Congress moves to cap all consumer credit at 36%, ending payday lending as we know it
S. 2781 — Protecting Consumers from Unreasonable Credit Rates Act of 2025 · Filed by Richard Durbin (D-IL) · 2 cosponsors · Introduced Sep 11, 2025 · Referred to committee
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What it does
This bill establishes a national 36% annual interest rate cap on all consumer credit, including all fees, charges, and ancillary costs. It applies to payday loans, car title loans, overdraft products, online installment loans, and credit cards—closing loopholes that currently allow lenders to charge 300–17,000% annual rates. Consumers benefit by paying dramatically lower costs on high-cost debt; lenders in the payday, title, and overdraft sectors face severe revenue restrictions.
Why we flagged it
The bill's operative mechanism is a hard statutory ceiling on consumer credit rates, closing fee loopholes and applying uniformly across all credit products. This is straightforward consumer protection legislation, not a subsidy, carve-out, or deregulation.
What the text implies
- Payday lenders, car title lenders, and overdraft-dependent banks face existential business model pressure; many may exit high-cost lending entirely, reducing credit availability for the highest-risk borrowers (though alternatives like credit unions and small-dollar loan programs are encouraged in the findings).
- The 36% cap mirrors the 2006 Military Lending Act rate for servicemembers; extending it nationally may face industry litigation claiming constitutional takings or due process violations, though the bill's civil liability and enforcement provisions (including criminal penalties) suggest drafters anticipated resistance.
- State attorneys general gain 3-year enforcement windows and injunctive authority; this creates a patchwork of state-level enforcement intensity, potentially leaving some jurisdictions under-policed.
- The bill's definition of 'fee and interest rate' is broad and includes credit insurance, ancillary products, and wage-based repayment costs; lenders may attempt to restructure products (e.g., bundling insurance separately, using non-credit intermediaries) to evade the cap.
- Criminal penalties (up to 1 year prison + $50K fine or 3x debt) are unusually severe for a lending-rate violation; enforcement may be sparse given prosecutorial capacity, but the threat may deter some lenders from testing the boundary.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
Ordinary consumers, especially cash-strapped borrowers relying on payday and title loans, gain immediate and substantial protection: a 36% cap eliminates the 300–17,000% rates documented in the findings. The bill closes fee loopholes and applies uniformly across all credit forms, preventing lenders from circumventing the cap through ancillary charges. The only cost is reduced access to credit for the highest-risk borrowers, but that trade-off—less predatory lending vs. less credit availability—i
Named in the bill
Truth in Lending Act (TILA), Department of Defense, Consumer Financial Protection Bureau (CFPB), State attorneys general, payday lenders, car title lenders, banks (overdraft services), online installment lenders, credit unions, Military Lending Act (2006)
Where it stands
2 cosponsors: 2 Democrats.
- Sep 11, 2025 — Introduced · Congress.gov: “Introduced in Senate”
- Sep 11, 2025 — Referred to Senate Committee on Banking, Housing, and Urban Affairs · Congress.gov: “Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (text: CR S6577)”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $1,260,000 in lobbying spend. A filing names 22 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 41% of bills with at least one filing.
Richard Durbin, the sponsor, reported $-29,800 in PAC receipts in the 2026 cycle.
- Jpmorgan Chase Holdings LLC — $1,190,000 on 1 filing
- National Pawnbrokers Association — $70,000 on 1 filing
Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (8,547 characters) on May 21, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Jun 2026 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
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