On Thursday, Senators Chuck Schumer and Chris Dodd called on the Federal Reserve to “freeze interest rate hikes on consumer credit card balances,” just hours before a meeting between credit card companies and the White House.
Noting that the Fed has used its emergency powers multiple times since 2007 in the context of the financial crisis, the senators declared that it is “long past time for the regulatory agencies to act with the same sense of urgency to protect consumers from the behavior of those same financial companies. Therefore, we strongly urge you to utilize your emergency powers to put this rule into place immediately and protect consumers from these outrageous rate increases.”
The NY Times reports that President Obama “threw his support behind legislation moving swiftly through Congress that would restrict the ability of banks to impose higher fees and interest rates on consumers.”
In response to one executive who was trying to make the case for less regulation, Mr. Obama told the executives to remember that they were “talking to a president who still has a very fresh memory of relying on credit cards” to finance his lifestyle. “I know them firsthand,” he reportedly said.
Mr. Obama’s firm tone left some executives resigned. One executive told the president that although her assignment had been to try to persuade the president not to support new restrictions, “it was pretty clear I won’t succeed.”
“You’re probably right,” the president replied. “But you should feel free to make your pitch.” The comment prompted the room to break out in laughter.
Freezing interest rates on credit card balances and prohibiting companies from imposing higher fees is long overdue. Wall Street had their bailout and they are still sticking it to the taxpayers who foot the bill. It’s good to see we have a president who actually cares about the little people and it’s good to see members of Congress finally standing up to the corporate ho’s on Wall Street instead of handing them de-regulation on a silver platter as the Republicans have.