The Washington Independent
The Washington Independent

House Bill Would Cap Credit Card Rates at 16 Percent

Last updated: July 31, 2020 | November 25, 2009 | Kenzo Norman

Equating today’s rising credit card rates to usury, several House Democrats today announced plans to introduce legislation capping credit card rates at 16 percent.

“Things were a lot better for the average person in this country when we had usury caps,” Rep. Louise Slaughter (D-N.Y.), head of the House Rules Committee, said in a statement announcing her bill. “Watching how credit card companies have exploited people by increasing rates up to 30 percent and more is criminal and this bill will allow us to put an end to this practice.”

Massachusetts Democratic Reps. John Tierney  and Michael Capuano will co-sponsor the bill.

They have a tough road ahead, for several reasons. (1) Even though it was the finance industry that was primarily responsible for the recent global economic meltdown, there’s a growing reluctance on Capitol Hill to apply strict new regulations just as the banks are re-stabilizing — a circumstance the banks are already celebrating. (2) Although Congress was successful in passing sweeping credit card reforms in May, an amendment to cap interest rates at 15 percent was killed in the Senate. And (3) the banks aren’t going to allow Congress to squeeze a profit source without coming up with creative ways to make up the difference elsewhere. This, The New York Times reported yesterday, is what’s happening in Australia, where card issuers have responded to new regulations by attaching new fees to airline tickets, among other purchases.

“[I]f regulators limit one fee or rate, banks are likely to find another way to keep revenue flowing,” The Times wrote.

Kenzo Norman | Kenzo is a journalist-turned-marketer who is fascinated by how storytelling and targeted marketing can result in content that changes businesses. He is responsible for implementing inbound marketing strategies that help his clients raise brand awareness, generate leads, and gain new customers as an Account Executive. Jason enjoys reading on the beach, tracking down mono records, and playing guitar when he is not working.

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