Obama calls for credit card reform

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By The Staff

RIO RANCHO — Cheers echoed loudly and often inside Rio Rancho High School’s gymnasium during President Obama’s town hall meeting Thursday morning.

The president focused his talk on credit card reform. He discussed the need for an immediate overhaul of the credit card industry and his commitment to signing the Credit Card Bill of Rights into law by Memorial Day.

The audience erupted in enthusiastic applause when Obama vowed to work with Congress to pass comprehensive legislation.

“Americans need a durable and successful flow of credit in our economy, but we can’t tolerate profits that depend upon misleading working families,” Obama said. “For too long, credit card contracts have been deceptively complicated, often leading consumers to pay more than they reasonably expect due to unfair practices.”

Albuquerque resident Christine Lardner spoke of her entanglement with a credit card company. She and her husband have two children in college.

When a tuition payment mistakenly charged to a credit card put her over the limit, her credit card company more than tripled her rate to nearly 30 percent.

Lardner described the incident in an e-mail to the White House. The White House press office informed her Monday that her e-mail was selected for forwarding to the president.

The White House contacted Lardner a second time asking if she’d be willing to speak briefly at Thursday’s town hall. She agreed, wrote her speech and sent it in. The next thing Lardner knew – she was asked to introduce the president.

“I was just shocked,” she said with delight.

The registered Democrat described meeting the president with her family just before the event saying, “He was wonderful, very down to earth. My seventh grade son said ‘he’s just like somebody’s dad’.”

During his town hall talk, Obama said Americans pay some $15 billion in penalty fees annually. Nearly 80 percent of American families have a credit card and 44 percent carry a balance.

“It’s time for strong and reliable protections for our consumers,” he said. “It’s time for reform that is built on transparency, accountability, and mutual responsibility – values fundamental to the new foundation we seek to build for our economy.”

During his time in the U.S. Senate and throughout his presidential campaign, Obama called for measures to strengthen consumer protection in the credit card market.

He also met with representatives from the credit card industry in April to discuss the impact of the current economic crisis on consumers.

The Federal Reserve has taken a strong first step toward improving disclosures and ending unfair practices, Obama said, and this week the Senate brought a strong bill to the floor that would codify and strengthen these regulations.

The House already passed such a bill in a strong bipartisan vote.

Obama highlighted critical elements to be included in long-term credit card reform:

• First, there have to be strong and reliable protections for consumers – protections that ban unfair rate increases and forbid abusive fees and penalties. The days of “any time, any reason” rate hikes and late fee traps have to end.

• Second, all the forms and statements that credit card companies send out have to have plain language that is in plain sight. No more fine print, no more confusing terms and conditions. We’re going to require clarity and transparency from now on. 

• Third, we have to make sure that people can shop for a credit card that meets their needs without fear of being taken advantage of. That means requiring firms to make all their contract terms easily accessible and giving consumers the information they need to go online and do some comparison shopping. It also means requiring firms to offer at least one simple, straightforward credit card that offers the strongest protections along with the simplest terms and prices.

• Finally, we need more accountability in the system, so that we can hold those responsible who do engage in deceptive practices that hurt families and consumers.

“To do that, we’ll beef up monitoring and enforcement and also penalties for any violations of the law,” he said.

Lardner expressed confidence Obama will reform the credit card industry because he is committed to do so, she said.

Apart from the president, Lardner was the only person who spoke at Thursday’s event. Gov. Bill Richardson sat quietly in a chair placed on the floor along the left side of the stage with House Speaker Ben Lujan, Lt. Gov. Diane Denish, Rio Rancho Mayor Tom Swisstack and others. The president pointed over to Richardson and called him “a great friend and one of the finest governors in the country.”

Obama nominated Richardson for Commerce Secretary several months ago. The governor accepted, then rejected the offer after becoming embroiled in a pay to play investigation of which he has denied any wrongdoing.

The president left Rio Rancho about 11:45 a.m., after talking and taking questions for an hour or so.

Contact Carol A. Clark at lanews@lamonitor.com or (505) 662-4185 ext. 25. Read her blog at www.newsextras.wordpress.com.