Some well-intentioned lawmakers want to hasten implementation of a new federal credit card reform law, but this is mere feel-good legislation — a distraction at a time when more serious issues demand our attention.

Signed into law in May, the Credit Card Accountability, Responsibility, and Disclosure (Credit CARD) Act bans card issuers from deceptive and unfair practices. The most substantive provisions take effect February 22, 2010, including a rule prohibiting credit card companies from arbitrarily raising rates on existing accounts.

Credit Card Rates Going Up

Not surprisingly, some card issuers have raised rates in the lag time between the law’s passage and its scheduled implementation. Consumer advocates cried foul, and Congress responded. The House Financial Services Committee introduced legislation recently that would push up the implementation to December 1, and bills have been introduced in both the Senate and the House to freeze interest rates on current credit cards.

These proposals in Congress may sound like big wins for consumers. But let’s face it–the damage has already been done. Card issuers that wanted to raise rates have already done so, and other issuers, such as Bank of America, have voluntarily (no doubt under pressure from legislators) declined to raise rates on existing accounts.

Unintended Consequences

Who knows what unintended consequences rushing implementation might have? In a letter to the House Financial Services Committee, Federal Reserve Chairman Ben Bernanke said hastening implementation could force the Federal Reserve to enforce the new rules before the public has had a chance to comment, and it could lead to compliance problems for card issuers. Granted, my sympathies don’t lie with credit card companies, but let’s be realistic. Upgrading technology to meet the new regulations is a massive undertaking, and it won’t do any good to speed up implementation at the last minute if card issuers can’t get to the finish line in time.

Consumer Education Needed

Rather than focusing on some short-term feel-good legislation, we ought to focus on long-term issues, such as consumer education. Knowledge is power, and nowhere is this more true than in the arena of personal finance. Consumer financial education needs to start early and should be included, maybe even required, in high school and college curriculum. Yet lawmakers have accomplished little in this area. Other ideas, such as Obama’s proposed Consumer Financial Protection Agency, also demand our full attention.

Industry regulation is important to protect consumers. The CARD Act will help, but rushing its implementation and freezing rates at this point will do little, if anything, for consumers. Education must go hand-in-hand with industry regulation to make a real difference. We need to empower people to make sound financial choices, and the best way to do that is by teaching personal finance.