Bachus: Credit card bill will make an already difficult economic situation worseMortgagePress.comSpecncer Bachus, credit card bill, Financial Services Committee,
"We are in the midst of a severe economic downturn. Home
values are plummeting, unemployment is up and hard-working
Americans are facing unprecedented difficulties in securing credit.
But this bill will, in my view, only make an already difficult
economic situation worse. This bill will raise the price of credit
for consumers and limit their access to credit."
Congressman Spencer Bachus (AL), the top Financial Services
Committee Republican, issued the following statement regarding
credit card legislation being considered by the House today:
"We are in the midst of a severe economic downturn. Home values
are plummeting, unemployment is up and hard-working Americans are
facing unprecedented difficulties in securing credit. But this bill
will, in my view, only make an already difficult economic situation
worse. This bill will raise the price of credit for consumers and
limit their access to credit.
"Credit cards play a crucial role in the lives of everyday
Americans and the economy overall. Electronic payments now account
for more than half of all transactions. Any legislation or
regulation of credit card practices will have a profound impact on
the lives and livelihoods of millions of Americans.
"We all share the goal of protecting consumers from unfair and
deceptive credit card practices and ensuring that they receive
useful and complete disclosures. Like many of my colleagues, I have
received calls from constituents about credit card practices that
certainly don't seem fair. That is why I do not question the
motivation or sincerity of those who want to address these
practices. However, we must be careful that in trying to protect
consumers, we do not end up imposing new costs on them or the U.S.
economy overall. The problem with this bill is that it goes much
too far. This bill will limit credit card issuers' ability to
accurately price for risk and it will likely force responsible
card-holders to subsidize irresponsible ones through higher fees
and less generous reward programs.
"What we need is flexible and balanced regulation to protect
consumers without causing serious unintended consequences. The
Federal Reserve has already released new rules due to be
implemented on July 1, 2010--to protect consumers who use credit
cards. The Fed has issued 1,200 pages of regulations. These
regulations are the result of extensive consumer testing conducted
by the Fed, which also reviewed over 60,000 public comments before
issuing the rules. The Fed rules comprehensively address the credit
card practices which concern us all. This bill will only lay
potentially duplicative and confusing mandates on top of an
exhaustive set of regulations.
"The last thing Congress needs to do at this time of economic
uncertainty is raise the cost of credit or restrict its
availability. Yet this bill does both and that will harm, not help
here to view floor speeches that Bachus gave during
consideration of this bill.