Democrat Barack Obama called for tighter restrictions on credit card companies Wednesday and accused Republican presidential rival John McCain of doing too little to help Americans avoid crippling debts.
Continuing his monthlong emphasis on the economy, Obama met with hard-pressed borrowers in Chicago and summarized his plans to crack down on lending practices he describes as abusive. He would bar credit card companies from raising interest rates without the borrower's approval and from applying higher rates retroactively; establish a federal credit card rating system; and bar interest charges on items such as late fees.
McCain has "sided with the credit card companies" on issues such as protecting "teenagers and college students from deceptive credit card practices," Obama said.
In 1998, McCain opposed a Democratic bid to require credit card companies to obtain information showing that borrowers under 21 could handle the debts they would likely incur if given cards. Obama also noted that McCain opposed a 2005 bill to require credit card companies to inform borrowers, on their monthly statements, that making only a minimum payment would increase the amount of interest paid and the time it would take to pay off the full balance.
McCain's campaign fired back, noting that Obama voted against a 2005 measure that would have limited credit card interest rates to 30 percent.
In a January debate, Obama said he opposed the bill, which was defeated, "because I thought 30 percent potentially was too high of a ceiling. So we had had no hearings on that bill. It had not gone through the Banking Committee."
Obama on Wednesday said many Americans incur big credit card debts because they make foolish purchases. But for too long, he said, "credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can't afford." The contracts are lengthy and "often filled with traps and fine print that only a credit card executive could understand."
Obama had planned to campaign Wednesday in Iowa, but flooding there prevented him. His campaign hastily arranged the Chicago event to avoid a day with no public events during a week in which he is criticizing McCain on several economic issues.
Barely two dozen people attended the event, in which Obama talked with three struggling borrowers and a consumer advocate at a small table. The setting was in keeping with his recent emphasis on small, low-key events that contrast sharply with the huge rallies for which is known.