Restoring American Financial Stability Act of 2010--Continued

Floor Speech

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Mr. WHITEHOUSE. Mr. President, I was delighted to give the distinguished Senator from North Dakota a chance to clarify that.

I will speak just for a minute about amendment No. 3746, which I will not be calling up right now but which I intend to work with Chairman Dodd on to call up later.

I wanted to mention that this afternoon this amendment received the endorsement of Americans for Financial Reform, a coalition of dozens of national and State consumer groups that are working to help pass the critical legislation we are debating today.

In addition to the coalition as a whole, the amendment has been endorsed by individual members as well, including the AARP, the Consumer Federation of America, Consumers Action, Consumers Union, and on behalf of its low-income clients, the National Consumer Law Center.

These groups have sent a letter to each of my colleagues which reads in part:

On behalf of consumers, AFR strongly urges you to support Whitehouse's 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.

Mr. President, I ask unanimous consent to have printed in the Record this letter dated today from Americans for Financial Reform.

There being no objection, the material was ordered to be printed in the Record,

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Mr. WHITEHOUSE. Mr. President, I know the membership of this organization that supports the amendment includes AARP, as I mentioned, that also supported it individually, the Center for Responsible Lending, Common Cause, Consumers Union, the NAACP, the National Association of Investment Professionals, the National Council of La Raza, and the Veterans Chamber of Commerce, in addition to a great number of other organizations.

This is an important amendment. It closes a loophole that was opened by the Supreme Court decision of 30 years ago, the decision to define the term ``located'' in the National Banking Act from way back in the Civil War era, 1863, as meaning the location where the bank is located, not the location where the consumer is located, so that when there is a bank in one State doing business with a consumer in another State, the laws of the bank's State govern.

There is nothing particularly wrong with that decision. The problem is that the banks figured out that they could go to States that had the worst consumer protections or go to States that would be willing to chuck their consumer protections in return for the influx of business. From those States which have the worst consumer protection laws, they could then market their products around to other States and undercut and dodge around the laws of Rhode Island, the laws of Minnesota, the laws of Connecticut, the laws of Iowa, the laws of Virginia--the laws of all the States that for more than 200 years, in the history of our Republic, had this authority to regulate interest and to protect our consumers.

This is an unintentional loophole. It has created grievous abuse of consumers who for the first time in the history of America are paying 30-plus interest rates under the law. When you and I were growing up, Mr. President, if a flier came in the mail that offered a credit card with a 30-percent interest rate, that would probably be a matter to bring to the attention of the authorities because it would be illegal. Now they market this stuff at will, and too many Americans, too many of our State residents, too many consumers are paying exorbitant and what would in that State be illegal interest rates because of that loophole. It is long past time to change it. This amendment would close it.

I urge the support of my colleagues, and I look forward to the chance to call up this amendment.

I yield the floor. I suggest the absence of a quorum.

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