May 9, 2019

AOC, Bernie Sanders to introduce bill capping credit card interest at 15%

Sen, Bernie Sanders and Rep. Alexandria Ocasio-Cortez. Photos: Stephen Maturen/Getty Images and Alex Wroblewski/Getty Images

2020 candidate Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) — both self-declared Democratic-socialists — will introduce a bill on Thursday to prevent credit card interest rates from rising above 15% and capping consumer loans, the Washington Post reports.

Our thought bubble, via Axios' Felix Salmon: Credit cards are one of the most insidious forms of indebtedness. By bundling a loan with a very convenient payments device, banks deliberately make it easy to rack up large debts and interest charges. Capping rates at 15% would significantly reduce unintentional consumer indebtedness.

Expand chart
Source: Federal Reserve via FactSet; Chart: Axios Visuals

Reality check: The proposal illustrates Sanders' enthusiasm when it comes to taking on Wall Street — a consistent theme in his political career. However, it has a slim chance of passing through the Republican-controlled Senate and will most likely face strong resistance from banks.

The bottom line: U.S. card holders are expected to pay $122 billion in interest charges in 2019. That's 12% more than what they paid in 2017 and 50% more than what they paid as recently as 2014.

Buzz:

"We believe the interest rate exportation language may be the most important provision in the package because it is a measure that defers the issue of usury caps to the states. As such, it is ideologically consistent with a push by some Republicans to shift more power to the states. That means it could eventually gain some bipartisan support.
— Cowen Washington Research Group (WRG)

Go deeper: The Fed stopped raising rates, but credit card companies haven't

Go deeper

Robert O'Brien: "I don't think there's systemic racism" in law enforcement

White House national security adviser Robert O'Brien said on CNN's "State of the Union" on Sunday that he doesn't believe there is "systemic racism" among law enforcement in the U.S., arguing that there are "a few bad apples" that are giving police a bad name.

Why it matters: The mass protests that have swept across the United States are not just a response to the death of George Floyd, but of the dozens of high-profile instances of unarmed black men dying at the hands of police officers over the years.

Atlanta mayor on Trump's riot response: "He speaks and he makes it worse"

Atlanta Mayor Keisha Lance Bottoms responded on CNN's "State of the Union" Sunday to President Trump's tweets and comments about the mass protests that have swept across the United States, urging him to "just stop talking."

What she's saying: "This is like Charlottesville all over again. He speaks and he makes it worse. There are times when you should just be quiet. And I wish that he would just be quiet."

Black Americans' competing crises

Illustration: Eniola Odetunde/Axios

For many black Americans, this moment feels like a crisis within a crisis within a crisis.

The big picture: It's not just George Floyd's killing by police. Or the deaths of EMT Breonna Taylor and jogger Ahmaud Arbery. Or the demeaning of birdwatcher Christian Cooper and journalist Omar Jimenez. Or the coronavirus pandemic's disproportionate harm to African Americans. It's that it's all happening at once.