WASHINGTON–Democratic presidential candidate Bernie Sanders (D-VT) has said that if elected he would put in place a 15% APR cap on all loans.
Bernie In support of that position, Sanders cited the nation’s credit unions, stating, “In 1980, Congress passed legislation to require credit unions to cap interest rates on their loans at no more than 15%. And, that law has worked well. Unlike big banks, credit unions did not receive a huge bailout from the taxpayers of this country. It is time to extend this cap to every lender in America.”
But as the Huffington Post has reported, and as credit unions know, that statement isn’t true. “Under the terms of the Federal Credit Union Act, the rate cap can be, and has been, increased,” said the Huffington Post in its report. “The maximum rate has been increased to 18% since May 1987. Credit unions also offer a Payday Alternative Loan program (PAL), with interest rates up to 28% allowed.”
The Huffington Post quoted NCUA Chairman Debbie Matz’s earlier statement that “If the rate ceiling was reduced, credit unions would be stressed to maintain PAL programs. If the rate ceiling was reduced to 15%, I know, from first-hand experience working in a federal credit union, it would be difficult to cover the costs of such short-term loans."
As CUToday.info reported here, Sanders has also advocated for a cap on ATM fees.
WASHINGTON–Democratic presidential candidate Bernie Sanders (D-VT) has said that if elected he would put in place a 15% APR cap on all loans.
Bernie In support of that position, Sanders cited the nation’s credit unions, stating, “In 1980, Congress passed legislation to require credit unions to cap interest rates on their loans at no more than 15%. And, that law has worked well. Unlike big banks, credit unions did not receive a huge bailout from the taxpayers of this country. It is time to extend this cap to every lender in America.”
But as the Huffington Post has reported, and as credit unions know, that statement isn’t true. “Under the terms of the Federal Credit Union Act, the rate cap can be, and has been, increased,” said the Huffington Post in its report. “The maximum rate has been increased to 18% since May 1987. Credit unions also offer a Payday Alternative Loan program (PAL), with interest rates up to 28% allowed.”
The Huffington Post quoted NCUA Chairman Debbie Matz’s earlier statement that “If the rate ceiling was reduced, credit unions would be stressed to maintain PAL programs. If the rate ceiling was reduced to 15%, I know, from first-hand experience working in a federal credit union, it would be difficult to cover the costs of such short-term loans."
As CUToday.info reported here http://www.cutoday.info/Fresh-Today/If-Elected-President-Sanders-Says-He-ll-Cap-ATM-Fees, Sanders has also advocated for a cap on ATM fees.