Obama says it’s time for common sense credit card reform

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Tuesday, March 24th, 2009

While the pundits and folks like Huffington focused on Obama’s support for Geithner or his minor gaffs, we perked up at the following exchange:

Obama: Most of the stuff that got us into trouble was perfectly legal. And that’s a sign of how much we’ve got to change our laws. We were talking earlier about credit cards. It’s legal to charge somebody 30% on their credit card and charge fees and so forth that people don’t always know what they are getting into. So the answer is to deal with those laws in a way that gives the average consumer a break. When you buy a toaster, if it explodes in your face, there’s a law that says your toasters need to be safe. But When you get a credit card or you get a mortgage, there’s no law on the books that says if that explodes in your face financially, somehow you’re going to be protected. So this is the need for getting back to some common sense regulations. There’s nothing wrong with innovation in the financial markets, we want people to be successful, we want people to be able to make a profit, banks are critical to our economy and we want credit to flow again, but we just want to make sure there’s enough regulatory common sense in place that ordinary Americans are not taken advantage of and taxpayers at the back end are not taken care of.

Leno: When I was a kid, banks or credit cards would lend you money so you could pay it back. Now they lend so you can’t pay it back. Its like we were talking before, Mr. Potter, the meanest man, he owned the whole town, what did he charge on a mortgage, 2%!

Obama: He’s like Mother Theresa now.

Indeed. We sent a letter up to the Hill urging the President to prioritize credit card reform the day of his Leno appearance. The banks have come a long way, and not in a very good direction. We’re glad to see the highest level support for common sense credit card reform that curbs interest rates and fees and gives consumers some protection against products that “explode in your face financially.”

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