May 2008

Dear Seniors:

I recently had the opportunity to meet with seniors at that Torigian Community Life Center to discuss the importance of knowing and understanding your financial rights. Many Massachusetts’s residents and other credit cardholders across the country are finding themselves increasingly susceptible to excessive interest rate rises and credit card fees.

Comprehensive credit card reform legislation is essential if the playing field is to be leveled between individuals and credit card companies. Given this urgent need, I am proud to be an original cosponsor of the Credit Cardholders’ Bill of Rights (H.R.5244). This is by far the most thorough bill to be addressing this matter. Not only will it offer a moderate and balanced approach to reforming major credit card industry abuses, but it will do so while fostering fair competition and free market values.

This Bill of Rights would:

• Require card companies to give cardholders 45 days notice of any interest rate increases;

• Prevent universal default practices;

• Prevent double-cycle billing practices;

• Require creditors to mail consumer billing statements at least 25 days prior to the date on which payment of the bill is due;

• Prevent creditors from using terms such as “fixed rate” and “prime rate” in a misleading or deceptive manner by establishing single, set definitions of those terms; and

• Require that all fees for subprime cards, whose total fixed fees over a year exceed 25 percent of the credit limit, be paid up front before the card is issued.

These are changes which will greatly benefit all cardholders. I am also in the process of drafting legislation supplemental to H.R. 5244 which addresses other potential abuses not covered by the Credit Cardholders’ Bill of Rights. Among other things, my bill would prevent credit card companies from charging abusively high interest rates and would curb the industry’s ability to assess inappropriate fees on their customers.

Additional resources to aide with credit issues that the AARP recommends include: Consumer Data Industry Association (CDIA) which can provide information about the Fair Credit Reporting Act and educational material for consumers (http://www.cdiaonline.org); The Federal Trade Commission (FTC) which publishes consumer brochures and booklets about credit, along with providing instructions for filing complaints against a lender (http://www.ftc.gov); and, Federal Citizen Information Center (FCIC) which publishes various pamphlets about credit issues, ranging from predatory lending practices to fraud issues (http://www.pueblo.gsa.gov).

Also, as always, please feel free to call Cheryl Gresek in my Peabody office at (978) 531-1669 if you have any further questions.

Sincerely,



John F. Tierney

Member of Congress