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Senate banking committee Chairman Chris Dodd proposed a legislation today that would freeze the interest rates on the existing balances of an estimated 700 million credit cards.

While Dodd’s camp maintains that the legislation reinforces the Congressman’s opinion that “more consumer protections were needed,” many critics see the proposal as another “political maneuver” by the lawmaker who is seeking reelection:

Mr. Dodd’s proposal seemed aimed at reconnecting the Connecticut Democrat with voters, many of whom have questioned his close ties to big banks after he was tied to a sweetheart loan scandal. The Senate ethics committee cleared him of violating any rules, although his poll numbers remain shaky.

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The House’s approval of the credit card bill today sends the legislation straight to President Obama’s desk for his signature, which could come as soon as Memorial Day.

Yesterday we reported how this credit-card reform could have an adverse affect on responsible credit card holders. Financial expert Ellie Kay has offered some ways to combat the changes the card reform could bring.

In response to overwhelming customer complaints, a Congressional committee has launched a probe in order to examine the lending practices at the banks which have received TARP funds:

Elizabeth Warren, chairwoman of the Congressional Oversight Panel, the body named by Congress to oversee the federal bailout, said the panel is working on a report examining instances of potentially inappropriate lending by banks that got taxpayer capital. “The people who are subsidizing the activities of the banks through their tax dollars are the same people who are furnishing the high profits through consumer lending,” Ms. Warren said in an interview. “In a sense, we’re asking taxpayers to pay twice.”