Sen. Richard Durbin (D-Ill.) last week introduced an ABA-opposed bill (S. 673) that would set an interest rate and fee cap of 36 percent for all consumer credit transactions.
The legislation would apply the cap to all open-end and closed-end consumer credit transactions, including fees associated with mortgages and debt protection products. ABIA is studying the bill and will provide additional information on the impact it could have on insurance products sold by banks.
The bill would also apply to car loans, overdraft loans, car title loans, refund anticipation loans and payday loans. In addition, the measure would ensure that federal law does not pre-empt stricter state laws, and it would create specific penalties for violations of the new cap.
Sens. Richard Blumenthal (D-Conn.), Barbara Boxer (D-Calif.), Jeff Merkley (D-Ore.) and Sheldon Whitehouse (D-R.I.) are original co-sponsors of the legislation. Durbin introduced a similar bill (S. 3452) in the last Congress, but it did not advance.
Read Durbin’s press release.