Senate Democrats unveil bill to end excessive charges on consumer loans

“These excessive rates are often hidden and can have crippling effects on those individuals who can afford it least."

Durbin’s bill would establish a new Fee and Interest Rate (FAIR) calculation that includes all interest and fees and creates a cap of 36 percent for all consumer credit transactions including mortgages, car loans, credit cards, overdraft loans, car title loans and payday loans.

That rate is similar to usury caps already enacted in many states and is the same level already in place for military personnel and their families.

Durbin’s bill aims to eliminate the difficulty of defining predatory lending by setting a relatively high interest rate as the cap and applying that cap to all credit transactions.

The measure also is designed to encourage the creation of responsible alternatives to small-dollar lending, ensure the federal law does not preempt stricter state laws and create specific penalties for violations of the new cap. 

Sens. Jeff MerkleyJeffrey (Jeff) Alan MerkleyGrassley, Dems step up battle over judicial nominees 2020 Dem contenders travel to key primary states Mulvaney remarks on Trump budget plan spark confusion MORE (D-Ore.), Sheldon WhitehouseSheldon WhitehouseCommittee chairman aims for House vote on opioid bills by Memorial Day Regulators seek to remove barriers to electric grid storage Prison sentencing bill advances over Sessions objections MORE (D-R.I.) and Barbar Boxer (D-Calif.) are cosponsoring the measure.