The Obama administration has been largely silent about the credit card holder bill of rights since last year's presidential campaign. However, a meeting scheduled for today with key executives from 14 major credit issuers suggests Obama is finally gearing up for an extended beat down that will have lasting effects on how credit card companies do business.
In a statement made on Wednesday, Obama adviser Valerie Jarrett said, "We are...working with Congress on legislation that will promote simplicity, require transparency, demand fairness, and ensure accountability - so that we can strengthen consumer protections against abusive and deceptive practices." You may recall that the Federal Reserve already passed tougher rules on credit card lending practices that will go into effect July 2010, but Obama and many other congressional Democrats still believe it's necessary to pass legislation that will make the changes stick around for good. The proposed legislation, among other things, would require more disclosure, prohibit excessive fees for things such as late payments, and ban unreasonable interest rate increases. From 2007 to 2008, credit card companies raised interest rates on an estimated 25% of accounts, which cost consumers more than $10 billion. I can't help but wonder what thoughts were rushing through the minds of the bank executives as they got up this morning, put on their dark suits, and prepared responses to Obama's potential questions about how the industry has abused and deceived consumers. Those would be tough questions for anyone to answer. I do hope some good comes out of the meeting; however, I doubt we will see anything substantial happen in 2009. Only time will tell, but I would certainly love to be a fly on the wall in the White House today!
