HARTFORD, Conn. (Legal Newsline) - Connecticut Attorney General Richard Blumenthal, in a letter to U.S. Federal Reserve Chairman Ben Bernanke, called the Fed's draft credit card rules "woefully" inadequate and called for changes.
Blumenthal wants the Fed to compel rollbacks of massive interest rate increases on credit-worthy consumers.
"The board's aversion to consumer protection is most clearly evidenced by its failure to fight interest rate increases that credit card issuers unfairly and arbitrarily imposed on consumers - even some of their best customers who fully honored their credit card agreements," Blumenthal said in the letter.
Blumenthal's letter also reiterated his request that card issuers reverse all arbitrary rate increases since Jan. 1 for creditworthy consumers.
"Once again, the Federal Reserve Board has chosen to protect the interests of Wall Street bankers at the expense of Main Street consumers - putting concerns for bank 'safety and soundness' ahead of consumer protection," Blumenthal said.
The CARD Act was passed by Congress in May 2009, though key provisions did not go into effect until Feb. 22. In the interim, card issuers raised some interest rates as high as 30 percent on consumers, many of whom never missed a payment, Blumenthal said.
This is the third time since December that Blumenthal has written the Fed to note that the CARD Act compels issuers to roll back arbitrary increases during the interim and to urge the Fed to write rules compelling decreases.
The Fed's draft rules, Blumenthal said, fail to compel rollbacks by allowing issuers to set their own standards for interest rate reviews that are required by law.
Blumenthal is running for U.S. Senate.