Chatsworth Magazine

June 3, 2002


Viewpoint

Creditors Should Not Profit Off of National Emergencies, Consumers Should Not Suffer

by Congressman Brad Sherman

When air transportation was suspended following the terrorist attacks of September 11, millions of pieces of mail that normally would have traveled by air were placed on trucks and shipped over the road. Thereafter, during the anthrax scare, delivery of mail was further interrupted. Consequently, many Americans making bill payments found that their payments did not reach their destinations on time. As a result, they were greeted with late fees and finance charges on their credit card statements in October.

Americans should know that they will not be penalized when terrorist attacks directly impact our mail. National emergencies present hardships for everyone. That is why it was so shocking to learn how consumers were treated in the wake of 9-11 by companies who unfairly levied fees for late payments that simply could not have been prevented.

Financial institution organizations that recognized how unfair it would be to impose additional finance charges and late charges on good consumers should be commended. Unfortunately, not all financial institutions followed this wise policy.

After receiving negative publicity, many financial institutions waived the fees that resulted from delayed mail, but only for those consumers who called them and insisted on relief.

In the wake of the anthrax attacks, the Republican leadership of the House Financial Services Committee and the credit industry reached an agreement regarding the treatment of late payments resulting from biological, chemical or radiological attacks on the Postal Service. However, that agreement, crafted by the Republican leaders of the Financial Services Committee and the credit industry, fails to adequately protect borrowers. In fact, the agreement would not have even applied to the events of September 11.

Recently, my colleague John McHugh (R-NY) and I introduced the Bill Payment Grace Period Act. Our legislation is designed to protect borrowers from late payment penalties incurred after a national emergency declared by the President, such as on September 11. The bipartisan Sherman-McHugh legislation, H.R. 3891, would permit the Secretary of the Treasury to designate a grace period for late credit payments when mail is disrupted as a result of events associated with a national emergency.

Consumer protection is an essential government function. I will continue to press for this important proposal and I am hopeful that my colleagues will join me in supporting this bill.

 

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