Congress Starts the Blizzard

Well, the first in the blizzard of proposed legislation in the regulatory compliance front has been introduced into Congress. HR 627 was introduced into the House, as was its companion in the Senate, s. 235. The bills are known as the Credit Cardholders' Bill of Rights Act of 2009. (CCBRA) I'm not even going to begin to determine how to pronounce CCBRA. It sounds a little like the sound one of my cats makes when bringing up a furball.

This legislation was introduced in the face of the UDAP rules passed by the various regualtors. It limits such things as universal default, defines "prime rate", creates new rules for due dates, amends the rules for certain "subprime" or "harvester" credit cards to 25% of credit limit, and limits issuance of cards to minors. Finally, it sets the effective date for the law at 3 months after the law's enactment, including creation of rules by the various regulators all in that 3 month period. This would supercede the UDAP rules' compliance date of July 1, 2010.

While acknowledging the Congress's right to pass legislation, and even if I agree with the provisions of the legislation, setting 3 months' time period for compliance is just plain irresponsible. The cost and confusion will be passed along to consumers i nthe form of higher rates and higher fees. I applaud Congress's desire to initiate change, but let's do so in a fashion that is attainable and cost effective.