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Credit Card Foe Blumenthal to Seek Senate Seat
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Connecticut Attorney General Richard Blumenthal, who is crusading against interest rate hikes by credit card issuers, said on Wednesday that he intends to run for fellow Democrat Christopher Dodd’s seat in the U.S. Senate, boosting the likelihood of keeping a voice for credit reform in the Senate.
Blumenthal told the CNBC network that he would make his candidacy official, possibly today. Blumenthal has been Connecticut’s top law enforcement official since 1990, serving five terms in that office, and previously served in state legislature.
On Monday, Blumenthal called a news conference to announce he has asked Federal Reserve Chairman Ben S. Bernanke to order credit card companies to revert to their interest rates of a year ago. Banking industry officials responded with a warning that such regulation could make access to credit even tighter.
Dodd is chairman of the Senate Banking Committee, and a co-author of credit card reform laws set to take effect Feb. 22. Dodd’s attempt to freeze credit card interest rates in November was blocked by Republicans. Dodd is expected to announce later on Wednesday his decision to not seek re-election.
Democrats in the U.S. House are seeking to set a credit card rate cap at 16 percent.
Consumer groups and lawmakers say the Credit CARD Act of 2009, signed by Obama in May, does not go as far as regulating interest rates. Some are now asking the Federal Reserve to bolster the CARD Act with tougher rules in the wake of recent credit card hikes to as high as 29.99 percent, and other unique fee structures introduced by the major card providers. One credit issuer that caters to subprime borrowers is test marketing a card with a 79.99 percent interest rate.
“In the meantime, the banks are gaming and manipulating the system and exploiting the grace period that Congress has given them, to raise interest rates in almost a raging epidemic of rising fees and charges to consumers,” Blumenthal said.
Peter Garuccio, a spokesman for the American Bankers Association, said that the nation’s recovering economy is pushing lawmakers in the direction of over-regulation. “It’s important for policymakers to take a balanced approach because the risk of pushing far is decreased access to credit,” he said.
