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This bill would place a strict cap on credit card interest rates. It would make it illegal for a credit card company to charge an annual percentage rate, including finance charges, above 10 percent. It also says companies cannot get around the limit by adding certain fees, and people who are charged more than allowed could sue to recover the interest, finance charges, or fees they paid. The bill would also keep stronger state consumer protections in place and would end this new federal cap in 2031 unless Congress changes the law first.
- The interest rate cap would apply to credit cards under the Truth in Lending Act.
- Fees that are not counted as finance charges could not be used to bypass the 10 percent limit.
- Lenders that charge more than allowed could lose the right to collect the extra interest and could face legal penalties.
- Consumers could take legal action within 2 years after the last improper charge was made.
- The federal cap would be removed on January 1, 2031.
Official Summaries
10 Percent Credit Card Interest Rate Cap Act
This bill temporarily caps credit card interest rates at 10%.
Creditors that knowingly violate this bill forfeit the entire interest of the debt. The bill also provides a private right of action for debtors to recover interest, finance charges, or fees. The action must be brought within two years of the violation. In addition, violations of this bill are subject to civil liability under the Truth in Lending Act, which is enforced by the Consumer Financial Protection Bureau and the Federal Trade Commission.
These changes sunset on January 1, 2031.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1944 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 1944
To amend the Truth in Lending Act to cap credit card interest rates at
10 percent.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 6, 2025
Ms. Ocasio-Cortez (for herself and Mrs. Luna) introduced the following
bill; which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Truth in Lending Act to cap credit card interest rates at
10 percent.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``10 Percent Credit Card Interest Rate
Cap Act''.
SEC. 2. CAP ON CREDIT CARD INTEREST RATES.
(a) In General.--Section 107 of the Truth in Lending Act (15 U.S.C.
1606) is amended by adding at the end the following:
``(f)(1) The annual percentage rate applicable to an extension of
credit obtained by use of a credit card may not exceed 10 percentage
points, inclusive of all finance charges.
``(2) Any fees that are not considered finance charges under
section 106(a) may not be used to evade the limitations of paragraph
(1), and the total sum of such fees may not exceed the total amount of
finance charges assessed.
``(3) The taking, receiving, reserving, or charging of a credit
card annual percentage rate or fee greater than that permitted under
this subsection, when knowingly done, shall be deemed a violation of
this title, and a forfeiture of the entire interest which the note,
bill, or other evidence of the obligation carries with it, or which has
been agreed to be paid thereon.
``(4) If a credit card annual percentage rate or fee greater than
that permitted under this subsection has been paid, the person by whom
it has been paid, or the legal representative thereof, may, by bringing
an action not later than 2 years after the date on which the usurious
collection was last made, recover back from the lender in an action in
the nature of an action of debt, the entire amount of interest, finance
charges, or fees paid.
``(5) Any creditor who violates this subsection shall be subject to
the provisions of section 130.
``(g) Nothing in this section may be construed to preempt any
provision of State law that provides greater protection to consumers
than is provided under this section.''.
(b) Technical and Conforming Amendment.--Section 130(a) of the
Truth in Lending Act (15 U.S.C. 1640(a)) is amended, in the matter
preceding paragraph (1), by inserting ``section 107(f),'' before ``this
chapter''.
(c) Sunset.--
(1) In general.--The Truth in Lending Act (15 U.S.C. 1601
et seq.) is amended--
(A) in section 107 (15 U.S.C. 1606), by striking
subsections (f) and (g); and
(B) in section 130(a) (15 U.S.C. 1640(a)), in the
matter preceding paragraph (1), by striking ``section
107(f),''.
(2) Effective date.--The amendments made by paragraph (1)
shall take effect on January 1, 2031.
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