Connecticut’s Attorney General says the banking industry has admitted it is charging higher credit card fees to low risk customers, in order to be able to lend to those with less credit. Richard Blumenthal has written to the chairman of the Federal Reserve asking him to take action. WNPR’s Harriet Jones reports.
Richard Blumenthal has been campaigning on this issue in recent months, and he says the American Bankers Association has acknowledged in a letter to his office that their members are trying to offset financial losses by raising fees and interest rates on creditworthy customers. Blumenthal says the practice is offensive:
"The banks are essentially compelling their most creditworthy consumers to rescue them twice, once through taxpayer funded bailouts, and a second time through exorbitant credit card interest rates and fees, which seems completely unjustifiable and even unconscionable, and that’s why the Federal Reserve ought to stop them."
He’s written to Fed Chair Ben Bernanke, calling on him to use his current powers to roll back credit card interest rates and fees to January 2009 levels. New legislation controlling credit card fee and interest rate increases goes into effect next month.
For WNPR, I'm Harriet Jones.