Ocasio-Cortez says bill would ‘destroy’ predatory payday loan industry

Rep. Alexandria Ocasio-Cortez’s (D-N.Y.) team said the Loan Shark Prevention Act she unveiled Thursday alongside Sen. Bernie Sanders (I-Vt.) would “destroy” the payday loan industry. 

“The bill will officially cap all interest rates on consumer loans at 15% — lowering the credit card rates of millions of Americans, and functionally destroying the predatory ‘payday’ loan industry,” her team said in an email to supporters. 

{mosads} “Predatory lending and our credit rating system targets lower income Americans and people who are living paycheck to paycheck with manipulative practices and hidden fees — trapping millions in a cycle of systemic poverty as their hard-earned money is funneled into exorbitant bonuses for Wall Street executives,” the email also said. 

The lawmakers on Thursday announced that they would introduce the legislation in a livestream video. They also tweeted about the measure. 

In Texas, the average annual interest rate on a payday loan is 661%.

In Vermont, the payday loan industry doesn’t exist, because interest rates on small dollar loans are capped at 18%.

We must cap interest rates on consumer loans and credit cards at 15% nationwide.

— Bernie Sanders (@BernieSanders) May 9, 2019

There is no reason a person should pay more than 15% interest in the United States.

It’s common sense – in fact, we had these Usury laws until the 70s.

(Max interest rates are record-high for ppl with excellent credit, too.)

It’s a debt trap for working people + it has to end. https://t.co/tYf4J892KQ

— Alexandria Ocasio-Cortez (@AOC) May 9, 2019

A payday loan is a short-term loan that is borrowed at a higher interest rate. Sanders is among more than 20 Democrats running for president in 2020.

Ocasio-Cortez is a member of the House Financial Services Committee. Last month she grilled leaders of major banks over whether more people should have gone to prison for their roles in the 2007 financial crisis.