WASHINGTON (MarketWatch) -- Senate Banking Committee Chairman Christopher Dodd on Monday introduced legislation that would temporarily freeze credit-card interest rates on existing balances, after saying that financial institutions weren't supporting a new credit-card law.

"No sooner had it been signed into law, credit-card companies were looking for ways to get around the protections this Congress and the American people demanded," said the Connecticut Democrat. "This bill would end those abuses and further protect customers today."

Congress in May approved a credit-card law, known as the Credit Card Accountability, Responsibility, and Disclosure Act, to crack down on abusive practices by credit-card issuers. Dodd's legislation would freeze rates on existing balances until the remaining provisions of the CARD act go into effect by February, at the latest.

Specifically, the CARD law would only allow interest rate hikes on existing balances based on limited conditions, such as when promotional rates expire or when a cardholder is late on a payment. The law also bans deceptive practices and includes a number of new transparency measures, including a provision that prohibits interest-rate changes without 45 days of advance notice.

Dodd had sought such a freeze for several months. In April he sent a letter to the Federal Reserve and Office of Thrift Supervision seeking to have them implement a freeze on interest rates tied to existing balances on credit cards.

On the House side, Democratic lawmakers have also taken addition steps to reign in the credit card industry since the CARD legislation was approved. A key House panel on Thursday approved legislation to accelerate the implementation of the CARD law to December from February, while exempting smaller card issuers from the new deadline.

The exemption for small credit-card companies was introduced, in part, in response to concerns raised by Fed Chairman Ben Bernanke, who earlier this week argued that the accelerated deadline would have a detrimental impact on such issuers.

Bankers opposition

A bank-industry group expressed concern about the House legislation, known as the Expedited CARD Reform for Consumers Act of 2009. A senior vice president for the American Bankers Association said it would be "extremely difficult, if not impossible" for them to meet the new Dec. 1 deadline.

"Moving up the implementation date will place additional strain on institutions and is likely to further restrict access to credit at a time when consumers, small businesses and the broader economy need it the most," Dodd said.