Dodd aiming for Cap on Credit Card Interest Rate/Merchant fees

[Kdillard]

http://www.baltimoresun.com/business/bal-dodd-credit0523,0,2063810.story



The most sweeping reforms of the credit card industry in two decades were signed into law Friday, curtailing charges and practices that industry critics have said are abusive, if not predatory.

But Sen. Christopher J. Dodd, D-Conn., who led the effort to enact reforms in the U.S. Senate, was already looking ahead to more.

In a conference call with reporters Friday, Dodd said there are still two major issues that remain unfinished business: a cap on interest rates and limits on fees that merchants pay when a customer uses a credit card for a purchase.

Both issues were part of the debate that led to the wide-ranging reforms signed into law by President Barack Obama Friday, but never made it into the final Senate bill.



Dodd said it was outrageous that a credit company could charge more than 30 percent interest on purchases. It was equally appalling, he said, that big credit card companies make so much money from small store owners and other entrepreneurs who have to fork over a portion of their profits when customers pay with credit cards.

"And we've got to do something about it," Dodd said.

The Senate rejected a proposal to cap interest rates at 15 percent amid intense lobbying by the banking industry and worries by some lawmakers that the cap would kill the broader credit card overhaul package.

Dodd has asked that the Federal Reserve conduct an analysis to determine how Congress could rein in interest rates.

A similar study on merchant "interchange fees" will be conducted by the Government Accountability Office. The fees, typically 2 to 3 percent of each transaction, are paid by the merchant so they can accept major credit cards and have those transactions processed through banks.

[rockymountaindem]

1. So giving up and quitting on the Democratic party over credit cards is not yet in order?

Series?

[Kdillard]

2. Lol. I know Dems aren't perfect but the lack of patience is

astounding. We will continually make steps in the right direction if we keep fighting. People keep losing sight of the big picture. Dems are not our enemy. Anyway this is a good thing and we will see how it works out in the end.

[DJ13]

3. Any bets Dodd plans on this lasting through his reelection

only to be quietly shelved once he wins?

[ProSense]

6. Yeah, he should skip it. n/t

[flpoljunkie]

8. My exact concerns. Outrageous Sanders' bill to limit maximum rate to 15% garnered only 33 votes!

As Dick Durbin said about banks, "Frankly, they own the place.'

[w4rma]

4. Yes! Very good. (nt)

[JimWis]

5. Good to hear. Hope it goes somewhere this time.

[Flirtus]

7. The 'fee' this month on the majority of our business' transactions is 6%

Add the new monthly charge (that works out to be $12.33 additional per transaction on top of the 6%) makes some of our sales a donation to the bank, which will ultimately put us out of the business of accepting credit cards.

I'm not sure about the remarks above, I came looking for info on how a small business can find better rates. Capping the rates charged to people like me that unfortunately chose a credit card to fund a child's college education - a card I routinely pay three and four times the minimum and sometimes a whole lot more, yet it is no longer at a very healthy and already bad idea on my part 18% interest, it's now at 27.88%. I can only pay about half of it this year, it's v. depressing to have it hanging around.

[TrogL]

9. The province of Alberta, Canada just put a cap on "payday loan" and "rent to own" interest rates

My ex-wife ended up paying 400% interest on a laptop purchase. Eventually she couldn't make the payments and next thing she knows somebody's banging at the door wanting it back. They didn't even give her time to get her data off it.