Ground breaking, bipartisan federal legislation developed from research by Loyola University Chicago alumnus Paul Kantwill (BA ’83, JD ’86), a distinguished professor in residence at Loyola’s School of Law, was introduced this week in Washington, D.C. by members of the United States Senate and House of Representatives. The landmark bill, called the Veterans and Consumer Fair Credit Act, would establish the country’s first national usury law that imposes interest rate limitations on nearly all financial products and services in an effort to protect consumers from predatory lenders. Kantwill and Christopher L. Peterson, a professor of law at the University of Utah’s S. J. Quinney School of Law, first introduced the model legislation in “American Usury Law and the Military Lending,” a paper they coauthored earlier this year that was published in the Loyola Consumer Law Review. 

Their research provides a historical record of the Military Lending Act, which Congress adopted in 2006 to protect active duty military service members and their families from high-cost, predatory loans. The core provision of the statute is a usury limit capping interest rates at no more than 36 percent each year. A national usury standard has been proposed primarily in response to the rise of predatory and insidious payday lending products and practices that trap consumers in cycles of debt. This bill is the first bipartisan legislation on this issue in decades. The legislation is co-sponsored in the House of Representatives by Rep. Glenn Grothman (R-WI) and Rep. Jesus “Chuy” Garcia (D-IL). The Senate version of the bill is co-sponsored by Senators Jeff Merkley (D-OR), Jack Reed (D-RI), Sherrod Brown (D-OH), and Chris Van Hollen (D-MD).