American Financial Services Association

Senate Schedules Hearing on Anti-Consumer Rate Cap Bill

Blog Posts

Senate Schedules Hearing on Anti-Consumer Rate Cap Bill

Senate Banking Committee Chair Sherrod Brown (D-OH) today announced that the committee would hold a hearing entitled, Protecting Americans from Debt Traps by Extending the Military’s 36% Interest Rate Cap to Everyone on July 29 at 10:00 a.m. ET.

The hearing will center on the claim that an arbitrary 36% “all-in” APR rate cap protects consumers.

AFSA believes there is no place in our economy for predatory lenders that trap consumers in a cycle of debt. However, the proposed 36% “all-in” APR cap is not the solution.

Arbitrary rate caps actually harm millions of consumers, particularly consumers with less-than-perfect credit and limited access to licensed, safe, and affordable credit. “Small dollar loans are a lifeline for more than 60 million consumers nationwide, and access to credit is directly threatened by such anti-consumer, arbitrary rate caps as the new Senate proposal,” said AFSA President and CEO Bill Himpler.

“These types of proposals are often based on a misunderstanding of how consumer credit works,” said Celia Winslow, AFSA Senior Vice President. “We will work with Senators and their staffs to ensure that legislation helps consumers receive credit they need and does not inflict serious economic harm, as this proposed legislation would. As our country begins to recover from the pandemic, the Senate should not pass legislation that would harm the very consumers this bill purports to help.”

AFSA will continue to educate policymakers and the public on the important role that access to credit plays in the lives of all consumers and the disastrous consequences an arbitrary rate cap would have on Americans and the economy, while working with both the House and Senate to ensure that any legislation that goes forward will help consumers access credit rather than hinder it.

To contact your legislator to oppose APR rate cap legislation, visit caseforcredit.com/take-action.

July 13th, 2021 by