Where Credit Is Due
Email“The days of any time, any reason rate hikes and late fee traps have to end," President Obama said as he sat around a table with top executives of 14 credit card companies today.
Sitting in the Roosevelt room in the private meeting, Mr. Obama told the executives that every day he reads 10 letters, winnowed from the thousands the White House receives (as we told you in February), and on average one of the 10 is someone complaining about unfair credit card company practices.
The president told them "of the abuses and some of the problems that a lot of people are familiar with," as he said with reporters present, "people finding themselves starting off with a low rate and the next thing they know their interest rates have doubled; fees that they didn’t know about that are suddenly tacked on to their bills; a whole lack of clarity and transparency in terms of the terms and conditions of their credit cards.
Mr. Obama outlined four core proposals that he’d like to see:
• Banning unfair rate increases and forbidding abusive fees and penalties;
• “No more fine print; no more confusing terms and conditions";
• Having every credit card company "issue a plain- vanilla, easy-to-understand, simplest-terms-possible credit card as a default credit card that the average user can feel comfortable with"; and
• Requiring more accountability in the system, more effective oversight and more effective enforcement.
Some of the attendees from the credit card industry said the meeting was more "political theater" than anything else, more for the cameras than about substance. The industry sees the measures it’s been taking as necessary in a recession, with Americans accruing more credit than ever before and many not paying their bills.
The Federal Reserve is about to issue new regulations relating to credit cards. At the meeting, Pamela Joseph, Vice Chairman of Payments for US Bancorp, told President Obama that it was her task to make the case to him as to why the industry feels those regulations will be enough and the legislation making its was through Capitol Hill is not needed.
"Go ahead and make your case," the president said, "but I disagree."
With cameras in the room, he said, "we want to preserve the credit card market. But we also want to do so in a way that eliminates some of the abuses and some of the problems that a lot of people are familiar with. And so there’s going to be action in Congress. Our administration is going to be pushing for reform in this area. We think it’s important that we get input from the credit card issuers as we shape this reform.”
- jpt
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Mr. Obama and Tiger Woods today meet at the White House – two individuals at the peak of their professions. Tiger Woods uses both power, accuracy and sheer determine to push the game of golf to a higher level, while Mr. Obama combines lofty rhetoric and consistent lies to push politics to a new, hidden level.
Posted by: young_voter | April 23, 2009, 9:05 pm 9:05 pm
young voter,
Obama has just started.. You haven’t seen nothing yet. He just went pro and he has done more good for this country than bush….. um well bush did no good and much harm…. bad analogy.
but any way just like Tiger sinks a 15 footer, Obama will finally sink Bush and Cheney.
GET IN THE HOLE!!!!!!!
Posted by: Omentum | April 23, 2009, 9:18 pm 9:18 pm
That’s freaking awesome that he reads letters.
Posted by: Silky | April 23, 2009, 9:37 pm 9:37 pm
That a president who frivolously spends money that our country doesn’t have, spending us into a terrible, bankruptcy-threatening debt, it makes sense that he would come to the defense of people who frivolously spend money they don’t have and who therefore spend themselves into debt.
Just as the president obviously believes that those who did the spending are not accountable for the consequences, so does he perhaps believe himself to be unaccountable for any of the devastating consequences that will become inevitable due to his disastrous deficit-building spending.
It’s a perfectly logical question to ask of Robert Gibbs, Mr. Tapper?
Posted by: Thank God for Karma | April 23, 2009, 10:09 pm 10:09 pm
Speaking of abuses:
Is the whole TARP plan a criminal enterprise? Sounds farfetched, I suppose. But after reading about Special Inspector General Neil Barofsky’s report, it may well be that TARP is just one big criminal problem.
Barofsky’s investigators reported Monday that they have opened 20 criminal probes into possible securities fraud, tax-law violations, insider-trading, and mortgage-modification fraud related to TARP. Yup, those are criminal probes. Barofsky is the special IG overseeing the bailout program.
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This can’t be good.
Posted by: mad | April 23, 2009, 10:24 pm 10:24 pm
If anyone knows about responsible spending it is Obama–he is so far in debt to China that they had to cut him off.
Credit Counseling?
Posted by: riley | April 23, 2009, 10:36 pm 10:36 pm
Paul Kruger is right, deep despair is setting in.
Posted by: 3rd party | April 23, 2009, 10:51 pm 10:51 pm
Omemtum, hope you don’t mind if your Speaker Pelosi goes in the dink, too. Dink, look it up.
Posted by: sybilll | April 23, 2009, 11:16 pm 11:16 pm
Political theater
Posted by: Jason | April 23, 2009, 11:22 pm 11:22 pm
If a white, “conservative” president
were to have taken Obama’s tack, he
would have been impeached by now.
We truly are a tolerant nation…to the
extreme.
Posted by: Trajan | April 23, 2009, 11:54 pm 11:54 pm
The best part of the meeting was seeing Larry Summers sleep through it.
That was classic…LOL
Posted by: lm | April 23, 2009, 11:55 pm 11:55 pm
Mad…
Your right.. its not good
That money was thrown out there so fast, that there is no way to figure out how it was used.
This should have been thought out before the bill was signed and the money given to the banks… but now its way too late and there is no way to prove if the money was used for the right reasons…. just recently, stories have been reported that these banks are using millions to lobby the government… wonder if it was the TARP money being used?
Barofsky is non-partisan, and he has been doing this type of investigations for years, so if he says there is a great chance of fraud in this system, I believe him.
This is one thing Obama should have thought out before doing his McCain knee jerk decision, because this could cost us taxpayers alot more than what he would like to admit.
And all this just to make his first 100 days look successful…
Posted by: not sold on obama yet | April 24, 2009, 12:01 am 12:01 am
Credit where credit is due. Obama and his administration their political careers over the life of my brother and the hundreds of other american soldiers. They all belong in jail.
Posted by: Mikah | April 24, 2009, 12:15 am 12:15 am
We all know credit card companies screw us…caveat emptor…so what else is new?
Hows about quit monkeying with the economy and ruining confidence in the economy for the sake of Socialism…that’d be the best medicine for the jumpiness of credit lenders.
Posted by: RR GOP | April 24, 2009, 12:44 am 12:44 am
Credit cards is the only industry where competition among issuers has not led to lower costs (fees, interest rates) for the consumer. So it is good to see that the Obama administration is trying to get card companies to behave. And, while caps on interest rates will force card companies to tighten their credit and issuance policies (which is not a bad thing), it will ultimately not mean fewer people having access to plastic. This is because cards is a volume-driven business, and card issuers will continue to compete for market share and greater penetration. Cards is also one of the most lucrative businesses for banks. Everytime you buy something, they earn about 2% from the merchant (Split between the card issuing and the merchant acquiring banks). Then there are the fees and financing charges paid by the card holder. Both these income streams, on an annualized basis, yield a much higher return than any other form of bank lending. So, don’t worry that more reasonable pricing policies will doom card companies to hard times, and is somehow anti-capitalistic.
Posted by: Arvind | April 24, 2009, 5:47 am 5:47 am
Isn’t one of Joe Biden’s biggest campaign contributors a credit card company?
Posted by: Sally J | April 24, 2009, 6:26 am 6:26 am
Obama already ran up the US credit card to about $4,000,000,000,000 (trillion) in debt and now he wants people to quit borrowing so much?
Do as I say, not as I do…
Posted by: Wilma H. | April 24, 2009, 6:28 am 6:28 am
Arvind,
You are mistaken. Competition HAS led to lower rates. This is just another case of Obama wanting to sieze more power. It’s none of his business what credit card cos charge their customers.
Posted by: Mitch in NC | April 24, 2009, 7:51 am 7:51 am
More government involvement.
Hugo Obama now adds credit cards to the list of nationalization projects.
Posted by: drjohn | April 24, 2009, 8:05 am 8:05 am
drjohn,
that’s very funny. I might have to use that one. btw, I have a bumper sticker that says, “Here’s an idea. Pay your own mortgage.”
Posted by: Mitch in NC | April 24, 2009, 8:15 am 8:15 am
Banks ripping customers off.. when did this start happening.. probably during the Bush admin.
Posted by: DontGet818OnMeNow | April 24, 2009, 8:56 am 8:56 am
He needs to go to the Bank of China and renegotiate our loans.
Posted by: DontGet818OnMeNow | April 24, 2009, 9:04 am 9:04 am
Why should Obama attack credit card companies??
It was millions and millions of illegal foreign dollars in untraceable credit card contributions that funded The One’s campaign for Prez!
Posted by: Obama is Biting the Hand that Fed Him | April 24, 2009, 9:06 am 9:06 am
Well Thanks to Bush and The Republicans with their Deregulation they have allowed the GREEDY BANKS to rip us off Good Job President Obama Trying to Restore Commonsense Regualtion to Protect the People and not the Greedy Banks!
Posted by: Angie in Pa | April 24, 2009, 9:12 am 9:12 am
“Why should Obama attack credit card companies??”
Disregarding the word ‘attack’, Obama is reacting to a large groundswell of outrage by many Americans, that do pay their bills on time, that they are not being treated fairly by these companies. We could call it a ‘counterattack’ then.
Posted by: Skip | April 24, 2009, 9:12 am 9:12 am
Pay your bills on time, deadbeats, and you won’t have to worry about excessive fees and interest.
Posted by: Deadbeatonomics | April 24, 2009, 9:17 am 9:17 am
Obama is truly the Savior of the Irresponsible.
Posted by: marylou | April 24, 2009, 9:20 am 9:20 am
“Pay your bills on time, deadbeats, and you won’t have to worry about excessive fees and interest.”
That’s the whole point: People who DO pay their bills on time are getting hit too.
Posted by: Skip | April 24, 2009, 9:22 am 9:22 am
Has Mr. Obama ever run a credit card company? Has he ever extended credit to anyone. Has he ever faced lawyers in court to try and collect a just debt? In a time when he wants more credit extended, should he be dictating terms to credit card companies? Does the constitution give Mr. Obama the authority to dictate to private companies how to conduct business? Isn’t this just a case of demonizing another group of people for his own aggrandizement?
Posted by: Terry | April 24, 2009, 9:24 am 9:24 am
Mitch in North Carolina…..You’re so naive and ignorant….why? Listens to too much of the Ignorant Fox entertainers…..Competition does Not lower interest rates….What Competition Does CitiBank have other than CitiBank. Citibank owns 90% of credit card companies under the names of their subsidiaries. This is the Secret that is not being told. The other small percentage of bank owned credit cards are attempting to make Billions just as Citibank….late fees, and Changing the Contract. A contract is a Contract. When I signed up for my cards at 8%, and not miss a payment, at best 2 days late due to moving to another State, this was the contract and should have been honored. 30 day late is when credit cards should be applying their Massive Late Fees, Not 1 or 2 days. That’s Robbing. Don’t we have laws governing “Loan Sharks?”
Posted by: sngeorgia | April 24, 2009, 9:27 am 9:27 am
Listen Haters the Credit Card Compaines are GREEDY AND RIPPING PEOPLE OFF Now the President is Responding to the PEOPLE, You Know the People who Elected him his Job is to work for us. So you are going to Bash him for Trying to Protect us from getting ripped off from GREED? UNBELIVEABLE! I know your all use to a President that didnt give a Rats — what when on! BUT CHANGE HAS COME! GOOD CHANGE!
Posted by: Angie in Pa | April 24, 2009, 9:30 am 9:30 am
I am truly Embaressed by you Fox loving News people you People are UNBELIVABLE Just like Faux News! waht a shame
Posted by: Angie in Pa | April 24, 2009, 9:33 am 9:33 am
Since when is it the president’s responsiblity to hold your hands because you think you are treated unfairly? What next? Will he go after corporations who are having layoffs because that’s not fair either? YOU make the decision to be a customer…if you don’t like what they’re doing, close the account. It’s simple, really.
Posted by: stdntDrvr | April 24, 2009, 9:34 am 9:34 am
sngeorgia,
you are the ignorant one. the disclosure that was sent with your plastic states that the bank reserves the right to change your rate at any time. So, is it our fault that you signed-up for the card without reading this ‘contract?’ No. And your whole Citibank argument is well, baseless.
It is not the role of the federal government to hold your hand to ensure you make good, sound financial decisions. Perhaps you shouldn’t rely on your cards so heavily. Saving for something and paying cash isn’t a bad thing, you know. Instant gratification comes at a price.
Posted by: stdntDrvr | April 24, 2009, 9:40 am 9:40 am
“Isn’t this just a case of demonizing another group of people for his own aggrandizement?”
‘Demonizing’? So you think all this public outrage is misplaced? We’ll see how well that works for you in 2010.
Posted by: Skip | April 24, 2009, 9:41 am 9:41 am
The companies are lying about the “down turn” in the economy and the defaults during this period…..BS, these companies were practicing these “shark” fees before the recession and for years. So has we been in a Recession for Years? I say stop, entangling school kids, and others that are Not even working by giving them credit cards, and then raising You Rates on the rest of us that pay our bill. Furthermore, credit cards have no business snooping in my credit history looking to see if I have paid the Other bills that are not related to their card or my pay history with them. So what if I am 10 days late with my light bill….It’s none of their business, and certainly does not Justify you Raising someone’s Rate on their credit Card……….Deregulation cause these and other “Slimy” practices of these companies.
Posted by: sngeorgia | April 24, 2009, 9:45 am 9:45 am
STDNT DRIVER
Some Credit card Compaines will not let you close your account until its paid in full. and Jacking peoples rates up to 20 or 30 percent when they have done no wrong and has always paid on time and if they have a high balance its hard to pay off it could take years because all you are paying is Interest not Principle!
Posted by: Angie in Pa | April 24, 2009, 9:47 am 9:47 am
sngeorgia,
it’s called ‘universal default.’
YOU are a customer. if you don’t like what they’re doing, cancel the card. It is your decision alone. If you did not like the food in a restaurant, would you eat there? probably…and then you would want obama to go in a fix it…
Do not blame the companies…especially when you’re the one supporting them by using the products that they offer.
Posted by: stdntDrvr | April 24, 2009, 9:49 am 9:49 am
Angie,
I really do not need an explanation as to how credit cards function. I know that they won’t close an account until it is paid in full. Just like a bank will not close out a loan until it is paid in full.
You people really believe that this is the government’s job? If people didn’t use the cards, they would have to make them more appealing to the public…which would mean lowering rates/fees/etc. The problem isn’t with the card companies, it’s with the public. What’s the difference between what they are doing (price gouging) and going to a sporting event/concert and paying $3 for a 20oz bottle of Coca-Cola? Nothing. Is Obama going to address that issue as well?
At what point will you people act like an adult and take care of your own affairs? I have a card…my rate isn’t the best…which is why I only use it if I have to. Sure, there are a ton of things I would like to have and with that little card in my pocket, I could get…but it is not worth it.
The rates for cards are high because they are unsecured loans. Do you know how much these companies write off in defaults each year? It is a huge risk these companies are taking to issue these cards. Sure, it’s their decision…and I do not hear them going to Obama saying ‘can you please have these people pay their bills?’
So, if you don’t like the rates/fees…pay it off and close the account. You have no one to blame for this other than yourself. Everything they are doing or have done is stated in your contract…which I bet the majority of the people here complaining never read.
Posted by: stdntDrvr | April 24, 2009, 9:59 am 9:59 am
Angie in PA… nobody is making you use the credit card. Just don’t use it if you don’t like the fees and interest. Above all, don’t exceed your credit limit, and don’t be late with a payment. There are very large differences in what interest rates are charged by different companies. Use those that offer you the best value for your borrowed money. If you want to get out of debt, first stop using credit. Use cash or debit cards for all purchases. I you don’t have the money, don’t buy it. While doing that, make minimum payments on all cards and put as much money as you can in a bank account for emergencies. Then continue making min payments on all cards except the smallest balance. On that one, make the biggest payments you can afford. Get another job if you have to… When that card is paid off, then move on to the next highest balance card. If you have to use your emergency fund, then make min payments on all cards until you build it back up. In no time at all, you will be out of debt. Oh, sure, you will have to live an austere live for awhile, but you can do it!
Posted by: Terry | April 24, 2009, 10:00 am 10:00 am
STDNT DRIVER
So your saying its ok for the Credit card Compaines to Jack your Rates up and charge you Hidden Fees even when you have done no wrong? its ok with you If your late and dont pay then by all means they should Punish. But if you have Fathfully agreed to your Contract and Paid on time or even Paid off your Balance then they should not punish you! especially if you have been a good customer for years!
Posted by: Angie in Pa | April 24, 2009, 10:03 am 10:03 am
Terry
I do not use my Credit Cards and Haved closed Most of my Accounts because of them rasing my rates. One Credit card tried to Bill me Twice what a Job I had trying to Fight that one One credit card Raised my Rate to 31 Percent because I moved called them gave them a Change of Address and they got My address wrong never got a bill Called them it was their Error so I paid for it this is why I dont use credit cards THEY ARE GREEDY AND CORRUPT!
Posted by: Angie in Pa | April 24, 2009, 10:07 am 10:07 am
Suppose credit card companies, after you paid off your cards, made you keep paying and used the money to make payments for other? Isn’t that what the government does? Taxes you earnings and gives it to those who haven’t earned it? Of course, first they consume 90 percent of every dollar in administrative fees. Maybe the government should stick to its constitutionally enumerated powers and stay out peoples wallets.
Posted by: Terry | April 24, 2009, 10:10 am 10:10 am
Terry
Taxes pay for Police Officers, Schools,Roads, Bridges, Unlike the Credit card Compaines Ripping you off for Big ceo Bonuses!
Posted by: Angie in Pa | April 24, 2009, 10:13 am 10:13 am
Angie,
I’m not saying it’s right or wrong. I am saying that these things are oulined within your disclosure…so, they aren’t ‘hidden’ fees. As far as your rate going up, it is law that they nofify you 30 days prior to the increase.
The point is that these things are known by the cardholder upfront if they actually take the time to read the contract. There are no ‘surprises’ other than when they increase your rate. There are quite a few companies who are increasing rates and decreasing credit rates due to the new laws going in next year. Yes, all of it sucks…but it’s an issue between the customer and business. It should not be address by the president…you should go through the BBB instead. It’s not his job at all.
Posted by: stdntDrvr | April 24, 2009, 10:13 am 10:13 am
Angie,
You are doing well, then… the less credit the better. However, I don’t agree that it was the credit card companies fault that you did not pay one bill during change of address. Every credit card has a phone number on it. When you didn’t get the bill, you should have call them.. just my opinion…
I have a good story, I got hit with a late fee because I paid my bill too early! I paid by computer 2 days before the billing cycle for the previous period ended. So the payment was recorded as second payment in the previous period. I spent the next month thinking I was ok. Then I got a call from the company asking me about my payment. When I got the next bill, it had a late fee on it. However, when I got a couple of bills together, and called the company, they apologized and reversed the late fee. I still don’t want President Obama’s help in dealing with the credit card companies. Individual rights, individual responsibilities – government stay out please!
Posted by: Terry | April 24, 2009, 10:18 am 10:18 am
Terry
I did call them It was the Person who took My Address she got it Wrong. But I paid for it they said sorry But you were Late first time I ever was, stll Jacked it up to 30 percent. I respect your views on no Goverment me on the Other hand I favor Commonsense Regualtion to stop the Greed and Ripping off of the People good day!
Posted by: Angie in Pa | April 24, 2009, 10:29 am 10:29 am
Grand Political Theatre, indeed.
Obama bounces from one industry to another, stoking the flames of popular resentment in a time of crisis, in order to pad his poll ratings and to distract from the devastation his policies are doing to our nation.
“My administration is the only thing between you and the pitchforks,” Barack Obama told the CEOs of the world’s most powerful financial institutions on March 27.
Posted by: carl | April 24, 2009, 11:50 am 11:50 am
Credit card companies obtained “bank” status and were the recipients of TARP funds.
This is a show. In the article they mention that the federal reserve is about to initiate new regulations.
For Obama who “disagrees” that it is adequate, even though his hand and tax cheats control the federal reserve, nothing will be enough.
Whatever ills that credit card companies need to cure can be done with legislation.
Obama is treating these companies like the banks and dictating to them
The next logical step will be to pay off credit cards for shirkers who have been “victimized”. Just as we are doing with mortgages.
Obama is by stealth taking control of every part of our economy and will thereby control us.
This show is only intended to incite anger so that his next power play will be perceived as a good thing, instead of part of a larger plan to control every dime every citizen makes.
This event cannot be seen in isolation.
Obama has shifted the US bankshares in some banks that basically nationalizes them, and guarantees that not only will the taxpayers never be paid back, he gets to use his power to decide winners and losers for loans, credit card deals, mortgages, business start ups, basically everything.
This is a set-up for corruption that we will never overcome and will cost us more than we can imagine.
Posted by: MNM | April 24, 2009, 12:38 pm 12:38 pm
No sooner said than done. Feds are now seeking to oust Citi-bank CEO. This is based on a stress test for which the feds set the parameters and could thereby control the outcome, all of the details kept secret.
We need to remember that AIG funneled 200 Billion of its bailout to Euro banks, at the request of the feds and with the demand they keep quiet.
So what plan did this CEO not cooperate with? Secrecy and control. This is like living in a communist country, while the state run media shows us pretty pictures.
The government involvement in private business is deepening. They will not allow TARP re-payments because they lose control of the bank.
This is a gathering, fearsome, major move toward limitless corruption, just like any 3rd world country, but with US funding.
Posted by: MNM | April 24, 2009, 12:47 pm 12:47 pm
We are deep poo!
young voter: Start saving for you will be picking up the slack down the road.
If that doesn’t bother you..so be it.
Posted by: lvh | April 24, 2009, 5:00 pm 5:00 pm
President Obama can we get the same deal for taxes. Everyones taxes will go up. (Cap and trade, carbon tax, fuel taxes, taxes on small buisness and corperations) all these taxes end up being paid by consumers and employees. If the government takes more of your bosses money how does he pay your wages and benifits, If utilities and companies spend more on (clean energy) you pay more for what they provide.
If it is good for Credit card companies to restrain themselvesit would be good for the govermnent as well. Taxes are an expense, they are paid by the guy that can’t pas them on.
Posted by: Philip V. | April 24, 2009, 10:38 pm 10:38 pm
OK.. Credit Card Issuers (as a group) should allow $100,000,000.00 in fee and interest increases (over the next 12 months).. same as the public sector’s sacrifice.. HeHe
Posted by: DontGet818OnMeNow | April 25, 2009, 4:24 pm 4:24 pm
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Credit Card Deals
Posted by: Mary Peter | June 5, 2010, 4:25 am 4:25 am
Now a days credit cards are facing many problems like if someone knows our password they can easily withdraw our money using our credit card.Hence we should not tell our password to any one.!!
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johnpeter
Posted by: Finance Software | June 8, 2010, 12:46 am 12:46 am