Yesterday, President Biden’s three nominees to serve on the Federal Reserve Board of Governors testified before the Senate Banking Committee on a variety of financial service-related topics, including the ability for consumers to access small-dollar credit.
During the hearing, Senator Tim Scott (R-SC) asked Fed nominee Sarah Bloom Raskin why she had previously endorsed legislation to establish a nationwide APR rate cap on all consumer loans, and if she was aware the Federal Reserve published an extensive study indicating a 36% APR rate cap would eliminate the ability for consumers to receive loans of under around $3,000.
Raskin answered she was not aware of a Federal Reserve APR rate cap study and said, “small-dollar loans are a very important source of credit to all Americans but particularly those that need access to credit in a timely way.” However, Raskin added that “there is more to be done” to provide access to safe, affordable small-dollar credit.
AFSA applauds Sen. Scott for his continued dedication preserving credit options for hard-working Americans of all economic backgrounds. Sen. Scott released a press release on the testimony following the committee hearing.
While serving as the keynote speaker at the 2021 AFSA Annual Conference, Sen. Scott spoke about the importance of access to consumer credit for families. He described how individuals benefit from the credit products AFSA members provide in many communities.
AFSA will continue to oppose APR rate cap legislation before Congress throughout the year and monitor the Federal Reserve nomination process as it moves through the Senate. Please reach out to AFSA if you have any questions.
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