Bernie Sent a Response.

Senator Sanders responded to my letter. Although it is a canned letter I am glad he took the time to send something back.



Dear Heather:



Thank you for contacting me with your concerns about high credit card fees and unfair practices in the banking industry. I appreciate the opportunity to respond to you on this important issue.



Today, we are experiencing nothing less than a credit card crisis. Banks, trying to offset losses in other areas, are hiking interest rates and imposing all manner of fees and penalties making it even less likely consumers will be able to pay off their mounting debts. Unfortunately, under current law, credit card companies can charge whatever interest rates they desire no matter how high, and can turn low interest rates into high interest rates without giving any reason at all.



Worse yet, while taxpayers are spending hundreds of billions of dollars bailing out major financial institutions, and while these big banks are getting near-zero interest rate loans from the Federal Reserve, these very same financial institutions are now charging Americans 20 percent or 30 percent interest rates on their credit cards. The time is long past due for a national usury rate that will protect consumers from predatory lenders and put an end to loan sharking practices.



To that end, I recently introduced legislation in the Senate to cap interest rates on all credit cards and consumer loans at 15 percent. The Interest Rate Reduction Act (S. 582) would also limit bank fees that have been increased dramatically over the past decade. I chose fifteen percent because that is the same interest rate cap that Congress imposed on credit union loans almost 30 years ago when it amended the Federal Credit Union Act.



That approach has worked for credit unions, which unlike their counterparts at the big banks, are not lining up for hundreds of billions in bailouts. In fact, they're doing quite well. They are responding to the credit needs of the small businesses in their communities and to individuals. They have not only survived this regulation, they are functioning exactly the way they are supposed to function. In my view, the rules that have worked well for credit unions for decades can work for all financial institutions.



As you may know, the Senate recently took up a comprehensive credit card reform bill to help protect consumers from some of the most egregious practices in the industry. The Credit Card Accountability Responsibility and Disclosure (or CARD) Act, of which I was a co-sponsor, prevents unfair increases in interest rates and changes in terms, prohibits exorbitant and unnecessary fees, and requires lenders to post their credit card agreements online. The bill also establishes new protections for young consumers targeted by aggressive and irresponsible credit card marketing offers.



I am happy to report that this bill was recently passed by both the House and Senate, and on May 22, 2009 was signed into law by President Obama. While this legislation represents an important step forward in protecting consumers, it does not go far enough in putting an end to the abusive and deceptive practices employed by credit card companies. The CARD Act did not set a maximum interest rate for credit cards and the legislation itself does not go into affect until nine months from passage. I offered two amendments to address both of these issues, but unfortunately neither was included in the final bill.



Over the past few months, I have received many letters from Vermonters describing the difficulties they have been having with their banks and credit card companies. I thought these stories were so important that I recently went to the floor of the Senate and read a sampling of them to the nation. To watch a video of the Senate floor speech, click here: http://www.sanders.senate.gov/news/record.cfm?id=311950



Rest assured, I will continue to fight for a nationwide cap on interest rates and an end to abusive credit card practices. If we are going to turn this economy around, it is time that we stand up to these big banks, and say enough is enough.



Again, thank you for contacting me about this important issue. Feel free to contact me again in the future about this or any other subject of interest to you, or for up-to-date information on what my office is working on please visit http://www.sanders.senate.gov. While there, I invite you to sign up for my e-newsletter, the Bernie Buzz, at http://sanders.senate.gov/buzz/. Please be aware that due to security screening procedures, postal mail to my office experiences delays that will lengthen the time it takes me to get back to you. The fastest way to contact my office is by calling 1-800-339-9834.


Sincerely,


BERNARD SANDERS
United States Senator