In a late afternoon Rose Garden ceremony, President Obama signed the “Credit Card Accountability, Responsibility and Disclosure Act,” or credit card bill of rights, and said card holders and card companies need to act responsibly when it comes to taking on and managing debt.
“We're not going to give people a free pass, and we expect consumers to live within their means and pay what they owe, but we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives,” he said.
The legislation passed Congress this week with overwhelming bipartisan support, a response to the groundswell of frustration nationwide at the confusing and perhaps deceptive rate hikes and fees levied by credit card companies for the slightest late payment or no reason at all.
The president was joined on stage for the signing by a dozen members of Congress including Sen. Chris Dodd, D-Conn., and Sen. Richard Shelby, R-Ala., chairman and ranking member respectively of the Senate Committee on Banking, Housing, and Urban Affairs.
Obama stressed that he does not excuse or condone consumers who have acted irresponsibly with their credit cards but noted that even responsible users have been hit with higher costs, when card companies increase rates or require card holders to pay down debt with the lowest interest rate first instead of the highest.
Obama said he wanted to be clear that the credit card companies do provide a valuable service, but they too need to act responsibly.
“We don't begrudge them turning a profit,” the president said. “We just want to make sure that they do so while upholding basic standards of fairness, transparency and accountability.”
According to statistics from the Federal Reserve, credit card debt in the United States has increased by 25 percent in the last 10 years and reached $963 billion in January 2009. The average amount of credit card debt among families was $7,300 in 2007.
At the Rose Garden ceremony, Obama did not mention one controversial element of the bill – an amendment that gave states the power to allow loaded concealed weapons in national parks and shelve a long-standing National Park Service rule against weapons.
-- Karen Travers and Z. Byron Wolf