PRINTER'S NO. 2811
No. 227 Session of 1991
INTRODUCED BY DONATUCCI, F. TAYLOR, RIEGER, KENNEY, SCRIMENTI,
KOSINSKI, CALTAGIRONE, BELARDI, LEVDANSKY, CAPPABIANCA,
SALOOM, DALEY, COLAIZZO, CIVERA, BLAUM, HUGHES, JAMES,
ACOSTA, WILLIAMS, TIGUE, DeLUCA, RAYMOND, STABACK, LAUGHLIN,
JOSEPHS, KASUNIC, ROEBUCK, OLIVER, EVANS, CARN, COHEN, THOMAS
AND RICHARDSON, NOVEMBER 25, 1991
REFERRED TO COMMITTEE ON RULES, NOVEMBER 25, 1991
A RESOLUTION
1 Memorializing Congress to amend Federal laws to place a cap on
2 credit card interest rates.
3 WHEREAS, With the Federal Discount Rate and the Prime Rate
4 having dropped to single digit levels, the cost of money has
5 significantly declined over the past several years, but the rate
6 of interest charged the average credit card user has continued
7 to remain at between 18% and 21%. This is both unfair to the
8 consumer and detrimental to the Nation's economy; and
9 WHEREAS, Prior to the 1980's, the states had the ability to
10 control interest rates by adopting specific usury limits. A
11 Supreme Court decision in the early 1980's limited the states'
12 ability to adequately control such rates by ruling that the laws
13 of the state where the credit cards were issued would be
14 applicable across the country. What this meant, in general, is
15 that a bank who issued credit cards from a state where the usury
16 rate was either very high or even nonexistent could charge a
1 rate of interest much higher than the legal limit existing in
2 the home state of the credit cards user. What this meant to
3 Pennsylvania is that most of the medium-to-large financial
4 institutions have moved their credit card operations, along with
5 thousands of jobs and millions of dollars in tax revenue, to
6 states such as Delaware or South Dakota where there is no limit
7 on interest rates; and
8 WHEREAS, With credit card usage very much part of the
9 American way of life, these financial institutions have been
10 reaping huge profits at the expense of vital economic
11 development and taking money out of the pockets of the average
12 consumer and taxpayer. Even with these huge profits, many of the
13 same banks, through management ineptness and ill-advised
14 investments, have come so near the point of bankruptcy that they
15 are requiring a Federal bailout paid, of course, by the
16 taxpayers; therefore be it
17 RESOLVED, That the House of Representatives hereby
18 memorialize the Congress of the United States to place a uniform
19 and reasonable cap on interest rates charged to consumers on
20 bank credit cards; and be it further
21 RESOLVED, That copies of this resolution be transmitted to
22 the presiding officers of each house of Congress and to each
23 member of Congress from Pennsylvania.
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