Trinity Event is First in Dodd’s Series on “Connecticut Banking on Change”

HARTFORD, Conn. –Calling for an end to the predatory practices that credit card companies commonly employ, U.S. Sen. Christopher J. Dodd called for tough new laws, both at the federal and state levels, to rein in the abuses that often leave Americans burdened with debt and in bankruptcy.

Dodd, who spoke at a press conference Friday, March 13 at the Smith House on the Trinity campus, was joined by state Attorney General Richard Blumenthal; Tom Swan, executive director of the Connecticut Citizens Action Group (CCAG); and Samantha and Don Moore of Guilford, who told a horror story about their recent experience with American Express.

The event was the first in a series on “Connecticut Banking on Change,” that Dodd, a five-term Democrat who chairs the Senate Committee on Banking, Housing, and Urban Affairs, will be holding throughout the state.

Dodd’s hour-long press conference focused on a bill that he has introduced in Congress – called The Credit Card Accountability Responsibility and Disclosure Act – that would strengthen the supervision and regulation of the credit card industry; prevent arbitrary and unfair increases in interest rates and terms; require fairness in card payments; protect the rights of financially responsible credit card users; ban unnecessary rates and fees; provide enhanced disclosure of terms and conditions; and ensure adequate safeguards for young adults.

(L-R) Samantha Moore, Sen. Chris Dodd, Attorney General Richard Blumenthal

Dodd called the deceptive practices used by credit card companies “a disgrace,” and said his legislation is based on the premise that “consumer protection is good for economic growth.” In recent months, Dodd’s Senate committee has held 82 hearings on the nation’s severe economic downturn, credit card abuse and the myriad problems plaguing banks and other financial institutions.

Dodd introduced two constituents, Samantha and Don Moore, who are longtime holders of an American Express credit card. Samantha Moore explained that their credit card limit was $31,500 but because they were three days late with a payment earlier this year, American Express reduced their credit limit to $4,500 and raised the interest charged on the balance from 12 percent to 27 percent. The Moores had been customers in good standing for 18 years.

Like Dodd, Blumenthal said he has proposed legislation at the state Capitol that would protect credit card users and place restraints on deceptive marketing practices. He noted that credit card companies often prey on college students who have limited income and are vulnerable to inviting come-ons.

He criticized those colleges and universities who sell the names and addresses of their students to credit card companies, a practice that Trinity does not engage in.

Blumenthal also noted the link between citizens who have trouble making their mortgage payments and must use their credit cards to save their homes, a situation that often leads to “financial ruin.”

“We’re not going to continue to be a nation founded on free enterprise if we continue to have these abuses,” he said.

Swan, whose citizens’ group has 25,000 members, said he’s constantly hearing complaints from people who say the credit card companies exploit them by arbitrarily and abruptly changing the rules. CCAG is one of 20 organizations that have signed a letter in support of Dodd’s legislation.

“It’s not only the right thing to do but it’s the only way to build a vibrant and strong economy,” Swan said.

Regarding safeguards for young adults, Dodd’s bill would:

• Require issuers soliciting to people under the age of 21 to obtain an application that contains the signature of a parent or guardian who will take responsibility for the debt.
• Require proof that the applicant has an independent means of repaying any credit extended or proof that the applicant has completed a certified financial literacy course.
• Limit pre-screened offers of credit to young consumers by prohibiting consumer reporting agencies from furnishing reports in connection with offers of credit that are not initiated by consumers under the age of 21.

Dodd said he is hopeful that he can garner enough votes in the Senate and House to pass his bill in the not-too-distant future.

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