WASHINGTON — A House subcommittee voted Wednesday to impose an adjustable cap on credit card interest rates that would, if in effect today, set top rates at 13.8%--almost five points below the prevailing rates.
Along straight party lines, the Democratic-run Banking, Finance and Urban Affairs subcommittee on consumer affairs and coinage approved a ceiling of eight percentage points above the yield on one-year Treasury securities. The rate would be adjusted quarterly.
The ceiling, opposed by the credit card industry, now goes to the full committee.
"Anyone who can't make a profit by borrowing money at 5.8% and lending at 13.8% should find another line of work," said Rep. Frank Annunzio (D-Ill.), the subcommittee chairman.
Notes Other Rates Decline
Annunzio noted that credit card interest rates have hovered at 18%, while other interest rates have declined over the last five years.