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New regulations toward credit card companies spurred many such lenders to rapidly increase their interest rates – while they still could.

This angered consumer advocates and individuals who were subject to such. Massachusetts Treasurer Timothy Cahill may be fighting back, according to a recent article by BusinessWeek, by removing the state’s funds from any financial institutions that do not comply with an 18 percent usury law.

This includes withdrawing some $231 million from Bank of America Corp., $9 million from an account Massachusetts has with Citigroup Inc. and about $3 million from Wells Fargo & Co. The state is also reviewing $17 million in funds held at JP Morgan Chase & Co., pending talks with the banks, according to the report.

“I understand everyone has got to make money, but I think 18 percent is very reasonable, especially when that’s the state law,” Cahill said in the interview.

A spokesman for Bank of America said that state-by-state regulations make it difficult to manage efficient and cost-effective credit-card services. The bank told the state that about 70 percent of lender’s credit cardholders currently face interest rates below 15 percent, according to the report, which is the rate proposed by Vermont Senator Bernie Sanders.

In a letter to President Barack Obama last month, Sanders asked that Federal Reserve Board vacancies be filled with individuals committed to consumer protections.

“Millions of American consumers and small businesses are paying interest rates as high as 35 percent on their credit cards,” the letter said. “At the same time, financial institutions are able to borrow money from the Federal Reserve with virtually no interest at all. This is extremely unfair.”

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 will soon require that lenders review rate increases made since January 1, 2009.

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