California lawmakers are backing away from restrictions on the credit card industry, following threats from bankers to move card jobs elsewhere.

State legislators recently scuttled a proposed card rate cap and now seem bent on reversing some pro-consumer court rulings limiting late fees.

Card bankers in other states have increasingly used threats of moving jobs to beat back proposed restrictions. But the tactic appears to have been especially successful in California, largely because of its long recession.

Protecting jobs is "certainly the impetus" behind a bill to reverse the late-fee rulings, said an aide to state Sen. Dan Boatwright, the bill's sponsor.

Rate Cap Defeated

Last month, the Legislature defeated a plan backed by consumer groups to limit card rates to the interest rate paid by the bank on savings accounts plus 10 percentage points.

Now, Sen. Boatwright's bill, which would enable banks in California to impose late fees comparable to those charged by banks in the more lenient states, appears to be sailing through the committee process.

The proposal was approved in a 6-to-1 vote by the Banking and Trade Committee of the state Senate and is expected to go to the Judiciary Committee soon.

It was inspired by several court decisions against First Interstate Bank and Wells Fargo & Co. that bankers said set a dangerous precedent. The courts held that the late fees charged by these banks -- modest fees, by industry standards -- were illegal because delinquent borrowers suffered the same penalty regardless of the amount past due.

A study prepared for Visa U.S.A. said California could lose 4,500 of 2 1,000 credit card jobs to such states as Colorado, Arizona, and Nevada if the rate cap were imposed and the court decisions were allowed to stand.

There is no estimate of how many jobs might be lost by the state as a direct result of the rulings on late fees. But the Visa report, by Berkeley law professor Robert D. Cooter, said overturning the court curbs on late fees would make' California much more attractive.

Citing a DRI/McGraw Hill index of the attractiveness of each of the 50 states to credit card issuers, he said the bill would move the state's ranking up to 15th, from 42nd.

Consumer advocates are skeptical, however. There is no guarantee the banks will keep the credit card jobs in California even if the late fee bill is enacted, said Gail Hillebrand, an attorney in the San Francisco office of Consumers Union.

Proving that almost any group is liable to be targeted with a credit card, both Harley-Davidson Inc. and the newsletter Louis Rukeyser's Wall Street are planning offer to offer some.

The Harley card will enable the cardholders to buy anything offered at the motorcycle company's outlets, from repairs to temporary tatoos.

The no-fee, private-label card, printed to look like black leather, offers a revolving line of credit up to $5,000. Accounts will be serviced by National Processing Co., a unit of National City Corp. of Cleveland.

The Rukeyser newsletter, published by Financial Service Associates of Alexandria, Va., is expected to offer its subscribers a low-rate MasterCard issued by Union Planters National Bank.

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