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ABA: The American Bankers Association
Letter to Congress & Regulators

Letter to Congress regarding Fee and Interest Rate Cap Legislation

  • From American Bankers Association, Americas Credit Unions, Association of Military Banks of America AMBA, Bank Policy Institute BPI, Consumer Bankers Association CBA, Defense Credit Union Council, Independent Community Bankers of America ICBA, National Bankers Association NBA
  • Published October 27, 2025

Re: Financial trade associations' views of fee and interest rate cap legislation
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Dear Senators Durbin, Whitehouse, and Blumenthal:

The undersigned trade associations, representing depository institutions that serve millions of American consumers, are united in opposition to legislative proposals to institute new government price controls for consumer loans, such as the Protecting Consumers from Unreasonable Credit Rates Act (S. 2781), that would impose a national "fee and interest rate" cap of 36%. This would have a devastating effect on access to credit for individuals and small business owners who rely on access to well-regulated credit products. Numerous studies have shown that even modest government price controls raise costs rather than lowering them.

Ensuring access to credit for all consumers is a shared goal among policymakers and financial institutions. Small dollar loans, credit cards, and other forms of short-term credit are critical to helping people meet emergency expenses, avoid disruptions in pay, and manage misalignments in the timing of their expenses and income. The proposed 36% fee and interest cap would make it more difficult for many consumers to obtain credit, thereby harming the very consumers the legislation seeks to protect.

It is a shared goal to ensure consumers, including those on the margins with thin or no credit profiles, or with less-than-perfect credit, have access to safe and competitive credit options. While this legislation may aim to curb the much higher rates charged by payday lenders and other less-regulated providers, in reality, its impact would extend far beyond payday lenders to the broader consumer credit market to cover affordable small dollar loans (including "accommodation" loans) that depository institutions are being encouraged to offer, credit cards, personal loans, and overdraft lines of credit. As a result, many consumers who currently rely on credit cards or personal loans would be forced to turn to more expensive, less regulated short-term lenders, including pawn shops, online lenders – or worse – loan sharks, unregulated online lenders, and the black market.

Download the letter to read the full text.

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