Obama Credit Card Plan – President Barack Obama is working on a credit card plan to cap rate and fee increases imposed by companies and make credit terms easier to understand.
Obama says his administration is determined to get a credit-card law that eliminates tricky fine print, sudden rate increases and late fees that give millions of consumers headaches.
“I trust that those in the industry who want to act responsibly will engage with us in a constructive fashion, and that we’re going to get this done in short order,” Obama said, delivering a pointed message to leading executives of credit-card issuing companies seated at his side.
Many consumers who pay their credit card bills on time have seen huge interest rate hikes from firms that have received massive amounts of taxpayer money during the bailout of financial firms.
Both the House and the Senate are pursuing bills to give consumers greater protections. Obama said his economic advisers will examine the various proposals and work with Congress and the industry, but he made clear he intends to sign a law protecting consumers.
At issue is how to protect consumers, particularly in a severe recession, while not imposing the kind of rules that could make it harder for banks to offer credit or put credit out of reach for many borrowers. Industry advocates are wary of those consequences and hopeful Obama will listen.
Obama outlined the principles he wants in any legislation: Protections so that consumers won’t face sudden, surprising jumps in fees; requirements that companies publish their forms in plainspoken language, with no more fine print; the availability of customer-friendly comparison shopping on credit-card offers; and greater enforcement so that violators feel the “full weight” of the law.
The president also acknowledged the importance of credit cards; almost 80 percent of U.S. households have one. Credit cards often serve as a vital source of liquidity, both for individuals and small businesses.
A return to the old usury laws that were in place for decades would be a good place to start. Those laws capped interest rates for consumers at 18%, but were superseded by state laws that now allow whatever interest rates companies want to charge.
And that’s the latest news on the Obama Credit Card Plan.
Tags: bailout, barack obama, credit cards, obama credit card plan, talf program
May 14th, 2009 at 9:42 pm
I think that if the banks would stop going to the colleges and recruiting students that can’t afford to pay credit card off then they wouldn’t have so many people in debt. A friend of mine told me a year ago his daughter was given a line of credit and didn’t have a job and ran up a 600.00 line of credit and couldn’t pay it back because she thought her parents would pay it. Her father told her no!
She had to figure it out for her self but some parents pay it and don’t worry about there kid having it. They figure that the line of credit would do them good to learn about. They need to make sure that people can PAY for the credit given and only give there amout that they can afford. Even if it is 100.–,.
July 21st, 2009 at 2:15 pm
I do not think that a bank or credit card company should be allowed to increase the APR 15% just because President Obama’s plan was to put a cap on the fee and interest charges. I had a 12.xx APR since 1987 and I think during that entire time until present I was late twice on a payment and probably no more than 5 days if that much. Now my APR has jumped to 27.24% so my finance charge is a few dollars less than my monthly minimum payment due. They should not be allowed to raise your rate that much because of a late payment. Can someone help us out with this and the banks and credit card company’s be fair during this time of crisis!!!!!!!!!!
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