While it is expected that the General Assembly will pass new banking legislation to significantly ease regulations on credit cards and interest rates, the issue remains controversial, as was clear today at a hearing on a banking deregulation measure.
"Tell me one thing for the record," said Sen. Fred Malkus (D-Eastern Shore), who has made no secret of his hostility toward the banks, as he turned toward Committee Chairman Jerome Connell (D-Anne Arundel), a sponsor of the bank bill. "Who wrote your bill?"
When Connell said, "me," Malkus got out of his chair, laughed loudly and left the room, which at that point was filled with a dozen or so lobbyists for banks and credit card companies who had spoken in favor of the legislation.
Malkus nonetheless said that he probably will vote for the bill, and a majority of the committee is expected to vote with him.
The measure, which would permit banks to levy "reasonable" credit card fees, charge unrestricted variable interest rates on some consumer loans and also allow the banks to collect a variety of other fees for lending services, comes just a year after the legislature agreed to a bank bill that raised the state interest rate ceiling to 24 percent.
Gov. Hughes and Attorney General Stephen H. Sachs have developed a similar banking bill that would allow a flat credit card fee and a variable rate on some loans, with restrictions that would not allow the rate to rise arbitrarily. The Hughes-Sachs bill would not allow other fees that have been included in the bankers' bill.
The banks' main lobbyist, William Weaver, said today that last year's bill included too many consumer amendments, including a ban on credit card fees, that "literally crippled the banking industry" and made the 1982 bill "cumbersome, unworkable, and sometimes incomprehensible."
As a result, many banks took their credit card operations out of state to Delaware, and Maryland lost 935 jobs.