The Long Fight Against Credit Card Abuses

As the Senate debated tough new rules for the credit card lenders, Sen. Bernie Sanders spoke at a press conference on Wednesday in favor of the bill that includes many reforms he has championed for years. While the ranking Republican on the Senate Banking Committee blocked a vote on a Sanders amendment to cap interest rates, Sanders reasserted his support for the bill that clamps down on deceptive practices by lenders.

As the Senate debated tough new rules for the credit card lenders, Sen. Bernie Sanders spoke at a press conference on Wednesday in favor of the bill that includes many reforms he has championed for years. While the ranking Republican on the Senate Banking Committee blocked a vote on a Sanders amendment to cap interest rates, Sanders reasserted his support for the bill that clamps down on deceptive practices by lenders.

"Today we are saying they are not going to keep getting away with this," Sanders told a Capitol Hill press conference by supporters of the measure to outlaw some of the most outrageous abuses by banks. "What is going on in my view is extortion. It is loan sharking by people in three-piece suits. And what adds insult to injury is that this is taking place at a time when we have placed hundreds of billions of dollars to bail out these financial institutions, at a time when they are getting zero interest loans from the Fed, their response to the American people is, ‘Thanks, chump, now we're going to raise your interest rate.'"

Senate Banking Committee Chairman Christopher Dodd, the chief author of the Senate bill, and Sen. Charles E. Schumer, one of the Senate's top leaders, also participated in the press conference on the bill.

Sanders said the legislation includes provisions he has advocated since he served on the House Financial Services Committee.

  • On July 14, 2003, then-Congressman Sanders introduced the Credit Bait and Switch Prevention Act (H.R. 2724) to prevent credit card issuers from jacking up interest rates on consumers who always paid their credit card bills on time and never went over their credit card limit.
  • On July 23, 2003, then-Congressman Sanders, by then the ranking member of the Financial Institutions and Consumer Credit Subcommittee, offered an amendment with Congressman Spencer Bachus (R-Ala.) and Congresswoman Carolyn Maloney (D-N.Y.) to prohibit credit card issuers from using negative information contained in a customer's credit report, such as a late payment on a student loan, a lower credit score, a new mortgage, or a new loan to pay for a medical emergency, or an error in a credit report as a reason to increase credit card interest rates. Alan Greenspan, who was chairman of the Federal Reserve, opposed the amendment that lost by a vote of 44 to 22.
  • On September 10, 2003, then-Congressman Sanders offered an amendment in the House to ban the credit card interest rate bait and switch. This amendment lost by a vote of 142-272 in the full House of Representatives.
  • On April 13, 2005, then-Congressman Sanders introduced the Loan Shark Prevention Act (H.R. 1619) to cap interest rates on all loans at 14 percent; ban the credit card interest rate bait and switch; and cap bank fees at $15. The legislation garnered 24 cosponsors.
  • On March 12, 2009, Senator Sanders introduced the Interest Rate Reduction Act (S.582) to cap interest rates on all loans at 15 percent, the same cap that Congress imposed on credit union loans in 1980. The bill currently has five co-sponsors.

To watch Sanders at Wednesday's press conference, click here.