WASHINGTON — The Obama administration is moving to rewrite the rules of the game for credit card lenders, vowing to crack down on high interest rates and predatory practices it says contributed to the economic crisis.
The drive, which comes as Congress takes up competing plans to impose greater regulation and oversight on card companies, faces stiff resistance from the industry. Companies warn that proposed bills could tighten credit and damp the increased consumer spending they say is necessary for economic recovery.
On Thursday, President Obama and his chief economic advisor, Lawrence H. Summers, will meet at the White House with executives from leading credit card issuers, such as American Express Co., Bank of America Corp., Visa Inc., Capital One Financial Corp. and MasterCard Inc.
Many of those lenders have raised interest rates substantially as the recession has deepened, and defaults and delinquencies have shot up.
Summers said Sunday that the president was focusing on such credit card abuses as those "having to do with the way people have been deceived into paying extraordinarily high interest rates that they wouldn't have paid if they knew what they were getting themselves into."
On Monday, White House spokesman Robert Gibbs said there were several goals for the Thursday meeting.
"There are meaningful uses for credit, obviously, in this economy," Gibbs said. "What we want to do is make sure that people have access to credit, but you can also do this in a way that's transparent and fair."
Also this week, members of the House Financial Services Committee will consider a bill by Rep. Carolyn B. Maloney (D-N.Y.) referred to as the Credit Cardholders' Bill of Rights. The measure takes its name from Obama's pledge in the presidential campaign to provide more protection for consumers from arbitrary interest rate hikes and late fees.
One thrust of the Maloney bill, which also is backed by Financial Services Committee Chairman Barney Frank (D-Mass.), would call for clearer labels on the financial products, similar to those used for food. The White House wants a system that rates credit card offers for consumers, Gibbs said.
The Maloney bill is similar to rules the Federal Reserve will put into effect in 2010.
A version of the bill passed the House last year with significant Republican support. Maloney said Monday that she hoped for quick congressional action on the measure.
