Van Hollen, Brown Announce Legislation to Cap Consumer Lending Rates During COVID-19 Outbreak
Statement
Today, U.S. Senators Chris Van Hollen (D-Md.) and Sherrod Brown (D-Ohio) announced legislation to temporarily cap consumer lending rates, also known as usury rates, at 36 percent during the COVID-19 outbreak. The Senators also urged leadership to include this cap within the phase three coronavirus emergency package. The legislation, as described in their letter below, would amend the Military Lending Act to extend to all consumers the credit protections provided to members of the Armed Forces and their dependents throughout the duration of the COVID-19 National Emergency. The Senators are also sponsors of legislation to cap the usury rate at 36% permanently, but further support the temporary enactment of this rate in response to the current public health emergency.
"The exorbitant fees charged by payday lenders are abhorrent, even under normal circumstances -- but in an emergency, these fees should be criminal. Loan sharks should not be able to profit on those who are struggling to get by, due to the impacts of the coronavirus. We should immediately cap consumer lending rates to ensure fairer lending practices across the country," said Senator Van Hollen.
"During this time of crisis, American consumers and small business owners need support. They should not be preyed upon by unscrupulous lenders and loan sharks seeking to capitalize on those most in need. That is why I am proud to join my colleague Senator Van Hollen in calling for an immediate cap on lending rates and will continue to fight to ensure fairer lending practices now and in the future," said Senator Brown.
"It's astonishing that even in this emergency predatory lenders are exploiting people's hardships by charging 100% APR or more. A temporary 36% rate cap would put a stop to that. I applaud Senator Van Hollen and Senator Brown for their efforts on this issue," said Lauren Saunders, Associate Director of the National Consumer Law Center.
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