Sanders: Subject FCUs to All State Usury Limits Posted by AVCU on 5:21 PM

Vermont's Bernie Sanders is among Democrat U.S. Senators reported by American Banker as introducing legislation to get around a landmark 1978 Supreme Court decision that has long rankled consumer advocates. Under the Supreme Court decision, national banks must comply with the lending laws of the states where their credit cards are issued, but not the lending laws of other states where their customers live. 

"This legislation would restore historic, long-standing states' rights to protect consumers from improperly high interest rates," Whitehouse, D-R.I., said in a press release. His legislation is being co-sponsored by Sen. Carl Levin, Sen. Dick Durbin, Sen. Jack Reed, Sen. Bernie Sanders, Sen. Mark Begich, Sen. Jeff Merkley, and Sen. Al Franken.

The legislation, strongly opposed by the credit-card industry, was last considered by the Senate in 2010 as an amendment to the Dodd-Frank Act. It failed by a 60-35 margin, at a time when Democrats held six more Senate seats than they do today.

Analysts said its chances today remain dim. "We believe this news presents more of a headline risk vs. there being actual risk that this legislation gets passed," Keefe, Bruyette and Woods wrote in a research note. "We think the likelihood of the Whitehouse bill passing Congress is quite low."