Dodd Bill Would Freeze Credit Card Rates
Attempting to fix a problem that his panel helped create, Senate Banking Committee Chairman Chris Dodd (D-Conn.) will introduce legislation today to prevent credit card companies from hiking rates on existing balances. Although Congress passed sweeping credit card reforms earlier in the year — including a ban on retroactive rate hikes — the banking lobby was successful in convincing Democratic leaders to delay those changes, most of which don’t take effect until February. Many banks have taken advantage of the delay, hiking rates on existing balances in order to get in under the reform deadline.
“[N]o sooner had it been signed into law, but credit card companies were looking for ways to get around the protections this Congress and the American people demanded,” Dodd said in a statement. “This bill would end those abuses and further protect customers today.”
But Dodd’s bill, by carving out the retroactive rate-hike reform, doesn’t go nearly as far as several separate proposals to expedite all of the credit card reforms passed earlier in the year. The House Financial Services Committee approved that legislation last week, and an identical Senate bill appeared the same day.
Calls and emails to Dodd’s office seeking comment on the larger expedited reform bill were not returned last week. His newly introduced proposal explains why.