Obama has round-table talk on South Side
Democratic White House hopeful Barack Obama held a round-table talk today on the South Side with three consumers gouged by credit card companies.
“For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can’t afford,” Obama said.
(AP)
The credit card companies start with teaser rates of four percent, then jack them up to 30 percent, lower customers’ credit limits so they can then charge interest, late fees and over-the-limit fees on them, said Obama and Elizabeth Warren, a Harvard Law School professor who participated in the event.
Obama said he knew only too well how easy it was to get caught by deceptive credit card deals: ÒIn the interest of full disclosure, I've gone through this. I've had credit cards,Ó Obama said.
ÒWe have a bunch of regulators in Washington who see their job as protecting banks and see you folks as little profit centers for them,Ó Warren said.
Obama's Republican rival, Arizona Sen. John McCain, has been on the other side of bills on which Obama fought for consumer rights, such as the bankruptcy bill, Obama said. The bill made it harder for consumers drowning in credit card debt to seek refuge in bankruptcy, Obama said.
ÒI fought this bill hard, as many of my colleagues did as well,Ó Obama said. ÒUltimately it passed. It was jammed through. John McCain was strongly supportive of this bill.Ó
Obama acknowledged that, ÒPart of why our debt crisis is so bad is that some folks are making reckless decisions -- racking up big credit card bills by purchasing flat-screen TVs and other luxury goods that they know they can't afford.Ó But he said the credit card companies are pushing many responsible consumers into inescapable debt.
He proposes a ÒCredit Card Bill of RightsÓ that bans the companies from unilaterally changing rates, especially on past debt; and a ban on charging interest on late fees.
Obama and Warren had originally planned to have Wednesday's event in Cedar Rapids, Iowa, with Iowa victims of credit card gouging. But that city is experiencing severe floods. So the campaign late Tuesday scrambled to line up three Chicago-area consumers struggling with credit card debt.
Northwest Sider Rosa Figueroa, 43, racked up big charges on her credit card just paying for daily needs after her divorce. She got the credit card company to defer interest, but then found out the company just tacked on all the accrued interest without notifying her. She filed for bankruptcy five years ago before the laws changed.
Marvin Weatherspoon, of Blue Island, found his credit card raising his rate from 4.5 percent to 25 percent on the $12,000 balance he used to pay for home repairs. After paying $15,000 to the company he still owes about $11,000.
Ola Horton, of the South Side, had to buy five pairs of eyeglasses for herself and her son at a cost of $1,750. Two and a half years later, she owes $3,800 on the card, which is charging her a 27 percent interest rate.
ÒWe've heard three examples of what I think most people would say is grossly unfair, but this is not atypical,Ó Obama said after the three told their stories at the Illinois Institute of Technology.
Warren praised Obama's leadership on consumer issues, saying, ÒI'll never forget the first ... words he said to me: He said predatory lending is killing America's families.Ó
Ironically, Obama's national finance chair, Penny Pritzker, headed up a Chicago-area bank that critics said was a pioneer in predatory lending: Superior. The campaign said Pritzker and her family voluntarily paid $460 million to clear up the banks debts, though that still left 1,400 customers without some of their savings.
McCain's campaign charged that the man who, until today, headed up Obama’s vice-presidential search team, James Johnson, got special mortgage rates from his friend’s bank, Countryside, another sub-prime lender.
“On the same day Barack Obama is staring down headlines about the head of his VP selection committee’s inappropriate ties to a predatory lender, Obama launches blind political attacks against John McCain for voting for the bipartisan Senate Bankruptcy Bill that was actually supported by 18 Democrats,” said McCain spokesman Tucker Bounds.
Obama went from the IIT event to an 8th-grade graduation next door, where he urged the 50 graduates of the Young Women's Leadership Charter School to “hit the books” this summer instead of watching TV to prepare for high school. "Dream big dreams," he urged them.