The American Fintech Council (AFC) has issued a statement addressing Virginia Governor Glenn Youngkin’s veto of SB 1252. The legislation sought to cap interest rates on certain credit options.
SB 1252 stated that except as otherwise permitted by law, no contract shall be made for the payment of interest on a loan at a rate that exceeds 12 percent per year. There were certain exceptions included in the legislation.
Phil Goldfeder, CEO of the AFC, stated:
“Governor Youngkin’s decision to veto SB 1252 protects access to safe, responsible credit for hundreds of thousands of Virginians. The bill, while well-intentioned, would have created unnecessary barriers for consumers seeking flexible financial tools and introduced legal uncertainty for responsible providers. AFC has been deeply engaged on this issue from the start—meeting with lawmakers, submitting formal comments, and mobilizing a coalition of responsible providers to raise concerns about the bill’s impact.”
“This veto reflects a thoughtful and pragmatic approach to regulation—one that puts consumers first without stifling responsible innovation. AFC thanks Governor Youngkin for standing up for financial inclusion and recognizing the importance of maintaining a diverse and competitive credit marketplace in Virginia. We remain committed to working with lawmakers in Virginia and across the country to ensure policy solutions reflect the realities of today’s financial landscape.”
While superficially, some may be inclined to support reducing the cost of credit, the reality would have been quite different. Rates tend to be set by lenders based on risk with riskier individuals paying a higher rate. If credit providers could not adjust rates to match affiliated risk, some segments of society would not have been able to access credit. There was a distinct possibility for these individuals to seek out even more punitive options.
