D'Amato Attacks |Collusion'
Calls for Probes of Uniform Rate for Cards
WASHINGTON -- Stepping up his attack on big credit card banks, Sen. Alfonse M. D'Amato called Thursday for Justice Department and Federal Trade Commission investigations into what he said is collusion in the setting of interest rates.
"Seven of the 10 largest card issuers have the same interest rate, 19.8%, right down to the decimal," Sen. D'Amato said on the Senate floor.
The New York Republican's statement came eight days after an amendment he sponsored to cap the interest rates passed the Senate and stunned the banking industry.
His aim, he said, is to "attack collusive activity of the biggest credit card issuers to drive up rates artificially."
Floating Cap Proposed
Meanwhile, two key House Democrats introduced legislation Thursday that would authorize the President to impose a floating cap on card rates following a study by the General Accounting Office.
Rep. Charles E. Schumer, D-N.Y., one of the measure's sponsors, said the rate called for in the bill would be 15.5% if it was in place today. "If the GAO study confirms our claim that there is no competition in the credit card industry, it will be up to the President to finally take meaningful action, instead of just winging it," said Mr. Schumer, referring to the President's effort to jawbone rates down without legislation.
The measure's other sponsor, Rep. Esteban Torres, D-Calif., said he was still canvassing members of the House Banking subcommittee on consumer affairs, which he chairs, to see if there was enough support for the measure to vote it out.
Senate Backs Away
Although it is widely assumed that the D'Amato amendment will be dropped from any banking legislation that clears Congress this year, one influential senator said it would be up to the House to take the measure out.
"We're not going to do anything about it here on the Senate side, not when you had a 74-to-19 vote in favor of it," said Sen. Jake Garn of Utah, the Senate Banking Committee's ranking Republican.
Sen. Garn indicated that Congress might compromise in the end by requiring some kind of study into why credit card rates have remained so high when other interest charges are dropping.
D'Amato to Keep Pressure On
Sen. D'Amato said he is determined to keep pressure on banks.
"I am not giving up on this battle," he said, vowing not to "turn the spotlight off" the industry.
Edward L. Yingling, chief lobbyist for the American Bankers Association, said he doubted Sen. D'Amato's petition for an antitrust investigation would succeed.
"I can tell you that the credit card market is almost a perfect example of free competition," Mr. Yingling contended.