Wyden/Obama seeks rating system for credit cards [View All]

The Associated Press

U.S. Ron Wyden, D-Ore., said he plans to introduce legislation that would direct the Federal Reserve to create a rating system for credit cards.

The highest-risk cards, such as those that allow the issuing bank to raise the interest rate at any time without stating a reason, would receive one star. The lowest-risk cards would get five stars.

At a news conference at Portland State University, Wyden noted that that U.S. households had an average of $6,900 in credit card debt at the end of September, an increase of 41 percent from a year earlier.

"These credit card debts are hitting Oregon families like a wrecking ball," he said Tuesday.

Wyden said he and U.S. Sen. Barack Obama, D-Ill., will introduce the legislation next week. He said the system would give consumers a way to judge the riskiness of a credit-card offer without having to plow through all that fine print.

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Consumer advocates support Wyden and Obama's proposal, but a banking industry spokesman said he doesn't know if it's necessary.

"We all agree that disclosures could be improved, but this may be premature," said John Hall, a spokesman for the American Banking Association in Washington, D.C.

Hall said the federal government is considering a measure, known as Regulation Z, which would increase disclosure requirements for credit cards.

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