Obama to take aim at credit card abuses

WASHINGTON (Reuters) - President Barack Obama plans to crack down on deceptive credit-card industry practices that have saddled U.S. consumers with huge debts and soaring interest rates, U.S. officials said on Sunday.

A customer swipes a credit card at a gas pump in Centennial, Colorado June 26, 2006. REUTERS/Rick Wilking

Top White House economic adviser Lawrence Summers said Obama would be “very focused in the very near term on a whole set of issues having to do with credit card abuses.”

“We need to do things to stop the marketing of credit in ways that addict people to it,” Summers said in an interview on the NBC television talk show “Meet the Press.”

Summers, director of the White House National Economic Council, said the administration is concerned about practices that result in consumers being “deceived into paying extraordinarily high rates that they wouldn’t have paid if they knew they were getting themselves into.”

Summers and other officials are scheduled to meet on Thursday at the White House with top executives of credit card companies.

The meeting comes as lawmakers in the Democratic-led Congress have vented anger that banks with big credit card operations charging high interest rates and fees are the same institutions getting government bailouts from U.S. taxpayers who use these credit cards.

The House of Representatives and Senate are considering a credit card “bill of rights” that would limit the ability of credit card companies to raise interest rates on existing balances and require greater disclosure of terms.

Federal Reserve Chairman Ben Bernanke has spoken out against complexity in consumer lending practices that is designed to confuse customers and drive up lending fees.

The Fed tightened rules on credit-card practices in December, but the proposed legislation would take that further.

White House spokeswoman Jen Psaki said credit-card abuses were a priority for Obama, who highlighted the subject during his campaign last year. “We look forward to working with Congress on these issues,” Psaki said.

Reporting by Caren Bohan; Editing by Bill Trott