Just Charge It

Today in encouraging news: Obama has called credit card CEOs to the White House. They'll meet on Thursday and, according to McClatchy, Obama will "stress the need for greater clarity in the way that credit cards are marketed and administered."

This of course is a preliminary step in reining in shoddy lending practices, which extended not just to mortgages but credit cards and other consumer loans. And it's a good sign that the Administration is willing to expend some political capital on reforming sectors not quite as toxic as subprime mortgages.

Of course, the bears and pessimists might view this as evidence that credit card debt is about to explode and take down a bank or two, and the Administration is starting triage. As I wrote a couple of months ago, I think this is a red herring. Banks have already taken writedowns on their credit card debt holdings (although in the credit card biz they're called chargeoffs). And the credit card sector is less than one-tenth the size of the mortgage sector ($1 trillion versus $11 trillion), so even if defaults skyrocket, banks don't have nearly as much at risk.