Two Democratic Socialists are teaming up to sponsor companion bills in the House and the Senate that would, among other things, call for a cap of 15 percent on credit card interest rates and provide basic banking services at U.S. post offices.
Sen. Bernie Sanders (I-VT) and Rep. Alexandria Ocasio-Cortez (D-NY) announced their bills on a Facebook live event on Thursday, both calling it a “moral” issue.
“It’s not just an economic issue,it’s a moral issue — charging people outrageously high-interest rates,” said Sanders, who is also trying for a second time to become president of the United States.
“The reason this is a moral issue is because we should not be using people’s misfortune and using people’s income status as a basis for extortion and as a basis for predatory lending,” Ocasio-Cortez said.
There is no reason a person should pay more than 15% interest in the United States.
It’s common sense – in fact, we had these Usury laws until the 70s.
(Max interest rates are record-high for ppl with excellent credit, too.)
It’s a debt trap for working people + it has to end. https://t.co/tYf4J892KQ
— Alexandria Ocasio-Cortez (@AOC) May 9, 2019
The pair said high credit card interest rates disproportionately affect the poor and the poor also don’t have access to banking. They used words like “disgusting,” “grotesque,” and “hoodlum” to describe banks and Wall Street.
“You got all these guys in three-piece suits who are now the loan shark hoodlums that we used to see in the movies,” Sanders said.
The proposed bills — which even Sanders has admitted have little chance of passing as is in the Republican-controlled Senate — also call on “ending payday lending scams,” and allowing states to set credit card interest rates.
The bill proposes that post offices would provide basic checking and savings accounts, low-interest loans, debit cards, ATMs, check cashing, money wiring services, and online banking services.
“What we’re really setting out a vision of what a moral America looks like; what a moral economy looks like,” Ocasio-Cortez said.
Sanders and Cortez’s proposal notes that banks can borrow money from the federal reserve for 2.5 percent but charge an average of 17.71 percent on credit cards. Some department stores charge as much as 27 percent in credit card interest rates.
The 25-minute Facebook live event ended with the two engaging in an awkward hug as they wave goodbye.
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