Tens of millions of Americans are turning to high-cost loans that routinely carry interest rates of more than 400% for everyday expenses, such as paying their bills and covering emergency expenses. For many, those rates end up being just too high and lead to a seemingly endless debt cycle.
But that may soon change. This week, five members of Congress plan to introduce federal legislation that would ban these sky-high rates on a variety of consumer loans, including payday loans. Instead, the Veterans and Consumers Fair Credit Act in the House would cap interest rates at 36% for all consumers.