Push to curb credit-card rates fades

Democrats resist consumer outcry

By Michael Kranish, Boston Globe Staff  |  November 18, 2009

WASHINGTON - Efforts in Congress to cap credit-card interest rates are faltering because of opposition from Democrats and a lack of specific support from the White House, despite growing consumer outrage over a rush by banks to impose rates as high as 30 percent.

During the 2008 presidential campaign, Barack Obama vowed to back a strict limit on credit-card interest rates. But the White House is not yet behind any particular plan this year. While Obama has chastised credit-card companies, his spokeswoman declined to say this week how he planned to follow through on his campaign pledge.

(Time to invoke a Presidential Lemon Law on Osama. What a turd.)

Obama finds the behavior of credit-card lenders “outrageous’’ and “looks forward to reviewing additional legislation that caps interest rates,’’ but he has not taken a specific position, spokeswoman Jen Psaki said.

Vice President Joe Biden, whose home state of Delaware is headquarters to many credit-card companies, did not respond to requests for comment.

The Senate soundly defeated legislation in May that was introduced by Senator Bernard Sanders, the Vermont Independent, to cap most credit-card interest rates at 15 percent. Nearly half of the Democratic senators joined Republicans in defeating the measure, 60 to 33.

Consumer groups say the problem of skyrocketing interest rates has only worsened since that vote, as banks scramble to boost rates in advance of a new rule scheduled to take effect in February, requiring banks to give consumers a 45-day advance notice of rate increases.

Sanders said many of the credit cards in the hands of American consumers are issued by four banks that received taxpayer bailout money after last year’s economic meltdown: Citigroup, Bank of America, JP Morgan Chase, and Wells Fargo.