After Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Bernie Sanders (I-Vt.) today unveiled a bill that—among other things—would cap consumer loan annual percentage rates at 15% nationwide, the American Bankers Association forcefully pushed back with quotes in several media reports. “Today consumers benefit from a highly competitive and vibrant credit market,” said ABA SVP Jeff Sigmund. “It would be a mistake for the government to artificially limit those choices.”
The Ocasio-Cortez/Sanders bill would permit the Federal Reserve to raise the cap for limited periods when safety and soundness warrant. “This specific proposal will only harm consumers by restricting access to credit for those who need it the most and driving them toward less regulated, more costly alternatives,” Sigmund added.
Ocasio-Cortez and Sanders said their plan would permit the U.S. Postal Service to offer depository accounts and small-dollar loans. ABA has long resisted efforts to expand postal financial services, arguing that it would present significant competitive, regulatory and consumer protection challenges, as well as distracting USPS at a time when the Post Office is already struggling to achieve its mission.