Prime is for the banks best commercial customers - those least likely to default. How can you say any unsecured consumer loan should be based on it?
Rates vary as credit risk varies. Limiting rates would limit access to credit. Traditional usury rate was 24%. Even with current limits mostly less than that, loans are plentiful for qualified borrowers at substantially less, so I say let the marketplace decide - NO LIMIT.
I don't like a floater. Sort of reminds me of subprime. I lived through Carter's prime going to what, 19%?
Alternatively, the prime now is 3.25%, so we'd be looking at a 5.25% consumer loan interest rate. That would probably lead to people hitting their max's much more quickly. Not a good thing.
I still like 12%
Prime + 2%.