S.381 - 10 Percent Credit Card Interest Rate Cap Act (119th Congress)
Summary
S.381, 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 Senate, 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. A sunset clause is included, setting the expiration date for these amendments on January 1, 2031.
Expected Effects
The bill, if enacted, would significantly lower the cost of borrowing for consumers using credit cards. This could lead to increased consumer spending and decreased profits for credit card companies. The sunset clause introduces uncertainty about the long-term effects of the legislation.
Potential Benefits
- Reduced cost of borrowing for consumers.
- Potential decrease in debt accumulation for low-income individuals.
- Increased consumer spending due to lower interest payments.
- Greater transparency and fairness in credit card lending practices.
- Protection against predatory lending practices.
Most Benefited Areas:
Potential Disadvantages
- Reduced availability of credit for some consumers, particularly those with lower credit scores.
- Potential increase in credit card fees to compensate for lower interest rates.
- Reduced profitability for credit card companies, potentially leading to decreased investment in innovation.
- Possible unintended consequences, such as a shift towards other forms of high-cost credit.
- The sunset clause creates uncertainty for both consumers and lenders.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the Commerce Clause (Article I, Section 8, Clause 3) of the U.S. Constitution, which grants Congress the power to regulate interstate commerce. Credit card lending involves financial transactions that cross state lines, thus falling under federal regulatory authority. 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).