H.R.1944 - 10 Percent Credit Card Interest Rate Cap Act (119th Congress)
Summary
H.R.1944, the "10 Percent Credit Card Interest Rate Cap Act," aims to amend the Truth in Lending Act by capping credit card interest rates at 10 percent. Introduced in the House of Representatives, the bill seeks to protect consumers from high interest rates and fees associated with credit cards. The bill includes provisions for penalties for violations and allows consumers to recover unlawfully collected interest and fees.
Expected Effects
The primary effect of this bill, if enacted, would be to limit the annual percentage rate (APR) on credit cards to 10 percent, inclusive of all finance charges. This could lead to lower borrowing costs for consumers but may also result in reduced access to credit for some individuals. The bill also includes a sunset clause, setting the expiration of these amendments for January 1, 2031.
Potential Benefits
- Lower borrowing costs: Consumers with credit card debt would likely experience lower interest charges, potentially saving them money.
- Reduced debt burden: Capping interest rates could help consumers pay down their debt faster.
- Protection from predatory lending: The bill aims to prevent lenders from charging excessively high interest rates and fees.
- Increased consumer spending: With lower interest payments, consumers may have more disposable income for other purchases.
- Financial stability for some: Lower interest rates could help some individuals avoid financial distress and bankruptcy.
Most Benefited Areas:
Potential Disadvantages
- Reduced access to credit: Lenders may become more selective in issuing credit cards, potentially denying access to higher-risk borrowers.
- Higher fees: Lenders may increase fees to compensate for the reduced interest income.
- Limited credit card options: Some credit card issuers may withdraw from the market, reducing the variety of available cards.
- Potential for economic disruption: A sudden cap on interest rates could disrupt the credit card industry and impact financial institutions.
- Unintended consequences: The sunset provision could create uncertainty and instability in the credit market.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's constitutional alignment is primarily based on Congress's power to regulate commerce, as granted by Article I, Section 8, Clause 3 (the Commerce Clause). This clause allows Congress to regulate interstate commerce, which includes the activities of credit card companies operating across state lines. The bill does not appear to infringe upon any specific individual rights or liberties protected by the Constitution or its amendments.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).