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May 15 2019

Not Pragmatic

Among my many personal failings is that I rarely resist the opportunity to say ‘I told you so.’

When on the 9th, a little less than a week ago, I drew your attention to the Ocasio-Cortez/Sanders 15% Usury Cap out of a recognition of its fundamental justice and economic sanity.

I am gratified but not surprized that it’s wildly popular even among Republicans.

The vast majority of Republicans support Alexandria Ocasio-Cortez and Bernie Sanders’ plan to cap credit-card interest rates at 15%
Eliza Relman and Walt Hickey, Business Insider
5/15/19

The vast majority of both Republicans and Democrats who said they plan to vote in the 2020 presidential primary support legislation rolled out by Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders last week that would cap credit-card interest rates at 15%.

Nearly 70% of Republican primary voters and 73% of Democratic primary voters said they either support or strongly support the proposal to cap rates at 15%, according to a new INSIDER poll. Just over 60% of respondents who don’t plan to vote in the 2020 presidential primaries also said they support the bill, known as the Loan Shark Prevention Act.

Just 13% of GOP primary voters were opposed to the idea, while 7% of Democratic primary voters were opposed.

INSIDER specifically asked Americans whether they support or oppose a law that would cap credit-card interest rates at 15%, noting that the current median interest rate for a credit card is about 21.36%.

Overall, about 68% of respondents said they either support or strongly support the plan and 10% oppose it.

Support for the cap was consistent across income levels, but higher-income respondents appeared to support the proposal more strongly than the average respondent — though the sample size was too small to draw any specific conclusions.

Under the proposed law, the annual percentage rate applicable to any extension of credit would be capped at 15% on “unpaid balances, inclusive of all finance charges” or “the maximum rate permitted by the laws of the State in which the consumer resides.”

In short, the bill would impose the cap on credit-card interest rates at the federal level and allow states to establish even lower interest rates. The bill would also give the Federal Reserve flexibility to allow lenders to charge higher rates if it’s determined the federal cap “would threaten the safety and soundness of financial institutions.”

The median credit-card interest rate was 21.36% as of last week, compared with 12.62% a decade ago, according to Creditcards.com. Meanwhile, Americans collectively hold more than $1 trillion in credit-card debt, according to the Federal Reserve.

The law would implement a 15% interest-rate cap on all federal loans and also institute postal banking — allowing the US postal service to offer banking services as an alternative to payday lenders and commercial banks.

This poll was conducted by Survey Monkey. It’s a digital poll which skews the way those skew and was also incentivised by a directed charitable contribution. The sample universe is 1127 respondents weighed for age and gender but not race or income leaving a margin of error around 3.12%.

Still the numbers are stark.

Listen up Democrats- Popular Policies are popular by definition. If you are being “pragmatic” about electoral victory you support (or at least appear to) Popular Policies. If you don’t because they conflict with your Neo Liberal Religion of Mammon Worship are you being “pragmatic” or “faith-based”?

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