Senator Dick Durbin has spent much of his career in a love affair with price controls. He flirted with them in his infamous Durbin Amendment, the addendum to the 2010 Dodd-Frank Act. He renewed his vows with Senators Bernie Sanders and Josh Hawley in pushing a 10 percent ceiling on credit card interest. And now, determined to consummate the relationship, he’s demanding a nationwide 36 percent cap on personal loans with Senators Whitehouse and Blumenthal, regardless of the loan’s length or size.
The Illinois Democrat has staked his legacy on the belief that Americans are too helpless to manage their own finances without Washington watching from the sidelines. It’s the soft bigotry of low expectations.
Durbin’s logic sounds seductive: if prices are too high, pass a law capping them. Who wouldn’t want cheaper loans or lower fees? But that’s not how economics works. Prices are signals: subtle winks that balance risk, cost, supply, and demand. When government substitutes ideology for reality, it distorts those signals. Rate caps are price controls. And price controls always carry consequences.
Look at Durbin’s home state. In 2021, Illinois enacted a 36 percent APR cap under the Predatory Loan Prevention Act. Within a year, loan volume plunged by 36 percent. Roughly 29,000 borrowers were cut off. Deep subprime borrowers lost 57 percent of their options. Lenders fled the state or raised minimum loan sizes, forcing people into bigger, costlier loans they didn’t need.
Surveys showed more than half of borrowers couldn’t get credit when they needed it. Many faced utility shutoffs or turned to pawn shops and unregulated alternatives. Only 11 percent said they were better off. Nearly 40 percent reported that their condition had worsened. That’s not protection; that’s punishment.
This is Economics 101. Price controls don’t erase demand; they choke supply. Less supply means less competition. Less competition means lower quality, fewer participants, and ultimately higher costs.
The irony is that Durbin justifies his crusade with a broken tool: the Annual Percentage Rate. APR, born of the Truth in Lending Act, was sold as transparency but functions as sleight of hand. It hides the lifetime cost of borrowing behind a sanitized annual figure.
Take the 30-year mortgage. At five percent APR it looks harmless, even “cheap.” But it doubles the cost of a home. That $300,000 house? By the end of the loan, you’ve paid $600,000 or more in principal and interest. By any honest measure, the mortgage is the most predatory loan in America. Yet politicians don’t rail against mortgages; they wield APR to demonize small-dollar loans.
A $10 fee on a $125 24-hour payday advance must be advertised as 2,900 percent APR, an eye-popping number designed to shock. Meanwhile, hundreds of thousands of dollars in mortgage interest are normalized as the American Dream. APR isn’t clarity; it’s propaganda.
Durbin’s fixation goes further: his own beloved amendment capped debit card interchange fees. Retailers promised to pass along savings. Instead, nearly all banks eliminated debit rewards, hiked account fees, and scrapped free checking. Studies from the Richmond and Atlanta Feds found that 98 percent of retailers pocketed the difference. Consumers got nothing.
Now, his disciples in statehouses are replaying the same failed script with credit card interchange fees. Bills in Arizona, New Mexico, New York, and Colorado would carve out sales tax and tips from fee calculations, slashing the revenue that funds rewards. The New York Fed reports that 86 percent of interchange income is allocated directly to points, miles, and cash back. Cut off that stream, and Americans’ rewards vanish overnight.
Illinois is already tangled in lawsuits over its 2023 Interchange Fee Prohibition Act, with courts exempting out-of-state banks but leaving Illinois institutions bound to conflicting rules. Colorado is next in line with its own “fairness” bill, destined to produce taxpayer-funded litigation.
These state-level caps are a shadow regulatory regime, trying to impose price controls on a complex interstate financial system. They raise constitutional questions under the Commerce Clause, but they also repeat the same pattern: destroying consumer benefits, increasing costs, and leaving families worse off.
Durbin’s love affair with price controls rests on one patronizing assumption: that Americans can’t be trusted with their own money. That Washington must tighten the restraints, dictate the terms, and keep consumers firmly under its thumb.
But markets are what expand access and protect consumers. Competition drives innovation, lowers costs, and tailors options to diverse needs. Price controls do the opposite. They stifle competition, reduce choices, and raise hidden costs. They empower bureaucrats, not families.
Durbin isn’t compassionate; he’s obsessive-compulsive. His romance with price controls has become an addiction with control itself. Price controls don’t free Americans; they bind them. They don’t lower costs; they shift them in ways that make families poorer and less free.
It’s time to tell Senator Durbin that this relationship has gone too far. Americans deserve transparency, innovation, and choice, not masochism disguised as protection. It’s time to end Washington’s unhealthy obsession with price controls and trust Americans to manage their own financial lives.
