Average credit card rates are hovering around 24% as of August and American credit card debt passed the $1 trillion mark in the same month. Hawley’s legislation is the first attempt at capping credit card rates since Democratic Rep. New York Alexandria Ocasio-Cortez and Democratic Sen. Bernie Sanders introduced the Loan Shark Prevention Act in 2019 to cap credit card APRs at 15%.

“Americans are being crushed under the weight of record credit card debt,” Hawley told RCP. …

Hawley called the proposed legislation “common sense” and a way to give “the working class a chance,” according to the RCP.

[This isn’t ‘common sense’ and it will hurt the ‘working class,’ which already has more difficulty accessing credit. The problem here isn’t ‘usury,’ but Americans largely living beyond their means (and not just in the working class). A 24% APR rate on unsecured revolving credit is not historically unusual, especially in a high-inflation environment while prime rates are rapidly escalating. The APR interest rate is how lenders balance the higher risks of unsecured revolving interest and demand for credit. If regulators cap interest at any level, lenders will start getting a lot more particular about risk in issuing credit, which means the working class will get a lot less access to that credit. Just like any other goods or services, price caps produce shortages, not ‘justice,’ and Hawley should know better. — Ed]