Card Issuers Face New Scrutiny
Credit Executives Are Summoned To White House By Nancy Trejos and Binyamin Appelbaum
Washington Post Staff Writers
Friday, April 17, 2009
Under pressure for questionable industry practices, top executives of 14 of the nation's largest credit card companies are heading to the White House on Thursday for a meeting with senior administration officials. The executives plan to talk about their efforts to increase transparency and help the economy, according to an industry official and a Capitol Hill aide, both of whom spoke on condition of anonymity because the meeting has not been announced.
The credit card industry has been under intense scrutiny in the past year for practices such as arbitrarily raising interest rates, charging excessive fees and giving customers little time between billing them and requiring payment.
In December, the Federal Reserve approved new rules that would ban such practices. But consumer groups and several members of Congress criticized the Fed's efforts because the new regulations don't take effect until July 1, 2010. Bills have been introduced in both the House and Senate to accelerate that timeline.
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Consumer advocates and congressional leaders said they were pleased that the Obama administration would meet with the card issuers.
"The federal government is assisting the credit card companies in two significant ways, and we would hope this meeting would focus on how the White House can get credit card companies to immediately begin these reforms," said Travis Plunkett, legislative director of the Consumer Federation of America.
"If what we hear about a White House meeting is true, it makes a lot of sense given that President Obama campaigned on credit card reforms and the Fed has already ruled that their practices are unfair and deceptive," said Rep. Carolyn B. Maloney (D-N.Y.), who introduced one of the bills that aims to crack down on credit card practices.
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