Opinion: Hawley’s misguided bill opens Pandora’s box on government intervention 

Adrian Breen

Looks can be deceiving. Some may think a bank president wouldn’t know the first thing about financial struggles, but that’s not the case for me. I was raised by a single mother who worked multiple jobs to support my two siblings and me. At a young age, my siblings and I delivered newspapers, babysat and mowed yards to help out our mom. Money was tight at times, but we relied on each other to make ends meet. 

I share this because legislative activity in Washington, D.C., concerns me. A proposal may look good at first glance, but if you dig deeper, it poses a host of challenges that could lead to unintended consequences. 

Sen. Josh Hawley, R-Missouri, has proposed capping credit card annual percentage rates at 18%. His reasoning: The bill is necessary to fight inflation and reduce the impact of rate increases on consumers’ debt load. Although I understand the senator wanting to help individuals, his bill is misguided. It’s bad federal policy that opens a Pandora’s box on government intervention in our lives while having a devastating impact on the consumers he claims to be interested in helping. 

If Hawley’s bill was to become law, other lawmakers could follow suit with their own proposals. These measures could potentially place caps on any type of consumer credit products. Commercial loans, mortgage loans, auto loans – all could be viewed as too burdensome based on economic conditions at a given time and in need of government intervention. Even more disturbing is that Hawley’s bill could set a government precedent for anything that lawmakers simply don’t like. Giving more power to the government to call the shots in business and banking operations is simply bad policy. 

This type of government intervention worries me, and it should concern you, too, because it never leads to what is promised. Rather than letting businesses operate in a free-market system that welcomes competition that benefits consumers, the government would impose mandates that would force many credit card providers to leave lower-credit borrowers behind. Rates for any credit product aren’t set in a vacuum. They are based on risk and borrower behavior. If you limit rates, you remove risk controls, and that means credit providers simply cannot afford to serve lower-credit borrowers. Instead of ensuring they have access to affordable credit, Hawley would be leading these borrowers to use nontraditional credit providers, like fintechs targeting small dollar credit markets, that are largely unregulated and whose rates may be 10-times higher than credit card rates. Consumers around Missouri and around the country would be devastated by this bill. 

It’s no secret that inflation has caused prices to skyrocket and presents challenges for consumers. Passing legislation like Hawley’s bill won’t fix this, and the government won’t solve the problem of consumer debt. However, consumers facing financial challenges can turn to trusted resources in their own communities for help – their local community banks. That’s the best path to financial health and well-being. 

Bankers across Missouri are here to assist individuals achieve financial independence. By sharing their expertise and resources, bankers guide consumers to make informed decisions with their money. Having this type of relationship gives individuals somewhere to turn when challenges arise – someone who knows and understands them to provide direction to weather disruptions. That’s always been true with community banks. Just look at the incredible work of community banks across this nation these last few years – we were the ones that kept Main Street America alive. 

Individuals trust their local bankers with their livelihoods; they know their bankers have their best interest at heart. The same can’t always be said about Washington. Relying on legislation from bills like Hawley’s only leads them on a path to nowhere. Tell Hawley you trust your community banks, not his bill. 

Sen. Hawley, don’t make your inability to govern and legislate effectively create a crisis for millions of consumers and the community banks that keep their communities viable. 

Adrian Breen is the CEO and president of The Bank of Missouri, headquartered in Perryville, and chair of the Missouri Bankers Association. Breen can be reached at abreen@bankofmissouri.com.