Despite complaints that banks and credit card companies are gouging customers by charging outrageous interest rates, the Senate on Wednesday easily turned back an effort to cap interest rates at 15 percent.
The effort by Senator Bernie Sanders, the Vermont independent, drew only 33 votes and needed 60, with a bipartisan group of 60 senators opposing it as the Senate pushed its credit card overhaul toward the finish line. Some Democrats and consumer groups have said that an interest cap is needed to put real teeth into an otherwise solid bill.
Other backers of the measure calculated that an interest rate ceiling would doom the popular legislation. The banking industry, which had some heavy-weight representatives monitoring the vote off of the Senate floor, warned that an interest rate limit could cause a sour reaction in the financial markets.
But Mr. Sanders said the card companies and banks were engaged in conduct that could get others hauled into court. He said one-third of all credit card holders are paying interest above 20 percent and as high as 41 percent.
“When banks are charging 30 percent interest rates, they are not making credit available,” said Mr. Sanders, who noted credit unions are limited to 15 percent. “They are engaged in loan-sharking.”
After the effort failed, Senator Christopher J. Dodd of Connecticut, the Democratic chairman of the banking committee, proposed that the Federal Reserve be asked to provide an analysis of how Congress could rein in interest rates.
Senators said they hoped to finish up the credit card bill as early as Thursday, coinciding with a town hall meeting by President Obama on credit card issues in New Mexico.
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Can we please see a roll call of the yeas and neas?
— c eisenhartThe Finance, Insurance, and Real Estate (FIRE) interests own our political system. They own both parties, including the white houses run by both parties. They own the courts too. Thus, our GDP is comprised of whatever bubbles these nefarious interests can concoct, and wealth is concentrated in their greedy hands. A tragically high number of our politicians go from the halls of Congress to lobbying firms and vice versa to maintain this plutocracy’s hold on power. The credit crunch, health care, foreclosure, and energy crises are traceable to this sinister cabal and we bail them out when they drag us into ruin. We have the best system FIRE money can buy. It saddens and disgusts me.
— TietjensNow this tragic. What exactly does anyone benefit from this other than banks and credit card companies?
The Senate should be tarred and feathered over this.
That such heavy-handed lobbying of veritable loansharking tells us Jefferson’s nightmare has in fact come to light, yet no-one is saying anything. Two comments here and counting.
Is there a conspiracy of duncery at work here?
— KalThat’s all I needed to know.
The Democrats can whistle for my vote in 2010 and 2012. From now on I vote with my feet, which is to say, Independent. I hope the Democrats lose their shirts in 2010. They deserve to. I knew it – I knew there’d be no substantive help for us while they frantically funnel truckloads of money to help the banks get out of THEIR debt.
Congress has just given its approval to loansharking. I will not vote for a major party candidate again.
— Elizabeth RenantProof-positive that the Senate is unable to REFORM anything! If something matters right now to millions of Americans, it is getting credit at a reasonable cost. I personally do not use revolving credit, but realize that for many it is a necessity. This latest Senate action is unacceptable. Democrats and Republications have much to be ashamed for today! How dare they hamstring their constituents like this!
— Paula BurkhartWho allows banks bailed out with taxpayer funds to lobby against the taxpayers?
Without the taxpayer bailouts, these banks would have gone bust. Money is fungible. The banks effectively are using taxpayer funds to lobby. The gov’t stopped Freddie and Fannie from lobbying because they took taxpayer bailouts. Why not BofA and the other banks?
The same banks claiming the markets will tank with an interest-rate capped also assured us the sub-prime MBSs were really, truly, absolutely AAA. Other than massive campaign contributions and expensive lobbyists, what could the banks possibly have done to get Congress to believe them this time?
— GarakI got a nasty phone call about $15 due from an account from one of the country’s biggest stores and I never even got the bill!! Imagine a call for $15 “past due” about 1week. I just canceled the account. Enough said. Bank of America called to get me to use an account again when they jacked the rate up 10%, I guess because I did NOT use it. I think they did not think I could read. It is best not to owe anything in these times, even if government wants us out shopping again.
— GeorgeCome now, if the credit industry can’t charge whatever rates they likes, however will they produce all of those valuable goods and services they contribute to our society?
Oh, wait, never mind….
— EricWhen is the American public going to wake up???!!!! As the stock market is to legalized gambling, credit cards are to legalized loan sharking. If the Senate is unable to effect reform, we the people are going to have to continue to keep our wallets–and our plastic–firmly shut.
— joan DahlgrenHow could the Senate Democrats not pass this legislation? I thought the Democrats were looking out for us and would stop the banks from charging these outrageous interest rates. I never expected Republicans to go along, but expected alot more from the party I support. I would love to know which Democrats opposed this reform.
— jacquesSo…..my liberal friends and supporters of Obama….how’s that ‘change’ workin’ for ya?
— rvn1965