WASHINGTON -- Consumers aren't likely to get any help from Congress in getting banks to cut interest rates on credit cards.
Shocked by Friday's stock market slide, Congress backed away yesterday from an effort to force banks to cut the rates, leading legislators said.
"We are going to slow down on credit cards," said House Speaker Thomas S. Foley, D-Wash., who added that the chances for an absolute cap on bank-card interest rates "have diminished a lot."
A key House banking subcommittee had been scheduled to vote on a bank-card rate-limit bill yesterday but canceled the meeting "until further notice." Mr. Foley said the House might not act on the question this year.
Senate Minority Leader Bob Dole, R-Kan., also backed away from the idea, despite having been one of 74 senators who voted Wednesday to impose a cap on bank-card rates.
"Congress should not try to involve itself in the marketplace. There shouldn't be legislation" imposing such rate caps, Mr. Dole said in a Senate floor speech.
President Bush, who called last Tuesday for banks to lower their credit-card rates, would veto any bill that imposes credit-card rate caps, the White House press secretary, Marlin Fitzwater, said yesterday.
Mr. Bush himself told a handful of journalists in an Oval Office interview that it never occurred to him that Congress might seize the idea and try to mandate it.
"Maybe it should have, but it didn't" occur to him, Mr. Bush said.
Yet that's what the Senate did -- the next day.
Sen. Alfonse D'Amato, R-N.Y., offered an amendment to set an effective ceiling of 14 percent on bank-card rates. Such cards currently charge an average 18.9 percent, and eight of the top 10 companies average 19.8 percent.
Eager to vote for consumers and against banks after years of unpopular bank bailout bills, senators of both parties backed Mr. D'Amato, 74-19.
Bank stocks plummeted Thursday, and analysts such as the industry newsletter Nilson Report said that the U.S. banking industry would have lost $1.97 billion overall in 1991 if Senator D'Amato's amendment were law. By contrast, banks now expect a 1991 pretax profit of $5.83 billion, demonstrating how lucrative high credit-card rates are for banks.
But what got Washington's attention was Friday's 120-point nose-dive by the Dow Jones industrial average of 30 blue chip stocks. That spread fear all weekend that the stock market was about to crash, as it did in October 1987.
But the Dow rose 29 points yesterday.
Speaker Foley said yesterday that he believed the weak economy was more the cause of Friday's stock market slide than the credit-card bill. But he added that "there is a lot of concern about the impact" such a bill would have on the economy.