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Loyola Research Behind New Federal Predatory Lender Bill

Groundbreaking, bipartisan federal legislation developed from research by Loyola University Chicago alumnus Paul Kantwill (BA '83, JD '86), a distinguished professor in residence at Loyola's School of Law, was introduced this week in Washington, D.C. by members of the United States Senate and House of Representatives.

The landmark bill, called the Veterans and Consumer Fair Credit Act, would establish the country's first national usury law that imposes interest rate limitations on nearly all financial products and services in an effort to protect consumers from predatory lenders.

Kantwill and Christopher L. Peterson, a professor of law at the University of Utah's S.J. Quinney School of Law, first introduced the model legislation in "American Usury Law and the Military Lending," a paper they coauthored earlier this year that was published in the Loyola Consumer Law Review.

Their research provides a historical record of the Military Lending Act, which Congress adopted in 2006 to protect active duty military service members and their families from high-cost, predatory loans. The core provision of the statute is a usury limit capping interest rates at no more than 36 percent each year.

"It is time to expand predatory lending protections to veterans and Gold Star families," said Kantwill. "I am proud to have worked on the Veterans and Consumers Fair Credit Act, and excited to be a part of new legislation that will extend the same protection military servicemembers receive under the Department of Defense rules to all consumers."

Kantwill joined the School of Law after a long and distinguished career in public service. Most recently he served as an assistant director with the Consumer Financial Protection Bureau (CFPB), leading the Office of Servicemember Affairs.

Prior to joining the CFPB, Kantwill served as the director of the Office of Legal Policy, Office of the Under Secretary of Defense, Personnel & Readiness.

In that capacity, he served as the principal advisor to the Secretary of Defense on a wide variety of consumer protection legal and policy issues, including the Servicemembers Civil Relief Act, Military Lending Act, and other financial/consumer issues affecting members of the armed forces and their family members.

Kantwill also served on active duty for 25 years with the U.S. Army Judge Advocate General's Corps.

During his tenure with the CFPB, Kantwill and his department led unprecedented efforts to protect servicemembers and their families in the financial marketplace.

A national usury standard has been proposed primarily in response to the rise of predatory and insidious payday lending products and practices that trap consumers in cycles of debt. This bill is the first bipartisan legislation on this issue in decades.

The legislation is co-sponsored in the House of Representatives by Rep. Glenn Grothman (R-WI) and Rep. Jesus "Chuy" Garcia (D-IL). The Senate version of the bill is co-sponsored by Senators Jeff Merkley (D-OR), Jack Reed (D-RI), Sherrod Brown (D-OH), and Chris Van Hollen (D-MD).

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See also:

* CNBC: Federal Lawmakers Aim To Reduce Payday Loan Rates From 400% Interest To 36%.

* Kantwell and Peterson, Military Times: All Americans Deserve The Same Protection From Predatory Loans That Service Members Have.

* Chuy Garcia press release.

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Comments welcome.



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Posted on November 13, 2019


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