Senate Banking Committee Chairman Chris Dodd complained Thursday to bank regulators about credit card issuers' rate increases before new restrictions take effect next year.
"I am disturbed by recent reports in the press that some credit card companies are allegedly raising interest rates on their customers' existing balances without justification," the Connecticut Democrat wrote in a letter to the heads of four agencies. "Press reports indicate that some companies are raising rates now to get around these consumer protection provisions before they take effect and before regulations can be promulgated to enforce them."
Dodd highlighted a provision of a new law that requires a review every six months of any rate increase that was made after January 1, 2009.
"I ask you to immediately notify all credit card companies under your respective jurisdictions that they will be held accountable for all interest rate increases during this time period and will be subject to the review requirement once it takes effect."
Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Discover Financial Services have all introduced higher rates or changes to their policies, drawing complaints from lawmakers including Rep. Barney Frank, D-Mass., and Sen. Charles Schumer, D-N.Y.
