Obama Backs Credit Card Industry Reform

Progress on the credit card reform front: The House Rep. Carolyn Maloney's Credit Cardholders' Bill of Rights (which I first wrote about back in September of last year) has cleared the House Financial Services Committee. The Senate is presently working on a similar bill sponsored by Chris Dodd and Charles Schumer. And President Obama has signaled that he supports such reform efforts:

President Obama is making clear to credit card executives today that he intends to back efforts to crack down on what lawmakers consider to be deceptive practices, even as the industry criticizes legislation in the House of Representatives as dangerous to the nation's hopes for an economic recovery.

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This afternoon, senior executives from 13 companies -- including Gordon Smith, chief executive of Chase Card Services for J.P. Morgan Chase & Co.; Paul Galant, chief executive of N.A. Cards for Citi; and Richard Struthers, president of Global Card Services for Bank of America -- are meeting with Obama and his top economic aides at the White House. Edward L. Yingling, president and chief executive of the American Bankers Association, was also scheduled to participate. The president was to be accompanied by Treasury Secretary Timothy F. Geithner, top economic adviser Lawrence Summers, chief economist Christina Romer and senior adviser Valerie Jarrett. Aides said Obama will make clear that the power of the White House will be behind the legislation.

"The President believes new rules of the road for the credit card industry are needed and he looks forward to having an open and productive conversation tomorrow with the representatives of the credit card industry about the impact of the current crisis on consumers," Obama aide Valerie Jarrett said in an e-mail sent late yesterday.

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Obama is expected to tell the executives today that he wants to go further than the House bill without specifically endorsing all of the provisions of Dodd's bill. Administration officials confirmed that the president will push for stronger rules in some areas than those proposed in the legislation but is "broadly supportive" of the bills working their way through Congress.

Also today, U.S. Sen. Charles E. Schumer (D-N.Y.) and Senate Banking Chairman Christopher J. Dodd (D-Conn.) called on federal regulators to implement an emergency freeze on interest rates tied to existing balances on credit cards. The Federal Reserve's new rules would limit such rate increases, but not until July 2010.

No word on how that last proposal will go over. But it's always a pleasure to see businesses prevented from ripping customers off.