On the recordMay 19, 2010
I wanted to share with my colleagues an update on where we are with the bipartisan amendment on which I have been working so hard. The amendment, as you know, would allow States to protect their citizens from exorbitant interest rates that are charged by out-of-State banks. There is a trick to this. Years ago, the Supreme Court made a decision saying when a bank is in one State and a consumer in another, the transaction between them is governed by the laws--and here they had to pick one State or the other--the bank's State. It didn't seem like a big deal at the time, but it opened a loophole that crafty bank lawyers figured out, and that is that you could move and redomicile a bank's headquarters in the State with the worst consumer protection laws in the country. Then, from that State, you could market back to other States which have consumer protections, which have interest rate limits honoring the tradition of usury restriction that was at the founding of this country and that lasted for hundreds of years but goes back to all our ancient religions and which is a constant in human civilized legal codes.
