Riding on the coattails of the growing unpopularity of credit card companies, President Obama voiced his support, on Thursday, behind legislation that would limit the ability of credit card issuers to impose higher fees and interest rates on consumers. The president said he plans to change the law so that consumers no longer face confusing fine print or sudden increases in their interest rates or fees.
The legislation, which is moving swiftly through Congress, will most likely be approved by the House as early as next week and then be debated in the Senate soon after.
Making good on pledges he made during his presidential election campaign, the president called the top executives from the nation’s largest credit card companies to the White House to pressure them to take steps that officials say would reduce deceptive practices.
In addition to high fees and soaring rates, recent polls indicate the unpopularity of credit card companies is due to the fact that most of these banks have received government assistance as part of the federal bailout, yet they are also the ones charging consumers these exorbitant charges.
Participants described Thursday’s half-hour meeting in the Roosevelt Room as cordial and non-confrontational. President Obama called on the credit card companies to produce clearly written billing statements that do not have any confusing terms and conditions. He also proposed that every company issue a “plain-vanilla, easy-to-understand, simplest-terms possible credit card” to make it easier for the average consumer.
Mr. Obama’s stern tone left some executives resigned, however many speculate they are not going down without a fight. The industry leaders, representing the likes of Bank of America Corp., JPMorgan Chase & Co. and Citibank, exited the meeting without saying a word to waiting reporters. But their silence spoke volumes, because on the line for them is an estimated $3 trillion in annual credit and debit card transactions, plus billions more in late fees and other charges. This legislation will significantly cut into their profitability, so we haven’t heard the last of this.
Written by Kim Phan at Best Credit Cards.
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