Business

BATTLE OF THE GOUGE

A crackdown on greedy credit-card companies may finally be at hand — as Congress and the White House aim to curb steep fees and deceptive practices that have saddled consumers with ever-rising mounds of debt.

Top executives at big card issuers — including Bank of America, American Express, Wells Fargo, JPMorgan Chase and MasterCard and Visa — will be hauled on the carpet this week to discuss “a whole set of issues having to do with credit-card abuses,” Larry Summers said in an interview yesterday on NBC’s “Meet the Press.”

In language that appeared to draw a comparison between credit-card lenders and Big Tobacco, the White House economics adviser said, “We need to do things to stop the marketing of credit in ways that addict people do it.”

He added that President Barack Obama is looking to do something about “the way people have been deceived into paying extraordinarily high rates that they wouldn’t have paid if they knew what they were getting themselves into.”

The meeting, slated for Thursday, comes as US lawmakers have expressed anger that the same banks with big credit-card businesses charge high interest rates and fees while getting a government bailout from the taxpayers who are using their cards.

Bills in Congress are looking to punish card companies that jack up interest rates on existing balances to exorbitant levels, and give more information about their cards to consumers. Some lawmakers also have introduced legislation that would wipe out credit-card debt for consumers that file for bankruptcy.

Backing from the White House could give a boost to such bills that to date have been stalled. Credit-card lobbyists have countered that such legislation would force card companies to restrict credit and raise rates and fees.

Yesterday, Summers hinted the president views credit-card companies as a risk for the economy at large. “He’s going to be pushing on issues relating to what’s known as systemic risk, the concern that an institution gets itself into a situation where it becomes itself a source of risk . . . to the whole financial system,” he said.