Obama Urges Action On Credit Card Rules
Friday, May 15, 2009
RIO RANCHO, N.M., May 14 -- President Obama on Thursday declared that "enough's enough" when it comes to high credit card fees and sudden interest rate hikes and called on Congress to immediately protect consumers from abusive practices by credit card companies.
Speaking during a packed town hall meeting here as senators debated credit card legislation back in Washington, Obama used the rhetorical power of the presidency to push Congress along. As he did last week, Obama urged lawmakers to pass legislation that he can sign into law by Memorial Day.
"These practices, they've only grown worse in the middle of this recession, when people can afford them least," he told the friendly crowd of about 2,000. "You should not have to worry that when you sign up for a credit card, you are signing away all your rights."
But the Senate did not immediately respond to the president's call to action. Deliberations over a bill authored by Banking Committee Chairman Christopher J. Dodd (D-Conn.) continued into the evening as Democratic and Republican senators introduced at least 60 amendments, some of which had nothing to do with credit cards. The bill would restrict card companies' ability to raise interest rates on existing balances and require them to allocate payments in a way that would help consumers pay off balances more quickly.
Still, industry representatives and lawmakers said they believed passage of a bill was almost assured, most likely Tuesday, because Dodd had already brokered a deal with Sen. Richard C. Shelby (Ala.), the senior Republican on the Banking Committee.
"We are on the verge of a historic victory for hardworking American families that have suffered for far too long at the hands of credit card companies," Dodd said. "The Senate will vote on my bill on Tuesday, and I am committed to working with President Obama and my colleagues to ensure that it passes with overwhelming support."
Credit card executives have warned that new regulations would reduce the availability of lending in the middle of an economic downturn.
"We are very respectful of the president's view on this important topic and recognize that his concerns are legitimate, but again we worry that initiatives may not achieve the right balance and result in consumers and small businesses losing access to credit at a time when they can least afford it," said Kenneth J. Clayton, senior vice president of the American Bankers Association.
The president waved aside those concerns. Companies deserve to make a profit, he said, but government should make sure the companies are not doing so unfairly.
"This is America, and we don't begrudge a company's success when that success is based on honest dealings with consumers," he declared.
The town hall capped a concerted weeks-long effort to pressure lawmakers to pass a bill. The House on April 30 passed another bill that closely mirrors new regulations approved by the Federal Reserve in December that also prohibit certain industry practices. But the Senate bill is stronger because it prohibits retroactive interest rates unless the borrower is at least 60 days late and requires card companies to restore the original rate if payments are made on time the next six months. Lawmakers will have to reconcile the differences between the Senate and House bills before sending legislation to Obama.
On Thursday, the president was introduced by a New Mexico woman who has been the victim of what Obama called abusive tactics. She and about 50 other local residents who were invited to the town hall by the administration had written to Obama complaining about their credit card companies.
Trejos reported from Washington.