WASHINGTON--Recently reintroduced Senate legislation would create a patchwork of state-by-state interest rate caps and is opposed by America’s Credit Unions, the trade group stated.
Sens. Sheldon Whitehouse (D-RI), Elizabeth Warren (D-MA), Jack Reed (D-RI) and Jeff Merkley (D-OR) have introduced the Empowering States’ Rights to Protect Consumers Act.
“Credit unions share the goal of helping Americans manage debt and improve their financial well-being, but creating a patchwork of state-by-state interest rate caps is not the right solution. This approach would create a fragmented lending system, increase compliance complexity, and ultimately reduce the availability of responsible, lower-cost credit offered by not-for-profit credit unions. Credit unions already deliver some of the lowest credit card rates in the market because of their member-owned structure,” said America’s Credit Unions President/CEO Scott Simpson.
“If Congress wants to address rising debt, it should focus on policies that expand access to safe, affordable credit and support financial stability, rather than proposals that risk cutting off millions of consumers from the credit options they depend on. Congress should look to credit unions for solutions on affordability," Simpson added.
The senators cited the president’s support for a 10% credit card interest rate cap bill in their press release. America’s Credit Unions said it continues to engage policymakers about the consumer harms that come with government price caps on financial services and products.