States' Rights to Cap Interest Rates Defeated by Senators Receiving Money from Banks and Credit Industry
May 20, 2010 - On Wednesday, May 19, the Senate voted on a measure introduced by Sheldon Whitehouse (D-RI) amending the Financial Reform bill that would "restore to the states the right to protect consumers from usurious lenders." Under current law, credit and cash advance companies "located in less consumer-friendly states" are not subject to local interest rate caps. The measure would have restored the historical right of states to cap interest rates on out-of-state firms doing business in-state. Offered in a last ditch effort to strengthen the regulatory framework of the Wall Street Reform bill, it failed by a 35-60 vote.
Senators opposing the amendment received 129% more money from banks and credit institutions, such as American Express, Moneytree International and Ace Cash Express, that would be negatively impacted by the measure.