Dodd Claims Credit Card Reforms, Despite Delay, Prevent Recent Rate Hikes « The Washington Independent
Congressional Democrats — the same Democrats who delayed implementation of their credit card reform bill for nine months — just didn’t anticipate that the country’s credit card issuers would race to exploit that postponement by hiking rates in the meantime.
Or did they?
In a letter today to the Federal Reserve and other key financial regulators, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) called on the officials to examine a section of the new law, which doesn’t take effect until next February, requiring the companies “to review every six months any account where the interest rate has been raised since , and reduce the rate if the review indicates that the cardholder has become less risky or the circumstances that warranted the increase are no longer present.”
In addition to any future interest rate increases, all interest rate increases that have taken place this year will become subject to the mandatory 6-month review. I ask you to immediately notify all credit card companies under your respective jurisdictions that they will be held accountable for all interest rate increases during this time period and will be subject to the review requirement once it takes effect.
Numerous reports in recent weeks have indicated that card issuers have raised rates and lowered limits on even their most reliable customers. If Dodd is right here — and if the law is enforced — those customers may very well see there rates reduced to prior levels in February. Of course, the companies can still make out like bandits in the meantime.