II 

116TH CONGRESS 

1ST SESSION S. 1389 

To protect consumers from usury. 

IN THE SENATE OF THE UNITED STATES 

MAY 9, 2019 

Mr. SANDERS (for himself and Mr. WHITEHOUSE) introduced the following 

bill; which was read twice and referred to the Committee on Banking, 

Housing, and Urban Affairs 

A BILL 

To protect consumers from usury. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Loan Shark Prevention 

5 Act’’. 

6 SEC. 2. INTEREST RATE REDUCTION. 

7 (a) NATIONAL CONSUMER CREDIT USURY RATE.— 

8 Section 107 of the Truth in Lending Act (15 U.S.C. 1606) 

9 is amended by adding at the end the following new sub10 section: 

11 ‘‘(f) NATIONAL CONSUMER CREDIT USURY RATE.— 


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•S 1389 IS

1 ‘‘(1) LIMITATION ESTABLISHED.— 

2 ‘‘(A) IN GENERAL.—Notwithstanding sub3 section (a) or any other provision of law, but 

4 except as provided in paragraph (2), the annual 

5 percentage rate applicable to any extension of 

6 credit may not exceed the lesser of— 

7 ‘‘(i) 15 percent on unpaid balances, 

8 inclusive of all finance charges; or 

9 ‘‘(ii) the maximum rate permitted by 

10 the laws of the State in which the con11 sumer resides. 

12 ‘‘(B) OTHER FEES.—Any fees that are not 

13 considered finance charges under section 106(a) 

14 may not be used to evade the limitations of this 

15 paragraph, and the total sum of such fees may 

16 not exceed the total amount of finance charges 

17 assessed. 

18 ‘‘(2) EXCEPTIONS.— 

19 ‘‘(A) BOARD AUTHORITY.—The Board may 

20 establish, after consultation with the appro21 priate committees of Congress, the Secretary of 

22 the Treasury, and any other interested Federal 

23 financial institution regulatory agency, an an24 nual percentage rate of interest ceiling exceed25 ing the 15-percent annual rate under paragraph 


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•S 1389 IS

1 (1) for periods of not to exceed 18 months, 

2 upon a determination that— 

3 ‘‘(i) money market interest rates have 

4 risen over the preceding 6-month period; 

5 and 

6 ‘‘(ii) prevailing interest rate levels 

7 threaten the safety and soundness of indi8 vidual lenders, as evidenced by adverse 

9 trends in liquidity, capital, earnings, and 

10 growth. 

11 ‘‘(B) TREATMENT OF CREDIT UNIONS.— 

12 The limitation in paragraph (1) does not apply 

13 with respect to any extension of credit by an in14 sured credit union, as that term is defined in 

15 section 101 of the Federal Credit Union Act 

16 (12 U.S.C. 1752). 

17 ‘‘(3) PENALTIES FOR CHARGING HIGHER

18 RATES.— 

19 ‘‘(A) VIOLATION.—The taking, receiving, 

20 reserving, or charging of an annual percentage 

21 rate or fee greater than that permitted by para22 graph (1), when knowingly done, shall be 

23 deemed a violation of this title, and a forfeiture 

24 of the entire interest which the note, bill, or 


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•S 1389 IS

1 other evidence of the obligation carries with it, 

2 or which has been agreed to be paid thereon. 

3 ‘‘(B) REFUND OF INTEREST AMOUNTS.—If 

4 an annual percentage rate or fee greater than 

5 that permitted under paragraph (1) has been 

6 paid, the person by whom it has been paid, or 

7 the legal representative thereof, may, by bring8 ing an action not later than 2 years after the 

9 date on which the usurious collection was last 

10 made, recover back from the lender in an action 

11 in the nature of an action of debt, the entire 

12 amount of interest, finance charges, or fees 

13 paid. 

14 ‘‘(4) CIVIL LIABILITY.—Any creditor who vio15 lates this subsection shall be subject to the provi16 sions of section 130. 

17 ‘‘(g) RELATION TO STATE LAW.—Nothing in this 

18 section may be construed to preempt any provision of 

19 State law that provides greater protection to consumers 

20 than is provided in this section.’’. 

21 (b) CIVIL LIABILITY CONFORMING AMENDMENT.— 

22 Section 130(a) of the Truth in Lending Act (15 U.S.C. 

23 1640(a)) is amended by inserting ‘‘section 107(f),’’ before 

24 ‘‘this chapter’’. 

Æ 


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