Questions of Waivers and Witnesses
Some questions have come up regarding our story from this morning on yesterday’s House Financial Services subcommittee hearing examining credit card reform. The program was to feature testimony from five card users whose interest rates had skyrocketed despite good credit ratings and histories of responsible borrowing. Those testimonies were never heard, though, because the Republicans, acting on behalf of the credit card companies, demanded that the witnesses first sign waivers allowing the companies to discuss the accounts publicly — anytime, anywhere. (Most refused, and all were abruptly cut from the morning’s program.)
Their removal, however, was more the result of political gamesmanship than it was a legitimate legal move. That is, the Democrats could have attempted to seat the consumer panel even without the members signing the waivers. But, according to a Democratic staffer familiar with the dance, the Republicans, in that case, would have presented a number of procedural roadblocks that would have stalled the hearing indefinitely. Rather than waste the entire morning fighting endless motions to adjourn, Democratic committee leaders Barney Frank (Mass.) and Carolyn Maloney (N.Y.) decided to scrap the first panel and salvage some of the hearing.
In a statement on the controversy, Maloney said:
“„In order to have a discussion that focused entirely on the substance and not on process, we are doing everything we can to accommodate any concerns that have been raised. It is my hope that we will be able to work things out between now and our next hearing, and bring our consumer witnesses back to testify.
(Regarding the second panel, which featured higher-ups from Bank of America, JP Morgan Chase, Capital One, as well as several academics, there was no controversy.)
Part of this tale makes sense: If a credit card user stands before Congress and criticizes the practice of the sponsor company, then that company should have the right to defend itself in the face of those allegations. In this case, though, the banks had little to fear: They had been given the identities of the consumer witnesses weeks in advance, according to the Democratic aide, and there was nothing to prevent the representatives of those companies (who were to testify in the panel following the consumers) from presenting lawmakers with the details of those clients’ accounts.
What made these waivers unique was just how vague they were. For Susan Wones, the Denver woman who was prepared to testify about her tough experiences with her Chase card, the entire waiver read:
“„I hereby authorize Chase Credit Card Services to publicly discuss my Chase credit card account(s) in connection with the March 13, 2008 and April, 2008 credit card hearings by the U.S. House of Representatives Subcommittee on Financial Institutions and Consumer Credit.
The use of waivers is rare, if not unheard of, in the Financial Services Committee, but other committees do employ them in situations when privacy is a concern (commonly when a hearing is investigative in nature or involves victims.) Compare the Financial Services waiver language to that used by Sen. Carl Levin (D-Mich.) during a recent investigative hearing involving credit card users.
“„I hereby authorize Chase to give all bills, correspondence and other records with respect to XXXXXXXX’s credit card account(s) to U.S. Senate staff, and to discuss such accounts with U.S. Senate staff, in connection with the credit card investigation by the U.S. Senate Permanent Subcommittee on Investigations.
Wones said that when she tried to negotiate with GOP aides about tailoring her waiver language to the hearing, one aide got “belligerent.” Another witness, Steven Autrey, said he was ignored when he made a similar request:
“„I asked the person I spoke with if they could re-word the language to be a little more restrictive, and I never heard back. And there was no interest there. But I would have signed a waiver, had it been reasonable and limited to the scope of this conversation they were trying to have today.
So the question for the committee Republicans is: Why not tailor the waivers to fit the circumstance? As Wones said yesterday: “I’ll bet none of them would sign that waiver!”
As of today, we don’t know the answer. The minority committee has not returned any calls.
