By Sally Greenberg, NCL Executive Director
On two occasions this week, consumer groups were invited to the White House to witness President Barack Obama’s historic signing of legislation intended to protect the interests of consumers and homeowners. I was lucky enough to attend both events. On Wednesday, the President signed the Helping Families Save Their Homes Act and The Fraud Enforcement and Recovery Act. These bills are intended to crack down on those who seek to take advantage of homeowners through fraud and other abuses. On Friday, the President signed the Credit Card Accountability, Responsibility, and Disclosure Act, a new law that will rein in some of the worst abuses of the credit card industry and help to restore the balance between consumers using their credit cards responsibly and the credit card industry’s obligation to treat their customers fairly, and not hiking up rates without notice, backdating interest on old balances, or changing terms, in the words on your credit card contract, “anytime for any reason.” I have lived and worked as a consumer advocate in Washington for more than a decade and had never been to a White House bill signing.
It wasn’t for lack of trying. Several years ago consumer and safety advocates worked hard to persuade the Bush Administration to celebrate the signing into law of the Cameron Gulbransen Kids and Cars Safety Act, which will protect toddlers especially from being backed over and killed when they run behind their parents’ car and cannot be seen because of blind areas behind the vehicle. The act sets a standard for rearward visibility in all cars. Unfortunately, we couldn’t manage to get a public signing at the White House for the many parents whose children had died or been injured, and who would have welcomed the opportunity to celebrate passage of this bill.
But the Obama Administration has reached out to consumer advocates in a new and important way that we hope will benefit the millions of consumers whose interests we try hard to protect each day. About a month ago, nine or so consumer organizations met with White House staff to discuss a range of issues, from product safety, to credit card legislation, homeowner protections, energy prices, access to the courts, and important appointments to agencies that provide consumer protection and enforce health and safety laws. We brought with us our platform of six issues that the groups had issued last December.
Attending an event at the White House is a heady experience. As my 91-year-old father pointed out recently, having the chance to be part of an event with a standing president is a significant honor. Yet there we were, mixing on Wednesday in the East Room with Senators, Representatives, cabinet secretaries, the President’s own staff, and discussing the important protections these bills would provide for homeowners and on Friday, in the Rose Garden, ten or so consumer representatives – who had fought for these provisions for a number of years, and brought with them individual consumers who had endured terrible experiences with credit cards – one woman’s son had committed suicide when faced with mounting debt on his credit cards. I watched the President listen to her story and give her a hug afterwards.
The President on Wednesday spoke eloquently about both the trials that homeowners face when confronted with the possibility of losing their homes – and the fraud thousands have faced at the hands of unscrupulous businesses, and on Friday talked with compassion about those consumers who never expected to confront mounting debt on the credit cards but had lost a job or faced a health care crisis. The bill will provide, in the President’s words, “common-sense reforms designed to protect consumers.”
Under the new law: credit card issuers will be required to tell card holders how long it will take to pay off a balance and what it will cost in interest if they only make the minimum monthly payments; retroactive rate hikes that appear on a bill “suddenly with no rhyme or reason” will be barred, Obama said; companies will have to post their agreements online; consumers will have to mail statements 21 days before payment is due, instead of 14; shifting payment dates will be prohibited; and 45 days’ notice will be required for changes in terms and conditions.
Some estimates say that the average household debt by credit cardholders who carry a balance is around $17,000. The White House said that every year, Americans pay around $15 billion in penalty fees. Nearly 80 percent of American families have a credit card, and 44 percent of families carry a balance on their credit cards. President Obama also pointed out that this bill is a good balance, and said the changes were not intended to encourage reckless spending. For the White House Fact Sheet on the bill, click here.
Consumer advocates hope that this week is a watershed, opening the way to a new era in which Congress and the White House are, after a long dry spell and a painful economic downturn, feeling the pain that the average American is experiencing and are trying at last to level the playing field so that the average consumer gets a fair shake. We at the National Consumers League welcome this new way of doing business.