Evan Bayh: “because of the events of September 11, tens of thousands of airline passengers who bought airline tickets before and…”

“because of the events of September 11, tens of thousands of airline passengers who bought airline tickets before and after that date will find that the flight they wanted is unavailable. How do these ticket holders get another flight or get their money back? If they paid cash for their tickets, then, they are out of luck if the airline goes bankrupt. There is no guarantee that another airline will honor the ticket. If they bought their ticket using a credit card, then as I understand it, Federal law protects them, but at a tremendous cost to those few banks who process airline tickets. The ticket holder has the right under Federal law, the Truth in Lending Act and Regulation Z, to seek a refund from their credit card issuing bank. If the airline is unable to cover such charge-backs, the loss is borne by the acquiring or processing bank. The burden on the banking system as a result of the events of September 11, and the requirements of Regulation Z, is not small. About $5 billion of advanced ticket sales by credit card exist at any given time. I doubt that anyone anticipated that Regulation Z would be used in this manner after an act of war shut down the entire air transportation system and caused the failure of perhaps several airlines. There is a simple and equitable way to protect these passengers who paid cash and have no recourse. It can also relieve some of the burden that the law puts on a very few banks.”