Obama will support credit card reform, hoping to spur increase in savings rate RAW STORY

Published: Sunday April 19, 2009





Print This Email This One of Americans' traditional financial foes  credit cards companies  may soon be more tightly regulated in favor of consumers.



President Barack Obama is willing to sign a "credit card bill of rights" if it is passed by Congress, White House economic adviser Larry Summers said today on NBC's Meet the Press. The bill, under consideration by both the House and the Senate, would - among other things - limit the ability of credit card companies to raise interest rates on existing balances.



The changes would be a huge relief to Americans drowning in debt during the worst financial crisis since the Great Depression. The White House hopes it will spur an increase in the current historically low U.S. household savings rate.



Summers said Obama will soon focus "on a whole set of issues having to do with credit card abuses, having to do with the way people have been deceived into paying extraordinarily high rates that they wouldn't have paid if they knew what they were getting themselves into."



The AP reported:



Summers said the administration wants to see a better-regulated financial system, encourage savings and eventually get back to a situation where government spending is not a drain on the economy.



"Individuals are going to have to save more, that's why savings incentives are so important," he said. "That's why we need to do things to stop the marketing of credit in ways that addicts people to it - so that our households are again saving, and families are again preparing to send kids to college, for their retirement, and so forth."





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