WASHINGTON - President Barack Obama said Thursday he is determined to get a credit-card law that eliminates the tricky fine print, sudden rateincreases 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 constructivefashion, and that we're going to get this done in short order," Obama said, delivering a pointedmessage to leading executives of credit-card issuing companies after a closed-door White Housemeeting.
Both the House and the Senate are pursuing bills to give consumers greater protections as anexpansion of new rules slated to take effect next year. Obama said his economic advisers willexamine the various proposals and work with Congress and the industry, but he made clear he wantsto sign a bill into law.
"The days of any time, any reason rate hikes and late fee traps have to end," Obama said. At issue is how to protect consumers, particularly in a deep recession, while not imposing the kindof rules that could make it harder for banks to offer credit or put credit out of reach for manyborrowers.
Industry executives left the White House without talking to reporters.
Later, one of the participants, American Bankers Association president Edward Yingling, said theexecutives listened to Obama's concerns and "agreed to work with the administration to addressthem." In a statement on behalf of the executives, he said consumer protection must be balanced with"ensuring that credit remains available to consumers and small businesses at a reasonable cost." Thecredit-card executives made the case in the meeting that the sweeping rules already ordered by theFederal Reserve, due to take effect next year, address many of the concerns held by the presidentand Congress.
"He disagreed with that case and believed that more needed to happen," White House presssecretary Robert Gibbs said of Obama.
So Obama outlined the principles for any legislation: Protections so that consumers won't facesudden, surprising jumps in fees; requirements that companies publish their forms in plainspokenlanguage, with no more fine print; the availability of customer-friendly comparison shopping oncredit-card offers; and greater enforcement so that violators feel the full weight of the law.
The president made no mention of the responsibility of consumers to keep themselves from gettingoverextended.
As one possibility, Obama said it may help if all credit-card issuers offer a basic, "plain-vanilla" cardas a default option for consumers.
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.
Credit-card debt has increased by 25 percent in the past 10 years, reaching $963 billion by January,according to figures released by the White House. The average outstanding credit card debt forhouseholds that have a credit card was $10,679 at the end of 2008, according to CreditCard.com, anonline marketplace designed to link consumers and card issuers.
The Federal Reserve has already ordered new rules, to take effect July 2010, that are designed toenforce a host of new consumer protections.
On Thursday, Sen. Chris Dodd, D-Conn., chairman of the Banking Committee, and another panelmember, Sen. Chuck Schumer, D-N.Y., wrote a letter asking the Federal Reserve, the Office of ThriftSupervision and the National Credit Union Administration to enforce those rules immediately.
The effect would be put emergency freeze on interest rates tied to existing balances on credit cards.
A Federal Reserve spokeswoman said the Fed received the letter and was considering the issuesraised in it.