Congress to Act on Obama Credit Card Bill

May 15, 2009 – 1:40 pm – No Comment

President Obama urged Congress today to act quickly on the bill he has initiated to protect credit card holders from ‘abusive credit card practices’. Obama has specifically spoken out against unexpected fees and unreasonable APR spikes. “There’s no doubt that people need to accept responsibility,” Obama said at a New Mexico high school in a town hall style meeting. “This is not free money — it’s debt and you should not take on more than you can handle. Banks are businesses too. So they have a right to insist that timely payments are made,” Obama said, asking for accountability from individual citizens who often buy far more than they can afford.

His main purpose has been to lobby Congress to make it harder for credit card companies to hike interest rates precipitously, charge unfair late fees, or impose other impossible conditions on consumers. “Those days are over,” he said, “This is America and we don’t begrudge a company’s success when that success is based on honest dealings with consumers. We need reform to restore some sense of balance.” The new administration is ‘demanding’ a bill by Memorial Day. The House of Representatives has approved legislation containing some of the protections Obama seeks. A modified verson is pending on the floor of the Senate right now, and a vote is expected as early as tomorrow.

Both versions of the bill would ban interest rate increases on previous balances in most cases, and require that customers be given 45 days notice before their rates are hiked. In an unexpected, unrelated turn, the passed, completed bill also would deter companies from giving a credit card to minors. Obama also made a slip of the tongue, a “freudian slip”, some reporters joked. “We didn’t agree on anything — everything — as you might imagine,” Obama said about the meeting, then laughing as he realized his verbal mistake. “That was a slip of the tongue. We didn’t agree on everything.”

The American Bankers Association has released a statement to the Senate explaining that the measure could backfire by restricting credit for consumers at a time when they need it the most, in a time where credit is scarce. The ABA also argues that new rules by the Federal Reserve, scheduled to take effect in July 2010, address many of the concerns expressed by Obama and members of Congress, hoping to reason that the bill is unreasonable and unneeded. Obama doesn’t believe those rules are enough to fix the problem. Of course, legislation is the answer to all of the world’s problems, right?