Protecting Consumers from Unreasonable Credit Rates Act of 2025

This bill, titled the "Protecting Consumers from Unreasonable Credit Rates Act of 2025," amends the Truth in Lending Act to establish a national maximum interest rate for consumer credit transactions. It mandates that no creditor may extend credit to a consumer if the combined fee and interest rate exceeds 36 percent, aiming to eliminate high-cost lending practices prevalent across the country. The legislation broadly defines the "fee and interest rate" to encompass all charges payable, directly or indirectly, incident to or as a condition of credit extension. This includes numerical periodic rates, annual fees, cash advance fees, membership fees, late fees, insufficient funds fees, overdraft fees, credit insurance premiums, and charges for ancillary products or services. Limited exceptions are provided for certain application, late, and insufficient funds fees in specific long-term installment credit obligations. The bill outlines specific methods for calculating the fee and interest rate for both open-end and other credit plans, granting the Bureau of Consumer Financial Protection authority to make adjustments to these calculations. A primary goal of these adjustments is to protect consumers and ensure the 36-percent limitation is not circumvented, explicitly stating that the Bureau's exemption authority does not apply to these rates. Violations of this national cap carry significant consequences, including civil liability where transactions made in violation are deemed null and void, requiring creditors to return all principal, interest, and fees. Furthermore, individuals who violate or seek to enforce such agreements face criminal penalties, including up to one year in prison and fines up to three times the accrued debt or $50,000. State Attorneys General are also empowered to bring enforcement actions to obtain injunctive relief.