Blumenthal demands rollback of credit card interest rates and fees

Nick Rees Dec. 14, 2009, 3:36pm


HARTFORD, Conn. (Legal Newsline) - Eleven large banks and financial institutions have received letters from Connecticut Attorney General Richard Blumenthal demanding they reverse all increases in interest rates and fees since January.

Blumenthal's letter also takes the company's to task for the hikes, which he says are aimed at foiling a new federal law.

"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 has announced that he will fight for tough enforcement and strict federal rules to seek roll backs of rate or fee increases. Blumenthal is also seeking detailed information on all interest rate and fee increases this year and the reasons for them.

Consumer credit card interest rates have been drastically hiked in recent months by banks and other financial institutions, some as high as 30 percent, and additional fees have been added, Blumenthal says.

These actions come prior to the Credit Card Accountability Responsibility and Disclosure Act, which is federal legislation to restrict the ability to make such interest hikes beginning in February.

"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," Blumenthal said. "I will urge federal authorities to use the rulemaking process in the new law to reverse these hugely unfair and unconscionable increases."

Blumenthal sent the letters to American Express, Bank of America, Barclays, Capital One, JPMorgan Chase, Discover, HSBC, Target, U.S. Bank, USAA Savings and Wells Fargo, demanding an interest rate and fee rollback of them all.

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

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