Finance Committee Chairman John J. Igliozzi announced today that he is introducing a resolution urging the federal government to establish a national usury rate. If instituted, the law would create a maximum ceiling for credit card interest rates, providing relief for the many Americans who face extremely high credit card debt in these tough economic times.
“Current law allows credit card companies to charge people who are already suffering 30% or more interest, making it virtually impossible for hardworking families to end the cycle of debt,” said Igliozzi. “The economy will be better served when people are spending their money to improve their families’ quality of life and not increasing the profits of credit card companies.”
Forty-eight states have usury laws protecting their citizens from excessive interest charges, however, the Supreme Court ruled that banks operating nationally can charge the maximum interest rate allowed in their home state, prompting many credit card companies to relocate to the two states without usury statutes, Delaware and South Dakota. “The court’s decision has allowed banks to circumvent the will of the people for their own private gain,” said Igliozzi. “A national usury law would solve this problem and restore fiscal sanity to the credit card business.”
The councilman’s resolution calls for the federal government to limit interest to ten percent or no more than two percent greater than the change in the Consumer Price Index the previous year.
The resolution will be considered tonight, November 6th, at the 7 pm City Council meeting.
