In advance of Senate Banking Committee Hearing, NAFSA Sends Letter to Committee Leadership Opposing 36 Percent Rate Cap
Yesterday, the Senate Banking Committee convened a hearing to examine the extension of the Military Lending Act (MLA)’s 36 percent APR cap to all consumer loans. This came a day after Banking Committee Chairman Sherrod Brown (D-Ohio), along with Senators Reed (D-R.I.), Merkley (D-Ore.), and Van Hollen (D-Md.) introduced legislation that would implement such a rate cap.
Earlier this week, in advance of the hearing, NAFSA Executive Director Gary Davis sent a letter on behalf of the organization expressing its “strong and serious concerns with any legislation expanding the provisions of the Military Lending Act of 2006 (MLA) to all Americans by enacting a cap of 36% on all forms of consumer credit.”
“Tribal financial services businesses have never been more important since the COVID-19 pandemic, during which 100% of the 474 Tribal casinos in America closed,” Davis wrote. “Tribes made the difficult decision to save lives by closing their casinos, but the cost was massive. Subsequently, Tribes took insurmountable hits to their annual revenue, leaving many unable to pay for basic essential human services such as nutrition programs, childcare, elderly support programs and infrastructure maintenance, not to mention the countless Native and non-Native employees that found themselves unemployed for extended periods.”
“During this time, Tribal financial services revenue was the last remaining lifeline for dozens of geographically-isolated Tribes, providing tens of thousands of Tribal citizens with food, shelter, and health care,” Davis continued. “Financial services and FinTech are areas that Tribes are finding to be the great equalizer for Indian Country, finally generating meaningful revenue that can lift our communities out of poverty. Enacting a 36% rate cap would effectively eliminate these Tribal businesses, erase the good they do for Native American governments and their citizens, and leave Indian country with yet another insurmountable burden and greater economic inequity.”