White House seeks simpler credit card fees, terms

Reuters News
Posted: Dec 07, 2011 6:08 AM
White House seeks simpler credit card fees, terms

WASHINGTON (Reuters) - The White House said on Wednesday it wants to make it easier for credit card holders to understand the interest rates and fees they are charged to avoid more financial strain on the middle class.

Previewing an announcement by the new Consumer Financial Protection Bureau (CFPB), Obama administration officials said simplified credit card agreements would help avoid confusion and stress for those struggling to make ends meet.

The CFPB will release a prototype agreement that explains in plain and concise language the prices and features of credit cards, "separate from the legalese," as a model for credit card companies to follow, the White House said.

Better managing of household debt is a priority for the United States following the 2008 financial crisis, which was triggered in large part by cash-strapped homeowners stretched too far with mortgages and home equity credit lines.

The credit card announcement followed a highly populist speech by President Barack Obama, who is trying to convince 2012 voters he is an effective economic leader in spite of still-high U.S. unemployment and weak growth.

The Democrat said in Kansas on Tuesday that he would look to toughen penalties against big banks that break anti-fraud rules and said strong financial oversight was needed in light of the "make or break moment for the middle class."

There are about 514 million credit cards in circulation in the United States -- more than 1.5 for every adult and child. Americans used credit cards to spend an estimated $1.9 trillion in 2010, according to the administration.

(Reporting by Laura MacInnis, Editing by Vicki Allen)