Lauren Tara LaCapra
Sen. Tim Johnson, a Democrat on the Banking Committee that Sen. Dodd chairs, said he supports consumer protection, but not at the cost of a free market.
Johnson did not comment specifically on the CARD legislation, but said he is "concerned some changes floated could limit consumers' access to credit. It is important to encourage competition in our markets, strengthen consumer protection and ensure Americans have appropriate access to credit." The House is considering a similar but less extensive proposal called the Credit Cardholder's Bill of Rights, introduced by New York Rep. Carolyn Maloney. Reforms also face heated opposition from the banking industry, which says the government should not be allowed to decide pricing structure and risk management. The CARD Act "insert[s] the federal government into credit markets in unprecedented ways," Edward Yingling, president and CEO of the American Bankers Association, said in a statement. He warned that if passed in its current state, the bill "would have serious, unintended consequences such as unfairly raising the cost of credit for consumers -- even those who have a record of managing their credit well." It could take months of wrangling and compromise before a softer law comes to fruition. That may not happen during this legislative session, and it will take even longer for changes to be felt by struggling consumers. If both parties can pass some type of reform, it would still need to be signed by President Bush, who will not necessarily support such hands-on regulation of the banking industry.
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