Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders unveiled legislation Thursday to “take on Wall Street greed” and protect consumers by imposing a 15 percent federal cap on credit card interest rates—a major source of financial industry profits.
The bicameral legislation, titled the Loan Shark Prevention Act, would allow states to establish interest rate caps lower than 15 percent and hit violators of that limit with steep penalties.
“Millions of people now pay credit card interest rates as high as 30 percent. That’s not banking. That’s loan sharking. And it’s time to stop it.”
—Sen. Bernie Sanders
“Today’s loan sharks wear expensive suits and work on Wall Street, where they make hundreds of millions of dollars in total compensation by charging sky-high fees and usurious interest rates,” Sanders and Ocasio-Cortez will say in a joint statement accompanying the plan, The Intercept‘s David Dayen reported ahead of the bill’s release.
According to Dayen, Ocasio-Cortez “plans to suggest postal banking as a public option for consumer lending, though that is not in the legislation.”
“A postal lending option would in theory minimize the impact on access to credit from the rate cap,” wrote Dayen. “Sanders endorsed postal banking during his 2016 presidential campaign.”
Watch Ocasio-Cortez and Sanders introduce their legislation:
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In an email to supporters on Thursday, Sanders called for citizen co-sponsors of the Loan Shark Prevention Act.
“Millions of people now pay credit card interest rates as high as 30 percent. That’s not banking. That’s loan sharking. And it’s time to stop it,” said Sanders. “The American people are sick and tired of being ripped off by the same financial institutions that they bailed out ten years ago. They are sick and tired of being extorted by credit card companies.”
Warren Gunnels, staff director for Sanders, tweeted late Wednesday that Jamie Dimon and Lloyd Blankfein—the CEO of JPMorgan Chase and former CEO Goldman Sachs, respectively—”are really, really going to hate this bill.”
“[A]nd we will welcome their hatred. Big time,” Gunnels added. “They have the money. We have the people.”
In an interview with The Washington Post ahead of the bill’s release, Sanders said the plan will certainly face fierce opposition from Wall Street and industry-friendly members of Congress.
“I have a radical idea,” said Sanders. “Maybe Congress should stand up for ordinary people.”
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