SENATE BILL: Loan Shark Prevention Act (Passed)

[Southern Senator North Carolina Yankee]

SENATE BILL
To protect consumers from usury
Be it enacted in both Houses of Congress

Section 1; Title
1. This legislation may be cited as the "Loan Shark Prevention Act".
Section 2; Substance
1. Interest rates on credit cards shall be capped at a maximum of 15%.
a) If state or regional laws prescribe a lower cap, then nothing in this legislation shall prevent the lower cap applying instead of the 15% cap.
b) Any fees that are not considered finance charges shall not be used to evade the limitations of this paragraph, and the total sum of such fees shall not exceed the total amount of finance charges assessed.
2. The Federal Reserve shall have the authority to waive the prescribed 15% interest rate cap for a maximum of 18 months if-
a) A determination is made that prevailing interest rate levels seriously threaten the safety and soundness of individual lenders, as evidenced by meaningful adverse trends in liquidity, capital, earnings and growth.
b) This clause shall not affect the regulations regarding credit unions.
3. If a fee or interest rate greater than the cap prescribed in this legislation is knowingly charged to consumers, the entire interest shall be forfeited.
a) A usurious collection that is forbidden by this legislation shall be able to be entirely recovered from the lender provided that a legal action is brought no later than 2 years after the date on which the last usurious collection was made.
b) Nothing in this section shall be construed to pre-empt state or regional laws that provide greater consumer protection than in this legislation.
4. The Atlasian Postal Service shall be permitted to engage in banking services.
Section 3; Implementation
1. This legislation shall come into effect one year after its passage into law.

Sponsor: Devout Centrist
Senate Designation: SB19:27

[Southern Senator North Carolina Yankee]

The sponsor has 24 hours to advocate, the other members 48 hours to respond.

[Devout Centrist]

This bill would limit the interest rate charged on credit card users. it would also institute postal banking and allow consumers to open a savings account at their local post office.

I am willing to work with lawmakers to make the cap on interest more flexible and equitable. Once again, I accept any constructive criticism regarding this proposal.

[Mr. Reactionary]

The post office can already do banking services in Atlasia... iirc it funds one of Pericles programs from last year.

[Southern Senator North Carolina Yankee]

Postal Lending was embraced by my first administration and signed into law by my successor DFW when Congress failed to deliver to my desk before I left office.

So it has been law for over two years now.

[Devout Centrist]

Postal Lending was embraced by my first administration and signed into law by my successor DFW when Congress failed to deliver to my desk before I left office.

So it has been law for over two years now.

Alright, thank you for pointing that out. I'll amend this bill accordingly.

[Southern Senator North Carolina Yankee]

How soon can we expect that amendment?

[Devout Centrist]

Presenting the following amendment:

SENATE BILL
To protect consumers from usury
Be it enacted in both Houses of Congress

Section 1; Title
1. This legislation may be cited as the "Loan Shark Prevention Act".
Section 2; Substance
1. Interest rates on credit cards shall be capped at a maximum of 15%.
a) If state or regional laws prescribe a lower cap, then nothing in this legislation shall prevent the lower cap applying instead of the 15% cap.
b) Any fees that are not considered finance charges shall not be used to evade the limitations of this paragraph, and the total sum of such fees shall not exceed the total amount of finance charges assessed.
2. The Federal Reserve shall have the authority to waive the prescribed 15% interest rate cap for a maximum of 18 months if-
a) A determination is made that prevailing interest rate levels seriously threaten the safety and soundness of individual lenders, as evidenced by meaningful adverse trends in liquidity, capital, earnings and growth.
b) This clause shall not affect the regulations regarding credit unions.
3. If a fee or interest rate greater than the cap prescribed in this legislation is knowingly charged to consumers, the entire interest shall be forfeited.
a) A usurious collection that is forbidden by this legislation shall be able to be entirely recovered from the lender provided that a legal action is brought no later than 2 years after the date on which the last usurious collection was made.
b) Nothing in this section shall be construed to pre-empt state or regional laws that provide greater consumer protection than in this legislation.
4. The Atlasian Postal Service shall be permitted to engage in banking services.
Section 3; Implementation
1. This legislation shall come into effect one year after its passage into law.

[Devout Centrist]

I believe the amendment has been adopted?

[ON Progressive]

The amendment has been adopted.

[Devout Centrist]

I'm not seeing very many comments here, I'm looking for any comments concerning the upper threshold on interest rates charged for credit card holders.

[lfromnj]

No thx. Saving money by churning  and getting subsidized by financial idiots is great for me.

[Devout Centrist]

No thx. Saving money by churning  and getting subsidized by financial idiots is great for me.

Ah yes, profiting off the backs of the poor and the working class. You're an excellent example of what's wrong with the Federalist Party.

[lfromnj]

Yes I like my 2% savings on every purchase. Idiots aren't forced to use credit cards.

[Devout Centrist]

Yes I like my 2% savings on every purchase. Idiots aren't forced to use credit cards.

In order to build a credit history, people need to make purchases on credit...

[lfromnj]

Yes I like my 2% savings on every purchase. Idiots aren't forced to use credit cards.

In order to build a credit history, people need to make purchases on credit...

And you can always pay back in one month.

[Southern Senator North Carolina Yankee]

I'm not seeing very many comments here, I'm looking for any comments concerning the upper threshold on interest rates charged for credit card holders.

The thing that comes to my mind would be concerns about them not lending to certain people, though that may or may not be a bad thing in the abstract it could certainly be inconvenient in the short term for some people.

[Devout Centrist]

I'm not seeing very many comments here, I'm looking for any comments concerning the upper threshold on interest rates charged for credit card holders.

The thing that comes to my mind would be concerns about them not lending to certain people, though that may or may not be a bad thing in the abstract it could certainly be inconvenient in the short term for some people.

Indeed, some folks may not be able to use credit card services with their history under this bill. However, I believe there are ways to help those people without letting credit card firms take advantage of them.

[Southern Senator North Carolina Yankee]

I'm not seeing very many comments here, I'm looking for any comments concerning the upper threshold on interest rates charged for credit card holders.

The thing that comes to my mind would be concerns about them not lending to certain people, though that may or may not be a bad thing in the abstract it could certainly be inconvenient in the short term for some people.

Indeed, some folks may not be able to use credit card services with their history under this bill. However, I believe there are ways to help those people without letting credit card firms take advantage of them.

I am no fan of debt based consumption. Debt based investment maybe, assuming it is a long term investment with a decent chance of it paying off (well thought out small business plan for instance) or being paid off (house with proper income requirements)

That being said there are people who are in a bad situation and it is difficult to get out of that situation, especially if you have kids and even more so if you are single. The year delay helps but we should look at those "other ways" both those that already exist (postal lending for instance) and those that don't. I think any further amendments to that bill, would probably come from that angle.

[Southern Senator North Carolina Yankee]

Yes I like my 2% savings on every purchase. Idiots aren't forced to use credit cards.

In order to build a credit history, people need to make purchases on credit...

I am semi-partial to the Dave Ramsey model of thinking on this.

"You need a credit history"? Why? "To go more into debt?"

Plus I think it is funny that you can be a literal millionaire and get denied a loan because you have no credit history. I think that says a lot about the whole credit industry.

[Southern Senator North Carolina Yankee]

So on the subject of those other ways to mitigate the impact?

[Devout Centrist]

So on the subject of those other ways to mitigate the impact?

Hmm...give me some time to research a flexible ceiling on credit card APR. Perhaps that would be a better solution.

[Southern Senator North Carolina Yankee]

So on the subject of those other ways to mitigate the impact?

Hmm...give me some time to research a flexible ceiling on credit card APR. Perhaps that would be a better solution.

Keep us posted on the progress of said research and preferably on a daily or every other day basis.

[Devout Centrist]

I'm writing an amendment to put a flexible cap on APR around 17%. Will post it here tomorrow.

[Southern Senator North Carolina Yankee]

I'm writing an amendment to put a flexible cap on APR around 17%. Will post it here tomorrow.

Okay.