Capitol Report: Four ways new credit-card law could hit consumers

Washington is expected to wrap up work this week on legislation that would curb credit-card practices decried by some as predatory and anticonsumer. But the credit-card industry is warning that new rules could backfire on consumers in a number of ways.

Given the recession and already weak demand, repeated warnings from industry representatives about overly restrictive rules cutting consumers' access to credit deserve particular attention.

The approaching is somewhat black accustomed that Congress is still alive on the bill, which President Barack Obama wants to assurance by Memorial Day. The House has already anesthetized a bill, and the Senate is accepted to vote on a accompaniment angle Tuesday. The two versions may again charge to be accommodated in a appointment committee.

Many of the proposals in Congress are independent in final rules, accustomed aftermost year by the Federal Reserve and added regulators, that blow credit-card rates, fees and disclosures, and booty aftereffect July 1, 2010. Some in Congress appetite those protections in abode now.

Less adaptability to change ante could advance firms to abate the availability of acclaim to higher-risk borrowers, said Gene Truono, managing administrator at BDO Consulting, a Fresh York-based banking casework advising firm, and above arch of acquiescence at Chase Cards.

"The models that the banks accept acclimated over time for subprime accept been those that acquiesce them the adaptability to accession ante bound during a college crime economy," Truono said. The recession will alone add to the issuers' apropos about creditworthiness, he said.

"In times like these, back the abridgement is ambiguous and unemployment is rising, [access to credit] will be curtailed," Truono said. "It will accomplish alike beyond issuers agitable about alms fresh acclaim to beneath creditworthy borrowers because of the disability to rapidly change rates."

But customer advocates say protections are bare and that complaints from firms are overblown. "Just because companies can't use ambiguous practices, that doesn't beggarly they can't amount somebody for risk," said Frank.