Protecting Consumers' Access to Credit Act of 2017

Floor Speech

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Mr. KHANNA. Mr. Speaker, I rise in opposition to this bill, Protecting Consumers' Access to Credit Act.

I represent Silicon Valley, and I am not opposed to fintech. Let's be very clear: If there is technology that is going to make it easier for people to get access to capital, who is opposed to that?

But this has nothing to do with fintech. This has to do with basic State laws. The question is not: Are we going to go to the future? The question is: Are we going to go back to ``The Merchant of Venice'' when usury laws were allowed? That really is what the issue is.

What this bill does, just to be very clear, is it says: If you want to use fintech, if you want to use technology, now there is no law against being charged 380 percent interest.

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Mr. KHANNA. I yield to the gentleman from North Carolina.

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Mr. KHANNA. Mr. Speaker, let me take back my comment.

Mr. Speaker, I understand the Second Circuit decision. The Second Circuit decision basically said that, if you are a bank and if you are a fintech company and you are in a rural part of the country--and I totally agree with the gentleman; we need more capital to rural America; we need more tech there. I admire Steve Case's work, the ``Rise of the Rest.''

But what the Second Circuit said is you can't partner with a national bank and preempt State law. So if North Carolina has a law saying you can't charge 400 percent interest, if there is a bank in New York or a bank in California that wants to charge 400 percent interest just because they have some magical fintech, they can't charge people 400 percent interest in North Carolina or Arkansas.

I am all for giving more capital at affordable rates and using technology to help rural America.

We have done a terrible job of that. I concede that point. But this is not the way to do that.

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Mr. KHANNA. This is going to hurt ordinary folks who can't make paycheck to paycheck, and they are going to have to pay these exorbitant interest rates.

Now, if the majority comes up with a bill that says we want to expand the SBA, we want to expand figuring out how to get venture capital into rural America, we want to expand the earned income tax credit so that people have more money in their pocket so that they can make a living and meet their daily expenses, I agree.

If they say, look, all the capital, 85 percent of the capital is in my district in Massachusetts and New York, and we have got to get the capital into other States, I agree.

But to say that just to use the word ``fintech'' and to say okay, because there is something that is going to allow the diffusion of capital, that that means that you should get rid of the State laws capping usury, that is really going back to the Victorian era. I mean, we had that debate. I was reading Shylock; that was what that was all about. They were charging four times as much, and I just don't think that that is what people want.

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