[Congressional Record Volume 169, Number 206 (Thursday, December 14, 2023)]
[Senate]
[Pages S5999-S6000]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REED (for himself, Mr. Merkley, Mr. Brown, Ms. Smith, Mr. 
        Blumenthal, Ms. Stabenow, Mr. Warnock, Mr. Whitehouse, Mr. 
        Schatz, Mr. Wyden, Mr. Booker, Mr. Lujan, Mr. Fetterman, Mr. 
        Welch, Mr. Padilla, and Ms. Butler):
  S. 3549. A bill to amend the Truth in Lending Act to extend the 
consumer credit protections provided to members of the Armed Forces and 
their dependents under title 10, United States Code, to all consumers; 
to the Committee on Banking, Housing, and Urban Affairs.
  Mr. REED. Madam President, today I am reintroducing the Predatory 
Lending Elimination Act along with along with Senator Merkley, Senate 
Banking Committee Chairman Brown, and many of my colleagues. This 
important legislation would extend the bipartisan Military Lending 
Act's, MLA, projections for Active-Duty servicemembers and their 
families to all Americans by imposing a nationwide 36-percent cap on 
the annual percentage rate APR for most extensions of consumer credit.
  To The MLA was enacted on a bipartisan basis in 2006 to rein in 
payday and other unscrupulous lenders that targeted American troops 
with abusive and predatory loans. Unfortunately, the MLA does not 
protect veterans or Gold Star families from these exploitative 
practices. Our servicemembers and their families should not lose 
important consumer protections simply because they retire, separate 
from honorable service, or lose their loved ones. As such, our 
legislation would extend the MLA's protections to veterans and Gold 
Star families as well as ensure that all Americans are shielded from 
predatory loans.
  Hundreds of millions of American consumers could benefit from a 36-
percent APR cap. In States that do not have such a cap, predatory 
lenders are permitted to offer loans with triple-digit APRs that trap 
individuals in cycles of debt. For instance, the Consumer Financial 
Protection Bureau found that 80 percent of payday loans are rolled over 
or renewed within 2 weeks. This practice can subject borrowers not just 
to high nominal interest rates but also to high fees that can quickly 
surpass the amount of money originally borrowed. These are hallmarks of 
predatory lending and poor underwriting.
  According to a coalition of community organizations, payday lenders 
are known to target the most vulnerable, including seniors, veterans, 
and low-income borrowers. Many in these communities were already 
struggling to make ends meet before the COVID-19 pandemic, and 
continuing to pay exorbitant APRs may cause them to fall deeper into 
economic insecurity. This is why it is important to extend strong 
protections against unscrupulous lenders to all Americans.
  The MLA's successful track record demonstrates that providing 
reasonable, responsible limits on interest

[[Page S6000]]

rates does not cut off consumers' access to credit. According to a May 
2021 report from the Department of Defense, ``credit cards, auto loans, 
and personal loans are widely available at risk-based rates under the 
36 percent [military] APR'' and ``[s]ervice members continue to have 
ample access to necessary credit.''
  Moreover, this legislation would follow the trend in many States 
towards greater protections against predatory loans. Nineteen States 
and the District of Columbia have enacted 36 percent APR caps or banned 
payday loans. Lenders in these States have incentives to offer more 
affordable loans that borrowers have an ability to repay. The same 
incentives should apply across the Nation.
  I thank the 170 consumer advocacy groups, faith-based organizations, 
veteran service organizations, and trade associations that support this 
bill, including the Consumer Federation of America, the National 
Consumer Law Center on behalf of its low-income clients, the Center for 
Responsible Lending, Americans for Financial Reform, Amalgamated Bank, 
the Military Officers Association of America, and the National Military 
Family Association.
  I urge our colleagues to join us in supporting this important 
legislation.

                          ____________________