The White House says that it will back congressional efforts to clamp down on credit card abuses in an effort to address the recession’s effect on Main Street.
The House and Senate are considering a credit card bill of rights to limit the ability of credit card companies to raise interest rates on existing balances and to require greater disclosure. White House economic adviser Larry Summers said people needed to save more, but that the government also needed to curb credit card pitches that addict people to plastic.
US President Barack Obama was “going to be very focused, in a very near term, 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,” Summers said.
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.”
Summers made the comments in an interview broadcast on Sunday on NBC’s Meet the Press. He was attending a summit of Western Hemispheric leaders in Trinidad and Tobago.