Democratic presidential candidate Sen. Bernie Sanders and New York Rep. Alexandria Ocasio-Cortez moved today to introduce legislation that would cap rates on credit cards and other consumer financial services at 15%.
In an announcement on Thursday (May 9), Sanders and Ocasio-Cortez accused banks and other credit cardissuers of acting as “modern-day loan sharks.” In addition to capping interest rates on credit cards, the proposed legislation would turn roughly 30,000 post offices into providers of low-cost basic financial services, including checking accounts, savings accounts and some loans. The cap would also apply to payday (and other short term) loans.
The 15 percent mark, they said, was selected to match the interest rate cap already that already exists for cards issued by credit unions.
An outline of the plan released ahead of their formal announcement sharply criticized banks for charging on average more than 17 percent interest on credit card balances, in an environment in which they are able to borrow money at less than 2.5 percent.
“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 said in a statement on the proposed legislation.
Sanders and Ocasio-Cortez cited data from CreditCards.com to support their assertion that the average interest rate on credit card debt is roughly 17 percent and tha
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