While all eyes are on the convention, the Bush administration's Office of the Comptroller of the Currency (OCC), which successfully stopped state attorneys general from putting in tougher predatory lending laws against national lenders operating in their state, is now trying to pressure other federal regulators into watering down much-needed credit card reform.

In an unusual move, the Office of the Comptroller of the Currency has asked other federal regulators to scale back a proposal to crack down on unfair and deceptive credit card practices.

The proposal, issued earlier this year by the Federal Reserve, Office of Thrift Supervision (OTS) and National Credit Union Administration (NCUA), would ban credit card issuers from raising interest rates on existing balances, except in certain circumstances, such as when a promotional rate expires. It would also require banks to apply at least part of any payment to higher-rate balances and clamp down on fees charged to consumers with blemished credit.

Responding to the latest proposal, Comptroller of the Currency John Dugan wrote in an Aug. 18 letter that reform could have "unintended and undesirable consequences," such as less credit being offered to consumers. The agency oversees most credit card issuers, but doesn't have the authority to propose rules like other bank regulators, including the Fed.

Dugan also said that banning issuers from raising rates except under limited circumstances "would severely curtail the ability of creditors to react to adverse changes in a borrower's risk characteristics during the term of the account."

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Rep. Carolyn Maloney, D-N.Y., author of the Credit Cardholders' Bill of Rights, said mounting pressure on the Fed to "water down its regulation underscores the need to pass credit card reform legislation."

Robert Garsson, a spokesman for the OCC, dismissed the criticism. "We believe the standards we're proposing are things that average consumers will understand and would find pretty reasonable," Garsson said.

Just because this is a lame duck administration doesn't mean they are cute and harmless.