Washington Send me a bill that stops credit card companies from taking advantage of consumers, and do it by month’s end, President Barack Obama is demanding of Congress.
But there’s no guarantee lawmakers will deliver by Memorial Day, and the banking industry is fighting back.
“Americans know that they have a responsibility to live within their means and pay what they owe,” Obama said in his weekly radio and Internet address Saturday. “But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties and hidden fees that have become all too common.”
Legislation known as the Credit Card Holders’ Bill of Rights has passed the House and awaits action in the Senate, possibly in the coming week.
“You shouldn’t have to fear that any new credit card is going to come with strings attached, nor should you need a magnifying glass and a reference book to read a credit card application. And the abuses in our credit card industry have only multiplied in the midst of this recession, when Americans can least afford to bear an extra burden,” the president said.
The House measure would prohibit double-cycle billing and retroactive rate increases, and prevent companies from giving credit cards to anyone under 18.
Obama wants to sign the legislation by Memorial Day. “There is no time for delay. We need a durable and successful flow of credit in our economy, but we can’t tolerate profits that depend upon misleading working families. Those days are over,” he said.
Railing against what he said was “abuse that goes unpunished,” the president stressed the need “to strengthen monitoring, enforcement and penalties for credit card companies that take advantage of ordinary Americans.”
Credit-card executives say the new restrictions could backfire on consumers, making it harder for banks to offer credit or put credit out of reach for many borrowers. They also contend that the new rules ordered by the Federal Reserve beginning next year address many of the consumer-protection concerns expressed by the president and members of Congress.
The bill’s boosters are tapping into public anger over corporate excesses and the conduct of companies receiving billions of dollars in taxpayer money.
Obama spoke to the public’s frustration with credit cards.
“Instead of fine print that hides the truth, we need credit card forms and statements that have plain language in plain sight, and we need to give people the tools they need to find a credit card that meets their needs,” he said.