The amount of interest that people pay on borrowed money has a direct effect on how much of a surplus that same group has. This is why the federal government varies the amount of the federal interest rate. By lowering the rate, a surplus of available funds is created, allowing more money to be spent on things that are not interest. This is why our federal government has been lowering the rate recently.
However, with the recent situation of predatory lending (and other problems) creating financial hardships for most people, a lot of people in trouble either turned to companies charging very high interest, or their variable rate was changed. Even people who have never been irresponsible can have the interest rate that they pay affected by incorrect information on their credit reports or by selling of their debt to another company. This in turn has negated the federal rate cut, since companies can charge whatever rate they choose. No more additional money has been freed, and the economy takes a downturn. The "unintelligent" people that have fallen into this trap are, unfortunately, the biggest spenders in our economy, and therefore they have the largest influence on how much our money is worth. If this law were to pass, I believe we would see a largely positive effect on our economy.
While your argument seems to make sense on the surface, there is a lot more going on than we understand.