State lawmakers across the country have moved to shield residents from sky-high interest rates charged by out-of-state banks — in some cases as high as 199 percent on credit cards and loans. Now two Republican members of Congress who have received nearly $5 million in financial sector donations are pushing federal legislation that would override those state protections, allowing lenders to charge potentially exorbitant rates for their services.
The bill, introduced by Sen. Bernie Moreno (R-OH) and Rep. Warren Davidson (R-OH) on Feb. 12, would effectively codify a controversial lending loophole dubbed the “rent-a-bank” scheme. Under that model, lenders partner with banks headquartered in states with weak or nonexistent interest rate limits, allowing them to claim those states’ laws apply even when operating and issuing loans in states with more stringent consumer protections.
Many banks are based in states such as Delaware and South Dakota, which impose no caps on interest rates. Some other states, meanwhile, only prohibit “unconscionable” rates — a vague legal standard that generally bars charges “so one-sided that it shocks the conscience.”
The Republicans’ legislation comes amid rising credit card interest rates, with credit card debt becoming one of the nation’s top household expenses, costing consumers roughly $120 billion each year in interest rates and fees.
Since first taking office in 2016, Davidson has received more than $1.6 million from the finance, insurance, and real estate industries that are heavily reliant on interest rates, according to campaign finance watchdog OpenSecrets.
Throughout 2025, during the lead-up to the bill’s introduction, Davidson also accepted campaign donations from political action committees (PACs) representing industries that likely stand to benefit from the bill. These contributions included:
- $6,000 from a PAC representing credit unions,
- $5,000 from a PAC affiliated with Wells Fargo,
- $2,500 from La suite est à lire sur: jacobin.com
Auteur: Freddy Brewster
