This editorial appeared in The Fresno Bee.
President Barack Obama is expected to quickly sign a credit card reform bill that was just sent to him by Congress. These are solid reforms that will help restore some fairness to the credit card system for consumers.
Credit cards have become a vehicle for banks and others in the credit industry to routinely gouge consumers with excessive fees, sudden increases in interest rates and misleading promotional rates. That's why consumers demanded changes.
The Senate passed the reform bill on Tuesday and the House followed on Wednesday. These reforms have long been supported by the president, and White House officials said Obama looks forward to signing the bill.
The credit card industry opposed the changes, claiming they would limit credit and would result in higher interest rates on all consumers to make up for bad credit risks who receive consumer protection. The big hole in the industry logic is credit card rates already have been hiked to double-digit levels, and higher, at a time of historic low interest rates.
Credit cards rates have been used by the industry to make up for bad financial decisions they've made in other areas. Consumers, even those with solid credit, have been subsidizing poor decision-making by the financial services industry.
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