WASHINGTON, March 24 (UPI) -- A U.S. Senate Judiciary subcommittee Tuesday reviewed a bill designed to help consumers struggling with debt to avoid sky-high credit card rates.
The bill, introduced by subcommittee Chairman Sheldon Whitehouse, D-R.I., and Sen. Richard Durbin, D-Ill., allows consumers filing for bankruptcy to divest themselves of credit card debt if the interest rate on the balance is higher than 15 percent plus the current yield on the 30-year Treasury bond, The Washington Post reported.
Currently, the bill will apply to rates above 18.5 percent.
"The standard credit card agreement gives the lender the power to bleed their customer through evolving and ever more crafty tricks and traps," Whitehouse said.
"Bank of America has come before you asking for help … yet when the consumers go to these institutions going for the same help, understanding and financial support, we get roughed up and receive no compassion," Douglas Corey of Rhode Island, a card holder, said at the hearing.
But, David John, a senior research fellow at the Heritage Foundation, said the bill would provoke lenders to reject risky credit card applicants. "This bill will damage some of the people you're most interested in helping," John said in a prepared statement.