A bipartisan group of lawmakers that includes 6th Congressional District Republican Glenn Grothman and U.S. Sen. Sherrod Brown, D-Cleveland, wants to limit interest rates on consumer loans nationally at 36%, “a move that worries the payday and online-lending industries,” The Wall Street Journal reports.
The legislation introduced Tuesday, Nov. 12, in both chambers of Congress “aims to extend to all consumers an interest-rate limit already in place for the military, its sponsors said. A rate cap of 36% would effectively eliminate traditional payday loans, which often charge interest rates exceeding 300%, as well as many installment loans offered online,” according to The Journal.
While Democratic lawmakers are the primary supporters of the legislation,Grothman,is backing the House bill. In addition to Brown and Grothman, sponsors are Sen. Jeff Merkley, D-Ore., and Rep. Jesus Garcia, D-Ill.
The newspaper notes that more than a dozen states “have banned payday loans, and the ranks of states with tough limits on high-cost loans are growing. California last month enacted a law imposing a 36% cap on loans between $2,500 and $9,999. Voters in Colorado approved a 36% limit last year, following similar moves in South Dakota and Montana in recent years.”