Bill · S. 2781· Senate(119-S-2781)
Protecting Consumers from Unreasonable Credit Rates Act of 2025
- Introduced
- 9/11/2025
- Last activity
- 9/11/2025 — Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (text: CR S6577)
- Sponsored by
- Richard Durbin
- Cosponsors
- - 2 - 0
- Introduced
- In Committee
What this bill would do
This bill, known as the "Protecting Consumers from Unreasonable Credit Rates Act of 2025," seeks to amend the Truth in Lending Act. It proposes the establishment of a national usury rate to cap consumer credit transactions. Under this proposal, no creditor could charge a fee and interest rate exceeding 36 percent. The bill aims to close existing loopholes in state laws that allow for high-cost lending. It also defines exactly what constitutes the fee and interest rate to prevent circumvention. Finally, it establishes strict penalties for creditors who violate these new limits.
Yes· 3 of 5
Would households on low incomes be better off under this?+8
The cap on interest rates and fees provides significant relief to those frequently subject to triple-digit interest rates.
Does this give people more protection from unfair business practices?+8
The bill establishes a 36 percent national cap on interest rates and fees to prevent predatory lending practices.
Is this likely to lift people out of poverty?+5
By capping high-interest payday and overdraft loans, the bill helps prevent consumers from falling deeper into debt-related poverty.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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Capping High-Cost Loans: The bill establishes a national maximum interest rate of 36 percent, which would prevent consumers from paying extremely high rates such as the 400-percent annual interest seen in some payday loans (Section 3(a)).
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Closing Loopholes on Fees: By defining the "fee and interest rate" to include all charges, such as annual fees, cash advance fees, and even overdraft fees, the bill prevents creditors from bypassing the interest cap through various extra charges (Section 3(b)(1)).
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Consumer Protection for Wage-Based Products: The bill includes costs for products that provide funds based on a consumer's accrued wages and are repaid automatically, ensuring these specific types of loans are subject to the cap (Section 3(b)(1)(E)).
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Legal Recourse for Consumers: If a creditor violates the cap, any payment made for that transaction is considered null and void, and the creditor must return the principal, interest, charges, and fees to the consumer (Section 3(h)).
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Enforcement Power: The bill allows State attorneys general to bring actions to enforce these protections in court (Section 3(j)).
Potential Negative Impacts for People
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Limited Exceptions for Certain Fees: The bill limits the ability of creditors to exclude certain fees, such as application or participation fees, unless they meet very specific criteria regarding the amount of credit and the length of the credit line (Section 3(b)(2)(A)(i)).
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Strict Late Fee Limits: The bill restricts late fees to a maximum of $8 per late payment or $8 per month, which may impact how creditors manage payment schedules (Section 3(b)(2)(A)(ii)).
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Strict Insufficient Funds Fee Limits: Creditor-imposed insufficient funds fees are capped at $15 when a borrower pays with a check drawn on insufficient funds (Section 3(b)(2)(A)(iii)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Low Income Households+8Good For Urban Residents+3
- Economy And Finance
- Improves Consumer Protection+8
- Social Issues And Justice
- Improves Poverty Reduction+5
- Governance And Ideology
- Improves Government Transparency+4
- 9/11/2025
- Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (text: CR S6577)
- 2 Cosponsors added.
- Introduced in Senate
Richard BlumenthalDemocrat · Connecticut
Sheldon WhitehouseDemocrat · Rhode Island