WASHINGTON-While its prospects may be dim, a bill in Congress to cap credit cards APRs has been dropped, with its sponsor citing credit unions' ability to offer lower-rate loans as a counter to bank complains that such a limit will much lending unprofitable.
Rep. Bernie Sanders, the Vermont Independent, has proposed a bill that places a 15% cap on consumer loans, including credit cards. The law would supercede a 1978 Supreme Court decision allowing banks to charge whatever was allowed by the state in which its lending or card operations were based. Sanders called his proposed 15% ceiling a "national usury law."
Sanders expressed dismay that some lenders, including Capital One, were raising carholders' APRs to 18% even in cases were the cardholder had been paying on time and was not delinquent. He said the focus on mortgage interest rates was distracting policymakers from practices he referred to as "loan sharking" going on at some banks.
