10-R228
2010 -- S 2712
Enacted 05/11/10
S E N A T E R E
S O L U T I O N
RESPECTFULLY
REQUESTING THAT THE UNITED STATES CONGRESS PASS
FEDERAL USURY
LEGISLATION
Introduced By: Senators Bates, Miller, Walaska, Picard, Ruggerio, and Blais
Date Introduced: March 24, 2010
WHEREAS, The United
States does not have a federal usury rate establishing a
maximum interest rate that can be charged to an individual
when he or she takes out a loan or
opens a credit card account; and
WHEREAS, Usury statutes
protect people from being taken advantage of and convinced
to take on loans they cannot afford; and
WHEREAS, Allowing
excessive interest rates disproportionately hurts those at the
bottom of the economic ladder who accept such high rates
because financial hardship leaves few
other options; and
WHEREAS, 48 out of 50
states have passed usury laws to protect their citizens; and
WHEREAS, These laws were rendered unenforceable in 1978, when the
Supreme Court
ruled in Marquette Bank of Minneapolis v. First of Omaha
Service Corporation that a bank
operating nationally could charge interest up to the amount
allowed by the bank's home state; and
WHEREAS, Since the
Marquette ruling, banks and credit card companies have
moved
their operations to states with no restrictions on interest
rates, circumventing state usury statutes;
and
WHEREAS, In 1991, the United States Senate passed a bill capping
credit card interest
rates at 14 percent, but the United States House of
Representatives failed to take further action;
and
WHEREAS, The United
States is currently facing a financial crisis caused in large part
by predatory lending practices; and
WHEREAS, Many leading economists and financial forecasters are
predicting a "credit
crunch," resulting in limited credit availability and
increased interest rates; and
WHEREAS, Some credit card companies are currently charging interest
of 30 percent or
more, making it extremely difficult for hardworking
Americans to break the cycle of debt; and
WHEREAS, A national usury law would provide immediate relief to those
people facing
high credit card debt, allowing them to save more, provide
a higher quality of life for their
families, and bolster the economy; now, therefore be it
RESOLVED,
That this Senate of the State of
hereby urges the United States Congress and President Obama to adopt legislation establishing a
federal usury rate of 21 percent, or no more than nine
percentage points higher than the domestic
prime rate published in The Wall Street Journal; and be it
further
RESOLVED,
That the Secretary of State be and he hereby is
authorized and directed to
transmit duly certified copies of this resolution to the Rhode
Island Delegation to the United
States Congress, as well as
members of the United States Senate Committee on Banking,
Housing,
and Urban Affairs, and the
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LC02248
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