Senate Banking Committee Chairman Chris Dodd on Monday said he would introduce legislation to immediately halt rate increases on existing credit card balances.
Dodd's new bill appears aimed at pressuring banks to comply with the sweeping credit card law enacted in May. A House bill approved Thursday by the Financial Services Committee would advance the enforcement date for this law to Dec. 1, from Feb. 22.
The May legislation was designed to make it harder for banks to raise rates on outstanding debt, ban universal default and restrict card fees. But Dodd said card issuers are already developing strategies to avoid these restrictions.
"We worked long and hard to enact the safeguards included in the Credit CARD Act," said Dodd in a press release. "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."