It appears today that the Obama administration is barreling down the tracks toward a Thursday train wreck with credit card companies.
A White House meeting is on the books with representatives of Bank of America, HSBC, Capital One and others who, flush with taxpayer cash from the TARP program, are further bolstering their balance sheets by unilaterally jacking interest rates into the stratosphere. The reason? The “risk of doing business,” they say.
While I remain skeptical that Obama and Congress can withstand the onslaught from the phalanx of credit card lobbyists, it’s at least interesting to note that they’ve been called on the carpet like their other financial brethren.
I wonder if Obama will limit them to one glass of water and no munchies, as he did some of the bankers when he warned them, “We’re the only thing between you and the pitchforks.”
While I don’t question the banks’ risk of doing business, it appears to me that the real risk lies with consumers who made the unfortunate decision to do credit card business with some of these institutions.
An additional note: Once you complete the McClatchy piece, go down to the bottom and read the credit card practices study by Pew Charitable Trusts. It directly contradicts industry claims that they can’t remain profitable without unilateral account control.