As the House gets ready to debate the disgusting credit-card/banking-industry-backed bankrutpcy bill, Rep. Bernie Sanders (I-VT) is introducing "The Loan Shark Prevention Act" - a legislative package designed to prevent the worst abuses by credit card companies and commerical banks. The bill has three very simple provisions:
1. Cap interest rates at 8% above what the IRS charges income tax deadbeats. Currently, the cap would be 14%, the same level that the Senate approved by a 74-19 vote in an amendment offered by Sen. Al D’Amato in 1991.
2. Cap bank and credit card fees at $15, instead of the astronomical late fees that are now regularly assessed.
3. Ban the credit card interest rate bait and switch. Credit card companies are doubling or tripling the interest rates of consumers even though they always paid their credit card bills on-time. The reason? Maybe they were one day late on a student loan payment three years ago. Maybe they took out another loan for a medical emergency. Or maybe they did nothing wrong at all. Today, credit card companies can raise rates for any time for any reason. This bill would restrict that.
Sanders makes a good point: "Loan-sharking is an odious practice whether it is performed by street corner thugs or the CEOs of large banks. Charging economically vulnerable Americans outrageous interest rates and fees is simply not acceptable and, amid all of the recent political discussion over 'values,' this certainly does not constitute 'moral' behavior."
Here's the deal with this bill - people who oppose this legislation literally support usury. And that's fine - but they should have the guts to admit that, rather than pretend that their vote in support of the upcoming bankruptcy bill is about anything other than paying back an industry that regularly engages in consumer abuse.