Democratic Sen. Sheldon Whitehouse of Rhode Island has introduced legislation that would grant states the power to limit interest rates on credit cards and other consumer loans.
“This is not a new power to states,” Whitehouse said on the Senate floor Tuesday. “This is not a new principle or idea. This is the restoration of a historic states right which was just eliminated a few decades ago.”
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If signed into law, Whitehouse’s website says, the Empowering States’ Rights to Protect Consumers Act would “amend the Truth in Lending Act of 1968 to clarify that all consumer lenders — regardless of their location or legal structure — must abide by the interest rate limits of the states in which their customers reside.”
“Madam President, when you and I were growing up, a credit card offer with a 20 percent or 30 percent interest rate might be something to bring to the attention of law enforcement. Such interest rates were illegal under most states laws,” Whitehouse said on the Senate floor.
“Today, in contrast, credit card companies routinely charge rates of 30 percent or more…they may have a teaser rate up front that is a lower rate but make one of those mistakes in that 20 page long contract that is full of tricks and traps and pow, there you are at 30 percent.”
Whitehouse sponsored the bill. Democratic Senators Carl Levin of Michigan, Richard Durbin of Illinois, Jack Reed of Rhode Island, Jeff Merkley of Oregon, Mark Begich of Alaska and Al Franken of Minnesota, and Vermont indepdendent Sen. Bernard Sanders, are co-sponsors.