Rep. Anna Paulina Luna (R-FL) has discovered an unlikely ally in her bid to tackle bank card firms.
The second-term Congresswoman has labored along with Rep. Alexandria Ocasio-Cortez (D-NY) to ban bank card firms from charging greater than 10 p.c curiosity.
Collectively, the 2 girls launched laws on Friday that may see this rule come into impact.
“For too lengthy, bank card firms have abused working-class Individuals with absurd rates of interest, trapping them in an nearly insurmountable quantity of debt,” Luna mentioned in a press release.
“We’d like a good resolution – and which means eliminating the established order and placing an affordable cap on rates of interest,” she continued.
“Bank cards with excessive rates of interest repeatedly lure working individuals in limitless cycles of debt.”
”At a time when households are struggling to make ends meet, we can’t permit huge banks to shake down our communities for revenue.”
For too lengthy, bank card firms have abused working class Individuals with absurd rates of interest, trapping them in an nearly insurmountable quantity of debt.
We’d like a good resolution — and which means eliminating the established order and placing an affordable cap on rates of interest. pic.twitter.com/lBeBbQwmAx
— Rep. Anna Paulina Luna (@RepLuna) March 8, 2025
AOC added:
Bank cards with excessive rates of interest repeatedly lure working individuals in limitless cycles of debt. At a time when households are struggling to make ends meet, we can’t permit huge banks to shake down our communities for revenue.
Throughout his marketing campaign, President Trump pledged to cap bank card rates of interest at 10%. We’re making that pledge greater than a speaking level by introducing laws to guard working individuals from remaining trapped below mountains of debt.
It isn’t the primary time that such bipartisan laws has been put ahead, and Donald Trump repeatedly endorsed the concept throughout his presidential marketing campaign.
Republican Sen. Josh Hawley and socialist Sen. Bernie Sanders have beforehand launched comparable laws, most notably a 2019 invoice that may have capped charges at 15%.
The present common rate of interest is almost their proposed restrict, in accordance to Forbes.
Whereas charges have been excessive for a few years, they had been significantly exacerbated by the response to the coronavirus pandemic and the excessive inflation throughout Joe Biden’s presidency.
Critics of the proposal argue that whereas capping bank card rates of interest might seem to be a method to shield shoppers from extreme charges, it comes with important downsides.
By limiting how a lot lenders can cost, banks and bank card firms might turn into extra selective about who they approve, making it tougher for individuals with low credit score scores or no credit score historical past to entry credit score.
As a substitute of providing decrease rates of interest, banks may additionally introduce extra charges or cut back rewards packages to make up for misplaced income.
There’s additionally the danger that if conventional credit score turns into tougher to entry, shoppers might flip to riskier alternate options like payday loans, which frequently have even greater prices.
