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Amendment in Senate would force national banks to follow state interest rate limits
By Edith Barlow on May 15th, 2010
Senators at the federal level are looking to amend financial reform to include additional protections for consumers against elevated credit card interest rates.
An amendment from Rhode Island Democratic Senator Sheldon Whitehouse would require card companies to adhere to state-level interest rate caps. Along with helping consumers, the bill aims to aid locally based lenders who must abide by these limits.
"We need to correct the historical anomaly that has allowed credit card companies to escape state law interest rate limits," Whitehouse said during a recent press conference.
Whitehouse's office noted that a 1978 Supreme Court case resulted in the ability of national banks to avoid state usury laws. His bill is being cosponsored by a number of other Democratic senators, as well as Thad Cochran, a Republican from Mississippi.
Of course, there is no guarantee that Whitehouse's measure passes, which will leave some consumers to deal with increased credit card rates. However, these people may have an option in debt consolidation, which can lower the amount if interest account holders pay over time.
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