wanted if they moved to a State without an interest rate law such as South Dakota or Delaware.
So all of these companies moved to South Dakota. They moved to Delaware. No interest rates. And they charged the people in Vermont or Hawaii or anyplace else 35 percent interest rates.
So getting back to the original agreement—which I strongly disagree with— that the President and the Republican leadership agreed to, I think that agreement significantly helps the upper income people by lowering the tax rates for millionaires and billionaires, by lowering the interest rate on the estate tax, and by providing some business loans which are not the kinds of investments that can best create jobs.
(The PRESIDENT pro tempore assumed the chair.)
One of the things we have to do to protect the middle class today is have a cap on interest rates because otherwise people are getting a paycheck and then going into debt and paying 25, 30 percent on their interest rates, with the money going to a handful of banks on Wall Street.
I have introduced legislation to put a cap on interest rates, and it is not a radical idea. Right now, credit unions in this country, by law, are not allowed to charge more than 15 percent, except under extraordinary circumstances. By and large, that has worked for about 30 years. So if you get a credit card through a credit union, you are going to be paying in almost every case no more than 15 percent. That was developed by Federal law.
Do you know what. I have talked to the credit union people in Vermont and all over the country. Credit unions are doing just fine. They are not the ones that came begging the American taxpayer for a huge bailout. So for 30 years they have survived just fine on a 15-percent cap. But our friends on Wall Street who caused this recession, our friends on Wall Street who needed a welfare check from the American people in order to survive, who today are earning more money than they did before the bailout—we don't have any cap on the interest rates they can charge.
In my view, if the credit unions have survived and survived well with a 15percent maximum interest rate cap— the most they can charge—and it worked for credit unions, it can work for the private banks as well. That is what we have to do.
According to a recent article—this is a year ago—in the Los Angeles Times:
Chris Collver, legislative and regulatory analyst for the California Credit Union League, said that a rate cap hasn't hurt business for nearly 400 credit unions represented by his organization. "It hasn't been an issue," he said. "Credit unions are still able to thrive."
Here is my point. The middle class is hurting. Unemployment is outrageously high, poverty is increasing, there are 50 million people with no health insurance, there is a gap between the rich and everybody else, manufacturing is collapsing, and jobs are going all over the world—China, Mexico, India. We have to start protecting the middle class of this country.
There are a number of things we have to do. I think one simple thing we have to do is tell the crooks on Wall Street—and I use that word advisedly— history will prove that they knew what they were doing. They were dishonest. The business model is fraudulent. There are honest people who occasionally make a mistake, but there are other businesses that are based on fraud and assume they are never going to get caught. When they do get caught, the penalty they have to pay is so little that it is worth it because they end up getting caught 1 out of 10 times, but they make a whole lot of money, and then they pay a fine and somebody goes to jail—very rarely, though—for a year. That is what you are seeing on Wall Street.
I think if it has worked very well for the credit unions, it can work for the private banks as well.
Mr. President, in the financial reform bill, did we address this issue? Yes, we did, and no, we didn't. We said the credit card companies have to be clearer and more honest about their interest rates and how much borrowing money will actually cost because before they would say: You will get a zero interest rate or a 2-percent interest rate, but most people didn't read the small print on page 4 that said they could raise interest rates at any time.
We have made some progress on at least them being honest with the American people about what their credit card costs will be, but that is not enough. What we have to do is put a cap on interest rates. It has worked for the credit unions. I believe it can and should work for the big banks as well.
Mr. President, what I want to do now is just give you some examples about— you know, sometimes here—and I am guilty of it as well—we talk in big numbers—a billion here and a trillion there—and it adds up. But I think it is also important to look at the flesh and blood that is out there, the real suffering people are experiencing.
A while back, what I did was I sent an e-mail out to people in Vermont. It was a very simple e-mail. It said: Tell me in your own words what is going on in your family. What is going on in your lives, in the midst of this terrible recession?
Again, it is important. Yes, we know unemployment is 9.8 percent and the real unemployment is 16 percent, 50 million people don't have any health insurance, median family income has gone down, poverty has gone up, and 25 percent of our kids are on food stamps. It is important to know that stuff. But behind all of those statistics is flesh and blood and good people who are doing everything they can to survive with a shred of dignity in their lives.
I did this last year. I sent that e-mail out to my constituents in Vermont, and I said: Write back to me. Tell me in your own words what is going on in your lives. I cannot remember how many we received, but there were hundreds and hundreds of responses. It quite amazed me. Frankly, it was hard to read these letters from decent, good people about what was happening in their lives.
What I said to them was this: If it is OK with you, we will publish what you have written. We won't use your names, of course. I don't want to embarrass anybody. We will read some of these stories on the floor of the Senate.
That is what I did. I didn't read them all, but I read some of them because it is important for us sitting here inside the beltway not to forget what is going on in the real world, whether it is Hawaii, Vermont, California, or anyplace.
Here are letters from two mothers in Vermont. First is from a woman in a rural area. The second is from a single mother in a small city. In Vermont, frankly, we don't have too many big cities. In my very beautiful State, where I expect the weather is very cold today, our largest city is all of 40,000 people. That is Burlington, VT, and I was honored to have been the mayor of that city for 8 years. Certainly, the vast majority of our people live in towns of less than 1,000, and there are towns of 500. For a while, I lived in a town called Stanton, up in the Northeast Kingdom of Vermont, which has probably 150 people in it, and that is not uncommon in Vermont. There are a lot of small towns.
Here are the two letters.
A woman in the rural area says:
My husband and I have lived in Vermont our whole lives. We have two small children, a baby and a toddler, and have felt fortunate to own our own house and land. But due to the increasing fuel prices, we have at times had to choose between baby food and diapers and heating fuel.
In Vermont, heating fuel gets up there when the weather gets 20 below zero. It is an expensive proposition.
Continuing:
We have run out of heating fuel three times so far, and the baby has ended up in the hospital with pneumonia two of the times. We tried to keep the kids warm with an electric space heater on those nights, but that just doesn't do the trick. My husband does what he can just to scrape enough money for car fuel each week, and we have gone from three vehicles to one just to try to get by without going further into debt. We were going to sell the house and rent, but the rent around here is higher than what we pay for our mortgage and property taxes combined. Please help.
That is what she asked of me and her government—"Please help." She didn't ask me to lower taxes for billionaires. She is speaking for tens of millions of people in this country who are in desperate need of help.
Here is another letter that came from a woman who lives in a larger town:
I am a single mother with a 9-year-old boy. We lived this past winter without any heat at all.
