Credit card annual percentage rates limited to ten percent.
HF5162 would cap the annual percentage rate on credit card balances at 10 percent for Minnesota financial institutions, credit unions, and federal credit unions, while leaving most other loan-rate provisions in place. The bill amends several sections of Minnesota law governing finance charges and interest rates, including statutes for banks and credit unions, and adds a new section specifically stating that credit card loans made by credit unions may not exceed the rate authorized for banks under the new credit card cap.
The bill also preserves existing rules for non-credit-card loans, overdraft plans, prepayment refunds, and the calculation of finance charges, but it changes the credit card carve-out from the current 18 percent cap to 10 percent. Several provisions are tied to a future change in federal law; the new limits would take effect only if federal law is changed to require national banks, federal savings institutions, and federal credit unions to comply with state maximum finance-charge laws. The commissioner of commerce would notify the revisor when that federal trigger occurs.
If enacted and triggered by the specified federal-law change, the bill would substantially lower the maximum interest rate that Minnesota-chartered financial institutions and credit unions could charge on credit card balances, from 18 percent to 10 percent. It would amend Minnesota Statutes sections 47.59, 48.185, and 52.14, and create new section 52.138 to align credit union credit card rates with the new bank cap. The bill would not change the general maximum rates for most other loans, overdraft credit, or existing prepayment refund rules, but it would directly affect banks, credit unions, federal credit unions, and credit card borrowers in Minnesota.
The available record shows no committee transcript, vote tally, or recorded floor debate, so there is no documented public sentiment in the materials provided. Based on the bill text and caption, the measure appears consumer-protective in nature because it seeks to lower credit card APRs, but the absence of discussion or votes means support and opposition cannot be assessed from the provided context.
The main policy contention is the proposed 10 percent cap on credit card APRs, which is far below the current 18 percent ceiling and would likely be opposed by financial institutions that rely on higher revolving-credit pricing. Another point of contention is the bill’s dependence on a future federal-law change before it becomes effective, suggesting concern about federal preemption and whether Minnesota can impose these limits on national banks and federally chartered institutions. Credit unions are also directly affected because the bill extends the same cap to their credit card loans.