Sen. Sheldon Whitehouse (D-R.I.) announced Friday an amendment to the financial regulatory overhaul bill that would force national card issuers to comply with anti-usury laws in each state where their customers reside. Currently, the caps apply only to state-chartered lenders.  "Creating a strong, level playing field in consumer protection rules is a key part of Wall Street reform," said Sen. Jeff Merkley (D-Ore.), one of the amendment's sponsors. The other sponsors are Sen. Richard J. Durbin (D-Ill.), Sen. Bernard Sanders (I-Vt.) and Sen. Carl M. Levin (D-Mich.).  The amendment is one of hundreds expected to be filed in the next few days as the Senate debates far-reaching legislation to revamp the nation's system of financial regulations. Although Sen. Christopher J. Dodd (D-Conn.), chairman of the banking committee and author of the overhaul bill, has repeatedly supported efforts to cap credit-card interest rates, those proposals have not passed.  The American Bankers Association, a trade group, said the provision could end up restricting access to credit for millions of consumers because credit card companies would lose some latitude to charge riskier customers higher interest rates. The group also said tracking consumers and setting their interest rates would prove challenging as they move across the country.  "The idea that the Congress would pass a law that would result in a dramatic cutback in the availability of credit would at this time send shudders through the markets," said ABA chief executive Edward L. Yingling.  The push for a national usury law has emerged periodically since the U.S. Supreme Court decided in 1978 that banks with customers nationwide had to comply with interest rate caps only in the state where they were headquartered. But as consumers stumbled under debts during the recent recession, the issue has gained momentum.  The credit card industry has undergone an overhaul in the past year after Congress banned several practices that it deemed unfair and deceptive and limited issuers' ability to raise interest rates. J.P. Morgan Chase, the nation's largest credit card provider, said its credit-card division lost $300 million during the first quarter and estimated that the new rules would cost it hundreds of millions of dollars in revenue. Bank of America, the second-largest provider in the nation, totaled its hit at $900 million this year.  Meanwhile, a report from Fitch Ratings on Friday showed that consumer delinquencies fell to a six-month low in March. Its prime credit card charge-off index fell to 10.93 percent, though that is still higher than the 12-month average of 10.69 percent. Payments that are at least 60 days late fell to 4.27 percent, while 30-day late payments declined to 5.74 percent.
Following a wave of new regulations aimed at curbing credit-card industry abuses, some liberal senators are hoping to breathe life into an old idea: capping the interest rates paid by cardholders.