S. 2730Senate118th Congress (2023-2025)In Committee

Protecting Consumers from Unreasonable Credit Rates Act of 2023

AI-Generated Summary

Updated January 20, 2026 at 11:09 AM UTC

The Protecting Consumers from Unreasonable Credit Rates Act of 2023 amends the Truth in Lending Act to create a nationwide usury limit for consumer credit. It caps the total fee and interest rate at 36 percent for any loan or credit line to a consumer, counting all charges, fees, and ancillary costs. The rule applies to all lenders and credit providers and is intended to curb predatory lending practices that charge extremely high rates. It also sets disclosure and enforcement mechanisms to protect borrowers.

Key Provisions

Sets a 36% maximum fee and interest rate for all consumer credit extensions, overriding any other law that allows higher rates.
Defines “fee and interest rate” to include all charges, fees, credit‑insurance premiums, and costs of ancillary products associated with the credit transaction.
Allows limited tolerances: application/participation fees up to $30 (or up to $120 under certain conditions), late fees up to $20 per late payment, and insufficient‑funds fees up to $15.
Specifies how the fee and interest rate must be calculated for open‑end credit plans and other credit plans, using annualized totals of all included charges.
Prohibits any exemptions from the cap and requires that disclosures reflect the new “fee and interest rate” metric; state laws offering greater consumer protection are not preempted.
Makes violations void and unenforceable, requires creditors to return all amounts received, and imposes civil penalties of up to one year in prison and a fine of the greater of three times the debt or $50,000 per violation.
Allows state attorneys general to bring enforcement actions within three years and to seek injunctive relief.

Legislative Activity

Stay on top of the latest movement without scrolling through every action

1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Banking, Housing, and Urban Affairs Committee

September 6, 2023

View full timeline

SenateIntro Referral

Introduced in Senate

September 6, 2023

SenateIntro Referral

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Banking, Housing, and Urban Affairs Committee

September 6, 2023

Floor Debate

2 members

What members said about S. 2730 on the floor

2 Democrats

Sen. Tim KaineD-VA · Sep 6, 2023

Madam President, today I want to discuss legislation I am introducing, the End Shutdown Act. When Congress is unable to come to an agreement about government funding, Federal employees, government…

Madam President, today I want to discuss legislation I am introducing, the End Shutdown Act.

When Congress is unable to come to an agreement about government funding, Federal employees, government contractors, and Americans who depend on critical government services all suffer the consequences of using government shutdowns as a negotiating tactic. This bill prevents government shutdowns by initiating an automatic continuing resolution on October 1 if no appropriations bill is passed by that date and stops Congress from considering any nonemergency legislation until it reaches a long-term spending deal.

For Federal employees who are forced to go without a paycheck through no fault of their own during a government shutdown, furlough can mean falling behind on mortgage, rent, or student loan payments and uncertainty about how to put food on the table for their families. I am glad my colleagues and I were able to guarantee backpay for all Federal employees in 2019, but the potential for prolonged shutdowns continues to threaten families' budgets and local economies. Virginia is home to more than 170,000 Federal employees and tens of thousands of Federal contractors. They are not a bargaining chip to be played in these negotiations.

Government shutdowns disproportionately harm Virginia's economy, but over 80 percent of Federal workers live and work outside of the DC area. Shutdowns inflict pain on communities across the Nation, as they disrupt Federal contracts and loans to small businesses, complicate supply chains, and stall the release of data business owners need to make decisions.

Further, government shutdowns halt the essential services that furloughed employees are unable to provide, from food inspection services to passport renewals and Social Security card replacement. Over the past two decades, government shutdowns have put some of our most essential programs like Medicare, SNAP, TANF, and WIC in jeopardy. Using government shutdowns as a negotiating tactic has the potential to inflict senseless pain on millions of Americans who rely on these and other Federal programs.

By ending the threat of government shutdowns, Congress can ensure no one can ever again hold public servants and critical programs hostage by using a shutdown as a negotiating tactic. I encourage my colleagues to support this common-sense proposal that is needed for both the American people and the Federal employees across the country on whom we rely.

Sen. Richard J. DurbinD-IL · Sep 6, 2023

Madam President, I ask unanimous consent that the text of the bill be printed in the Record.

Sen. Richard J. DurbinD-IL · Sep 6, 2023

Madam President, I ask unanimous consent that the text of the bill be printed in the Record.

Bill Text

Latest available legislative text

Reading Mode

Raw Text PDF XML

Introduced in SenateIssued September 6, 2023

118th CONGRESS

1st Session

S. 2730

IN THE SENATE OF THE UNITED STATES

September 6, 2023

Mr. Durbin (for himself, Mr. Blumenthal, Mr. Merkley, and Mr. Whitehouse) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To amend the Truth in Lending Act to establish a national usury rate for consumer credit transactions.

Short title

This Act may be cited as the Protecting Consumers from Unreasonable Credit Rates Act of 2023.

Findings

Congress finds that—

(1)

attempts have been made to prohibit usurious interest rates in America since colonial times;

(2)

at the Federal level, in 2006, Congress enacted a Federal 36-percent annualized usury cap for servicemembers and their families for covered credit products, as defined by the Department of Defense, which curbed payday, car title, and tax refund lending around military bases;

(3)

notwithstanding such attempts to curb predatory lending, high-cost lending persists in all 50 States due to loopholes in State laws, safe harbor laws for specific forms of credit, and the exportation of unregulated interest rates permitted by preemption;

(4)

due to the lack of a comprehensive Federal usury cap, consumers have paid as much as approximately $14,000,000,000 on high-cost overdraft loans, $9,000,000,000 on storefront and online payday loans, $3,800,000,000 on car title loans, and additional amounts in unreported revenues on high-cost online installment loans;

(5)

cash-strapped consumers pay on average approximately 400-percent annual interest for payday loans, 300-percent annual interest for car title loans, 17,000 percent for bank overdraft loans, and triple-digit rates for online installment loans;

(6)

a national maximum interest rate that includes all forms of fees and closes all loopholes is necessary to eliminate such predatory lending; and

(7)

alternatives to predatory lending that encourage small dollar loans with minimal or no fees, installment payment schedules, and affordable repayment periods should be encouraged.

National maximum interest rate

Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by adding at the end the following:

140B.

Maximum rates of interest

(a)

In general

Notwithstanding any other provision of law, no creditor may make an extension of credit to a consumer with respect to which the fee and interest rate, as defined in subsection (b), exceeds 36 percent.

(b)

Fee and interest rate defined

(1)

In general

For purposes of this section, the fee and interest rate includes all charges payable, directly or indirectly, incident to, ancillary to, or as a condition of the extension of credit, including—

(A)

any payment compensating a creditor or prospective creditor for—

(i)

an extension of credit or making available a line of credit, such as fees connected with credit extension or availability such as numerical periodic rates, annual fees, cash advance fees, and membership fees; or

(ii)

any fees for default or breach by a borrower of a condition upon which credit was extended, such as late fees, insufficient funds fees, overdraft fees, and over-limit fees;

(B)

all fees which constitute a finance charge, as defined by rules of the Bureau in accordance with this title;

(C)

credit insurance premiums, whether optional or required; and

(D)

all charges and costs for ancillary products sold in connection with or incidental to the credit transaction.

(2)

Tolerances

(A)

In general

With respect to a credit obligation that is payable in at least 3 fully amortizing installments over at least 90 days, the term fee and interest rate does not include—

(i)

application or participation fees that in total do not exceed the greater of $30 or, if there is a limit to the credit line, 5 percent of the credit limit, up to $120, if—

(I)

such fees are excludable from the finance charge pursuant to section 106 and regulations issued thereunder;

(II)

such fees cover all credit extended or renewed by the creditor for 12 months; and

(III)

the minimum amount of credit extended or available on a credit line is equal to $300 or more;

(ii)

a late fee charged as authorized by State law and by the agreement that does not exceed either $20 per late payment or $20 per month; or

(iii)

a creditor-imposed insufficient funds fee charged when a borrower tenders payment on a debt with a check drawn on insufficient funds that does not exceed $15.

(B)

Adjustments for inflation

The Bureau may adjust the amounts of the tolerances established under this paragraph for inflation over time, consistent with the primary goals of protecting consumers and ensuring that the 36-percent fee and interest rate limitation is not circumvented.

(c)

Calculations

(1)

Open end credit plans

For an open end credit plan—

(A)

the fee and interest rate shall be calculated each month, based upon the sum of all fees and finance charges described in subsection (b) charged by the creditor during the preceding 1-year period, divided by the average daily balance; and

(B)

if the credit account has been open less than 1 year, the fee and interest rate shall be calculated based upon the total of all fees and finance charges described in subsection (b)(1) charged by the creditor since the plan was opened, divided by the average daily balance, and multiplied by the quotient of 12 divided by the number of full months that the credit plan has been in existence.

(2)

Other credit plans

For purposes of this section, in calculating the fee and interest rate, the Bureau shall require the method of calculation of annual percentage rate specified in section 107(a)(1), except that the amount referred to in that section 107(a)(1) as the finance charge shall include all fees, charges, and payments described in subsection (b)(1) of this section.

(3)

Adjustments authorized

The Bureau may make adjustments to the calculations in paragraphs (1) and (2), but the primary goals of such adjustment shall be to protect consumers and to ensure that the 36-percent fee and interest rate limitation is not circumvented.

(d)

Definition of creditor

As used in this section, the term creditor has the same meaning as in section 702(e) of the Equal Credit Opportunity Act (15 U.S.C. 1691a(e)).

(e)

No exemptions permitted

The exemption authority of the Bureau under section 105 shall not apply to the rates established under this section or the disclosure requirements under section 127(b)(6).

(f)

Disclosure of fee and interest rate for credit other than open end credit plans

In addition to the disclosure requirements under section 127(b)(6), the Bureau may prescribe regulations requiring disclosure of the fee and interest rate established under this section.

(g)

Relation to State law

Nothing in this section may be construed to preempt any provision of State law that provides greater protection to consumers than is provided in this section.

(h)

Civil liability and enforcement

In addition to remedies available to the consumer under section 130(a), any payment compensating a creditor or prospective creditor, to the extent that such payment is a transaction made in violation of this section, shall be null and void, and not enforceable by any party in any court or alternative dispute resolution forum, and the creditor or any subsequent holder of the obligation shall promptly return to the consumer any principal, interest, charges, and fees, and any security interest associated with such transaction. Notwithstanding any statute of limitations or repose, a violation of this section may be raised as a matter of defense by recoupment or setoff to an action to collect such debt or repossess related security at any time.

(i)

Violations

Any person that violates this section, or seeks to enforce an agreement made in violation of this section, shall be subject to, for each such violation, 1 year in prison and a fine in an amount equal to the greater of—

(1)

three times the amount of the total accrued debt associated with the subject transaction; or

(2)

$50,000.

(j)

State attorneys general

An action to enforce this section may be brought by the appropriate State attorney general in any United States district court or any other court of competent jurisdiction within 3 years from the date of the violation, and such attorney general may obtain injunctive relief.

Disclosure of fee and interest rate for open end credit plans

Section 127(b)(6) of the Truth in Lending Act (15 U.S.C. 1637(b)(6)) is amended by striking the total finance charge expressed and all that follows through the end of the paragraph and inserting the fee and interest rate, displayed as FAIR, established under section 141..