Continued from page 1

The Fed’s regulations wouldn’t go into effect until July 2010.

Mr. Furletti, a former researcher at the Federal Reserve, said that with the financial system shaky and delinquencies rising, it is a “bad time” for the legislation.

“A lot of these things are well intended, but nobody thinks about the unintended consequences,” he said. “They want them to lend more, but they are going to do something like this that will lead them to lend less.”

Mr. Benrud said the cap on rates on existing balances could have one positive effect.

“Banks will be explicit about the prices they charge. If the price is more transparent to borrowers, they can make a better decision,” he said.