Barney Frank to Banks: Play Nice or Else

(AP)  Rep. Barney Frank, the tough-talking liberal ushering through a major rewrite of rules governing Wall Street, sounded a warning shot on Thursday to big banks: Start playing nice or Congress will make your life even more difficult.

Last spring, Frank helped push a bill through Congress that imposes strict new rules on lenders, including a limitation on when and how banks hike rates. Most of the rules will take effect in mid-February, a date set by Congress to give banks time to prepare for the changes.

But the Massachusetts Democrat, who chairs the House Financial Services Committee, said at a hearing on Thursday that lenders have abused the grace period by using the time to hike rates ahead of the new rules.

Read more on the "credit card loophole" from the "CBS Evening News"

Related: Card customers' online revolt

"It is very clear that this is the kind of protection that shouldn't wait and we should move forward," Frank said about the new credit card rules.

Frank also said he is open to providing relief to merchants that pay heavy fees to banks in exchange for accepting credit cards from their customers. Thursday's hearing was focused on legislation by Rep. Peter Welch, a Vermont Democrat, that would regulate those fees.

The hearing included testimony from Kathy Miller, a grocery store owner in Elmore, Vt., whose voice cracked with emotion as she described the strain put on her business because of the high fees, known as "interchange," levied by credit card companies.

Some lobbyists have speculated that Frank's sudden interest in the bill is a warning to banks to tone down their opposition to his broader effort to impose new consumer protections. The financial industry has launched a multimillion-dollar effort to try to defeat legislation backed by Frank and President Barack Obama that would create a new federal regulator to police the fine print on such products as credit cards and mortgages.

Banks contend that tougher restrictions and the creation of a new federal regulator will hurt the availability of credit. In an effort to counter the backlash in Congress and elsewhere, some banks have announced they will adopt consumer-friendly policies on their own.

This week Bank of America Corp. pledged not to hike credit card interest rates or fees before February.

Frank called Bank of America's promise "welcome" but added that lenders have otherwise abused the grace period given to them by Congress. Further, he said, the bank's pledge was an indication that credit card companies could be forced to comply with the law sooner than planned.

[hungry1968-16]

That's great talk....

Now why don't you back it up with ruthless and brutal legislation AND enforcement?

[steeepe]

Good idea, but the legislators have been bought off. They don't work for us, they work for the special interests.

[Jade_River]

Wow some people really have an issue with sexuality don't they. Must be scary inside their heads. Get a little anonymity and they can play out all their fantasies under the guise of hetero disgust. Anyway, there is no way "play nice" is going to work. You are not going to get these Greed Behemoths to change their ways because they are out of human hands and are a tangled mess of gotcha contracts, 4 point font, 20 page terms conditions, bloated executive pension plans, and bottom line bottom diggers. Losing the ability to get credit from these pirates would be the best thing that could happen to this country. Have you ever tried to appeal to their sense of customer service, ethics, or morality. Their response is such a joke that it always makes me laugh out loud. The one thing that gives me the confidence to get through all this hardship caused by their graft, blackmail and extortion is that I am a bright guy and I know it is immediate and temporary and can not be sustained. Just like the culture of consumerism they have become slaves to instant gratification. They, and the economy will come tumbling down, and they are on such a crash course it won't be long. When that happens struggling middle class people such as myself will be emancipated and we can start putting together an economy that benefits everyone where money doesn't make money, but rather brings value to your life and you are no longer paying $250 for a $24 pair of jeans from China, or $35 for a 35 cent overdraft. I suspect the banks execs will be securitized behind their gates, and I for one will help to keep them their. Ironic isn't it. They have built their own prisons.

[burneb]

Amen.

[Constitionalist]

I vote for a return to justice old west style. Whenever these smarmy bank thugs pull money schemes to defraud average workers, we should string them up for all to see. The same for identity theives and those who intentionally borrow without the intention of ever paying back.

[stuart-johns2]

Well I don't reccommend the "old west style" but I do agree that somewhere along the line and for some reason, America lost its moral compass. If the wild west could bring that back I'm all for it. But the fact is the wild west had it's share of scoundrels too. The only difference is that back then they would be ashamed. Now that behavior is a badge of honor.

[Orlandojon]

HA HA HA...Barney Fife the "Dancing Queen" is in the pocket of banks. What a joke

[jackp32]

Tell the House Banking Queen that you do accept advice from someone who was censored by the House sometime ago for running a gay disorderly house in his apartment with his roommate.

[HGOODGUY]

AH YESSS!
WHAT WOULD WE EVER DO WITHOUT THE HOMOPHOBES

[Sky017]

Oh please... isn't 'Play nice' the same as having faith in them to do the right things?

We just had an experience of 'have faith in us' and deregulate. That turned out to be a Supreme Catastrophe.

We don't tell anyone, play nice with the car. There are laws about when you can get your license, laws about drinking and driving, and laws about road use. And all those laws are ACTIVELY policed and prosecuted upon.

So, just enact the banking laws to protect the people. That is your job. Stop this *****-footing with Corporate America, which got us into a helluva lot of trouble.

Legislate and protect the People!

[Questionews]

"Play nice or else!"...........Or else I'll tape you to a chair, put on my chiffon teddy with the pink boa & give you a lap dance that you will never forget!

[Mortarman29]

Threats from Little Boy Lollipop.

[Mortarman29]

Why is ANYONE listening to Barney Frank? What set of American misfits elected this guy?

[all_father]

From the article: "Banks contend that tougher restrictions and the creation of a new federal regulator will hurt the availability of credit."

Actually, not. If the current crop of thieves doesn't want to play nicely with the consumer, then new lenders will come along who will. Again, the consumer controls the marketplace with their dollar.

Finally, having Barney Frank acting "on behalf of the consumer" is very much like allowing the fox to guard the hen house. Hopefully, the voters in Massachusetts will send him packing at the next election. He and his cronies have done enough damage during their time.

[steeepe]

To make a law that goes into effect long after banks have had the chance to exploit the current system is stupid. They should have required the law to take effect within 30 days. That's typically all the notice banks give to customers. Usury is supposed to be illegal and immoral, but banks charge usurious fees. They claim they need those fees to remain profitable because of all the deadbeats. Not our fault that the banks sign up high-risk people. They then charge them more than low-risk customers, which only increases their exposure to risk.