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Sanders, Ocasio-Cortez unveil plan to cap credit card rates - YouTube
Channel: Fox Business
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what Alexandra and I are proposing in
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our legislation is something that is not
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complicated it just takes us back to
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where we were a number of years ago and
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that is that no bank in this country
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should have credit card interest rates
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of the over 15% so bringing back the
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concept of usury laws where people can I
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try to with banks can I try to get blood
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out of a stone
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20 20 presidential candidate and senator
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Bernie Sanders teaming up with
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congresswoman Alexander Ocasio Cortez on
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a new bill they say protects consumers
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and challenges Wall Street greed by
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capping interest rates on credit card
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loans of 15 percent now with default
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rates on credit card debt at less than
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half of what they were about 10 years
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ago is such a measure really necessary
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what do you think well it's it's
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destructive David prices are not
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arbitrary I mean they're they don't pick
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them out of the hat for wages commodity
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prices and interest rates as well
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they're not determined by feel feelings
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or or whatever Bernie Sanders thinks if
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they're actually determined by economics
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and those high rates for credit cards
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are high because of the risk of giving
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people unsecured loans a lot of those
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people in fact don't pay those loans
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back so credit cards if you pay them
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back are actually a great deal and these
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types of continued interventions in the
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free market only result in less credit
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being available for everyone down the
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line but what about the fact that there
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is a cap rate for credit unions at 18%
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so why are they held separately compared
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to banks and if we talk about just the
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amount of people that don't even have
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access to credit cards in the first
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place if this rule were to go into place
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it would provide what 30,000 post
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offices with the option to provide
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credit card rates or credit cards in
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general to lower-income people that
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wouldn't normally qualify and don't you
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want these people to go out start their
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business build America that's now
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getting into the post office now offer
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offering credit cards well they go under
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so why don't we give them another avenue
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because they can't even pay back the
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loans they've already taken out
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Christina this is the whole point
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actually one other way one of the
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reasons we have this seeming disparity
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between borrowing costs and banks and
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the charges on credit card
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is because Congress in their wisdom
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passed a rule a law the credit card Act
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in 2009 which basically said you
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couldn't raise interest rates on
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existing borrowing so what did the
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credit card companies do they hiked the
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rates of the short end or the front end
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of the loan to make sure that they were
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not going to get caught out if interest
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rates began to go out so you can thank
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the government from once again screwing
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up the effective working plug the report
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marketplace this is true and that's kind
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of where this big divide between
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borrowing costs and credit card rates
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began but to Jonathan's point it is
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completely the case that the reason the
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central reason why these rates are so
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high is because people default I'm not
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here to defend credit cards because I
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got to tell you take Superman's vision
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to see the little letters at the bottom
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of your state you don't even know what
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the heck it says but what I am here to
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defend are the free markets and free for
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businesses to do with as they do in the
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rule of law and against to people that
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shouldn't be running a lemonade stand
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you have one person that stopped Amazon
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from bringing forty to fifty thousand
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jobs to Long Island City and another
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ones that's proposed every tax and
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taking it over the industry Guerry name
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it well is UPS enough I don't think it's
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entirely but we're also talking about
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the teaming up of Bernie and AOC and
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these are two people who believe in
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socialism they don't believe in
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capitalism they've been honest about
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that and if you don't believe in
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capitals you don't believe in supplied
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the man I mean as as Jonathan was saying
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there's a reason why interest rates are
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fixed at a particular point and move
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based on what happens to the market it
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involves risk and calculations and if
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you try to artificially stem that at
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some point which has no relation to what
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the market is doing you'll have chaos
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imagine if they were agent imagine if
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they were actually able to put in
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legislation on all the things they want
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to do via Disneyland would head south
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costs would go up and you know what's
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gonna go into the crapper it as simple
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as that that's all I'm talking about
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here we can sit here and talk credit
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cards from
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now to New Year's my main point is
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business leave them alone with Julie
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meeting with these people yeah a quick
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question don't you think that maybe some
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of these banks or financial institutions
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that are providing the cards are somehow
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working together too so that these rates
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continue to be high they can all my gosh
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you know they can wait they can increase
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the annual Apr rate and what are the
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reasons they're one of the reasons rates
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are so high also is because competition
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is so fierce in the credit card industry
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that they've all up the rewards and the
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roared costs have gone through the roof
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so one of the reasons seriously it is a
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competitive cost and so I mean you don't
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want to if you don't want to pay high
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interest rates pay your credit card on
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[Music]
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personal responsibility is kind of like
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oh yeah we forgot about that personal
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responsibility
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that's the message these these Congress
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people should by the way for the record
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38 percent of American households have
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credit card debts so it is a minority
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it's a big minority but it is in a
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minority and the minute you can pay em
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off folks pay them off because it's not
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a great deal
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