WASHINGTON — President Barack Obama warned the credit-card industry that his administration is pushing for reforms to protect consumers from abusive practices and strengthen oversight.

"We are confident that we can arrive at something that is common sensical, something that allows the industry to continue to provide loans and to run a stable business model that's not dependent on bubbles, that's not dependent on people getting overextended or finding themselves in over their heads," Obama told reporters after a meeting Thursday with representatives of the major U.S. credit card issuers.

He said his economic team would work with lawmakers on the details, adding that a solution could be reached "in short order."

Credit card practices have surged to the top of Democrats' agenda as rising joblessness has made it harder for consumers to pay monthly balances. The spotlight on credit card companies and the interest rates they charge intensified after some accepted government funds under the Troubled Asset Relief Program.

At Thursday's meeting, Obama outlined a series of principles he believes should be included in any overhaul, including a ban on abusive fees and penalties and unfair rate increases. He said firms should be required to use plain language in all forms and statements and subject to beefed-up monitoring and enforcement.

He suggested that each company should issue a "plain vanilla" card with easy-to-understand terms, as a default.

"We want to preserve the credit card market," Obama said. "But we also want to do so in a way that eliminates some of the abuses and some of the problems that a lot of people are familiar with. You know, people finding themselves starting off with a low rate, and next thing they know their interest rates have doubled; fees that they didn't know about but are suddenly tacked on to their bills; a whole lack of clarity and transparency in terms of the terms and conditions of their credit cards."

Separate bills advancing in the House and Senate would place strict limits on card companies' ability to raise rates on existing customers and ban certain controversial practices. The Fed adopted new rules for card issuers late last year, but they won't take effect until July 2010.

While, lawmakers want to speed this up and enact tougher restrictions, the banking industry warns that additional action could restrict the flow of credit to consumers at a time when they need it most.

"I would caution the President that significant changes to banking laws, or regulations that affect any bank's ability to select their customers or restrict their credit lines, are likely to affect a bank's ability to protect itself from the ravages of increased fraud," said Judith Rinearson, a partner at Bryan Cave LLP and a former group counsel at American Express. "In turn it could restrict credit to a more-narrow range of consumers."

Obama said the current relationship between consumers and credit card companies is "out of balance."

"We think we need to create a new equilibrium where credit is flowing; those who are issuing credit are able to make a reasonable profit, but they're doing so in a way that is responsible, and consumers are not finding themselves in a bad situation that they didn't anticipate," he said.

The credit card executives left the White House complex without addressing reporters. White House spokesman Robert Gibbs said Obama opened the meeting by saying that he disagrees with the notion that the new Fed rules on credit cards are strong enough. He said Obama also pointed out that he came into office having recently carried "appreciable" credit card debt.

The legislation advancing in the House would bar issuers from applying payments to the portion of a borrower's balance with the lowest interest rate. It would also prohibit them from charging interest on parts of the balance that were already paid on time, a practice known as double-cycle billing.

In addition, it requires card companies to give customers 45 days' notice before raising rates and prevents them from raising rates on existing balances in most circumstances.

The Senate legislation would go further by placing a host of restrictions on credit card transaction fees, requiring them to be linked to costs.

"There is going to be action in Congress," Obama said. "Our administration is going to be pushing for reform in this area."

In addition to Obama, the White House was represented at the meeting by Treasury Secretary Timothy Geithner, National Economic Council Director Lawrence Summers, Council of Economic Advisers Chair Christina Romer and senior adviser Valerie Jarrett.

Industry representatives included: David Bohne, president of USAA Savings Bank; Patrick Burke, senior vice president and chief operations officer at HSBC Card and Retail Services; Paul Galant, CEO N.A. Cards at Citibank; Pamela Joseph, vice chairman of payments at US Bancorp; Christopher McWilton, president, US Markets at MasterCard Worldwide; David Nelms, CEO of Discover Financial Services; Kevin Rhein, division president of Wells Fargo Card Services and Consumer Lending; Ryan Schneider, president of cards at Capital One Financial Corp.; Lawrence Sharnak, executive vice president and general manager of consumer cards at American Express; William Sheedy, global head of strategy at VISA U.S.A. Inc.; Gordon Smith, CEO of Chase Card Services at JPMorgan Chase & Co.; Richard Struthers, president of Global Card Services at Bank of America; Lloyd Wirshba, chief executive officer of Barclaycard US; and Edward Yingling, head of the American Bankers Association.

"Obviously, we're at a time where issues of credit and how businesses and families are able to finance everything from a car loan to a student loan to just paying their bills every day is on a lot of people's minds," Obama said.

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