A group of lawmakers wants to limit interest rates on consumer loans nationally at 36 percent, a move that worries the payday and online-lending industries, the Wall Street Journal reported. The legislation introduced yesterday in both chambers of Congress aims to extend to all consumers an interest-rate limit already in place for the military, its sponsors said. A rate cap of 36 percent would effectively eliminate traditional payday loans, which often charge interest rates exceeding 300 percent, as well as many installment loans offered online. While Democratic lawmakers are the primary supporters of the legislation, Rep. Glenn Grothman (R-Wis.), is backing the House bill. “It’s too hard to imagine in any way this business practice should be allowed,” he said. Grothman said that he expects the bill to soon get a vote in the House Financial Services Committee, but it isn’t clear what chances the measure has in clearing Congress. More than a dozen states have banned payday loans, and the ranks of states with tough limits on high-cost loans are growing. California last month enacted a law imposing a 36 percent cap on loans between $2,500 and $9,999. Voters in Colorado approved a 36 percent limit last year, following similar moves in South Dakota and Montana in recent years. For active members of the military, the Military Lending Act of 2006 placed a 36 percent limit on most loans and it was extended to credit card loans in 2017.
