Sanders and AOC team up for an anti-loansharking bill that will replace payday lenders with post-office banking

Yesterday, Senator Bernie Sanders and Rep Alexandria Ocasio-Cortez jointly introduced The Loan Shark Prevention Act, which will cap credit card interest rates at 15% (and closes the loopholes that lets credit card issuers exceed their stated APRs with the use of hidden fees) and which re-establishes American post-office banking.

Critics of the bill say that it will put the payday lending industry out of business and that this will harm poor people, who struggle to get credit elsewhere. It's a position that has been carefully cultivated by the wildly profitable predatory lending industry, who spent lavishly on academic research to support the position, then used bots to flood regulatory proceedings that might have produced evidence to counter it. This has allowed for a modern return of usury, targeting the poorest and most desperate Americans, with out-and-out swindles going unpunished (naturally, Trump has dismantled any protections victims of the debt industry might have sought).

But capping interest rates at 15% won't just benefit the desperate and poor. Today, banks charge an average of 17% on their loans, but -- thanks to generous federal monetary policies and low fed interest rates -- they only pay 2.5% to access capital. That massive spread means that banks are guaranteed massive profits -- at taxpayer expense, and with taxpayers pickup up the pieces when the banks' usury destroys Americans' lives.

America does have a problem with underserved and underbanked poor households, and this has indeed created a thriving alternative finance industry to serve these peopel. Read the rest