Connecticut Attorney General's Office

Press Release

Attorney General Demands Banks Roll Back Credit Card Interest Rate and Fee Increases To January 2009 Levels

December 14, 2009

Attorney General Richard Blumenthal today wrote 11 large banks and financial institutions demanding they reverse all increases in interest rates and fees since January 2009 -- and blasting them for hikes aimed at foiling a new federal law.

Blumenthal said that he would fight for tough enforcement and strict federal rules seeking roll backs of rate or fee increases. Blumenthal is also seeking detailed information on all interest rate and fee increases this year and reasons for them.

"Bankers who owe their survival to taxpayer bailouts are now gouging those taxpayers," Blumenthal said. "They are poster boys for biting the hand that fed them.

"As the president meets today with bankers, I hope these rollbacks are on his agenda," Blumenthal added.

In recent months, banks and other financial institutions have drastically hiked consumer credit card interest rates to as high as 30 percent, along with higher fees, before federal legislation known as the CARD Act (Credit Card Accountability Responsibility and Disclosure Act) restricting their ability to do so takes effect in February.

Blumenthal said, "This greedy, immoral money grab gouges consumers already hurting. The banks are gaming and evading the new law -- rushing to raise rates before consumer safeguards take effect, looting and pillaging before the deadline.

"I am demanding that Big Finance immediately reverse and roll back interest rate and fee raises since January 2009. I'll seek tough enforcement and stricter federal rules if they refuse to roll back fee and interest rate increases. I am seeking a full accounting -- what rates and fees were raised when, by how much and why.

"These massive, unconscionable increases seek to lock consumers into excessive fees and ruinous charges before a new federal law barring such abuses takes effect in February. They condemn consumers to an unending treadmill of crushing debt for years, even decades. Interest rates of 30 percent are utterly unjustified -- especially with the cost of borrowing at an all time low.

"Big Finance is mocking the spirit if not the letter of the new law, exploiting a lengthy effective date to crush consumers with cascading debt. I will urge federal authorities to use the rulemaking process in the new law to reverse these hugely unfair and unconscionable increases.

"Especially galling, institutions gouging and gutting taxpayers are many of the same ones saved by billion-dollar taxpayer bailouts. Bankers continue to collect record bonuses, even as they financially straitjacket struggling consumers who saved them."

The attorney general sent letters demanding an interest rate and fee rollback to: American Express, Bank of America, Barclays, Capital One, JPMorgan Chase, Discover, HSBC, Target, U.S. Bank, USAA Savings and Wells Fargo.