Bill would allow states to cap interest rates on credit cards, loans

A bill introduced in the U.S. Senate last week would allow individual states to set a limit on interest rates banks could charge on credit cards and loans.

Known as the "Empowering States’ Rights to Protect Consumers Act," the bill was sponsored by U.S. Sen. Sheldon Whitehouse, D-RI. Among several co-sponsors is U.S. Dick Durbin, the Democrat from Illinois known for being vocal on banking issues. Most notably, his name adorns the amendment to the Dodd-Frank financial reform law that caps swipe fees on debit transactions.

“It’s time to stop Wall Street banks and their credit card subsidiaries from taking advantage of struggling families in Rhode Island and across the nation,” Whitehouse said in a statement. “This legislation would restore historic, long-standing states’ rights to protect consumers from improperly high interest rates.”

The American Bankers Association has yet to issue a public statement on the bill. The Credit Union National Association says the bill has little chance of moving forward.