Congress is considering a proposal to speed up implementation of new consumer protection rules for credit cards, but this rush is misguided. Much greater benefit would come from focusing our efforts on consumer education, the enforcement of current regulations and new ideas that might actually change the financial landscape, such as the Obama administration's proposal to create a Consumer Financial Protection Agency.

CARD Act Implementation

The new credit card rules are part of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which President Obama signed into law in May. Part of the law, which requires banks to give 45 days' notice for rate increases and provide more time for consumers to pay bills before late fees kick in, went into effect August 20. But other provisions are scheduled to go into effect February 22, including a ban on credit card companies raising interest rates arbitrarily on existing balances and provisions to improve disclosures to consumers and limit cards for adults under 21.

New CARD Act Deadline Proposed

In anticipation of the new restrictions, some card issuers have raised rates, drawing fire from consumer advocates. In response, Financial Services Committee Chairman Barney Frank (D-Mass.) and Rep. Carolyn Maloney (D-NY) have introduced a bill that would move the effective date up to December 1. Most recently, Senate Banking Chairman Christopher Dodd (D-Conn.) has unveiled legislation to freeze credit card rates effective immediately.

Sounds good, right? But the point missed is this: unfortunately, my friends, the damage has been done. Card issuers that wanted to get around the new credit card rules have already raised rates, and under growing pressure from lawmakers, other card issuers such as Bank of America have "voluntarily" agreed not to raise rates and fees. Bumping up the implementation of the CARD Act at this point would produce little real benefit for the consumer.

Credit Education Needed

Instead, we should focus more time and effort on educating consumers. Why aren't legislators placing higher priority on addressing long-term critical issues such as support for personal finance education from an early age? If the economic crisis has done nothing else, it's shown us the dire need for better informed and empowered consumers. Personal finance courses should be readily available or even required in our high schools and colleges. Yet, there is little movement in this direction. The Your Money Bus Tour is a good example of how financial literacy efforts can make a lasting difference.

Higher Priorities at Stake

Rather than getting distracted with a feel-good deadline change that will have little real effect, let's refocus our efforts on enforcing current consumer protection regulations and engaging ourselves in issues that should demand our attention, such as consumer education and the Obama administration's proposed Consumer Financial Protection Agency.

Technology Hurdles

Another related issue that is worth mentioning is that many banks have said that pushing up the implementation deadline with little advance warning may not even be 100% achievable due to technology challenges. While I don't have sympathy for card issuers, I do realize that this sweeping regulation has to be a real strain on the IT departments of the card issuers (as is typically the case with any industry facing regulation). Even the Federal Reserve has shared its concerns in this regard.

The bottom line is that we should focus our efforts and resources on issues that are going to really impact consumers in a positive manner. I honestly don't think moving up the deadline or freezing rates at this point is going to make much, if any, difference. It looks good on paper and from a public relations standpoint, but what looks good on paper doesn't always reflect the reality of the situation. I have always maintained that our best defense as consumers is consumer education.