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Credit Card Practices Topic A at Obama Town Hall


President Obama speaks about credit card reform at a town hall style gathering at Rio Rancho High School in Rio Rancho, N.M.(Charles Dharapak/Associated Press)

By Michael D. Shear
RIO RANCHO, N.M. -- President Obama 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 to a packed town hall meeting here even as Senators debated credit card legislation back in Washington, Obama sought to use the rhetorical power of the presidency to push Congress forward.

"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."

The president waved aside the concerns of credit card executives, who have warned that new regulations on their industry would reduce the availability of lending in the middle of an economic downturn.

VIDEO | Obama Urges Congress to Act on Credit Card Bill

He said companies deserve to make a profit, but he said 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 White House used Obama's town hall to cap a concerted effort to pressure lawmakers to pass the credit card bill. The president was introduced by a local New Mexico woman who has been the victim of what Obama called abusive tactics.

Christine "Chris" Lardner told the audience that a mistaken charge by her daughter's college put her over the limit on her credit card, which hiked her interest rate to almost 30 percent.

"They said ... they were perfectly within their legal rights to raise our rate," she told the crowd. "Raising my rate to 30 percent is ludicrous and corrupt. I say that rights like these may be legal but they are ethically wrong."

Lardner had written to Obama complaining about her credit card company, as did about 50 other local residents who were invited to the town hall by the administration.

As he did last week, Obama urged lawmakers to pass legislation that he can sign into law by Memorial Day.

By Web Politics Editor  |  May 14, 2009; 1:24 PM ET
Categories:  B_Blog , Economy  
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Comments

The comment by jhpbriton is absolutely correct. In my early years if we couldn't afford it we didnt get it.I guess many Americans do not watch PBS. Frontline had a great program on the banks and Visa in America (make that anywhere in the world). They were classified as legallized loan sharks more than once during the program. Right on! Governments do nothing to protect citizens from such organizations and from what I can understand the new legistlation will not do much either.

Posted by: mpomroy | May 15, 2009 1:05 PM | Report abuse

The customer that does not need one of the services that only a large bank can provide has no business banking with B of A, Citi, Wells Fargo, Wachovia, etc. Someone has to pay for there past errors such as the purchase of Countrywide, Golden West etc. Wells Fargo may have been wiser than the others but they have a large overhead which the customer pays for. As banking practices return to the more conservative ones of the past, most little guys will do better in a small bank.

The payoff to taxpayers for this bailout should not be more reasonable banking fees but the conviction of those who helped perpetrated the frauds that lead to this crisis and the leveling of the power between the banks and the consumers so that only those who can pay off their balances are the borrowers and bank loses on credit card default will not be an excuse for raising rates. As consumers pay off their credit cards business for banks will drop rates to induce customers.

Banking is a business where the rules have been stacked against the consumer. Banks should not be punished just made to be subject to market forces like any other business.

Posted by: Gator-ron | May 14, 2009 6:03 PM | Report abuse

You have the bull by the tail, Mr. President. Regulating the way the companies bill the customer is like trying to protect the stupid customer who can't read and write, from himself/herself. Maybe that is the job of the Democrat government and if so I'll shut up. On the other hand a bigger, bipartisan issue is information theft. How about requiring all handlers of credit card information to be legally liable for losing that information or allowing it to be stolen? WalMart is one such handler at their gas stations, who is very careless with credit card information. VISA claims that they have been trying to force Wal Mart not to treat customer credit card information in so cavalier a manner, but to no avail.

Posted by: yard80197 | May 14, 2009 2:43 PM | Report abuse

Christine "Chris" Lardner interest rate went up to 30% on her credit card.

Congress is working on some bill. So they say!

With this new bill at work in congress, will her interest rate ever go about to her original contractual rate (let say for this discussion 10%)?

Answer: absolutely rate

Bank is under no hook to reduce the rates under the bills in progress.

If Christine "Chris" Lardner wants her interest rate reduced and capped at certain points, she should write a letter to her own senator - Jeff Bingaman.

Yes, he voted against a bill just yesterday that would have capped her interest rate to 15%.

Shame on you, Senator Jeff Bingman!

Posted by: AdvantaRipOff | May 14, 2009 2:43 PM | Report abuse

The problem here is that a massive number of Americans have utilized credit cards to buy a lifestyle that is not within their means.

For those of us who use credit cards as a convenience and pay all credit card balances in full....this is not an issue. Teach your children well, credit is for convenience...not to supplement income (which many Americans forgot).

Posted by: jhpbriton | May 14, 2009 2:41 PM | Report abuse

I don't know what all the banks are doing, but I know that I just received notices from Bank of America about increases in both domestic and international transaction fees. And I also received a notice from them about raising service fees on checking accounts. B of A received taxpayer money to stay afloat, and now they're raising taxpayer fees to make a bigger profit.

President Obama says that the banks shouldn't be doing this in the middle of a recession, but the banks aren't the only ones. Retailers are joining the crowd and increasing prices. Target is especially bad about this practice. They raise their prices, decrease the amount of their products, and then try to give us coupons to supposedly "help" us.

The NYT reported today that the cost of food increased last month, and although they state that home heating costs have decreased, they haven't been in my state lately. I live in Florida, and Progress Energy raised their prices last January, are going to lower them somewhat in July, and have asked for another increase for next January,

American business are greedy and unprincipled, starting with banks and including just about every other business. All I can say is that MBA programs are producing some really stupid leaders. Don't they realize that if they raise prices in a time when people's wages are being cut or when people are being laid off, people are just not going to buy.

Posted by: marmac5 | May 14, 2009 2:05 PM | Report abuse

Obama, once again fighting for us the people.

Posted by: MUPPET | May 14, 2009 1:41 PM | Report abuse

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