Protecting Consumers from Unreasonable Credit Rates Act of 2025

This bill amends the Truth in Lending Act to establish a national maximum interest rate of 36 percent for consumer credit transactions, including all fees and charges. It aims to close loopholes that allow high-cost lending and provides for enforcement and disclosure requirements.

Sec. 3, National maximum interest rate: No creditor may extend consumer credit where the fee and interest rate exceeds 36 percent. The fee and interest rate includes all charges payable incident to credit, such as periodic rates, annual fees, late fees, overdraft fees, credit insurance premiums, and ancillary product costs. Certain fees may be excluded for credit payable in at least 3 fully amortizing installments over 90 days, such as application fees up to $30 or 5 percent of the credit limit (up to $120), late fees up to $8, and insufficient funds fees up to $15. The Bureau may adjust these tolerances for inflation. Calculations for open-end credit plans are based on a 1-year period; for other plans, the Bureau prescribes methods. The term 'creditor' is defined by reference to the Equal Credit Opportunity Act. No exemptions from this rate are permitted. State laws providing greater consumer protection are not preempted. Violations render payments null and void, require return of principal and fees, and may be raised as a defense at any time. Violators face up to 1 year in prison and a fine of three times the total accrued debt or $50,000, whichever is greater. State attorneys general may bring enforcement actions within 3 years.

Sec. 4, Disclosure of fee and interest rate for open end credit plans: Amends the Truth in Lending Act to require that the fee and interest rate for open end credit plans be displayed as 'FAIR' under the new section 141.