A recent letter from the National Black Chamber of Commerce to US House Committee on Financial Services Chair, Maxine Waters (D-CA), points to the potential consequences of the imposition of a 36% Annual Percentage Rate (APR) cap on African Americans, and particularly on African American entrepreneurs.
The letter points out that a cap of 36% APR would:
- Risk excluding millions of Americans from the credit community by completely “unbanking” them,
- Particularly affect African American women,
- Exacerbate the effect of credit deserts, meaning those desperate to make ends meet must choose less desirable options like bouncing a check, or bankruptcy,
- Reduce options for African American entrepreneurs, who are more likely than White entrepreneurs to rely on personal credit to raise start-up capital.
The full text of the letter is below:
SOURCE: National Black Chamber of Commerce