Released: October 30, 2008

Groups seek credit card debt forgiveness

Source: Marcy Gordon, BusinessWeek

An alliance of financial industry interests and consumer advocates on Wednesday asked federal regulators to allow lenders to reduce by as much as 40 percent the amount of credit card debt owed by deeply indebted consumers in a special program.

As the economic crisis has deepened and consumers increasingly are defaulting on their credit card debts, write-offs on the loans have mounted for banks and other lenders.

The unusual joint request from the Financial Services Roundtable and the Consumer Federation of America highlighted the urgency of the situation: consumers - even those with strong credit records - defaulting at high levels on their credit cards, while banks battered by the credit crisis bleed tens of billions in red ink from the losses.

Read Full Article: Groups seek credit card debt forgiveness