The White House's Next Target: Credit Card Companies (V, MA, COF, AXP, DFS)
Tweet
Share
E-mail
Get Alerts V Hot Sheet
Join SI Premium – FREE
It appears President Barack Obama will soon turn his focus to high credit-card rates, giving a potential boost to congressional efforts to put limits on the industry.
White House economic adviser Larry Summers said on NBC's "Meet the Press" that the president is "going to be very focused, in a very near term, on a whole set of issues having to do with credit-card abuses." He said abuses do include charging consumers "extraordinarily high rates that they wouldn't have paid if they knew what they were getting themselves into."
Larry Summers is scheduled to meet with the heads of several of the largest U.S. credit-card companies at the White House on Thursday.
In recent weeks, credit card issuers and banks have come under scrutiny for raising their rates, while they are receiving government bailouts. The banks argue that changes in borrowers' credit scores necessitated the increases.
In December, the Federal Reserve finalized new rules that limit some credit-card rate increases, but those rules don't take effect until July 2010. There is now legislation pending in Congress that would accelerate implementation of the new restrictions on credit card companies.
If Obama does campaign against the credit card companies, I'd expect that to hurt credit card transaction volume, and the following companies could see some tough waters ahead.
White House economic adviser Larry Summers said on NBC's "Meet the Press" that the president is "going to be very focused, in a very near term, on a whole set of issues having to do with credit-card abuses." He said abuses do include charging consumers "extraordinarily high rates that they wouldn't have paid if they knew what they were getting themselves into."
Larry Summers is scheduled to meet with the heads of several of the largest U.S. credit-card companies at the White House on Thursday.
In recent weeks, credit card issuers and banks have come under scrutiny for raising their rates, while they are receiving government bailouts. The banks argue that changes in borrowers' credit scores necessitated the increases.
In December, the Federal Reserve finalized new rules that limit some credit-card rate increases, but those rules don't take effect until July 2010. There is now legislation pending in Congress that would accelerate implementation of the new restrictions on credit card companies.
If Obama does campaign against the credit card companies, I'd expect that to hurt credit card transaction volume, and the following companies could see some tough waters ahead.
- Visa (NYSE: V) down 4.31% today to $55.45
- MasterCard (NYSE: MA) down 5.67% to $153.85
- Capital One (NYSE: COF) down 23.46% to $13.67
- American Express (NYSE: AXP) down 12.88% to $18.98
- Discover Finanical (NYSE: DFS) down 9.82% to $7.71
Create E-mail Alert Related Categories
Insiders' BlogRelated Entities
Barack ObamaSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
