Sen. Brown Announces Support for Bill Immediately Freezing Credit Card Interest Rates

Bill Aims to Prevent Credit Card Issuers from Squeezing Americans in Final Months Before New Consumer Protections Take Effect

October 29, 2009 -- WASHINGTON, D.C. – Although landmark legislation protecting consumers from abusive and predatory practices used by credit card companies was enacted in May, credit card companies across the nation have been jacking up rates in an effort to squeeze customers before all of the new bill’s provisions can take effect.

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In response, U.S. Senator Sherrod Brown (D-OH) has joined his colleagues on the Senate Banking Committee in introducing a bill that would immediately freeze credit card interest rates, fees, and finance charges on existing balances.

“Ohioans have had enough of the abusive and predatory practices used by credit card companies,” said Brown, Chairman of the Senate Banking Subcommittee on Economic Policy, said. “Thankfully, we passed new consumer protections that are starting to take effect. Meanwhile, credit card companies are doing all they can to raise interest rates and squeeze consumers in the final months before they have to play by a new set of rules. This bill will prevent these last-ditch efforts and ensure consumers receive the protection they deserve.”

Brown fought to pass the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, which became law in May 2009. This bill prevents arbitrary interest rate, fee and finance charge increases on a customer’s existing balance. Already, the law requires 45-day notification of interest rate increases, and increases from 14 days to 21 days the amount of time before a bill is due that a statement must be delivered.

The new legislation announced this week would require companies to immediately freeze rates, finance charges, and fees on existing balances until the remaining provisions in the Credit CARD Act take effect.

The legislation is authored by Banking Committee Chairman Chris Dodd (D-CT). In addition to Brown, the bill has the support of U.S. Sens. Jack Reed (D-RI), Charles Schumer (D-NY), Robert Menendez (D-NJ), Jon Tester (D-MT), Jeff Merkley (D-OR), and Mark Udall (D-CO).

Source: Senator Sherrod Brown