Back on May 22, 2009, President Obama signed into law a bill sponsored by Senator Chris Dodd (D-CT), overhauling how credit card companies. The bill was a bi-partisan effort, passing 90-5, with major portions set to take effect in February and August 2010. The bill puts a stop to credit card companies’ predatory interest rate hikes, high fees and other practices that have previously gone unchallenged and unchecked. Giving the bill a 90 to 5 vote was a key element; showing that all agreed to put an end to banks and financial institutions preying on unsuspecting consumers.
Banks and financial lending institutions decided to counter the impact of this legislation by implementing a steady rise in credit card fees and rates that began shortly after the passage of the bill and continues to this date.
At the beginning of November, the House passed legislation to move the Credit Card Act effective date up to December 1st; three months ahead of the original date when major parts of the bill would take effect. One would think that since the bill passed the Senate 90-5, putting a freeze now on credit card companies to stop jacking up their rates would have at least seen close to if not the same bi-partisan support. Instead, Senate Republicans blocked the effort on Wednesday to immediately freeze increases in credit card interest rates, fees and finance charges.
“We worked long and hard to enact the safeguards included in the Credit CARD Act,” said Dodd. “And no 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. This bill would end those abuses and further protect customers today.”
Unfortunately, the Senate schedule is packed with nominations, health care and appropriations bills, leaving no time for a prolonged floor fight over credit cards. This meant that moving the implementation date from February 1, 2010 to December 1, 2009, required bi-partisan support. Dodd, on Wednesday afternoon, asked for unanimous consent to move the bill forward. “On behalf of several senators on this side of the aisle, I object,” said Sen. Thad Cochran (R-Miss.), which effectively killed the measure to freeze the credit card companies current interest rate hikes, fees and charges.
In May, there was a glimmer of hope when the party of no came out and voted on the side of the American people by passing the Credit Card Act. On Wednesday, they had yet another opportunity to do so but instead chose to ignore the American people and came out and voted on the side of the special interest groups and, in this instance, the financial industry, i.e., the banks and lending institutions, which represent some of the largest donors to lawmaker campaign war chests.
What is even a greater slap in the face for the American people; Senate Republicans chose to do this right at the height of the holiday shopping season. No doubt, small businesses would have benefited from a freeze on credit card rate hikes at this time of year. Bah, humbug! I will not use credit cards during this holiday season for any reason whatsoever!