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The 2007 Yorktown High School graduate and presidential hopeful Bernie Sanders just introduced a proposal to cap credit card interest rates at 15 percent this week, which would rein in the profits major banks can capitalize on.
The legislation has been dubbed the “Loan Shark Prevention Act.”
Currently, the national average annual percentage rate his 17.73 percent, while the median was sitting at 21.36 percent, according to CreditCards.com.
“Despite the fact that banks can borrow money today at less than 2.5% from the Federal Reserve, the average credit card interest rate today for consumers is a record-breaking 17.71%,” the two said in a statement announcing the bill. “At a time when the American people hold a record $1 trillion in credit card debt and desperately need relief, we need to establish a national maximum interest rate of 15 percent on credit cards and other consumer loans.”
In a stream posted on Twitter, Sanders said, “today, we’re telling Wall Street and the payday lenders that enough is enough. Maybe Congress should stand up for ordinary people.” The bill will now head to Congress, where it faces an uphill battle to pass the Republican-held Senate.
Those opposed to the legislation have cited the potential elimination of credit card rewards, an increased in the fees charged to cardholders and may limit access to credit for low-income consumers.
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