HOUSE OF REPRESENTATIVES

H.R. NO.

95

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

HOUSE RESOLUTION

 

 

urging the president of the united states and the united states congress to adopt legislation establishing a federal usury rate.

 

 

 


     WHEREAS, the United States does not have a federal usury rate establishing a maximum interest rate that can be charged to an individual who takes out a loan or open a credit card account; and

 

     WHEREAS, usury statutes protect consumers from being taken advantage of in loan situations, including unfair scenarios that convince consumers to commit to loans they cannot afford; and

 

     WHEREAS, allowing excessive interest rates in commercial loans disproportionately hurts consumers at the bottom of the economic ladder, who have accepted high loan rates because financial hardship has left them with few other options; and

 

     WHEREAS, forty-eight out of fifty states have passed usury laws to protect their citizens; and

 

     WHEREAS, state laws were rendered unenforceable by the 1978 United States Supreme Court opinion in Marquette National Bank of Minneapolis v. First of Omaha Service Corporation, 439 U.S. 299 (1978), where the Supreme Court held that a bank operating nationally could charge interest rates up to the amount allowed by the bank's home state; and

 

     WHEREAS, since the Marquette opinion, banks and credit card companies have moved their operations to states with no restrictions on interest rates, circumventing state usury statutes; and

 

     WHEREAS, proposed federal legislation that would have capped credit card interest rates at fourteen per cent was introduced in 1991, but was not enacted; 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 an extended "credit crunch," resulting in limited credit availability and increased interest rates; and

 

     WHEREAS, some credit card companies are currently charging interest rates of thirty per cent 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 better quality of life for their families, and bolster the economy; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Twenty-fifth Legislature of the State of Hawaii, Regular Session of 2009, that the President of the United States and the United States Congress are urged to adopt legislation establishing a federal usury rate of not more than ten per cent, 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 certified copies of this Resolution be transmitted to the President of the United States, the Chairman of the United States Senate Committee on Banking, Housing, and Urban Affairs, the Chairman of the United States House of Representatives Committee on Financial Services, and the members of Hawaii's congressional delegation.

 

 

 

 

OFFERED BY:

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Report Title: 

Interest; Federal Usury Rate