Obama to meet with credit card bosses today

04.23.09
By Sarah Beldo

It is increasingly looking as if Washington may be finally ready to pass legislation to help protect consumers from predatory lending practices - and President Obama is helping to advance the cause.

Today, Obama is scheduled to meet with the heads of 14 credit card companies to talk about lending practices and consumer protections. Industry analysts told ABC News the executives expect the president will ask for their help reining in certain practices, while also warning that legislation is on the way.

Obama's adviser Valerie Jarrett said that the administration is "working with Congress on legislation that will promote simplicity, require transparency, demand fairness and ensure accountability - so that we can strengthen consumer protections against abusive and deceptive practices."

Meanwhile, another step toward a reform of credit card company practices was taken on Wednesday when the U.S. House Financial Services Committee approved the Credit Cardholders' Bill of Rights.

The bill, which passed with a bipartisan vote of 48-19, could be set for a vote by the entire House of Representatives next week. Among other things, the bill would prohibit retroactive interest rate hikes and require a 45-day notice before any rate increase.

While consumers may welcome these changes, the lenders largely oppose the legislation. Credit card industry analysts say the potential for stricter controls over lending practices could take away a key revenue stream when they are already struggling to stay afloat.

They also defend the practice of risk-based pricing, saying that without it, all credit card customers will be subject to higher fixed rates and credit will be more difficult to come by.

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Obama is scheduled to meet with the heads of 14 credit card companies to talk about lending practices and consumer protections.