Bill Overview
Title: Empowering States' Rights To Protect Consumers Act of 2022
Description: Empowering States' Rights To Protect Consumers Act of This bill limits the annual percentage rate applicable to any consumer credit transaction (other than a residential mortgage transaction), including any associated fees, to the maximum rate permitted by the laws of the state in which the consumer resides.
Sponsors: Sen. Whitehouse, Sheldon [D-RI]
Target Audience
Population: Consumers who use credit transactions internationally
Estimated Size: 250000000
- The legislation addresses consumer credit transactions, which are common financial activities among individuals worldwide who engage in borrowing.
- Globally, countless people utilize credit for personal or business transactions, including using credit cards, personal loans, or auto loans.
- This bill will most directly impact consumers taking on credit while being regulated by state-specific APR laws, affecting how much they pay in interest and fees based on local regulations.
- The population impacted would broadly include all individuals who engage in credit borrowing, as the bill relates to consumer protection in financial activities.
Reasoning
- The policy impacts people based on their engagement with credit products, primarily affecting those who frequently utilize credit cards, personal loans, or non-mortgage loans. These individuals may see a difference in interest rates due to varying state regulations, potentially resulting in savings or higher charges, depending on local laws.
- The large target population in the U.S. indicates a significant variety in economic standing and financial practices, affecting how individuals perceive and experience financial regulations such as this policy.
- The financial reach of the policy is restricted by budget limits, requiring efficient allocation to significantly impact consumers without exceeding financial constraints.
- Given that 80% of U.S. adults have some form of debt, the variation in state APR regulations under the policy will create diverse outcomes in different regions, affecting consumers' financial stability differently across the nation.
Simulated Interviews
teacher (New York, NY)
Age: 42 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- I think anything that can help lower interest rates is beneficial. I use credit cards regularly to manage my monthly expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
software engineer (Austin, TX)
Age: 30 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 20/20
Statement of Opinion:
- The changes in APR might not make a big difference to me, since interest rates on my loans are already low thanks to federal regulations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
retail manager (Jackson, MS)
Age: 55 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- I am hopeful that with capped rates, I can manage my debt better. Right now, interest feels suffocating.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 3 |
| Year 5 | 7 | 3 |
| Year 10 | 7 | 2 |
| Year 20 | 6 | 2 |
graphic designer (Portland, OR)
Age: 28 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- It really depends on the state's decision on APR. While some flexibility might be good, too high a rate could be stifling.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
retiree (Bismarck, ND)
Age: 65 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 14/20
Statement of Opinion:
- I don't use much credit anymore, but I worry for those in my family who do, as it affects their savings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
small business owner (Miami, FL)
Age: 39 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 11/20
Statement of Opinion:
- I welcome any legislation to help better manage loans. Different states means variable results for business, however.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 4 |
graduate student (Chicago, IL)
Age: 24 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 18/20
Statement of Opinion:
- Any bit helps as I balance school and work, but student loans are primarily decided federally.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
factory worker (Detroit, MI)
Age: 50 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 13/20
Statement of Opinion:
- Capping interest will help, but job stability is my main concern.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 3 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 3 |
actor (Los Angeles, CA)
Age: 36 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- I'm fairly savvy with credit cards, so anything that reduces fees helps manage my finances.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
nurse practitioner (Seattle, WA)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 16/20
Statement of Opinion:
- I welcome state control over interest rates, but I hope they remain consumer-friendly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Cost Estimates
Year 1: $500000000 (Low: $400000000, High: $600000000)
Year 2: $450000000 (Low: $350000000, High: $550000000)
Year 3: $400000000 (Low: $300000000, High: $500000000)
Year 5: $350000000 (Low: $250000000, High: $450000000)
Year 10: $300000000 (Low: $200000000, High: $400000000)
Year 100: $100000000 (Low: $50000000, High: $150000000)
Key Considerations
- The impact on state revenue systems due to varying APR caps affecting consumer behavior.
- Potential need for consumer education on state-specific credit laws and implications.
- Monitoring for unintended consequences, such as reduced credit availability.