Madam Speaker, I am proud to stand here as a New Democrat and call for a credit card accountability, responsibility and disclosure act to be created. It is important for us to do this. With the economy in its current state and as we look for solutions to get out of this, it will require a team effort. That team effort is government and business taking responsibility. We know the banks got off scot-free in all of this. It is time for them to come to the table and produce a fair and balanced approach to its borrowing practices.
I want to go back to something that is really important. Back in 2003, John Manley, the Liberal minister who was known as the minister of everything because he had received so many portfolios, came to the House of Commons. He tried to negotiate with the parties to deregulate the banking system and make it more like the American system. I remember the debate quite well.
As a New Democrat, I opposed that. I give commendations to the Bloc members because they also opposed it. At the time, the Conservative Party/Alliance Party were excited about the issue and tripped over themselves to support it. If we had not stopped Mr. Manley and the Liberals, we would have had a far worse situation than we have today. Therefore, we did them a favour. We prevented the further deregulation and the creation a banking system similar to the American one.
The member from Winnipeg, who sits next to me, was quite active in that campaign and did a terrific job to ensure that people understood the issue. Canadians spoke loud and clear and said that they did not want that happen to our banking institutions.
Today we are starting to see what is happening. Over a series of time, there has been an effective marketing campaign to encourage people to sign up for credit cards, whether it be the retailers that offer credit card interest rates of up to nearly 30%, or the banks that offer up to 20% interest rates.
A number of practices are simply unfair. The credit card companies have made record profits over that time and they continue to make profits beyond the scope and pale of what people can even comprehend, because they are struggling to get by. It is time to take a reverse approach. Let companies have a profit, but it has to be fair and balanced. Let us redirect that income back into the economy as a stimulus and ensure we can settle people so they will not get further behind, which would help stimulate the economy.
We know the banking institutions are not doing that. We know the government is not releasing some of its programs and services in an expedient way. In fact, I was looking at some of the Industry Canada announcements, going back a couple of years ago. Money has never been spent, such as money for infrastructure, for example, the border infrastructure fund. There are many more examples.
One thing we could immediately do to alleviate some of the egregious attacks on consumers and their families is to put in a fair set of regulations. For example, I have a CIBC Visa card, which costs me $200 a year. There is no reason why that charge should be allowed. Two hundred dollars is quite a bit of money. On top of that, the service that one receives does not warrant that charge. At least that should be examined.
The United States recognizes this. The Obama administration is moving forward with a package that is going to ensure a better sense of balance.
When I talk about balance, one of the worst things right now for those who use credit cards is if they do not pay off the full balance, they get charged the interest rate on the full balance. For example, if people have a $500 credit exchange during the month and someone in their family gets sick or there is a crisis and they cannot pay back the full amount, they have to pay the interest on the full amount. That is unacceptable. It should be on the amount that is actually on the card. Once again, that would put money into the pockets of people so they could buy groceries, or pay their landlord, or pay for heating or cooling, all those different things that are important essentials.
The community of Windsor West has had an unemployment rate of 10% for a number of years, yet the government during the election said that there was nothing wrong with the economy. We understood the warnings with the threats to the auto industry ages ago, with no help or assistance from the government.
Unemployment is now at 15% and even higher given that many people have given up even looking for work. We are trying to find our way through it. The government needs to be responsible here and look at retipping the scales a bit. The credit card companies and the banks cannot have such a big advantage. Canadian taxpayers have had to buy up loans from the banks and support their systems. Taxpayer money has to be injected into the market economy because the banks will not provide that.
I have a couple of examples. Even before this crisis, an auto parts supplier in the county of Essex was producing parts for the Ford Escort and selling very well and doing very well in the market, It had workers making $12 or $13 an hour, not a rich salary, and they had modest benefits. The company brought in automation. It had a good assembly rate and a good quality rate. It had problems because the banks, even before that, changed their borrowing practises on them just because they happened to be in the sector. It was not because they were bad customers or that they were looking at closing or having a problem with a particular vehicle at that time. It was because they could. The bank actually raised the company's interest rate to a point where it ate into its entire profit from what it was getting from Ford Motor Company to produce the vehicle parts.
The problem is that there was nothing in there that was really productive, whereas those workers were doing what they needed to do every day. I do not think $12 or $13 an hour is a wage that one could really say is a Canadian dream. It barely lets people get by. Meanwhile, the banks were undermining that successful venture.
When we look at this motion and we talk about prohibiting the unfair application of credit card payments, protecting cardholders who pay on time, limiting abusive fees and penalties, prohibiting issuers from using a consumer's card history with another creditor to raise interest rates, prohibiting issuers from charging interest on debt that has already been repaid, ensuring that cardholders are informed on the terms of their account, and protecting young consumers from aggressive credit car solicitations.
Those are reasonable things to do. I would add another one that I do not believe has been addressed today, and that is the issue of privacy and security of information.
For those who are not aware, the CIBC has decided to outsource its credit card processing to the United States. That means that all our credit card information is now available through the Patriot Act to the Department of Homeland Security, the CIA and the FBI. All those organizations need to do is contact that credit facility and provide that information. They are not even allowed to tell CIBC that a person's information has been taken. As well, there is no process in place as to how our personal information is used within those agencies as to whether it is dispersed or scrubbed after an investigation is done.
The government, similar to the past one, has been remiss. We need to have an international treaty to protect privacy related to that and it has not done that. In fact, ironically, we have learned that even some Canadian government offices outsource some of their actual payment systems to the United States. That information once again leaves the country and becomes susceptible to the Patriot Act.
I want to go back to the economy right now. It is a fair and balanced approach when we start to look at the indebtedness of Canadians and what we could do to actually stimulate the economy. When we consider household debt right now, it is quite significant. It has gone up a number of stages over the last number of years, including that 84% of people have some type of a debt.
I would argue that this a very modest and responsible way to approach things. Everybody has to chip in right now to do the things that are necessary for our country to continue to exist and the middle class to flourish. The banks and credit card companies have an abysmal approach to lending practises that needs to be redirected. It is stimulus that will be good for many communities, as well as a local stimulus. We would stop a system right now that is counterproductive and, more important, is putting so many people behind at a time when they do not need to be.