SB 109-07: Andrew Jackson Memorial Bank-Killing Act (Veto Overridden)

[Joseph Cao]

ANDREW JACKSON MEMORIAL BANK-KILLING ACT

1. Section 85 of the National Banking Act (NBA) 12 USC §85, which permits federally charter banks to charge interest rates in States and Regions in excess of State or Regional interest rate caps, is hereby repealed. This Act shall take effect sixty (60) days after being ratified.

Sponsor: MB
Status: Final Vote

The gentleman from the Northern Marianas is recognized.

[Deep Dixieland Senator, Muad'dib (OSR MSR)]

This is definitely Mr. R's area of expertise more than mine but it's pretty straightforward - removing the ability of the central bank to charge interest rates greater than caps placed upon them by regional (or state) governments. This would curtail the Federal Reserve's power to charge undue rates when the regions have placed caps on them.

So States have always retained the power to curb the excesses of the money lenders through general intetest rate caps. This is based on the power of States to protect the health, safety, and morals of the public in contract subject matter. All States have some level on interest rate cap.

There is however a pernicious provision of federal law that exempts certain federally chartered banks from State interest rate caps by allowing such banks to swap in interest rates from other States it has branches in. This is a direct endrun around usury laws and provides a clear competitive advantage to big banks over little banks to the detriment of consumers.

We in the South have just harmonized the usury laws throughout our region to best protect our people from predatory and immoral interest rates. Federal law however greatly undermines our protections by allowing big banks to preempt our Regional caps. With this bill we merely ask our friends in Nyman to uphold the Truman Doctrine and protect the rights of the Regional governments to make the best decisions for their peoples, free from federal interferrence on behalf of the brown red alliance of big banks. Lincoln and Fremont can maintain abusive interest rates if they want to, but we in the South actually want to protect our people. Therefore with this bill we merely ask that the Senate give us the tools we need to crush the big banks by keeping the predatory rates of Fremont and Lincoln out of the South. This protects fairness by keeping all banks at the same competitive level in our region and will prevent a race to the bottom whereby all federally chartered banks set up in a predatory region like Fremont just to screw over the South.

Thanks for your consideration, and may the spirit of that great southerner and bank-killer, Andrew Jackson, guide yall to what is right, moral, and just.


CRS bankground if interested: https://www.google.com/url?sa=t&source=web&rct=j&url=https://crsreports.congress.gov/product/pdf/LSB/LSB10512&ved=2ahUKEwjAuqvm-IL2AhUAmGoFHakFB2kQFnoECCoQAQ&usg=AOvVaw0L7znyZEuN_xVTGWKMTOfd

[Dr. MB]

As Muaddib was kind enough to post the original arguments yes that’s basically what there is to the bill. I hope the Senate will reconsider it again this session and maybe it will have a different outcome this time.

[Deep Dixieland Senator, Muad'dib (OSR MSR)]

Maybe Labor can demonstrate that they aren't the party of usury... unlike last time.

[The world will shine with light in our nightmare]

Given that FT will hopefully be joining the South in imposing these usury restrictions, I urge Labor and likeminded senators to join our multi-partisan coalition in getting this legislation passed.

[S019]

This is one of the dumbest bills you can pass with the current inflation issues.

[GM Team Member and Senator WB]

This is one of the dumbest bills you can pass with the current inflation issues.

thank you for the enthusiastic endorsement of this bill, I shall vote aye on this because you have swayed me.

[Joseph Cao]

With respect to S019 it's not as if the economy wouldn't realistically be bleeding out of several orifices at the point where this bill begins inconveniencing the Federal Reserve. Their current powers wouldn't do much if that actually were to happen.

[S019]

With respect to S019 it's not as if the economy wouldn't realistically be bleeding out of several orifices at the point where this bill begins inconveniencing the Federal Reserve. Their current powers wouldn't do much if that actually were to happen.

That doesn’t not make it a dumb bill. Creditors have every right to charge high interest on risky loans, since those loans may not be repaid. This is just finding a solution to a non-existent problem. Quite disingenuous to see this from the party that claims to support small government and free enterprise, what happened to conservative values?

[Mr. Reactionary]

With respect to S019 it's not as if the economy wouldn't realistically be bleeding out of several orifices at the point where this bill begins inconveniencing the Federal Reserve. Their current powers wouldn't do much if that actually were to happen.

That doesn’t not make it a dumb bill. Creditors have every right to charge high interest on risky loans, since those loans may not be repaid. This is just finding a solution to a non-existent problem. Quite disingenuous to see this from the party that claims to support small government and free enterprise, what happened to conservative values?

This is a RevCom bill.

[Southern Senator North Carolina Yankee]

With respect to S019 it's not as if the economy wouldn't realistically be bleeding out of several orifices at the point where this bill begins inconveniencing the Federal Reserve. Their current powers wouldn't do much if that actually were to happen.

That doesn’t not make it a dumb bill. Creditors have every right to charge high interest on risky loans, since those loans may not be repaid. This is just finding a solution to a non-existent problem. Quite disingenuous to see this from the party that claims to support small government and free enterprise, what happened to conservative values?

Are you saying you aren't a great, grand hero of the people's and worker's revolution?

[S019]

With respect to S019 it's not as if the economy wouldn't realistically be bleeding out of several orifices at the point where this bill begins inconveniencing the Federal Reserve. Their current powers wouldn't do much if that actually were to happen.

That doesn’t not make it a dumb bill. Creditors have every right to charge high interest on risky loans, since those loans may not be repaid. This is just finding a solution to a non-existent problem. Quite disingenuous to see this from the party that claims to support small government and free enterprise, what happened to conservative values?

Are you saying you aren't a great, grand hero of the people's and worker's revolution?

I am an economic liberal, always have been. I’ve never thought much of socialist ideas though I am somewhat sympathetic to the reforms to socialist ideas undertaken by figures such as Gerhard Schroder in the late 1990s and early 2000s.

[AGA]

I am leaning against this bill.

[Mr. Reactionary]

I am leaning against this bill.

This is a Regional rights bill. This merely restores to the regions decisions over usury laws. No one region is required to do anything.

[S019]

I am leaning against this bill.

This is a Regional rights bill. This merely restores to the regions decisions over usury laws. No one region is required to do anything.

The regions should not have control over monetary policy.

[Joseph Cao]

I am leaning against this bill.

This is a Regional rights bill. This merely restores to the regions decisions over usury laws. No one region is required to do anything.

The regions should not have control over monetary policy.

…so no regional interest rate caps whatsoever?

[Mr. Reactionary]

I am leaning against this bill.

This is a Regional rights bill. This merely restores to the regions decisions over usury laws. No one region is required to do anything.

The regions should not have control over monetary policy.

The Regions undeniably have control over intrastate bank interest rates and credit union interest rates. It seems shady to give big banks carte blanche to ignore regional usury laws when small banks and credit unions must obey the same laws. It effectively creates a special privilege for big banks to jack up rates on consumers. Keep in mind this privilege didnt even exist until like the 1980s so its not as though infinite bank interest rates are that historically important to federal law. I still contend that this bill is a fair way to keep the rich, monied class from exploiting consumers through loan shark tactics that undermine Regional usury laws which have existed in some form since the colonial era. Now the South has technically already nullified the federal law we are seeking to amend and are enforcing through a 75% tax on noncompliant big banks but a clear amendment to the federal law is a cleaner fix. This amendment does not affect the Federal Reserve power over interest rates for deposits, the federal funds rate, or fractional reserve margins so its not as though this eliminates the Fed or deprives it if monetary tools. This merely allows Regions to cap interest rates from big banks within the Region. Im hesistant to agree with any claim that a big bank has a "right" to charge loan shark rates, rather this is a special privilege big banks obtained through lobbying. I care more for the consumer.

[The world will shine with light in our nightmare]

I also like to boast/point out that this is not the first time this Congress has rolled back special perks for big banks at the expense of smaller ones. Back in the '90s, a bipartisan group of congresspeople and President Clinton backed a bill which contained provisions specifically written by lobbyists for large banks - in this instance, to make it harder for small credit unions to do business. We rolled back this blatant corporate giveaway roughly three or four years ago.

I'll also point out, again, that before the South passed its bill, half the states in the country already had usury laws on the books. That never meant we allowed states to dictate monetary policy.

[Sestak]

A question here. I had initially read "federally charter banks" to refer to banks explicitly chartered by Congress/the Senate; that is, exclusively the branches of the Federal Reserve. The statute in question seems to refer to OCC supervised "national banks", i.e. all the private banks suffixed with 'N.A.'

Could the language on this be clarified? If it's the latter then this bill makes a good deal more sense, though I still have some questions on the potential of some regional usury law de facto preventing the Federal Reserve from increasing funds/deposit rates beyond a certain point.

[Mr. Reactionary]

So heres from the CRS report referenced above

To protect consumers, many states have adopted usury laws capping the interest rates that lenders can
charge borrowers. There is significant variation among state interest-rate limits: some states have adopted
strict usury laws, some have enacted more permissive rules, and others have eliminated usury laws
altogether. But federal preemption of state law has diminished the relevance of these differences when it
comes to bank lending. Section 85 of the National Bank Act (NBA) allows federally chartered banks to
“export” the maximum interest rates of their “home” states, meaning they can charge those rates when
lending to borrowers in other states with stricter usury laws. Accordingly, a national bank headquartered
in South Dakota—which has no interest-rate limits—need not abide by New York usury law when it lends
to New York borrowers. Predictably, this regime has made more permissive states attractive destinations
for banks’ credit-card operations. And these shifts have reduced the sway of states that favor stricter limits
on high-cost lending.

Federally chartered banks can be found listed here:

https://www.occ.treas.gov/topics/charters-and-licensing/financial-institution-lists/index-financial-institution-lists.html

There are hundreds of them. A federal charter just means u lend across state lines.

[Southern Senator North Carolina Yankee]

Back in the '90s, a bipartisan group of congresspeople and President Clinton backed a bill...

The path to hell was paved in the 1990s with "a bipartisan group in Congress, together with Bill Clinton".

[Joseph Cao]

How do we feel about a final vote here?

[Mr. Reactionary]

I move for a final vote

[Joseph Cao]

24 hours to object, et cetera.

[S019]

I hope the Senate chooses to reject this attempt at kneecapping the Fed and depriving creditors of appropriate compensation for the risky loans that they give out.