It’s Time To Protect the Average American Consumer

By Congresswoman Debbie Wasserman Schultz

In this time of economic hardship, helping Americans is more important than ever.  The people of the United States keep this country strong by participating in our economy and they deserve to have their rights protected—to feel safe in their purchases, loans, and mortgages. My colleagues in Congress and I are working hard to protect everyday Americans from economic harm.

That is why we recently passed legislation focused on consumer protection, including the Credit Cardholders’ Bill of Rights, the Credit Card Accountability, Responsibility, and Disclosure Act (Credit CARD Act), and the Helping Families Save Their Homes Act. These pieces of legislation focus on making sure Americans are protected from scams and unnecessary costs.

As families are being forced to cut back, lending companies have found ways around old regulations to try to get more money from everyday Americans.  The Credit Cardholders’ Bill of Rights provides much-needed oversight for the lending industry through several measures: It requires bills to be sent 21 days before the due date; prohibits companies from charging fees to pay a bill by phone, mail or the Web; bans over-the-limit fees (unless a consumer opts-in beforehand); and stops due-date tricks.  The bill also bans most retroactive interest rate hikes on existing balances (except when payments are more than 60 days late), and it strengthens credit card protections for young people.

The bill is fair to both card issuers and card holders, giving everyone an opportunity to succeed and prosper. The United States was founded on values of hard work and responsibility, and this legislation represents those values.

The Helping Families Save Their Homes Act, of which I was one of 19 original co-sponsors in the House, also represents these values by helping families hold onto and achieve the American dream.  In Florida, we have the second highest foreclosure rate in the nation.  This statistic has nothing to do with the dedication and hard work of Floridians—we are as hard-working as anyone in the nation, but we have had to deal with poorly functioning and nonexistent protections for the average homeowner.

This legislation fixes the Hope for Homeowners program, which is designed to spur the refinancing of mortgages by reducing current fees that have discouraged lenders from voluntarily participating and by offering new incentives for lenders to negotiate loans.  The bill also includes incentives that encourage lenders to negotiate affordable mortgages for homeowners who are underwater, at risk of foreclosure, and those nearing bankruptcy.

The Credit CARD Act protects consumers from being buried under mountains of debt from credit card bills.  The legislation amends the Truth in Lending Act to stop a creditor from increasing any annual percentage rate of interest (APR) on a credit card account without meeting certain requirements.  It also requires 45-day notice on any rate increases or significant contract changes, and it instructs credit card companies to apply payments to the highest balance, so that consumers are not left with interest on their highest debt, while the lower balances get paid off.

What’s more, the Credit CARD Act requires credit card companies to be honest and practical with their customers by disclosing how long it will really take someone to repay their credit card—the kind of honesty  and transparency that will allow our nation to move forward on a well-built economy, instead of stepping from one bubble to another. 

President Obama and the Congress are exploring further ways to protect consumers.  Timothy Geithner, the Secretary of the Treasury, spoke recently about the possibility of a new agency to protect American consumers who are buying financial products or taking out mortgages.  He said that Americans need more help to prevent the kind of unclear rules and decisions that have led to our recent economic trouble. 

These are just some steps to preventing unnecessary risks in our economy.  Consumer protection and economic recovery legislation introduced by Congress and initiatives put forward by President Obama are helping to restore the American dream for everyday Americans, helping small businesses reach their full potential, and helping to steady our economy so that American businesses and consumers can both prosper.