Dodd: Freeze Credit Card Interest Rates Now
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.