Senate Bill Would Cap Personal Loan Interest Rates at 36% Nationwide
Small business owners who rely on short-term, high-interest loans (like payday or title loans) for quick cash flow would benefit from lower borrowing costs. However, small business owners who operate payday lending, title loan, or other high-cost consumer lending businesses could see their business model eliminated or severely disrupted by the 36% APR cap, potentially leading to closures and lost revenue.
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (Sponsor introductory remarks on measure: CR S511-512)
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in Senate
The bill was officially filed and given a number. It now enters the legislative queue.
No votes have been recorded for this legislation yet.
A new Democratic Senate bill—the Predatory Lending Elimination Act—has been introduced to impose a nationwide 36% APR cap on most forms of consumer credit, extending the Military Lending Act standard to all consumers. It targets payday, car-title, and installment loans.
The proposal to extend the military's 36% interest rate cap to all consumer loans faces significant opposition from Republicans and banks. Critics argue it would hamper lenders' ability to price for risk, while supporters say it protects consumers from triple-digit interest debt traps.
The Independent Community Bankers of America (ICBA) expressed opposition to a national 36% interest rate cap, arguing it would make it more difficult for many consumers to obtain credit and harm the very people the legislation seeks to protect.
Document Type
Congressional Bill
Official Title
Predatory Lending Elimination Act
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