As New Report Details Credit Crisis Threatening Minnesota’s Middle Class, Franken Announces Major Reforms to Help Consumers
Posted in Press Releases on August 13th, 2008
At Roundtable With Minnesota Consumers, Proposes “Credit Card Bill Of Rights” To Protect Consumers, Vows To Crack Down On Predatory Lenders
Reveals That Coleman Is Bankrolled By Big Banks – And Details The Return On Their Investment
SAINT PAUL [08/13/08] – As a new Federal Reserve report details the credit crisis threatening to undermine Minnesotans’ economic security, U.S. Senate candidate
Al Franken joined several such middle class borrowers at a roundtable today to highlight new proposals for major credit industry reform.
Al Franken:
“Simply put, tens of thousands of Minnesotans have been hurt by Norm Coleman’s allegiance with the banking industry. It’s time for a change in Washington, and it’s time for common-sense reforms to level the playing field for Minnesota’s middle class. Norm Coleman is a wholly-owned subsidiary of George Bush and the special interests. I’ll be a Senator on your side.”
Americans are carrying over $2.5 trillion in consumer debt – an increase of 22% since George Bush took office. The average household’s credit card debt is over $8,500.
Meanwhile, Norm Coleman voted for the 2005 bankruptcy bill, which financial institutions spent over $100 million lobbying for – a bill that kept many vulnerable Minnesotans from protecting their homes. Coleman specifically voted against protecting people with high medical expenses, victims of identity theft, the elderly, and low-income and disabled workers.
He did, however, vote to protect one group – predatory lenders. He allowed them to keep using the bankruptcy courts to collect debts on loans they made in violation of federal predatory lending laws.
Franken proposed the following major reforms:
A Credit Card Bill Of Rights
- Ban “universal default” and other unilateral changes to repayment terms.
- Guarantee that prompt credit is given for payments made, and prohibit interest on late fees.
- Require that applications use plain language and at least size-12 font.
- Ban mandatory arbitration clauses.
- Require that credit card companies inform borrowers on each bill about the long-term costs of paying only the minimum balance – and how much they’d have to pay each month to eliminate their balance within three years.
Crack Down On Predatory Payday Lenders
- Cap the interest rate on “payday” loans at 36 percent, as twelve states and the District of Columbia have already done, saving vulnerable consumers as much as $1.5 billion a year.
- Require lenders to provide clear and simple information about loan fees, payments, and penalties during the application process.
- Require proof of income before a cash advance is approved.
Repeal The 2005 Bankruptcy Bill
- Repeal the bill written by the banks and credit card companies.
- Mandate an exemption in bankruptcy law for individuals who can prove they filed for bankruptcy because of medical expenses.
- Require prioritization of child support and alimony payments before credit card debt in bankruptcy proceedings.
