ICBA, others: Interest rate cap bill would hurt consumers’ access to credit

ICBA and other groups expressed opposition to the Protecting Consumers from Unreasonable Credit Rates Act (S. 2781), which would institute new government price controls for consumer loans, diminishing access to credit for individuals and small-business owners.

Details: In a letter to Sens. Richard Durbin (D-Ill.), Sheldon Whitehouse (D-R.I.), and Richard Blumenthal (D-Conn.), ICBA and the other groups said:

• Numerous studies have shown that even modest government price controls raise costs rather than lowering them.

• Small-dollar loans, credit cards, and other forms of short-term credit are critical to helping people meet emergency expenses, avoid disruptions in pay, and manage misalignments in the timing of their expenses and income.

• The proposed 36% fee and interest cap would make it more difficult for many consumers to obtain credit, thereby harming the very consumers the legislation seeks to protect.