Victory for Consumers: U.S. House Introduces Bipartisan Interest Rate Cap Bill
Washington, D.C. — Today, the U.S. House of Representatives introduced the Veterans and Consumers Fair Credit Act of 2021. The bipartisan House bill, backed by several veterans’ advocacy groups and even conservative Congressman Glenn Grothman (R-WI), would expand the Military Lending Act’s 36 percent interest rate cap to veterans, Gold Star Families, and all consumers nationwide – a blessing for vulnerable borrowers in states where 400 percent or higher APRs are commonplace and perfectly legal. In response, government watchdog Accountable.US released the following statement:
“The introduction of the Veterans and Consumers Fair Credit Act is a massive victory for the millions of consumers vulnerable to abuse from financial scammers and predatory lenders looking to take advantage of the fragile economic recovery,” said Kyle Herrig, president of Accountable.US. “At long last, Congress has a bipartisan opportunity to provide veterans and other hard-working Americans protections from financial ruin. Now all eyes are on lawmakers who have taken thousands from the payday industry: will they make excuses for financial predators that exploit veterans and vulnerable communities, or will they finally put consumers first?”
A report from Accountable.US found that in 2021 alone, the high-cost lending industry has spent nearly $2.5 million lobbying on various financial issues, including the “Veterans and Consumers Fair Credit Act.” The watchdog group also revealed that the high-cost loan industry has funneled at least $742,000 in campaign contributions to Members of Congress so far in 2021 – including at least $167,000 to Republican members of congressional committees considering national interest rate cap legislation.
High-cost lenders overwhelmingly target veterans, older persons, rural consumers, communities of color promising quick access to money in a pinch. But these loans often come with triple-digit interest rates that make it nearly impossible to pay back the loan. The high-cost loan industry has already padded its profits by over $15 billion (from abusive fees and penalties) due to the Trump administration’s August 2019 decision to delay implementation of the ability-to-repay safeguard that would keep predatory lenders from approving high-interest loans to vulnerable consumers they know cannot pay them back in time.
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