U.S Rep. Barney Frank, D-Mass., speaks at an event hosted last week by the Service Employees International Union, Massachusetts Public Interest Research Group and United for a Fair Economy. Frank said non-regulated mortgage companies are responsible for the subprime mortgage lending fallout that has led to much consumer distress.

America’s big banks are “bad for us and bad for our communities,” according to the Service Employees International Union.

U.S. Rep. Barney Frank and Attorney General Martha Coakley, however, say that non-regulated mortgage companies deserve more scrutiny.

The Washington, D.C.-based SEIU made its feelings known at a town hall-style meeting it co-hosted in Boston last week along with the Massachusetts Public Interest Research Group (MassPIRG) and United for a Fair Economy. Frank and U.S. Rep. Michael Capuano, both Massachusetts Democrats, and Coakley also attended the Wednesday event to discuss consumer assistance regulations and legislation they’re pursuing.

Local consumers who have been victims of credit card-related identity theft, as well as unexplained credit card fees and interest rate hikes, told their stories at the forum, which focused on credit card and bank fees and policies opposed by SEIU. The union has 1.9 million members.

“We don’t need to be lectured about individual responsibility and making wise financial decisions,” said Rocio Saenz, president of SEIU Local 615 in Boston, to applause from the audience of about 75. “We simply want our leaders to put an end to bad practices.”

Saenz said Bank of America and Citibank raised their credit card interest rates in February – “not because customers were late on payments, but to make up for the profits they’ve lost [associated with the recent mortgage crisis].”

But Bank of America spokeswoman Betty Reiss said the bank only raises rates on individual accounts with notice to the customer, after reviewing that customer’s use of credit at Bank of America and with other lenders.

“Our objective is to deepen our relationship with the customer. We wouldn’t want to make them angry,” Reiss said. Ninety-four percent of Bank of America’s credit card customers ended 2007 with a credit card interest rate the same as, or lower than, they had at the beginning of that year, she added.

University of Massachusetts at Boston student and single mother Denise Perrault described her battle with trying to alter payment terms on her credit card after her divorce and a car wreck, which followed each other in close succession. She was forced to rely on her credit card for necessities.

Perrault said she was only successful after calling the governor’s office in Georgia, where the issuing bank’s corporate headquarters is located.

Boston scientist Brad Bryan said he’s still trying to extricate himself from an identity theft in which 15 credit cards were taken out in his name, and $500,000 charged, by someone who filled out unsolicited, pre-approved credit card offers mailed to him at an address he left four years ago.

Such offers “should be banned outright,” he said, and banks that issue them should be required to reimburse consumers for the personal losses they incur while trying to fix identity theft problems that result.

Fraud alerts placed on credit reports should have teeth, Bryan added. He said despite the fact that he has placed such alerts on his credit report, accounts are still being opened in his name.

Frank and Coakley said the focus should be more on non-regulated mortgage companies than banks, which Frank said are responsible for the subprime mortgage lending fallout that has led to much consumer distress.

“We want to deal with the banks,” said Frank, who is co-sponsoring a bill introduced by U.S. Rep. Carolyn Maloney, D-N.Y., last month, that would forbid credit card companies from changing payment terms on existing balances, require 60 days’ notice for all changes, and outlaw “universal default,” a practice in which a card interest rate is raised for reasons unrelated to the payment history on that card.

Coakley compared the subprime lending practices regulators now are working to curtail to certain credit card industry practices today.

“The same families that were devastated by subprime mortgages are now being devastated by the credit card industry,” she said.

Massachusetts Bankers Association Senior Vice President for Government Affairs Kevin Kiley later praised Coakley and Frank for “acknowledging that areas like subprime lending have been driven by unregulated mortgage companies and brokers.”

But the Bay State is one of the most consumer-friendly states on banking matters, Kiley said, adding that bank fees and charges here are lower than in many other places.

“Consumers of all bank products and services need to comparison shop,” he said. “They will find there are significant benefits of doing business with Massachusetts banks, particularly community banks.”