00:00Thank you Mr. Chairman and welcome Mr. Secretary. A little over 30 years ago I
00:05introduced a bill in the House of Representatives that banned smoking on
00:09airplanes. I was sensitive to the environment in the airplanes, the safety
00:14of it, public health and the like, and thought the flying experience would be
00:19improved if smoking was removed and it was. I'd like to address another issue
00:24about the quality of the experience in the airplanes today. After you're in your
00:31seat and have your belt fastened and you're on your underway, there's an
00:38announcement usually comes around in most airplanes not about just critical
00:43safety issues but incredible credit card and frequent flyer opportunities. It's
00:49almost like the farmhand force-feeding a goose on his road to foie gras the
00:54information that is jammed on you and then the flight attendants walk up and
00:58down the aisles and pass out these cards for applications for their branded
01:02credit cards. They stand at the door as you leave the aircraft. It's a
01:06heavy sell. It's a hard sell and you ask yourself why? Why are they spending so
01:12much time doing it? I think you know the answer because major airlines make more
01:17money off their branded credit cards in your pocket than they do off their
01:21aviation operations. It turns out those big airlines are actually credit card
01:26companies that happen to own a few airplanes. So the question I have for you
01:30is who polices the ranks when it comes to these frequent flyer programs? There's a
01:35lot of expectation and a lot of investment in those programs by
01:39millions of Americans. I know that you've initiated through the administration an
01:45interest in this field. Can you tell us more? Yes, thank you. While we are of
01:50course not a banking regulator, we are an airline regulator and as those business
01:55lines get blurred, we're recognizing that our responsibility to protect passengers
02:00may well come into play. We share your concerns about the rights of passengers
02:05who count on these or are told about these rewards programs. DOT has launched
02:11a review of U.S. airline reward programs to determine if there are
02:17any unfair and deceptive practices and will take enforcement action if
02:21appropriate. That includes analyzing consumer complaints and meeting with
02:26airlines and we're considering soliciting further information. The other
02:30thing I would mention, having noted the the boundaries of our lane, is that we're
02:34coordinating with CFPB, recognizing that there is a mutual concern here. In fact,
02:40we plan to convene a joint hearing with CFPB on May 9th with industry
02:45representatives, labor leaders, and consumer advocates to talk about
02:49competition issues and challenges that consumers are experiencing with some of
02:52these airline and credit card reward programs. I'm glad you're doing that. I
02:57understand you have a jurisdiction that isn't exactly consumer protection, but
03:01this is really an entity that's become so important to so many families across
03:07America. We have troubling reports that airlines are devaluing points, making it
03:12harder for consumers to achieve promised rewards, and at certain times the cost of
03:16purchasing points from airlines' websites may be three times the value of the
03:20points at redemption. The list goes on and on. There is no policing the ranks of
03:25these airline credit card companies when it comes to this benefit. I have a minute
03:30and a half and I wouldn't, I'd be remiss if I didn't mention location, location,
03:35location. I'm glad you led off your statement on rail service with Chicago,
03:41Illinois. You can understand my interest in that. I hope that we could find a way
03:46to finally make an investment that will dramatically change the performance of
03:50railroads across the United States dependent on efficiency at Chicago. We've
03:56had some horror stories in the past. We want to get those behind us. What is your
04:00thinking on that? We certainly believe that there is enormous opportunity for
04:06investments to continue to yield improvements and we know how important
04:10that is to your region. Welcome further discretionary grant applications in that
04:16regard that would be helpful, and I know our personnel have been engaging with
04:20teams from the region to discuss this too. Thank you very much, Mr. Secretary. I
04:24yield back the balance of my time.
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