Obama speaks out against credit card fees

05.11.09
By Sarah Beldo

Could new credit card rules arrive this month? The fervor for reform seems to have taken hold in Washington, with some lawmakers demanding the issue be approached with increased urgency.

On Saturday, President Obama used his weekend radio and internet address to speak out in favor of stricter rules governing credit card issuers' practices - and pushing for legislation to be delivered by Memorial Day.

"Americans know that they have a responsibility to live within their means and pay what they owe," Obama said. "But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties and hidden fees that have become all too common."

Obama's call for action comes as Congressional lawmakers have been debating rules that would crack down on some fees and aggressive interest rate increases that may worsen credit card debt, as well as ensuring customers get more warning about changes to their account.

The Credit Cardholders' Bill of Rights has already passed in the House of Representatives and now the Credit CARD Act - a slightly tougher version of the legislation - is awaiting debate in the Senate.

Today, Politico reported that Democratic Senator Christopher Dodd and Republican Senator Richard Shelby have reached an important compromise regarding the bill, which may lead to more bipartisan report.

In the original legislation, sponsored by Dodd, credit card companies would not be permitted to raise interest rates on existing balances, even in cases where a cardholder had missed payments.

According to the news provider, the two senators have agreed that the rules will be amended to say issuers can hike rates on these balances if a consumer is at least 60 days late with a payment.

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Obama is pushing for new legislation to be delivered by Memorial Day.