06/04/2009 05:12 am ET Updated May 25, 2011

Credit Card Deal In Works As Senators Work Through Weekend

Senate negotiators worked through the weekend to come up with a bipartisan compromise on reform legislation that seeks to rein in deceptive credit card practices. A Democratic banking committee aide said that progress had been made and the talks continue.

Late last week, as an amendment aimed at stemming foreclosures was soundly defeated, rumors circulated through the Senate that a deal between banking committee chair Chris Dodd (D-Conn.) and the highest-ranking Republican on the committee, Sen. Richard Shelby (R-Ala.), was close.

Of course, deals are always rumored to be close in the Senate, where it's not wise to assume one has been reached until the parties are standing before the cameras. Even then, sometimes, they fall apart.

"We're working at it," Shelby told the Huffington Post late last week. "You've gotta price risk," he said when asked what his central bargaining position was. Credit card companies claim they need the power to adjust interest rates on the fly to reflect customers' variable level of risk.

Even as some Democrats were voting with the banks on the foreclosure measure, they were hopeful the credit card measure would pass. "I think credit card legislation will have substantial support," said Sen. Byron Dorgan (D-N.D.) "I haven't seen all of the legislation, but I expect I'll support it."

Sen. John Kerry (D-Mass.) voted against the banks last week and lamented the dozen Democrats who voted with them. But he said he was optimistic on credit cards anyway. "I still think we can get something done on it," he offered.

The foreclosure measure failed in the Senate last week without a single Republican vote in support, but hopes are higher for the credit card bill. In the House, 84 Republicans sided with nearly every Democrat to pass the bill.

The White House, too, has taken a much larger public role in the push for credit card reform than it did on the anti-foreclosure effort.

The bill would prevent creditors from jacking up interest rates retroactively on old balances, give people more time to make payments and otherwise standardize a process that is intentionally complex and designed to nickel and dime consumers for fees and unnecessary interest payments.