Obama Signs Credit-Card Overhaul Legislation Into Law

By HENRY J. PULIZZI

WASHINGTON -- President Barack Obama put his signature on legislation Friday clamping down on credit-card companies' ability to boost interest rates and slap higher fees on consumers, a measure long-sought by the White House but reviled by the banking sector.

"We're not going to give people a free pass, and we expect consumers to live within their means and pay what they owe, but we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives," Obama said at a signing ceremony in the Rose Garden.

The bill, passed by Congress this week to meet Mr. Obama's Memorial Day target, bans certain practices and makes it harder for credit-card issuers to raise rates. It also places restrictions on marketing cards to teenagers and college students.

The measure received bipartisan support despite the banking industry's opposition. Credit-card companies say the legislation will force them to raise rates and tighten credit.

Acknowledging the critics, Mr. Obama said the bill doesn't condone reckless behavior by borrowers and added that credit-card companies provide a "valuable service."

"We don't begrudge them turning a profit," he said. "We just want to make sure that they do so while upholding basic standards of fairness, transparency and accountability."

But he said credit cards all too often become an "anchor" rather than a lifeline for consumers and small businesses as terms change and rates rise. Over the past decade, Mr. Obama said, U.S. credit-card debt has grown by 25%.

The legislation stops retroactive rate increases, requires companies to post credit-card agreements online, ends the practice of shifting payment dates, and requires statements to be mailed 21 days before a payment is due.

The credit-card bill was passed with an amendment that will allow people to carry loaded, concealed weapons into national parks and wildlife refuges. Mr. Obama didn't mention the provision when trumpeting the merits of the new credit-card restrictions.

The credit-card bill was the latest in a series of measures Mr. Obama signed this week with implications for the economy or business interests. The other measures revamped federal housing programs, broadened anti-fraud laws, created a new commission to look into the origins of the financial crisis and overhauled the way the Pentagon makes major acquisitions.

"This has been a historic week, a week in which we've cast aside some old divisions and put in place new reforms," Mr. Obama said.

Write to Henry J. Pulizzi at henry.pulizzi@dowjones.com