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Leading Progressive Nonprofit Supports New Campaign to Cap Loan Interest Rates at 10 Percent
Metro Industrial Areas Foundation to launch “Ten Percent is Enough” campaign
“The ‘Do Nothing Coalition’ of Republicans, Wall Street lobbyists and certain Democrats who are afraid of their own shadows opposes limiting the interest rates which have propelled millions of people into unsustainable debt,” said Deepak Bhargava, executive director of the Center for Community Change. “We believe a ten percent cap on interest rates is enough to allow credit to flow to all worthy borrowers. It is enough to allow bankers their fair share of profit, and it is enough to protect families from permanent indebtedness.”
The Metro Industrial Areas Foundation’s (IAF) “Ten Percent is Enough” campaign proposes the cap on every credit card and personal loan, including pay day loans and rapid-return tax refund businesses. Today’s economic crisis has underscored the need to protect communities and highlighted the impact usurious interest rates have on families.
Usury laws, which protect consumers from abusive interest rates, were in place in America until 1980, capping rates at 9 percent during that time. Since then, hundreds of thousands of families have fallen victim to unfair lending practices. Pauline Charles of Baltimore borrowed $1,000 from a title loan company and was required to pay $300 a month to repay. After falling behind, she was required to pay $600 a month, eventually repaying $11,000 for a $1,000 loan.
As part of the campaign to reinstate usury laws, Metro IAF sent letters requesting meetings with the CEOs of the nation’s five largest credit card companies: Bank of America, JP Morgan Chase, Wachovia/Wells Fargo, Citibank, and Capital One. Participating cities launching the campaign today include Chicago, Washington, New York, Durham, London and Boston.