Exit Dodd, Enter Johnson?

A coming retirement from the United States Senate could lead to a change in the legislative approach toward credit card companies.

The recent retirement announcement of Sen. Christopher Dodd, D-Conn., means a champion of the recent  credit card reform legislation soon will leave the Senate, as well as his perch as the chairman of the Senate Banking Committee. Dodd will end his time in the Senate next January after the November 2010 election.

Dodd helped push the so-called CARD legislation through the Senate last spring.

“[The Credit Card Accountability Responsibility and Disclosure Act] prevents credit card companies from tricking consumers into paying additional interest and fees. It protects the rights of financially responsible credit card users,” Dodd said in an April 30, 2009 statement marking the introduction of the legislation.

Dodd could be replaced as chairman by a man from a state with a significant presence in the credit card industry – Sen. Tim Johnson of South Dakota. The second ranking Democrat of the committee was the only Democrat to vote against the credit card reform legislation that passed in May 2009. 

While South Dakota might have a relatively small population, it is a state in which credit card companies compose a notable presence. In the 1980s, a significant number of banks that issued credit cards moved to South Dakota for its friendlier regulatory environment.

In opposing the reform legislation, Johnson first agreed that many parts of the bill would benefit the consumer. However, he said consumers already have been facing higher interest rates and less available credit, and he feared the reforms would have the effect of adding to that problem.