WASHINGTON -
Clinton introduced the plan while in North Little Rock, Ark., on a stopover as part of her presidential campaign.
The New York senator said she is seeking a 30% cap on all APRs, including penalties, for credit cards, refund anticipation and payday loans. Eventually, she said, she plans to lower even that cap, and she called for requiring the Office of the Comptroller of the Currency to make additional recommendations on an appropriate cap tied to a standard benchmark, plus a margin in order to provide what she called a “reasonable” profit.
Clinton’s proposal is based in part on a similar plan from Harvard law professor Elizabeth Warren, who has been an outspoken activist on card issues.
In addition, the Clinton plan calls for ending the common allocation practice in which companies apply payments to balances with the lower interest rates first.
She also is proposing that companies be prohibited from raising card rates due to a credit score change or a default with other creditors, and for written consent before any changes in terms could occur.
Moreover, the plan calls for additional prohibitions on increasing rates on outstanding debtor charging interest on any penalties or fees that might be assessed the cardholder.
Last week, a representative of the American Bankers Association called the Clinton plan “unworkable.”
