Rep. Anna Paulina Luna (R-FL) has discovered an unlikely ally in her bid to tackle bank card corporations.
The second-term Congresswoman has labored along with Rep. Alexandria Ocasio-Cortez (D-NY) to ban bank card corporations from charging greater than 10 p.c curiosity.
Collectively, the 2 girls introduced laws on Friday that may see this rule come into impact.
“For too lengthy, bank card corporations have abused working-class People with absurd rates of interest, trapping them in an nearly insurmountable quantity of debt,” Luna mentioned in an announcement.
“We’d like a good resolution – and meaning eliminating the established order and placing an affordable cap on rates of interest,” she continued.
“Bank cards with excessive rates of interest recurrently entice working individuals in infinite cycles of debt.”
”At a time when households are struggling to make ends meet, we can’t permit large banks to shake down our communities for revenue.”
For too lengthy, bank card corporations have abused working class People with absurd rates of interest, trapping them in an nearly insurmountable quantity of debt.
We’d like a good resolution — and meaning eliminating the established order and placing an affordable cap on rates of interest. pic.twitter.com/lBeBbQwmAx
— Rep. Anna Paulina Luna (@RepLuna) March 8, 2025
AOC added:
Bank cards with excessive rates of interest recurrently entice working individuals in infinite cycles of debt. At a time when households are struggling to make ends meet, we can’t permit large banks to shake down our communities for revenue.
Throughout his marketing campaign, President Trump pledged to cap bank card rates of interest at 10%. We’re making that pledge greater than a speaking level by introducing laws to guard working individuals from remaining trapped below mountains of debt.
It isn’t the primary time that such bipartisan laws has been put ahead, and Donald Trump repeatedly endorsed the thought throughout his presidential marketing campaign.
Republican Sen. Josh Hawley and socialist Sen. Bernie Sanders have beforehand launched comparable laws, most notably a 2019 invoice that may have capped charges at 15%.
The present common rate of interest is sort of their proposed restrict, according to Forbes.
Whereas charges have been excessive for a few years, they had been notably exacerbated by the response to the coronavirus pandemic and the excessive inflation throughout Joe Biden’s presidency.
Critics of the proposal argue that whereas capping bank card rates of interest might look like a technique to shield customers from extreme charges, it comes with important downsides.
By limiting how a lot lenders can cost, banks and bank card corporations might develop into extra selective about who they approve, making it tougher for individuals with low credit score scores or no credit score historical past to entry credit score.
As a substitute of providing decrease rates of interest, banks might additionally introduce extra charges or cut back rewards packages to make up for misplaced income.
There’s additionally the chance that if conventional credit score turns into tougher to entry, customers might flip to riskier alternate options like payday loans, which regularly have even larger prices.
