Leading financial organizations have collectively urged the Senate to reject a proposed amendment to the GENIUS Act, which would impose government price controls on credit cards. The amendment, introduced by Senator Josh Hawley (R-Mo.), seeks to cap annual percentage rates (APR) for credit cards at 10 percent. Financial groups argue that this measure could severely limit access to credit for many Americans.
In their letter addressed to Senate Majority Leader John Thune (R-S.D.), Senate Minority Leader Chuck Schumer (D-N.Y.), and other Senators, these organizations highlighted potential negative impacts of the proposal. They noted that consumers who currently depend on credit cards might have to resort to alternative, often less desirable, sources of short-term financing if the amendment passes.
The letter states: “Many consumers who currently rely on credit cards would be forced to turn elsewhere for short-term financing needs, including pawn shops, auto title lenders, or worse – loan sharks, unregulated online lenders, and the black market.”
Further concerns were raised about broader economic repercussions. The financial groups indicated that reduced access to credit could lead consumers to cut back on essential spending and fall behind on important payments.
“Other research demonstrates that when consumers lose access to credit,” they wrote, “they often reduce spending on essentials such as healthcare, education, and food... Lacking a credit card would also likely reduce their consumption of items like furniture and clothing which not only negatively affects consumers but also negatively affects the broader economy.”
Signatories of the letter include representatives from various financial associations such as Weston Loyd from the Consumer Bankers Association and Sarah Grano from the American Bankers Association. These organizations represent a broad spectrum of banks and credit unions across America.
The Consumer Bankers Association emphasizes its role in promoting policies beneficial for both industry and economy since its establishment in 1919. Meanwhile, other signatories like America's Credit Unions advocate for more than 140 million members nationwide.
This joint stance reflects significant opposition within the financial sector against legislative measures perceived as restrictive towards consumer access to necessary financial services.
For further details or inquiries regarding this matter or any additional information about these associations' positions or activities related thereto can be obtained through their respective contacts listed above.