Date: 1988-10-13
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. I yield myself such time as I may consume. Mr. Speaker. credit and charge cards are part of the contemporary American scene. More than 100 million consumers have one or more credit cards with outstanding balances approaching $150 billion. H.R. 515. as agreed to in conference. is designed to protect the consumers who receive nearly 2.5 billion solicitations annually for credit cards. The legislation requires uniform disclosures of interest rates and other fees that consumers face in making a decision to apply for a credit or charge card. Most importantly. the bill requires these disclosures up front before the consumer receives the cardbefore charges and fees start accruing. Among other items. the consumer must be told. in a straightforward and clear manner. the annual percentage interest rate. information on any variable rates that might apply. any membership fees. transaction charges. and the length of any grace period granted before finance charges are applied. The consumer most also be provided the method by which the balance is calculated as well as ancillary fees such as cash advance fees. late fees. and over the limit fees. Mr. Speaker. there was a great deal of discussion about the relationship of the Federal law to the various State disclosure laws. Some of us. frankly. had hoped that we could avoid a flat preemption of State laws and allow the socalled truthinlending approach to applyan approach which would have allowed States to enact credit card disclosure laws so long as they were not Inconsistent with the Federal law. Ultimately. however. we settled on a compromise which added ancillary fees which brought the provisions of this legislation to the outer limits of the strongest laws now on the books in any State. We also gave the Federal Reserve Board the authority to add disclosures in the future. Mr. Speaker. this conference report is. without question. a major step forward for the American consumer. It is one of the most important and strongest credit disclosure acts that we have been able to move through the Congress since the first truthinlending statute was passed 20 years ago. In addition to disclosing all the terms relating to the use of the credit card. the legislation also requires the credit card issuer that offers credit life insurance to notify the consumer 30 days prior to any proposal to change the company providing such insurance. The notice must include information as to any increase in the fees for the insurance and any substantial decrease in service or coverage. The Federal Reserve Board is required to define in regulationqin an unambiguous fashionwhat constitutes "a substantial decrease in coverage or service." If it is to mean anything. this disclosure must be clearly brought to the consumers attention in a manner that provides meaningful comparisons. The Federal Reserve is also required to closely monitor the credit card industry and to collect information semi- annually on the cost of credit cards. The Board is required to collect the data from the 25 largest issuers of credit cards and at least 125 additional Institutorls in a manner that will provide a valid national sample. The data is to be made available to the public and the Congress. Mr. Speaker. H.R. 515 ends the hideandseek approach to disclosures on credit card terms. It prevents sneak attacks on unsuspecting consumers who often learn of charges and fees long after the facttoo late to reject the card and seek alternatives. I want to commend all the members of the Banking Committeeon both sides of the aislewho worked to produce a strong credit card disclosure bill. The chairman of the Consumer Affairs Subcommittee. FRANK ANNUNzio. deserves special credit for his many hours of hard work for strong H 10180 CO disclosures. Our colleagues. DoUo BARNARD from Georgia and CHUCK SCHUMER of New York. pulled together a consensus package that provided the focal point for strengthening the legislation in the conference. Their work was so important to the final resolution of this conference report. Mr. Speaker. H.R. 515 is part of the growing consumer bill of rights that is being constructed by the Banking. Finance and Urban Affairs Committee and the Congress. Mr. Speaker. I yield the balance of my time to the gentleman from Georgia . and I will ask the gentleman from Georgia to manage the conference report for the remainder of my time.