House Republicans gag witnesses against credit card companies
by smintheus
Sun Mar 16, 2008
Like so many other Americans, they discovered that their credit card
interest rates had skyrocketed without warning and sometimes inexplicably.
So on Thursday these citizens were invited to testify before the House
Financial Services subcommittee on Consumer Credit, which is considering
the
The Credit Cardholders' Bill of Rights (PDF)
http://maloney.house.gov/do***ents/financial/h.r.5244billtext.pdf
This legislation would add some significant new consumer protections, such
as requiring credit card companies to notify customers at least 45 days in
advance of a rate increase.
But Republicans on the committee found a repulsive new way to prevent the
witnesses from testifying. At the last minute, the GOP insisted that these
victims of arbitrary fee hikes (who'd flown into DC from around the
country
to tell their stories) had to sign a vaguely worded waver permitting the
credit card companies to discuss their credit histories publicly anywhere,
anytime.
For four of the five, it was a deal-breaker. Instead of signing the
waivers allowing them to testify Thursday, they all sat silently in the
audience.
"I didn't want all my ... information out there for just anybody," said
Denver's Susan Wones, who saw the interest rate of her JP Morgan Chase
card
jump from 0 percent to 23 percent in one month last summer, without
notification or explanation. "I'm extremely upset I can't talk about
this."...
At Thursday's hearing, the first panel was to consist of five card
holders
who had suffered interest rate hikes or unexplained user fees despite a
claimed history of responsible borrowing. The GOP waiver requirement came
as
a surprise, the witnesses said, not least because it surfaced just one day
before the hearing. "I didn't have time to contact a lawyer or anything,"
Wones said.
In addition, witnesses said they were concerned with the vagueness of
the
one-sentence waiver language, which offered no limitations on where or
when
the lenders could discuss their credit histories.
Make no mistake, this Republican stunt had the sole purpose of gagging
witnesses who would otherwise have testified about the credit card
companies' sharp practices.
It's not unusual for Congress to ask hearing witnesses to sign privacy
waivers. When Sen. Carl Levin held a hearing on credit card abuses in the
Senate last year, witnesses also signed privacy waivers, but they were
designed to allow only the Senate staff to access some of their financial
information so they could verify it in advance of the hearing. It was
basically for the Senate's own due diligence.
But the waivers that [Marvin] Weatherspoon and the others were asked to
sign were far broader, and they were foisted on the witnesses only hours
before the hearing. Some of the witnesses didn't get them in advance at
all.
The credit-card executives, of course, weren't asked to sign any waivers
at
all that might allow Congress to actually verify the claims they were
making.
Democratic members of the committee protested, and Republicans
threatened
a bunch of disruptive procedural maneuvers if the waivers weren't signed,
so
[Rep. Carolyn] Maloney and [Rep. Barney] Frank agreed to put the consumers
on ice until some later day, probably in April. Still, score one for the
banks. For the moment, they headed off another day of bad press, as
without
the consumer angle, the media all but ignored yesterday's hearing.
The credit card companies did not dare to prevent the academic witnesses
from testifying, however, and one of them, Elizabeth Warren, describes how
imbalanced the committee hearing was.
The card issuers were there in full force--complete with an army of
lobbyists to pack the audience...While the reps from Cap One, Chase and
Bank
of America went on for hours about their customer friendly policies and
how
much value they provided free to consumers, the people who had different
stories were never allowed to utter a single word.
Rep. Mark Udall (D - CO) blasted the Republican tactics of intimidation:
Udall...expressed anger later, saying the witnesses were being asked at
the eleventh hour to give up too many privacy rights. He said they could
have signed more limited privacy waivers earlier if they had been asked.
Instead, it amounted to intimidation, Udall charged.
"In short, I believe the credit card industry used tactics of
intimidation
today to silence these consumers," Udall said in a written release...
"The truth is that these people weren't allowed to speak because credit
card companies don't want their stories to be told," Udall said in the
statement. "That is wrong. It is unjust and unfair."
So why the full-court press by the credit card companies? The Democratic
bill before the committee would prohibit or limit many unfair billing
practices. In particular, it would prevent arbitrary interest rate
increases, penalties for those who pay their bills on time, and excessive
fees. This diary has further details. The Credit Cardholders' Bill of
Rights
is "easily the most major proposed credit card legislation in a long
time".
Pretty hard for the credit industry to argue against the legislation on
its
merits. The best they could manage on Thursday was to threaten darkly that
new regulations to check abuses could instead lead to higher rates. Credit
card company ****ll Rep. Mike Castle (R - DE) also argued that legislation
is
premature because anticipated Federal Reserve regulations "might address
these issues" by requiring greater disclosure of the abusive credit card
terms.
Chiz, that's about as pathetic an argument against the need for
legislation
as you could imagine. Thus the desperate need to silence any witnesses
who've fallen victim to these common abuses.
So what the heck is wrong with Reps. Maloney and Frank, that they'd allow
the Republicans to pull this stunt? Will citizens testifying about the
need
for health care reform in the future be required to sign waivers
permitting
their insurers to discuss all their health records in public? In any case,
I
eagerly await the day when mandatory public disclosure applies in equal
measure to the cor****ations and their hired guns that have such easy
access
to Congress.
http://www.motherjones.com/mojoblog/archives/2008/03/7666_credit_card_ind.html
Any number of things they could have done.....
the simplest being to refuse to permit the Republicans to interfere by
imposing waivers, or by replacing them with acceptable waivers of the
standard sort. If you're going to permit them to threaten disruptions at
this hearing, then where does that kind of thing end?
Seems pretty simple to me; if you invite witnesses, then you make sure
they
get heard.
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