Dodd Wants Immediate Credit Card Rate Freeze

WASHINGTON — Senate Banking Committee Chairman Chris Dodd, who is fighting for his political survival, proposed Monday an immediate interest rate freeze on existing balances for the estimated 700 million credit cards in circulation.

The legislation is unlikely to go anywhere in the Senate, where business-minded Democrats would join Republicans in casting the measure as draconian and unnecessary.

Banks say that capping interest rates would cut their profits and force them to lend less money, which would reduce spending and worsen the economy.

Dodd's proposal seemed aimed at reconnecting the Connecticut Democrat with voters, many of whom have questioned his close ties to big banks after he was tied to a sweetheart loan scandal. The Senate Ethics Committee cleared him of violating any rules, although his poll numbers remain shaky.

Spokeswoman Kirstin Brost said the bill was not a political maneuver and only reinforced Dodd's views that more consumer protections were needed.

"At a time when families are struggling to make ends meet, jacked-up rates can quickly create crushing debt," Dodd said in a statement. "People need to be responsible with their money, but they shouldn't be taken to the cleaners by outrageous rates."

Congress has already passed legislation that puts new rules for credit card lenders into effect come mid-February. The law, signed by President Barack Obama in May, limits when and how banks hike rates. It does not set a cap on the amount of interest lenders can charge.

But many progressive Democrats, including Dodd, say that banks have been hiking rates ahead of the new rules. The House was expected to vote soon on legislation that would move up the enactment date to Dec. 1.

While that measure was expected to pass the House, its prospects in the Senate are dim. Banks are telling lawmakers that they need more time to implement the changes.

Comments

[sandyvi]

Too little too late - I know personally of three national credit card agencies who have raised their credt card rates across the board - for everyone- regardless of payment history, length of time with company, etd.. They would have to make it retroactive to January 2009 at least to help any consumers. The credit card companies are greedy and are taking advantage to the fact that the new credit card regulations will nto be effective until Feb 2010.

[Democratuser]

hat tip to http://financeopinionss.blogspot.com

lets get unemployment benefit extension passed

[Clearing-Brush]

If we bail out one more bank with my tax money, I'm joining the teabaggers.

[keepyourheaddown*]

GREEDY USELESS PATHETIC banks...

[keepyourheaddown*]

THE BANKS MUST FAIL!!!!

[BowlingForRevenge]

It's essentially too late for most of us.
In the few months I have had every card rate jump between 2 and 6 % points.
One seemed to become a variable rate dependent upon X points over prime.
That was my 6% card that paid cash back. I'd been letting that ride but just had them cut me a check.
I just got a 5.9% loan from my bank and paid them all off.
Robbing Peter to pay Paul, I know BUT what's done is done.
Not canceling any just not gonna use them till we're over this hump.

15 years ago I lost my home to foreclosure and my credit was destroyed. .
I paid off EVERYTHING and did NOT file bankruptcy.
I was called a fool by all my friends.
It was a steep mountain to climb back up with many lessons along the way.
My 20 yr old is a most financially savvy kid because of it.
You probably know how all my friends are fairing...
not so swell.

That what don't kill ya makes ya stronger.

[middleofthemiddle]

Bernie Sanders proposed legislation to do just this. None of the r@ts in the senate voted for it.

[NiagaraFalls]

What we need is some legislators who can see a little further than the end of their noses (or the palms of their outstretched hands). What were these geniuses thinking?

Hopefully, they won't be so naive with health care reform -if it happens. I'm sure anyone with a health issue at this time is seeing the same abuses that the "insured" are seeing: blatant abuses and scrambling to get theirs before the laws change. Many, many unnecessary procedures and higher deductibles, higher premiums, more denied claims... all of the components that lead to bigger profits and less satisfied consumer/patients whose very lives may be at stake.

When basic needs such as housing, health care, and energy are so freely manipulated by "investors" who should expect anything less than a global meltdown? We have the finest military in the world, but no one willing to protect our way of life from our home-grown, return-driven, economic terrorists!

[Troubledwawa]

Somethings got Dodd nervous. Maybe the Connecticut voters have been paying closer attention than he realized a few months ago, when he helped watered down the House's credit card bill of rights.

[Casey08]

I watched a show once - maybe on FRONTLINE - about the history and rise of credit cards in America. The sad part of the whole idea of credit cards is that they boil down to CONGRESS approved predatory lending because CONGRESS doesn't take care about you unless you give them each $100K to be their friend.

I believe that the majority of Congress's never-ending self serving, dis-functionality and debilitating amorality will continue draw our country into a downward spiral.

Until the money is really sucked out of the vacuum and public servants earn regular paychecks with health benefits like all us local yocals. Until then, they will not serve the public interest - only big business.

Take away the taxpayer paid budgets, gov't owned jets they don't deserve - just take away all their candy. And we'll see who shows up to really serve the public interest.

[LateDave]

C'mon, you know we have the best Congress money can buy!

Unfortunately, you have to outbid the folks that already own them. And they won't give back the money they got from the last group. Unlike buying paintings at auction, you are still buying from the artist, not the guy who bought the painting last time. I guess that's what makes them such a great deliberative body - they have to work out compromises between all of the fat cats that keep dumping heaps of money in their laps.

This fits in with my rant about "looking out for the stockholders" referring only to the ones sitting around the boardroom table, and my other rant about how *cheap* it is to buy a politician - if you have a defense contract, the cost to buy enough politicians to guarantee a followon contract is less than a penny on the dollar. Much cheaper than advertising--or good workmanship. I could tell ya stories . . .

[Tom95134]

Too late. Credit Card companies are already jacking interest rates as much as 50%. The nly way this will work is if Sen. Dodd manages to get the law to be retro-active and set the rates at the level charged 6 months ago.

[VoteDemocrat]

How do we hold wall street accountable? NO matter what Obama & his team tires to do the bankers always find a way to evade it.

as stated by http://financeopinionss.blogspot.com it is time to create economic growth that we can all benefit from; not the top 1% of earners. An equitable economy is a better one.

[getsit]

Too late. The damage is done. Now, if he said retro to the beginning of 2008 it would make sense.

They stuck their head in the sand, now it looks like they are worried about being reelected. I'm pretty angry and I have a very long memory. Diane Feinstein WILL NOT GET MY VOTE. She better retire.

[themainpoint]

FREEZE rates? Where has Dobbs been? He must be kidding. How about taking rates down to fair and just levels? It is a little to late to freeze, which would just lock Americans in to these obscene rates.

[LynnW49]

That's right. I continue to be amazed at how loyal to their corporate masters so many in Congress are. Freezing rates at 34% does no one except the banks any good. And by February, when the legislation that does not even have a cap in it takes effect, those rates are likely to be closer to 44%. Or higher.

People in Congress who have opposed credit card regulation and health care reform need to spend the next recess staying with a family that has been working hard but has lost a job (more likely 2 jobs), lost health insurance coverage, and has seen credit card interest rise so high that it is impossible to make payments. And after that, if they have not become proactive for reforms, they need to go a year without health insurance themselves, have their pay cut, and have ANY debt that they have be charged interest at 40%. And then we need to unemploy them at the polls.

[nualak]

It's funny, or not, that when the bank's came before Congress for one of their hearings on credit card rates, they cried that it would take them at least a year to adjust their accounting system to put a cap on their rates, yet within a couple of week's, or less, they had figured out how to jack the rates up through the roof. Fooled again Congress. When will you learn.

[mogens]

A reasonable interest rate for long term investments is 3% + inflation. Is the inflation in the USA 27%?