Fed Member Rejected for Credit Card : Banking: Lawrence B. Lindsey takes it in stride as he testifies about the aggressive marketing of plastic.

Lawrence B. Lindsey, as a Federal Reserve Board member, helps make decisions with enormous sway over Americans’ credit--whether they can afford loans for new houses, say, or to expand businesses. But when he shops at Toys R Us, Lindsey must pay in cash.

His application for a Toys R Us credit card was rejected last month, thanks to a computer program that assumed he was a shaky credit risk.

Lindsey took the rejection in good humor Thursday as he testified, ironically, about banks’ aggressive marketing of credit cards and the rapid growth of consumer debt.

“At least they are turning somebody down for credit cards,” said Lindsey, who makes $123,100 a year and has good credit.

“The reason I got turned down was there had been too many requests of my credit history by banks,” Lindsey told a forum on credit card problems, sponsored by Rep. Joseph Kennedy (D-Mass.).

Lindsey’s record had numerous requests related to refinancing his mortgage and shifting his home equity line to another bank, the Wall Street Journal reported.

Bank of New York, which issues cards for the toy store, belatedly realized whom it had rejected and offered to issue Lindsey a card with a $15,000 line of credit, but Lindsey rejected the offer. Paul Leyden, a Bank of New York spokesman, declined comment.

Kennedy said he saw Lindsey’s rejection as a symptom of a broader problem of the rapid growth of credit cards and marketing abuses. The forum was timed to warn consumers about going overboard with their plastic when shopping for the holidays.

Kennedy said he fears that banks will begin cracking down severely on consumers if delinquencies continue to rise rapidly, leading to a sharp reduction in new lending, or a “credit crunch.”

Credit card debt has grown from $250 billion in 1992 to $512 billion this year.