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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.

Many financially vulnerable veterans fell into a carefully conceived trap that lured them into redirecting part of their monthly benefits for a cash advance from investors, USA Today reported. This business of buying and selling military benefits spread to at least 33 states before unraveling. In the last two years, investigators cracked down on the companies. More judges ruled that their transactions violate states and federal laws. The fallout created two sets of victims: Veterans and the people who provided them money. Veterans fell deeper into debt, while investors saw their nest eggs vanish as the veterans stopped paying and the companies collapsed. The architects of these arrangements were the only ones who truly profited. Their bank accounts swelled, sometimes into seven figures. Their riches came from high commissions, sometimes up to 50 percent, hidden fees and exorbitant interest rates as high as 240 percent. The company Future Income Payments ballooned into what's been described as a billion-dollar enterprise. Investors lost $451 million when that business burst last year, according to records obtained by the FBI. Its founder, Scott Kohn, was indicted in Greenville, S.C., on a federal charge of conspiracy to commit wire fraud and mail fraud in connection with the buying and selling of military benefits. The charge carries a maximum 20-year prison sentence. Jury selection is set for February. A Government Accountability Office report issued in October said the U.S. Department of Veterans Affairs should do more to prevent the financial exploitation of veterans. One recommendation in the report: "Centrally collect and analyze information, such as complaints against companies, that could show the prevalence of these scams, help VA target outreach to veterans, and help law enforcement go after scammers."

Democratic presidential candidate Pete Buttigieg unveiled a plan today to make tuition at four-year public colleges free for families earning up to $100,000, the Washington Post reported. The move is part of a package of new economic policies aimed at boosting the fortunes of middle- and working-class Americans and positioning Buttigieg as a clear alternative to more liberal candidates. While Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) have proposed making college free for everyone, Buttigieg is taking a more targeted approach of giving free tuition only to families he considers middle-class and lower. His new policy calls for reduced tuition at public universities for families earning $100,000 to $150,000 and no tuition for those below that threshold. Like several in the Democratic field, Buttigieg also proposes expanding Pell Grants to help low-income students pay for housing and fees and investing $50 billion in historically black colleges. Read more. 

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Federal Reserve data showed that U.S. consumer borrowing grew in September at the slowest rate in 15 months, MarketWatch.com reported. Total consumer credit increased $9.5 billion, down from $17.8 billion in August. Revolving credit, like credit cards, fell for the second straight month in September. That’s the first time this has happened since the summer of 2012. Borrowing fell 1.2 percent after falling 2.5 percent  in August. It is the third decline in revolving credit in the past four months. Non-revolving credit, typically auto and student loans, rose 4.2 percent in September.