Finally Taking A Look At Usury In The Credit Card Industry
In Al Franken's "Why Not Me," which chronicles his fake run for the White House (as opposed to his fake run for Senate, and I say "fake" because it can't be real that it's April and he still hasn't been seated), his single issue that he rides to victory is ATM fees at banks. I've been wondering why more politicians haven't jumped on consumer banking issues, that interface with the public every single day. Looks like the President has thought this over as well.
President Barack Obama plans to crack down on deceptive credit-card industry practices that have saddled U.S. consumers with huge debts and soaring interest rates, U.S. officials said on Sunday.
Top White House economic adviser Lawrence Summers said Obama would be "very focused in the very near term on a whole set of issues having to do with credit card abuses."
"We need to do things to stop the marketing of credit in ways that addict people to it," Summers said in an interview on the NBC television talk show "Meet the Press."
Summers, director of the White House National Economic Council, said the administration is concerned about practices that result in consumers being "deceived into paying extraordinarily high rates that they wouldn't have paid if they knew they were getting themselves into."
The movie Maxed Out covers this topic fully, and guess who emerges as the lone voice in Congress wanting to tackle this issue? Chris Dodd. His bills regulating the credit card industry have been so watered down over the years they actually arrive on the President's desk in liquid form. It's high time we did something about these usurious rates.
That said, I am not all that encouraged by the fact that the industry gets a White House meeting to plead their case:
Executives of the nation's largest credit-card companies will meet with President Barack Obama at the White House on Thursday to discuss growing concerns about questionable practices in the industry.
White House Press Secretary Robert Gibbs said Monday that the meeting would be a chance to stress the need for greater clarity in the way that credit cards are marketed and administered. During his campaign last year, Obama strongly supported legislation to improve the rights of cardholders.
"What we want to do is ensure that people can have access to the credit that they need, but that we can also do this in a way that's transparent and fair and honest. And I think that's one of the things that the president will talk to them about," Gibbs said.
A recent survey of credit card practices by the Pew Charitable Trusts found that of more than 400 cards offered online by the 12 largest issuers, all allowed payments to be applied in ways that disadvantaged cardholders, such as paying off lower-interest balances before those that accrue higher interest.
Keep in mind that most of these credit card issuers are the same banks that received huge bailouts from the government. Yet they continue to gouge the consumer. Why exactly do they deserve a meeting at the White House? Are consumers getting a meeting?