Obama again summons credit-card company chiefs

24 April 2009

US President Barack Obama has called top executives from 14 large US credit-card companies to the White House for the second time today to protect consumers from the abusive practices and curtail the unique powers they wield in the world of retail lending.

Executives from Bank of America, American Express, Citigroup, Wells Fargo, JPMorgan Chase, Capital One Financial, Visa Inc and MasterCard will be among those trooping to the White house for the second dressing down today to the White House.

The Obama administration wants to create a level playing field in times of recession as the credit-card issuers are facing increasing accusations of  fleecing and deceiving gullible consumer by charging high interest rates and changing terms midway arbitrarily, even on healthy accounts.

The Pew Charitable Trust along with the Sandler Foundation conducted a year-long survey till December 2008 to address the growing concerns about abuses in the credit-card industry.

It surveyed 20 consumer groups, credit-card providers, and all general-purpose consumer credit-cards offered online by the 12 largest issuers, which control over 88 per cent of outstanding credit-card debt in the US.

Their survey showed that between 2007 and 2008, credit-card issuers used their contractual powers to arbitrarily raise interest rates on nearly 70 million cardholders.