I really do wonder if politicians actually debate legislation in the House. Perhaps they sit around figuring out ways to look like they are actually accomplishing something. The House voted in favor yesterday of moving up the date of the enactment of the Credit Card Act. Originally, it was to go into effect February 2010. As I have stated before, it makes no difference at all whether it goes into effect in December or February. The damage is already done. So, they have spent a great deal of time discussing something that is a non-issue. Some of the quotes that come from this meeting are priceless.

From the AP story:

Democrats said the bill was a warning shot to lenders to stop price gouging. “This is both real and a lesson to them,” said Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee.

You tell them, Mr. Frank. Maybe this is a lesson for the politicians not to give the credit card industry 9 months (May 2009 act was passed and goes into effect February 2010) to gouge people. Of course, unless it was done on purpose to help out those campaign contributors (financial services companies and banks). After all, don’t want to bite the hand that feeds you.

The bill, approved 331-92, would force lenders to comply with the new rules immediately unless they agree to freeze interest rates and fees. The proposal’s chances in the Senate were dim, where several lawmakers worried that a short deadline would hurt the industry and limit the availability of credit.

If the credit card companies aren’t ready to go with the new rules by now, they won’t be ready come February. Credit is already seriously limited.

“The same companies that were in my office that claimed they needed months at least to make changes to their systems, apparently only needed in some cases days to find ways to raise interest rates and decrease credit limits on customers across the country,” said Rep. Dan Maffei, a New York Democrat.

Really??? You didn’t see that coming? Are you really that shocked or trying your hardest to deliver a political soundbite?

The bill “limits choice, rations credit, increases costs and it strangles innovation,” said Rep. Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee.

That was a real good one. That credit crisis has created a rationing of credit. Costs were going up regardless. In fact, I would argue that this bill has made it easier for credit card companies to raise costs by making the changes to variable rates as well as charging new fees which the credit card act does not prohibit. It will not strangle innovation. Credit card companies will always find ways to make money at the expense of consumers. They have been doing it for years.

My disclaimers – There are credit card lenders who are doing it the right way and who are not abusing consumers. There are politicians that are actually in Washington to serve the people and not just get re-elected. Unfortunately, on both counts, they are the minority.

Tags: Barney Frank, Bob Brooks, credit, Credit CARD act, Dan Maffei, House of Representatives, politicians, Spencer Bachus