Freshman Congresswoman Alexandria Ocasio-Cortez and Democratic presidential hopeful Bernie Sanders are setting their sights on Wall Street with the Loan Shark Prevention Act. The act would ensure a 15 percent interest rate cap on consumer loans, an initiative Sanders has been pushing for years. The bill has little chance, though, of pass through the Republican-held Senate.
“Today’s loan sharks wear expensive suits and work on Wall Street, where they make hundreds of millions of dollars in total compensation by charging sky-high fees and usurious interest rates,” part of the bill reads.
Sanders and Ocasio-Cortez are both self-described Democratic-socialists who accuse those who work on Wall Street of being “modern-day loan sharks,” Bloomberg reported.
Currently, Americans have over $1 trillion in credit card debt, with much of the debt coming from ever-increasing interest rates. According to The Intercept, the average interest on consumer loans in America is around 17 percent, but it isn’t uncommon for the interest rate to exceed 20 percent.
In addition to taking on Wall Street, the act would also ensure low-income Americans could go to post offices for banking services as many of these individuals do not have access to traditional banking.
“We must make sure that giant Wall Street financial institutions are not the only way Americans can gain access to banking services,” Sanders and Ocasio-Cortez said in a joint statement. “Together, we are going to put predatory lenders out of business and provide affordable banking options to all Americans.”
Using post offices as low-income banks is a plausible option as in 2016, the collective bargaining agreement between the American Postal Workers Union and U.S. Postal Service included a pilot program, which would easily allow the transition.
Acquiring loans through a post office could be a bit trickier. The current program does not include loans as this would require some form of additional legislation.
Ocasio-Cortez recently stated that she was thinking about endorsing a democratic presidential candidate. “What I’d like to see in a presidential candidate is one that has a coherent worldview and logic from which all these policy proposals are coming forward,” Ocasio-Cortez explained. “I think Sen. Sanders has that. I also think Sen. Warren has that.”