Senator Menendez Calls For Passage Of Legislation That Will End Predatory Lending

Member of Banking Committee crafted provision in bill that would protect consumers under 21, and require credit card companies to verify consumer's financial situation before approval

May 22, 2009 -- Hoboken, NJ – U.S. Senator Robert Menendez, a member of the Senate Banking Committee, today visited Stevens Institute of Technology in Hoboken to discuss credit card reform legislation currently being debated in the Senate. Senator Menendez was joined by Phyllis Salow-Kaye, Executive Director, of New Jersey Citizen Action, and John Snygg, a New Jerseyan, who reached out to Senator Menendez’s office for help when members of his family were subjected to multiple deceptive and predatory practices of credit card companies: college student debt, retroactive interest rate increases, and unjustified fees.

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“Credit card reform is something I’ve been calling for ever since I set foot in the Senate,” said Senator Menendez. “It’s great to see that a credit card reform bill is on the verge of clearing a hurdle in the Senate—and I am proud to see that it will likely include many of the provisions that were in legislation I introduced and have championed for years. That includes restricting retroactive rate increases, making fees more reasonable, and restricting unilateral changes to agreements. This legislation is about creating a level playing field for consumers when they’re taking on the big credit card companies, restoring some common-sense rules of the road, and stabilizing our economy by making it possible for consumers to get their footing.”

Credit card companies use an array of tricks and traps on cardholders that lead to increasing debt for families, which is particularly damaging in this economic crisis. They can raise interest rates for most any reason, change the terms of contracts, charge unreasonable penalties and prey on students. The US Senate is considering and close to passing legislation that will make things fair between credit card holders. Senator Menendez has been a champion for credit card reform, as the author of the Credit Card Reform Act and having helped craft a number of provisions in the bill before the Senate, including provisions to protect college students and consumers under the age of 21.

“I’m proud that the bill includes a provision I championed, that says, people under 21 have to proactively opt in to receive card offers, so that they will no longer be lured into deals unless the decision is their own,” said Senator Menendez.

Senator Menendez was joined by Phyllis Salow-Kaye, Executive Director, and NJ Citizen Action. The non-profit assists New Jerseyans who suddenly see themselves in the midst of ever changing interest rates and service fees that keep them deep in credit card debt.

“There is no doubt that consumers need to accept responsibility for the debt they have incurred, but we need to restore some sense of balance in the credit card business,” said Phyllis Salow-Kaye. “This legislation will protect credit card holders by making it harder to raise interest rates without notice, charge unfair late fees, or impose other predatory conditions.”

US Senator Robert Menendez (D-NJ) is a member of the Banking Committee and has been a champion of credit card reform, having authored the Credit Card Reform Act (http://menendez.senate.gov/newsroom/record.cfm?id=308071).

Source: Senator Robert Menendez