ADDRESSING THE CONSUMER CREDIT CRISIS

WHEREAS, the U.S. Conference of Mayors recognizes escalating problem of consumer credit in the United States; and

WHEREAS, according to the Federal Reserve, the total debt by consumers increased by $15.3 billion in the month of March 2008 alone, which is more than double what was expected; and

WHEREAS, according to a 2004 study conducted by the Federal Reserve, 46% of American households carry credit card debit; and

WHEREAS, almost 30% of households in the lowest income quintile also hold credit card debt, which is double the amount that held debt in 1989; and

WHEREAS, the increased inflation and harsh economic period in America has forced many Americans to increasingly rely on credit cards to make ends meet; and

WHEREAS, credit card companies have used questionable practices in their establishment of hidden fees, penalties for paying-off credit cards, and impenetrable credit card agreement language;and

WHEREAS, credit card debt among those that are 18 to 24 grew 22%between 1989 and 2004; and

WHEREAS, proposed federal legislation such as the Credit CardHolder’s Bill of Rights and the CARD Act can work to provide assistance to credit card holders; and

WHEREAS, the current foreclosure crises is related to an overarching credit crises where credit has been issued to those with little to no financial literacy at exorbitant rates replete with hidden and excessive fees on predatory basis,

NOW, THEREFORE, BE IT RESOLVED, that the Conference of Mayors calls upon the U.S. Congress to pass legislation that:

• Provides further regulation and supervision of the credit card industry to ensure compliance with existing and new regulations;

• Prevents the credit card industry from changing terms of the contract and the interest rate in an inequitable manor;

• Encourages payments to be made to the balance with the higher interest rates and prohibits unreasonable deadlines;

• Requires credit card companies to provide a more reasonable means for a consumer to pay on time and not incur late fees;

• Ends duplicate and exorbitant fees charged by credit card companies;

• Increases the level of disclosure of terms that are entered into under the credit agreement;

• Provides greater protection for those under the age of 21 when entering into a credit card agreement; and

BE IT FURTHER RESOLVED, that Mayors examine what credit counseling services their cities can provide to those that are victims of predatory credit practices such as, but not limited to, call-in credit help centers, credit/personal finance workshops, and/or official action taken against those companies that continually engage in deceptive practices.