Sponsors (3)
The bill would significantly reduce costs and protect borrowers—especially low‑income people and servicemembers—by capping high‑cost credit and improving transparency, but it risks shrinking the availability of small‑dollar loans and creating compliance and legal costs that could shift burdens or disrupt some lending markets.
Low‑income and other high‑cost borrowers (including payday and many installment borrowers) would pay less in interest and fees because the bill caps high‑cost credit at 36% APR including fees, reducing yearly costs for these households.
Active duty servicemembers and their families would get explicit nationwide protections similar to the DoD 36% cap, reducing payday/title loan harm near bases and extending existing military borrower safeguards.
Consumers who need very small loans would have safer alternatives if lenders offer installment schedules or minimal‑fee small‑dollar products, lowering the risk of debt traps from single‑payment payday models.
People who rely on short‑term, small‑dollar credit (including in rural areas) could face reduced access if some lenders exit markets or stop offering these products in response to the cap.
Banks and financial institutions could lose revenue from high‑fee products and may shift costs to other services or customers, potentially raising prices or fees elsewhere.
If the new disclosure and compliance requirements are burdensome, creditors may pass compliance costs onto borrowers through higher fees or interest, offsetting some consumer savings.
Based on analysis of 4 sections of legislative text.
Introduced September 11, 2025 by Richard Joseph Durbin · Last progress September 11, 2025
Creates a nationwide legal cap that prevents any consumer credit product from charging a combined "fee and interest rate" above 36% APR and requires clearer disclosures of fees and rates for revolving credit. It defines which charges count toward that cap, allows narrow, small tolerances for minor application/late/NSF fees, empowers the CFPB to set calculation rules and inflation adjustments, preserves stronger state protections, and establishes civil and criminal enforcement tools (including voiding unlawful charges, private defenses, state attorney general suits, injunctive relief, and criminal fines and jail time).