This bill establishes a national 36 percent annual interest rate cap on most consumer credit products, amending the Truth in Lending Act to close loopholes that currently allow predatory lending. The cap includes not just interest but all fees—such as overdraft fees, late fees, payday loan charges, and credit insurance—ensuring lenders cannot circumvent the limit by disguising costs. The legislation affects all creditors nationwide, though it provides modest exceptions for certain installment loans with fees capped at $30 or 5 percent of the credit limit. Violators face criminal penalties of up to one year in prison and fines of up to three times the debt or $50,000, and any charges exceeding the 36 percent cap become unenforceable and must be refunded to consumers. The bill reflects Congress's finding that American consumers currently pay billions annually in excessive charges on payday loans (averaging 400 percent interest), car title loans (300 percent), and bank overdraft fees (up to 17,000 percent), and aims to protect vulnerable, cash-strapped borrowers while allowing state laws that provide stronger protections to remain in effect.
Take Action
Your position
Add a comment
to comment on this bill.
Annotate the text
Highlight any passage on the Summary or Full Text tab to attach a note. Annotations appear on the Annotations tab.