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Credit Card companies feel the heat? How about some prosecution for the Credit Card Mafia?

April 24, 2009
2009 Five Presidents, President George W. Bush...
Image by BL1961 via Flickr

Yeah, yeah, we all know that the credit cards have rates of lending that even the mafia couldn’t have gotten away with.  Mob connections anyone?  Obama’s administration says they are finally tackling the credit card agencies. Considering that Freddie Mac execs have had trouble, and one has reportedly taken his own life after government intervention, I would tell the credit card companies to beware, but I just hope they get hit.

The CEOs from Visa, Mastercard, American Express and the credit card divisions at about a dozen of the largest banks will get their meeting Thursday, but it will be at the White House, and President Barack Obama and Treasury Secretary Timothy Geithner will join Summers as not-so-happy hosts.

On the Sunday show circuit last weekend, Summers made it clear that the administration wants to talk with the companies about high fees and predatory lending practices.

But, will Obama do anything?  He has been big on talk so far and small on action.  Oh look, someone feels like I do, with the whole bit about beating up those execs:

“If you are the chairman of Citibank, you don’t want your card guy going in there, because you know, having been there, that the companies will get the s—- beat out of them by the president and Summers,” a Republican credit card lobbyist told POLITICO. “You don’t meet with the president to talk about substance. You do that with lower-level guys at the Fed or Treasury — not with Geithner and Summers.”

Maybe Obama will do something.  Maybe he will address the credit woes.  Discover Card is taking the leap  of offering low monthly fees and sending notes of condolence if you miss too many payments.  I have those cards.  Maybe I should keep them for prosperity.   They might be worth something some day.  While I call it nice, I also call it damn smart.

But bashing the credit card industry is Politics 101 for a Ph.D.-level White House.

Consumer outrage about credit cards is at an all-time high. So are delinquencies, which hit 5.56 percent in the fourth quarter of 2008. That’s a 60 percent jump since 2005, according to the Federal Reserve.

And then there are the fears that credit card defaults could be the next financial storm to hit already struggling consumers.

Even some of the industry’s longtime allies on Capitol Hill admit that change is coming.

“Most of the banks realize that some of what they’ve done before — the processes being followed — don’t really look very good in the light of day,” said Sen. Tom Carper (D-Del.), whose state is home base for a large number of credit card firms.

Look good in the light of day?  How about look good anywhere, legal anywhere, mafia anyone?

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