Credit card reforms go forward at a steady gait

The Obama administration called for an end to unjust credit card industry practices such as retroactive interest rate increases for any reason, late-fee traps that penalize borrowers with weekend or middle-of-the-day deadlines and teaser rates that last less than six months. The Treasury Department released a written statement where the administration outlined practices it would like Congress to reform. One suggestion would force card companies to apply payments above the minimum amount to the highest interest rate debt. To crack down on over-limit fees, the administration would also like Congress to require card companies to get customers' permission to set up accounts so transactions over the limit can still be processed. Another suggestion touches the duty of card issuers to post periodically information online about rates, fees and other terms to increase transparency. Regulators would also be required to formally request public input on market trends and consumer protection on a biannual basis. Yesterday's meeting came a week after Obama met with the heads of the largest credit card companies at the White House. He has called credit card reform a key element in reviving the economy. However, banking officials have resisted change, warning that it would have the unintended consequence of forcing them to restrict lending or raise rates and fees because it would be more expensive to do business.