United States Senate

Washington, DC  20510

RE:   Support for Whitehouse Interstate Lending amendment to S. 3217

Dear Senator:

The consumer, employee, investor, community and civil rights groups who are members of Americans for Financial Reform (AFR) write to express strong support for the Whitehouse Interstate Lending Amendment that will be offered during floor debate on S. 3217, the “Restoring American Financial Stability Act.”

This amendment will restore to the states the ability to enforce interest rate caps against out-of-state lenders. By so doing, the amendment will help level the playing field so that intrastate lenders such as community banks, local retailers, and credit unions no longer are bound by stricter lending limits than national credit card companies.  It will also prevent payday lenders from circumventing state interest caps through loans made on bank-issued prepaid cards.

Under current law, national banks are bound only by the lending laws of the state in which the bank is based. As a result, the current system gives lenders an incentive to locate in states with weak or non-existent interest restrictions. A handful of states, eager to attract lucrative credit card business and related tax revenues, have all but eliminated their consumer protections.

On behalf of consumers, AFR strongly urges you to support Whitehouse’ Interstate Lending Amendment. By reinstating protections that existed prior to the U.S. Supreme Court’s decision in Marquette National Bank of Minneapolis v. First of Omaha Service Corp (1978), Congress will take a step in the right direction toward protecting consumers and leveling the playing field between national credit card companies and their local and community oriented counterparts.

The Whitehouse Interstate Lending Amendment takes a strong step towards restoring to each state the ability to protect its citizens from lenders based in other states.  We strongly urge you to vote in favor of this Amendment and in favor of the consumer protections this Amendment promotes. By leveling the playing field between national banks and local lenders, you will send a strong signal to Main Street that their interests count.  We urge adoption of this modest, yet tremendously helpful amendment.

Sincerely,

Americans For Financial Reform

AARP

AFL-CIO

AFSCME

Campaign for America’s Future

Consumer Action

Consumer Federation of America

Consumers Union

Metro Industrial Areas Foundation

National Association of Consumer Advocates

National Community Reinvestment Coalition

National Consumer Law Center (on behalf of its low-income clients)

National People’s Action

Public Citizen

Sargent Shriver National Center on Poverty Law

U.S. PIRG

Woodstock Institute

Click here to see the Partners of AFR.