2009 -- S 0025

Enacted 06/02/09



S E N A T E  R E S O L U T I O N




     Introduced By: Senators Ciccone, Tassoni, Jabour, Pichardo, and Metts

     Date Introduced: January 14, 2009



     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 hurt those at the bottom

of the economic ladder, who have accepted such high rates because financial hardship had left

them with 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;


     WHEREAS, In 1991, the United States Senate passed a bill capping credit card interest

rates at 14%, 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% 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 Rhode Island and Providence Plantations

hereby urges the United States Congress and the President-Elect Obama to adopt legislation

establishing a federal usury rate of 10%, or no more than two percentage points higher than the

change in the Consumer Price Index each year, for credit card lending; 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 President-Elect Obama 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 United States House Committee on

Financial Services.