Dodd: Freeze Credit Card Interest Rates Now

By: Brian Montopoli
Topics: Congress

(CBS)

Senate Banking Committee chairman Chris Dodd on Monday announced plans to introduce a bill to immediately freeze credit card interest rates on existing balances.

In May, Congress passed The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, which outlaws arbitrary increases in interest rates, fees or finance charges. But Dodd argues the new bill is needed because credit card companies have been "jacking up" interest rates in "a last ditch effort to squeeze customers" before the Credit CARD Act goes fully into effect next February.

It is unlikely that there are the votes in the Senate to pass Dodd's new legislation, but it may help him in a 2010 reelection campaign that is expected to be hard-fought. The longtime Democratic senator from Connecticut has faced criticism this year amid reports that he received preferential treatment from Countrywide Financial Corp. in securing a pair of home loans. He was cleared of wrongdoing by the Senate Ethics Committee.

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

The House has been expected to pass legislation that would move up enactment of the credit card regulations up to Dec. 1st, but the Senate is seen as unlikely to follow suit amid complaints from banks that they need more time to comply with the new rules.

Brian Montopoli
Brian Montopoli is the senior political reporter at CBSNews.com.
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by BobnOhio November 2, 2009 1:06 PM EST: So, let me get this straight.

We as taxpayers bail out the banks because they've been so inept at investing our savings (which are paying like 1% interest) that they're about to go under.

Then, at the height of the recession created by their ineptitude, (and when they're borrowing from the Fed at the lowest rates ever) they decide to hike rates on good customers who are trying to adapt to living with reduced incomes or unemployment money. Why? Simply to beef up their profits.

So, their customers are forced into bankruptcy because they can't make the payments on debt that's accruing 30% interest instead of 4.99%.

Guess what the next chapter in this story is? "Uhhhhh... Mr. Obama, we need another $800 billion because all our credit card holders went bankrupt"....

If the legislature won't act in the interest of the consumer to prevent these abuses, then maybe they should act in the interest of the banks to keep them from imploding AGAIN as a result of this most recent round of stupid decisions by their executives.; Reply to this comment

by ge_586 November 1, 2009 12:02 PM EST

My credit card interest rate with Chase bank has been around 9.9 percent the entire time I have had this card. Now Chase bank has decided to jack my rate up to 22.75 percent for no other reason than they want to make more money. That is what is actually on the form and I quote: " The principal factor we considered in amending your account is maintaining profitability on your account." In simple terms, they want to rip people off while it is still legal.

Reply to this comment


by payasigo November 28, 2009 12:59 AM EST: I got the same letter today-going from 9.9 to 18.24(minimum will go way up also based on what I've read today. Got same message *maintaining profitability". Never been late with any card etc.--outrageous!! On fixed income over age 70 and this one and BofA (same thing months ago will probably force me to do something I never dreamed of doing to keep my home and stay afloat. Dodd and Frank are a joke--both should be booted out.I cannot believe what is happening in our country. Change????Yeah, right--we are getting change alright--we're all getting rained on and especially the poorest people who voted the Chicago crowd in. Washington has turned into Chicago politics--Czars replace aldermen etc.
Again, this is outrageous!!! The thought of filing is making me sick already. Dodd should make this retroactive back to 1/1/09. LOL....


by owlgal October 27, 2009 6:38 AM EDT: The banks are finding the loopholes and taking advantage of them.
If this bill can't pass, it is a sad commentary on the elected officials we have representing us. Apparantly they are looking out for the banks and need to be ousted.; Reply to this comment


by rpmcestmoi October 26, 2009 11:31 PM EDT: Absolutely. Whatever happened to usury laws????
30% being charged by Citi, I read. Disgusting. Nobody protects the people who vote, but congress protects the companies who don't have a vote.
What is wrong with this picture??; Reply to this comment


by payasyougo October 26, 2009 8:49 PM EDT: Freeze them now that you've allowed them ample time to raise them. You putz.

The taxpayer is loaning the banks money at 0%. Mandate that credit card rates can't be higher than 6 point above the fed funds rate or 3 points above the T bill rate.

Pick a number.

And why has Barney Frank and his team not passed any legislation to prevent the next financial melt down. They've had a whole year already.

All talk. No action.; Reply to this comment


by bobnjersey October 26, 2009 8:48 PM EDT: [He was cleared of wrongdoing by the Senate Ethics Committee. ]

aren't they all?

never know when one of the senators on the ethics committee might be under scrutiny for some of that 'wrongdoing'.; Reply to this comment

by nowhiningallowed October 26, 2009 8:31 PM EDT

The percentage rate payday loan so-called businesses charge is hundreds and hundreds of percentage points. So, why isn't Congress going after these types? My rate went down. I don't rely on my credit card to fund a lifestyle I'm not entitled to, which includes the latest tech gadgets and 47" flat screen tv's. Never lived beyond my means and never will and I don't make much money. If I made a bill, I paid early and much more than the minimum. I also made sure I never was more than thirty-percent of my credit limit. I really don't feel sorry for those who are in the predicament they find themselves in at the present time. I also don't fault the credit card companies. Getting a credit card is making a contract without any secured assets. Credit card companies should be allowed to charge whatever rates they want to given this lack of secured assets on the part of the borrower. And, where does Dodd get off sounding like he cares? This was the same man who knowingly took sweetheart deals on his mortgages, accepting lower rates than the average "shmoe", merely because he was Chris Dodd, Super Pol. His heading up the committee is like putting the fox in charge of the chicken coup.

Reply to this comment


by democracy1 October 26, 2009 9:04 PM EDT: There are those like yourself who made very responsible use of their cards and made payments on time who have had their rates doubled! Care to guess why? The credit companies decided that they weren't making enough money off of them!


by mkeely October 27, 2009 10:24 AM EDT: Credit card companies should not be able to raise interest on existing debts. More people should be as responsible as you are, but we all know they are not. The credit card companies know this more than we do and bank on it. Allowing the government to step in and protect the average person can't be bad.

Democracy1 makes a good point about punishing responsible borrowers.
Example: Bank Of America is now introducing penalties for not carrying a balance. So what are the cardholders to do now? Close the account? Credit rating goes down when you do this. This is an attack on people like yourself who just opened a credit card to improve the credit score to begin with.

You CAN'T win in this system. The banks are allowed to do WHATEVER they feel like with our money. When profits fall (god knows how thats possible) they just take GOVENRNMENT LOANS as bailouts. So much for living by their code of non-intrusive Gov. Why any citizen would defend these lying, profiteering, hypocrites is beyond me. They would not lift a finger for you.


by jt92202 October 26, 2009 8:03 PM EDT: Funny my rates went down!; Reply to this comment


by skeetchamp October 26, 2009 7:39 PM EDT: rates need to be frozen retroactively.; Reply to this comment

by lkrupp October 26, 2009 7:24 PM EDT

No wonder Communism failed miserably. The marxist/socialist nutjobs posting here obviously have no clue as to how an economy works. Price and wage control (which is what they are clamoring for) has never, ever worked. Neither has centralized control of the economy. These were all stalwarts of the Communist movement at the dawn of the twentieth century. We all know how that worked out don't we. Now these same spastics are labeling borrowing money as a human right? The government should control interest rates. I'll remember that the next time my brother-in-law wants to borrow five hundred bucks to make a car payment. If I refuse to lend him the money at a rate HE deems fair I am trampling his human rights according to the screwballs posting here.

Reply to this comment


by democracy1 October 26, 2009 8:00 PM EDT: You think that being against usury is a Communist issue? You have "issues'!
LMAO!

You're the screwball, kiddo!


by mkeely October 27, 2009 8:28 AM EDT: So we should allow the banks to up interest rates on existing debts and bankrupt everyone? Yeah, you are right. Stick it to those pinko commies.

You charge your brother in law interest? Sh*t, you ARE a capitalist.

RETARD.

We bailed out these banks, they DO have to answer to us.