Groups Send Message to Lawmakers About Credit Card Practices

The text of the letter sent to the House of Representatives follows:

The biggest banks and credit card companies have used the power they wield in the marketplace to push unfair business practices that are costing our members -- retailers and working families -- tens of billions of dollars each year.

The credit card industry has moved steadily over the last several years to impose more burdensome penalties and fees on cardholders --ratcheting up interest rates as high as 30 percent. At the same time, the industry has dramatically increased credit card interchange fee revenues. All banks charge the same schedule of fees which drives up the costs of nearly everything consumers buy, including necessities such as gasoline and food, and removes the competitive pressure to reduce the fees.

Each year, these banks flood our mailboxes with 9 billion pieces of junk mail promising cheap, easy credit. The banks then make all of us pay for these billions of offers -- without us even knowing it -- by using part of the more than $40 billion they collect annually in interchange fees. These fees are nominally paid between banks but are actually passed on to merchants and, ultimately, to consumers. These fees are tremendously regressive because credit card industry rules make sure they are hidden in the prices of goods and services so that cash shoppers have to pay for them just like premium rewards credit cardholders.

The federal agencies that are responsible for protecting American consumers from the credit card industry's worst abuses have failed to use their authority to stop the anticompetitive and deceptive and unfair practices that have become standard in the industry. It is now time for Congress to step in and begin to restore fairness in the financial marketplace for working families and merchants.

With that in mind, we urge you to support three pieces of legislation that would begin to reform this industry. These are:

• The Credit Cardholders' Bill of Rights Act of 2008, H.R. 5244, sponsored by Rep. Carolyn Maloney (D-NY);
• The Credit Card Fair Fee Act of 2008, H.R. 5546, sponsored by Reps. John Conyers (D-MI) and Chris Cannon (R-UT) and S. 3086 sponsored by Senators Durbin (D-IL) and Bond (R-MO); and
• The Credit Card Interchange Fees Act of 2008, H.R. 6248, sponsored by Rep. Peter Welch (D-VT).

These pieces of legislation are important steps forward in ending the abusive credit card practices that drain billions of dollars from working families and retailers each year. We urge you to support these bills and quickly pass them.