Obama Takes Swipe at Credit Card Industry

April 23, 2009 12:00:00 AM PDT
The president plans to tell banks and financial companies to stop gouging consumers with sky-high interest rates and extreme penalties. Using the bully pulpit, President Obama will have a message for credit card companies: clean up your act.

Among those expected at the White House? More than a dozen C-E-Os of firms such as American Express, Visa, Mastercard , Bank of America, Citigroup, and Discover.

"He is going to be very focused in the very near term on a whole set of issues having to do with credit card abuses, having to do with the way people have been deceived into paying extraordinarily high rates," said White House Economic Advisor Larry Summers.

The President will tell executives he supports more protections for consumers, including: banning rate hikes considered unfair, abusive fees and penalties such as charging interest on debt that has already been paid on time. Obama also supports easy to understand forms and statements requiring greater accountability so companies that engage in deceptive practices can be rooted out, and keeping credit card companies from signing up minors.

"It's writing that you wouldn't even have your eye doctor use in your eye test that enumerates all these different rules and regulations, some of which change over time," said White House Press Secretary Robert Gibbs.

78% percent of American homes have credit cards. The President will argue resolving this issue is a priority, with or without the cooperation of credit cards companies

Lawmakers are also in on the action. Pending legislation, that credit card companies oppose, could be used as leverage by the president, if these firms don't follow his new rules of the road.

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