Connecticut Attorney General's Office
Press Release
Attorney General Urges National Small Business Trade Group To Join His Call On Fed To Roll Back Credit Card Interest Rates And Fees
December 18, 2009
Card issuers are arbitrarily hiking credit card fees and interest rates to as high as 30 percent to foil the Credit Card Accountability Responsibility and Disclosure Act (CARD Act). Effective February 2010, the new law will prohibit the very increases issuers are arbitrarily imposing unless payments are at least 60 days late.
In October, National Small Business Association President Todd McCracken told a congressional committee that small businesses, which are increasingly dependent on credit cards for financing, have this year faced a torrent of arbitrary interest rate and fee increases "unrelated to their past performances." He asked Congress to accelerate the law's implementation to December 1, 2009.
Senator Christopher J. Dodd, D-Conn., who sponsored the bill, sought to move up the effective date to December 1, but was thwarted when Senator Thad Cochran, R-Miss., used a parliamentary maneuver to kill the proposal.
In a letter to McCracken, Blumenthal said, "I write to urge you and the National Small Business Association to call on Federal Reserve Chairman Ben S. Bernanke to use his rule-making authority to roll back arbitrary credit card interest rate and fee hikes intended to foil the Credit Card Accountability Responsibility and Disclosure Act (CARD Act). Small businesses are the backbone of our economy, and the big banks' exploitation of your members through unjustified and crippling credit card interest rates is grossly unjust and unfair.
"The CARD Act empowers the U.S. Federal Reserve to roll back arbitrary credit card and interest fee increases between the law's May passage and its February 22, 2010 effective date. I have written Federal Reserve Chairman Bernanke urging him to assure that rules now being written to implement the law force reversal of these unconscionable and unfair increases.
"I share your anger and frustration over the credit card industry's arbitrary and outrageous fee and interest rate increases -- some to as high as 30 percent -- crushing small businesses and consumers alike. The Fed must stop big banks -- only recently bailed out by consumers -- from gouging hard-working, responsible consumers and small business people who pay their bills on time and play by the rules," Blumenthal added.
Blumenthal has also written the nation's 11 biggest credit issuers and the American Bankers Association demanding that credit card interest rates and fees be rolled back to January 2009 levels. In addition, he is asking other state attorneys general to join in his call on the Federal Reserve to compel the banks to reverse the increases.