Legal Commentary

Florida's Senator Nelson Votes Against Capping Credit Card Interest

By Professor University of Miami School of Law

Florida’s Senator Nelson, whose party registration identifies him as a Democrat, voted against a provision in the credit card bill currently being debated in the Senate that would have capped credit card interest rates at 15% (see U.S. Senate: Legislation).

Today, one-third of all credit card holders are paying interest above 20 percent and as high as 41 percent.

We used to call that usury. Now, as Sen. Bernie Sanders noted, we call it loan sharking. But Senator Nelson is OK with that, it seems.

I wonder what sort of campaign contributions Senator Nelson gets from credit card issuers?

PS. Yes, an interest cap may mean that at the margin a tiny number of people who could pay off the short-term credit will be denied it. Compared to the large number of people stuck with an escalating debt not dischargable in bankruptcy, I think that’s a net social win.

Full post as published by Discourse.net on May 14, 2009 (boomark / email).