On April 24, 2009, I sent an email to my Senate mailing list, the "Bernie Buzz". My request: Send me detailed information about how credit card companies are treating you and your family. Three days later, I had almost 1,000 responses.
Yesterday, I distributed a booklet to my Senate colleagues which reprinted a small number of them, demonstrating in often-heartbreaking manner the extraordinary greed and callousness of some of the largest financial institutions in our country. I have also read some of these testimonials on the floor of the Senate.
I hope you will take a minute to read these stories from Vermont and the nation. They offer a window into the outrageous behavior of credit card companies, and why we need fundamental reform of the industry. Here are a few examples:
I want to know why consumers are not protected in any way from these predatory lenders who were bailed out with my taxpayer dollars and then turn around and raises my interest rate from 7 percent to 27 percent because of "difficult economic times" for the credit industry. This is outrageous! I have not missed a payment and my credit rating is in the high 800's. How can they keep getting away with this?
Neptune, New Jersey
If any of these credit card companies have received any bailout money, I think it is outrageous that they are allowed to get away with their capricious rate hikes. I hope congress steps in and stops these practices before the Federal Reserve restrictions kick in next year.
I own and operated a summer business in excess of 43 years. My business credit card was with Avanta at 7.9 percent for years. Last year my payment jumped about $400 per month - I thought there was fraud involved. Upon checking I found my interest had been raised from 7.9 to 28.8 percent. I always paid more than the minimum and always on time. When Avanta was contacted and asked why, I was told it's a floating interest. I asked to speak to a manager and was advised that's the way it was and they could do nothing to lower it. I got a line of credit loan from the credit union at 1 percent over prime, paid them off and shut down my business. After 43 years of business, it took usury to shut me down. I am seventy five years old and a vet. Go get them Bernie, it's time we had honesty in the banking system.
I have personally had 3 separate credit cards raise the APR to 29.99 percent - when I have paid my bills on time (Citicard, Chase and BofA). Then just last billing cycle, another card I am in perfect standing with doubled my APR - no apparent reason (Chase). I am shocked and livid by these absolutely criminal APRs. This should not be allowed and I believe the APRs should not only be capped, but that there should be a civil lawsuit where they are charged huge fines for pursuing such practices.
Los Angeles, California
I live in a small town in Vermont. I feel that the credit card companies need to have a ceiling on interest rates and fees. They are stealing from us. We pay for the bailout and we pay the interest increases. They must think we are stupid.
We have had the problem with credit cards lowering credit limits with no warning and increasing interest rates for no reason other than "we raised the rates on everyone". We are trying to get our cards paid off but it is extremely difficult when the interest rates are constantly being raised and fees added all the time. One of our cards went from 9.9 percent to 19 percent, another from 12.9 percent to 27 percent. Many have clauses that if you are one day late the rate will go up to 30+ percent, even if your late payment was on a different card. And these are the same banks that have gotten billions of our tax dollars in bailouts!
In my view, when credit card companies charge 25 or 30 percent interest rates they are not engaged in the business of "making credit available" to their customers. They are involved in extortion and loan-sharking. This is especially true at a time when the taxpayers of this country have provided many hundreds of billions of dollars to bail out Wall Street and when the Federal Reserve is making zero interest loans to these very same companies.
I support legislation which will increase disclosure and transparency. But that's not enough! In order to protect the American people and our small businesses, we must pass a national usury law and place a cap on interest rates. I have proposed legislation that would emulate the regulations that credit unions live under - a 15 percent maximum interest rate (which currently can go up to 18 percent under exceptional circumstances). If credit unions can grow and prosper with a 15 percent cap, so can banks.
To send the senator your own credit card testimonial, click here.
To read Sen. Sanders' booklet, click here.