As part of his on-going effort to encourage the creation of a national usury rate, Finance Committee Chairman John J. Igliozzi sent letters to public officials around the nation last week informing them of the City Council’s action on this important issue.

Councilman Igliozzi’s letter included a copy of a resolution – sponsored by Igliozzi was passed by the Providence City Council last November – urging the federal government to establish a national usury rate; and the letter was sent to President Obama, every member of the United States Congress, the entire Rhode Island General Assembly, and the leaders of state legislatures around the country. The letter called on federal leaders to pass a national usury rate and urged state leaders to follow Providence’s lead and encourage their own congressional delegations to pass such legislation.

A national usury rate, if instituted, would create a maximum ceiling for credit card interest rates. The councilman stressed the importance of such a cap in the current economic climate. “Current law allows credit card companies to charge people 30% or more interest, making it virtually impossible for hardworking families to end the cycle of debt.” Igliozzi added, “The economy will be better served when people are spending their money to improve their families’ quality of life, and not on increasing the profits of credit card companies.”

Forty-eight states have usury laws protecting their citizens from excessive interest charges, however, the Supreme Court ruled that banks operating nationally can charge the maximum interest rate allowed in their home state, prompting many credit card companies to relocate to the two states without usury statutes.

“The court’s decision has allowed banks to circumvent the will of the people for their own private gain,” said Igliozzi. “I hope these efforts will encourage national action to solve this problem and restore fiscal sanity to the credit card business.”