Representatives García and Grothman Introduce Veterans and Consumers Fair Credit Act to Protect Consumers from Predatory Lending Practices
Statement
Earlier this week, Congressman Jesús "Chuy" García (IL-04), a member of the Financial Services Committee, and Congressman Glenn Grothman (WI-06) introduced the Veterans and Consumers Fair Credit Act, to extend small dollar "payday" and car-title 36% rate cap protections established under the Military Lending Act (MLA) to all consumers, including veterans and their families. This bill will better protect consumers, particularly military personnel, from certain predatory lending practices.
A Senate companion bill was introduced earlier this year by Senators Jack Reed (D-RI), Sherrod Brown (D-OH), Jeff Merkley (D-OR), and Chris Van Hollen (D-MD). Representatives García and Grothman both testified before the Senate Banking Committee in support of the bill.
"Predatory loans trap working class people like the ones I represent in Chicago in an endless cycle of debt and jeopardize our economic recovery. It's up to Congress to ensure that families aren't stuck with unpayable interest rates on loans for a utility bill or baby stroller," said Congressman Jesús "Chuy" García. "This bipartisan bill expands the time-tested protections of the Military Lending Act to veterans, military families, and other consumers. Congress should act with haste to advance it to protect families from this unpayable debt."
"Usury has been condemned since Biblical times. Historically, the United States has had usury laws, putting a guard rail up for borrowers. As more and more loans are given online, it becomes more difficult for states to deal with the problem of snowballing debt. The Veterans and Consumers Fair Credit Act is a great starting point to address the influx of foul play by payday lenders who seize on vulnerable borrowers. We already protect military service members under the Military Lending Act, which means that we have recognized the predatory nature of high-interest loans to our men and women in uniform. This raises the question -- if it is wrong to allow predatory lenders to target our service members, why is it right to let them target the rest of the community?" Said Congressman Glenn Grothman.
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