Obama administration to crack down on credit card companies

22 April 2009

The Obama administration is gearing up to revise the rules of the game for credit card lenders in a bid to crack down on high interest rated and practices it claims contributed to the economic crisis.

The drive is the latest in a series of measures to impose greater regulation and oversight on credit card companies. Analysts expect the drive to run into stiff resistance from an industry that has seen an increasing number of defaults and delinquencies in recent times.

Indeed companies have warned that the proposed measures could tighten credit and damp the increased consumer spending that would be necessary for economic recovery.

President Obama along with chief economic advisor, Lawrence H Summers is scheduled to meet at the White House with executives from leading credit card companies including American Express Co, Bank of America Corp and MasterCard Inc, later in the day today.

Increasing defaults and delinquencies with the deepening recession has forced many of the lenders to increase interest rates

Summers said on Sunday that the president was focusing on such credit card abuses that have to do with people who have been deceived into paying exorbitant interest rates that they would not have paid if they had known the real picture.