. I want to thank Mr. Ackerman for his efforts in getting the pay-to- pay prohibition added to the bill and for working with the committee to find a bipartisan compromise to carve out expedited payments from the ban. I also want to thank the gentleman from Delaware (Mr. Castle) for his work on this compromise. This amendment contains several other provisions, including a provision drafted by Mr. Hastings directing the Federal Reserve to suggest appropriate guidelines for creditors to supply consumers with information regarding the availability of credit counseling services; a provision sponsored by Mr. Castle requiring that all credit card offers notify prospective applicants that excess credit applications can adversely affect their credit rating; a provision authored by the gentlelady from New York, Congresswoman Slaughter, to require all written information and terms in any application, solicitation, contract or agreement for a credit card account to appear in no less than 12-point font; and a provision sponsored by Mr. Weiner requiring stores that are self-issuers of credit cards to display a large visible sign at counters with the same information that is required to be disclosed on the credit card information itself. I urge my colleagues to support this amendment. I reserve the balance of my time.

Mr. GUTIERREZ. Mr. Chairman, I would inquire as to the time remaining on our side.

Mr. GUTIERREZ. Madam Chair, I yield 1\1/2\ minutes to the author and architect of the bill, the gentlewoman from New York, Carolyn Maloney.

Mr. GUTIERREZ. Mr. Chairman, I yield 2 minutes to the wonderful gentlewoman and cosponsor from Maryland (Ms. Edwards).

Mr. GUTIERREZ. I yield 2 minutes to the chief sponsor of the legislation.

Mr. GUTIERREZ. First of all, let me suggest to the gentleman from Texas (Mr. Hensarling) that this bill is not going to prohibit credit card companies, once it is passed, to extend lines of credit at lower interest rates to those who have higher credit scores. It is just not going to do it. They will still be able to do that. When he suggests to us that this is a choice, this is an option, there are some options and some choices we should stand up against, and this is one of those choices and one of those options, because it is going to affect those that cannot read. I am sure the gentleman would never suggest that consumers understand every point of the fine print on that credit card. It is going to be hidden there. And the Federal Reserve Board has said to us it is bad practices. It is predatory. It is not fair to simply give notice. Lastly, look, all we are saying is, yes, we are stopping credit card companies and we are stopping consumers from having the ``choice,'' we like to suggest the ``harm'' of a credit card company being able to give you 90 days' notice and say, you know the $1,000 you took last year at 18 percent? They can say, for the whole last year that you have paid it, we are going to go retroactively and double that interest rate, and we want the money, although you have made all of the payments all year long on time, we are going to double the interest rate. Give me more money. That is fundamentally unfair, to retroactively go back and claim money just because you can, just because you sent somebody a 90-day notice. I urge everybody to vote against this amendment.

Mr. GUTIERREZ. Mr. Chairman, I rise in opposition to the amendment.

Mr. GUTIERREZ. I yield myself such time as I may consume. I oppose this amendment because it would essentially allow credit card insurers to circumvent most of the consumer protections in this bill, such as double-cycle billing and retroactive pricing increases, by simply making available one card that does not have these practices. The key to this amendment is that credit card companies will not be required to offer the cards to consumers that do not include predatory practices. In other words, consumers with the highest credit scores, those that have the ability to pay and the greatest assets and income, will get the good card, the one without double billing, without retroactive price increases, and those with low credit scores will get the subprime cards that include the very deceptive practices that this bill was intended to stop. That is why I have to be in opposition to this. It is almost as though we went through this for nothing. Allow this amendment to pass, and most of the work we have done in protecting consumers is undone. I reserve the balance of my time.

Mr. GUTIERREZ. Mr. Chairman, we yield back the balance of our time.

Mr. GUTIERREZ. It's a pretty simple amendment. It would require that credit card issuers notify credit cardholders 30 days before closing their accounts, the reason that the account was closed. They put it in writing; options to keep the account open; programs available to repay the balance, and the resulting impact on their credit score that this might have. It's a pretty simple amendment. It's very consumer- oriented. It allows for more transparency between those that issue the credit card and those that receive it. I reserve the balance of my time.

Mr. GUTIERREZ. Mr. Chairman, I yield myself the balance of my time.

Mr. GUTIERREZ. First of all, I want to thank the gentleman from Michigan for introducing this amendment. I think, first of all, probably the most junior member of my staff--they are all really bright--but the most recent graduate from college can probably go on the computer and somehow transcribe a document because the consumers--I don't want anybody to be led to believe that somehow this bill of rights isn't going to give the consumers the agreement. They are going to have every right to the agreement, and the banks are going to have to print the agreements and give it to people, except the agreements are going to be easier to read and understand. So I think a junior member can put that on a computer and Web site. Having said that, again, Mr. Hensarling--I hope that I have done a good enough job today, and I know he's always done a good enough job on his side, and we will take a look at that. If there is some onerous cost, we will take a look at that. But I have a funny feeling that there is a template out there that's going to be given to these smaller institutions. And I thank the gentleman for not opposing the amendment.

Mr. GUTIERREZ. I rise in opposition to the motion.

Mr. GUTIERREZ. Mr. Chairman, I rise to claim the time in opposition.

Mr. GUTIERREZ

Mr. GUTIERREZ. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 627 and to insert extraneous material thereon.