Sanders, Ocasio-Cortez Propose 15% Cap on Credit Card Interest

[oeb11]

https://www.bloomberg.com/news/artic...-card-interest


Democratic presidential candidate Bernie Sanders and Representative Alexandria Ocasio-Cortez accused banks of acting as “modern-day loan sharks” and called on Congress to enact a federal limit of 15% on credit card interest rates.
The two self-identified democratic-socialists are set to propose legislation on Thursday capping rates on credit card and other consumer loans and letting post offices offer low-cost basic financial services, such as loans and checking and savings accounts.

An outline of the plan released ahead of their formal announcement sharply criticized banks for charging on average more than 17% interest on credit card balances while they are able to borrow money at less than 2.5%.
“Today’s loan sharks wear expensive suits and work on Wall Street, where they make hundreds of millions of dollars in total compensation by charging sky-high fees and usurious interest rates,” the statement said.
With Republicans in control of the Senate, the proposal has little chance of becoming law any time soon.

Americans have more than $1 trillion in credit card debt. According to figures from CreditCards.com cited by Sanders and Ocasio-Cortez, the national average interest rate on credit cards is 17.73% and many people pay much higher interest. The interest rate limit they propose also would apply to payday loans. They said it would match the interest rate cap for credit unions.
The proposal also would let more than 30,000 post offices provide banking services for low-income Americans who currently don’t have ready access to banks.


Sanders, a Vermont Senator, is running for president as a progressive, in contrast to former Vice President Joe Biden, the current front-runner in the race, who is offering a more centrist alternative to a largely left-leaning field of 21 Democratic contenders. He’s also competing with Senator Elizabeth Warren of Massachusetts, who’s built her reputation as a harsh critic of Wall Street and as a champion for consumers.
Sanders’s new proposal highlights the way he will make taking on Wall Street and corporations a recurring theme in the 2020 contest. By teaming up with Ocasio-Cortez, a first-term representative from New York, Sanders is drawing on a high-profile fellow progressive with strong appeal to younger voters.
Sanders has been rolling out a series of proposals in recent weeks, including a “Medicare for All” proposal whose co-sponsors include four of his presidential primary rivals: Warren, Kamala Harris, Cory Booker and Kirsten Gillibrand. He also has proposed a broad overhaul of policies affecting small-town family farmers and the agriculture industry, which would include a moratorium on new agribusiness mergers.


For Once - I agree with the proposal to limit the interest rate to 15% Compared to the cost of money for the banks - it is a tremendous profit - and almost 25% on low credit rating people.
That rate is unsustainable. The cut is actually small compared to current rates. For Once, i agree.

[Levianon17]

Every now and then one of these imbeciles will come up with something that will actually benefit the masses.

[Jackie S]

This in lieu of people being more responsible.

Idiot Millennials seem to be very prone to large credit card debt. They want every thing mommy and daddy had, but no funds to acquire them. Their equivalent to the “participation trophy’s” they got as spoiled brat kids are free money through credit cars that they never seem to pay off.

Ole Bernie and AOC are smart. They are already tempting the entire Millennial Generation by telling them they just might forgive all college debt that they racked up while getting a worthless degree. The icing on the cake would be letting them splurge on credit card debt even more.

[eccieuser9500]

Originally Posted by Levianon17

Every now and then one of these imbeciles will come up with something that will actually benefit the masses.

[bambino]

Why not free credit that you don’t have to pay back? These two are losing their juice.

[the_real_Barleycorn]

Here is the joke, it was democrats who made this highway robbery possible. Back in the Carter 70s, credit card companies were capped at about 10%. The governor of South Dakota, Bill Janklow, had pushed through a bill uncapping interest rates in South Dakota. The country was in a severe recession and the prime interest rate was as high as 17%. That means the credit centers in Connecticut, Delaware, and New York City were losing money. Janklow went to the democratically controlled Congress and asked for a small change in lending regulations. Allow the credit card companies to charge the interest in accordance with the laws where their home office is located. It passed, Carter signed it, and if you look at most credit card company mailers they say Souix Falls, SD as the home office. The rest they say is misery. Janklow, who was later indicted for killing a motorcyclist while driving at an excessive rate of speed, was trying to save his state's economy. The congress was doing the bidding of the eastern credit card companies. Janklow did express some concern when Reagan got the prime down to normal but the companies did not follow suit.
So government creates a problem, they milk us dry, and now government wants to solve the problem with a crappy solution. The real long term solution; cap the credit card companies to the prime interest rate plus five percent. They get to make a profit but don't get to make loan shark rates. Also, reduce those missed payment penalties. The lending companies have acted irresponsibly for over 40 years and their gains are endangering the national economy.
First the politicians must take responsibility for their actions.

[dilbert firestorm]

Originally Posted by the_real_Barleycorn

Here is the joke, it was democrats who made this highway robbery possible. Back in the Carter 70s, credit card companies were capped at about 10%. The governor of South Dakota, Bill Janklow, had pushed through a bill uncapping interest rates in South Dakota. The country was in a severe recession and the prime interest rate was as high as 17%. That means the credit centers in Connecticut, Delaware, and New York City were losing money. Janklow went to the democratically controlled Congress and asked for a small change in lending regulations. Allow the credit card companies to charge the interest in accordance with the laws where their home office is located. It passed, Carter signed it, and if you look at most credit card company mailers they say Souix Falls, SD as the home office. The rest they say is misery. Janklow, who was later indicted for killing a motorcyclist while driving at an excessive rate of speed, was trying to save his state's economy. The congress was doing the bidding of the eastern credit card companies. Janklow did express some concern when Reagan got the prime down to normal but the companies did not follow suit.
So government creates a problem, they milk us dry, and now government wants to solve the problem with a crappy solution. The real long term solution; cap the credit card companies to the prime interest rate plus five percent. They get to make a profit but don't get to make loan shark rates. Also, reduce those missed payment penalties. The lending companies have acted irresponsibly for over 40 years and their gains are endangering the national economy.
First the politicians must take responsibility for their actions.

great history lesson.


Congress had usury laws already on the books. one state over-rode that law all due to one change in the lending laws.


so, everyone got screwed when the headquarters moved to SD.


they need to repeal that part of the law. doubt that will happen.

[Joey_Gleet]

Can they do something about the high price of eyeglass frames ?

[oeb11]

TRBC - thank you for a good history lesson , and an even better suggestion - Prime + 5% is a good idea - simple and fair.

[rexdutchman]

Will it actually benefit the masses, maybe just saying , people should be responsible ? for there own actions .
Oh wait never mind socialist don't like that idea , the gov cant save people from themselfs

[txdot-guy]

Banks have no reason to limit credit because of changes to bankruptcy laws. The uber powerful banking lobby pushed for changes to bankruptcy laws culminating in the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) that was passed in April, 2005. If more people could declare bankruptcy when confronted with unexpected challenges, like medical issues, or an unexpected global recession as back in 2008 many credit card companies wouldn't lower their standards and give credit cards to every joker out there.