Predatory Lending Elimination Act
Sponsored By: Senator Sen. Reed, Jack [D-RI]
Introduced
Summary
Extends the Military Lending Act's consumer protections to most consumer credit nationwide. It would apply the MLA's limits on interest and many fees to most consumer loans while carving out residential mortgages, auto purchase loans used to buy a car, and certain federal credit union loans. The Consumer Financial Protection Bureau would have one year to write rules and the protections would take effect when those rules require compliance or 18 months after enactment, whichever is earlier.
Show full summary
- Consumers and households: Most borrowers would get MLA-style limits on rates and many fees for both open- and closed-end credit, with explicit exceptions for residential mortgages and qualifying auto purchase loans.
- Creditors and card issuers: Lenders would need to calculate APRs for open-end accounts consistent with Department of Defense rules as of July 22, 2015, and some credit card fees may be excluded from finance charges only if they meet specific rules; credit insurance and debt cancellation fees must still be included.
- States and enforcement: State attorneys general and regulators would have a three-year window to bring civil actions or other enforcement, and state laws that give greater consumer protections would remain intact.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
Consumer Bureau rule deadline and limits
If enacted, the Consumer Financial Protection Bureau would have one year to issue rules to carry out this section. The Bureau would consult the Secretary of Defense and must notify Congress and the public when it issues those rules. The rules would have to be at least as protective as the Department of Defense rules issued July 22, 2015. The Bureau could not use its exemption power under section 105(f). The section would apply to credit after the earlier of the Bureau compliance date or 18 months after enactment.
State consumer laws and enforcement
If enacted, this section would not override State laws that give consumers more protection. State attorneys general would have three years after a violation to sue in state or federal court to enforce these rules. State regulators would also have three years to bring enforcement actions against state-chartered or licensed entities. Certain procedural protections from the Consumer Financial Protection Act would apply to those state enforcement actions.
Military-rate protections for consumers
If enacted, this bill would apply Military Lending Act protections and the same penalties to most consumer credit. It would not cover residential mortgages, car-purchase loans that are secured by the car, or some Federal credit union loans. For open-end credit, APRs would be calculated using the method in DoD rules from July 22, 2015. For credit cards, some bona fide non-periodic fees could be excluded from the APR only if assessed under section 127(n); credit insurance, debt cancellation, debt suspension fees, and credit-related add-ons would still count in the finance charge.
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Sponsors & CoSponsors
Sponsor
Sen. Reed, Jack [D-RI]
RI • D
Cosponsors
Richard Blumenthal
CT • D
Sponsored 2/5/2026
Tammy Duckworth
IL • D
Sponsored 2/5/2026
Sen. Fetterman, John [D-PA]
PA • D
Sponsored 2/5/2026
Sen. Heinrich, Martin [D-NM]
NM • D
Sponsored 2/5/2026
Sen. Luján, Ben Ray [D-NM]
NM • D
Sponsored 2/5/2026
Sen. Merkley, Jeff [D-OR]
OR • D
Sponsored 2/5/2026
Sen. Padilla, Alex [D-CA]
CA • D
Sponsored 2/5/2026
Sen. Schatz, Brian [D-HI]
HI • D
Sponsored 2/5/2026
Sen. Smith, Tina [D-MN]
MN • D
Sponsored 2/5/2026
Chris Van Hollen
MD • D
Sponsored 2/5/2026
Sen. Whitehouse, Sheldon [D-RI]
RI • D
Sponsored 2/5/2026
Raphael Warnock
GA • D
Sponsored 2/5/2026
Peter Welch
VT • D
Sponsored 2/5/2026
Sen. Wyden, Ron [D-OR]
OR • D
Sponsored 2/5/2026
Sen. Booker, Cory A. [D-NJ]
NJ • D
Sponsored 2/5/2026
Roll Call Votes
No roll call votes available for this bill.
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