In their rush to punish the credit-card industry, Congress is about to hurt a number of innocent people. While detailed legislation on credit-card practices may make legislators feel that they have resolved a tricky issue, their legislation is far more likely to make it harder for low- and moderate-income workers to get the credit they need. By significantly raising cost, the bill practically guarantees less credit to higher risk customers.

It will also hurt the millions of young people who go to work right out of high school by forbidding companies from offering credit cards to consumers who are under 21 through prescreened offers — the way that most of us get our credit cards. It also requires them to get co-signers or proof that he or she has the income to pay for the credit. This is fine for middle-class college kids who are likely to buy beer. However, only a little more than half of high school graduates go to college. The rest go to work as responsible adults. This bill is about to make it much harder for them to get credit cards.

I am not defending credit-card companies. However, the alternative to this bill is not doing nothing. The Federal Reserve and other financial regulators have already produced a set of regulations that solve the very problems that Congress claims that it has addressed. Their regulations were carefully crafted to preserve credit opportunities for those who really need it. By passing this bill instead, Congress can now say that they have done something about credit cards, but sponsors fail to realize that their legislation will hurt the very people who need credit the most. – David C. John is senior research fellow in Retirement Security and Financial Institutions in the Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation.