May 12, 2009
As the credit card crisis continues, the White House is once again flexing its influence to confront the issue affecting a large majority of American citizens. This time, President Barack Obama plans to hold a town hall meeting during a planned stop in New Mexico on May 14. The President plans to open discussions on the credit card crisis during the meeting and to push for the passage of the credit card reform bill in Congress.
Robert Gibbs, press secretary of the White House, expressed to reporters the administration’s “strong desire to get something done on an issue of tremendous importance to middle class families and that is to rein in some of the excesses and some of the abuses that we’ve seen from credit cards over the past many years”.
Gibbs further elaborated on the administration’s stance saying, “For many people, credit cards provide an opportunity to finance purchases, but we think there’s a more equitable way to do that. Those reforms are on their way through Congress.”
The White House press release came as cardholders were reeling after the effects of the sudden interest rate increases and banking fees that came to effect last year and earlier this year. Rate hikes and card fees became the norm as banks struggled to keep afloat while the economic crisis continued. Unfortunately, cardholders were ill prepared for the sudden interest and fee increases, having to contend with a failing job market and a drop in the property markets.
The first signs of the changes on credit card legislation were first seen in the new federal rules which were set to become effective on July 1, 2010. Earlier this year, the credit card crisis got some much needed attention from President Barrack Obama and a bill arrived in the House of Representatives early this year.
The credit card amendment has already passed through the lower house and is currently going through deliberations in the U.S. Senate. It passed through the House of Representatives late in the month of April and was known as the Credit Cardholders’ Bill of Rights. The passage was by an overwhelming vote of 357 to 70.
In the U.S. Senate, the bill is sponsored by Senator Christopher Dodd and Senator Richard Shelby, who is Dodd’s GOP counterpart. The Senate bill has been named as The Credit Card Accountability, Responsibility, and Disclosure Act or the Credit CARD Act. The bill is supposed to be a tougher version of what the House of Representatives recently passed.
As the bill continues to be deliberated in the senate, President Obama’s town hall discussion is calculated to boost support for it and, at the same time, inform the public on what the bill entails and what it will mean for the American cardholder.
interest rates higher than they are currently and decrease available credit across the board. It is painfully clear that consumers and their financial well being is not a point of concern for banks. That realization on it’s own is enough to anger Americans who have lost jobs, homes and their life savings in the last year. Now when you remember that many big banks have received bailout money to support their business, it is almost unbelievable the lengths they are willing to go to avoid regulation. While bank executives and government officials argue over unfair practices consumers remain at the mercy of the credit card giants. To offer consumers some level of protection, Senate Chris Dodd and Senator Chuck Schumer have proposed an immediate credit card rate freeze. The House of Representatives is also considering legislation (Credit Cardholders’ Bill of Rights Act) which also contains provisions which prohibit credit card practices that punish responsibly customers.