Democrats Trying to Cram Worst Parts of Their Agenda into Coronavirus Relief

AP Photo/Susan Walsh

House Speaker Nancy Pelosi of Calif., center, speaks as she stands next to Senate Minority Leader Sen. Chuck Schumer of N.Y., left, and Sen. Dick Durbin, D-Ill., right, following their meeting with President Donald Trump at the White House in Washington, Wednesday, Jan. 9, 2019. (AP Photo/Susan Walsh)

Democrats are playing politics with Americans’ lives in an unprecedented crisis to try and cram through parts of their agenda that never stood a chance of passing on their own.

Liberals in Congress are trying to cram a misguided and sweeping restriction of consumer credit into the Coronavirus relief package so radical even Democrats on the House Financial Services committee couldn’t pass it when it was a bill in their committee. Now Democrats are playing politics with people’s lives by trying to cram the provision into coronavirus relief at a time when American workers need more access to credit, not less. Sen. Sherrod Brown and Rep. Chris Van Hollen announced that they are seeking to include a 36% usury rate cap in the coronavirus relief package, which Democrats believe will have at least two more phases to be passed after the Phase 3 relief bill.

This proposal to include a rate cap in coronavirus relief is an extension of HR 5050, a misguided, sweeping consumer credit bill that Rep. Maxine Waters tried getting passed through her committee earlier this year. The bill was roundly criticized as unfairly restricting access to credit for those who need it the most, and it effectively died in committee. The bill was deceptively titled as the “Veterans and Consumers Fair Credit Act”—and would have extended the provisions of the “Military Lending Act” to all consumers, meaning the legislation would have imposed a nationwide 36-percent interest-rate cap on short-term loans. Unfortunately, HR 5050 was a bill that if enacted, would have hurt the very people it purports to protect: consumers with no credit or bad credit. The proposal failed to address the issues facing consumers and would instead compound their financial struggles.

In fact, it is well documented that the so-called Military Lending Act, upon which HR 5050 was based, actually did nothing to help members of the military:

“By denying easy access credit to military families, the Military Lending Act forces military families to use more damaging and permanently scarring options of not paying bills on time,” writes Don Loren, Al Zapanta and Frank Yoakum, all Armed Forces retirees, said of the bill.

Similarly, the millions of hourly workers who are currently not working because of the coronavirus and their families shouldn’t have to worry about being able to get access to loans that can help provide a bridge during this difficult time, and yet that’s exactly what this coronavirus “relief” provision would do: It would double down on the false promises of previous efforts to regulate these products, and it would close off legitimate avenues of credit for millions of Americans who now find themselves in a precarious financial situation. In other words, Democrats are trying to put a provision in an emergency “relief” package that would actually make millions of Americans worse off.

Now is not the time to use the coronavirus relief process as an avenue to cram through the most radical and liberal policies that could have never passed standing on their own.

Obliterating the short-term loan industry with an arbitrary 36-percent rate cap won’t magically improve the financial difficulties of workers right now. Instead, it will create even more troubles for American families, who will no doubt feel the impact of this law as they struggle to make ends meet.

Implementing a nationwide rate cap on short-term loans will guarantee that Americans who now need money in a pinch—whether it’s to pay bills or expenses until they can get working again, or pay for an unexpected car repair, medical bill, rent, mortgage payment—will have fewer ways of obtaining cash when they need it most.

Consequently, it will force them into seedier ways of obtaining money and putting them even more than they already are. This is not the outcome American families need—nor is it the outcome they deserve, but it’s the inevitable result if lawmakers have the audacity to sneak this provision into later phases of Coronavirus relief.