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13 May

Senate Rejects Limit on Credit-Card Interest Rate

Twenty-one Democrats Vote Nay

By Carl Hulse, May 13, 2009, 5:49 pm

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.

Democrats voting Nay:

Akaka (D-HI)
Baucus (D-MT)
Bayh (D-IN)
Bingaman (D-NM)
Byrd (D-WV)
Cantwell (D-WA)
Carper (D-DE)
Hagan (D-NC)
Johnson (D-SD)
Kaufman (D-DE)
Landrieu (D-LA)
Lincoln (D-AR)
Murray (D-WA)
Nelson (D-FL)
Nelson (D-NE)
Pryor (D-AR)
Shaheen (D-NH)
Specter (D-PA)
Stabenow (D-MI)
Tester (D-MT)
Warner (D-VA)

Let us all face it. The banks own the place.

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