Dodd introduces bill meant to freeze credit card interest rates

Credit card rates would be immediately frozen under new legislation introduced on Monday by Senate Banking Committee Chairman Chris Dodd (D-Conn.).

Dodd will introduce the bill in response to concerns that the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, enacted earlier this year, has done little to block credit cards from raising interest rates before the remaining provisions of the CARD Act go into effect.

“We worked long and hard to enact the safeguards included in the Credit CARD Act,” Dodd said in a statement. “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.

“At a time when families are struggling to make ends meet, jacked-up rates can quickly create crushing debt," Dodd added. "People need to be responsible with their money, but they shouldn’t be taken to the cleaners by outrageous rates.”

Among key provisions in the CARD Act were requirements of a 45-day notification before a cardholder incurs an interest rate hike, as well as preventions against arbitrary rate hikes and finance charges.

The legislation would also require credit card companies to review all rate increases on credit card holders since the beginning of this year to see if they were justified.