The Most Important Supreme Court Case of Which You've Never Heard
The Court's decision threw open the doors to punishing interest rates on bank credit cards.
When one thinks of landmark Supreme Court cases, several immediately come to mind: Brown vs. Board of Education, Roe vs. Wade, Bush vs. Gore, Marquette National Bank vs. First of Omaha.
Say again? Marquette National what?
A 1978 U.S. Supreme Court case called Marquette National Bank v. First of Omaha Service Corporation effectively ended state usury laws. (1) The Court held that states cannot impose their own interest rate caps on national banks that are headquartered in other states.
This may indeed be the most important Supreme Court case of which you’ve never heard: it threw open the doors to punishing interest rates on bank credit cards.
As a direct result, you may have paid a good chunk of change in interest over the years.
The Court’s opinion concludes: “(P)rotection of state usury laws is an issue of legislative policy… (and) is better addressed to the wisdom of Congress than to the judgment of this Court.”
Meaning what?
Congress could amend national banking laws and effectively allow for the reestablishment of state laws capping interest rates – if only it wished to do so.
Forty-three years have passed. Month after month, American citizens docilely pay huge amounts of juice on credit cards.
Once on the credit card treadmill, it can become almost impossible to get off. Many of us are effectively in debt bondage. We’re peons of debt.
The big banks love it. Why would they want to change a thing? The profit margins on bank cards are enormous.
Don’t get me wrong. Banks perform essential functions. And credit cards are very convenient. My point is this: the banks should (and would) remain profitable if usury laws were to be reinstated. They simply wouldn’t be off-the-charts profitable.
So let’s combat those enormous bank profits with an enormous citizen outcry. Let’s tell Congress to take up the court’s invitation in Marquette Bank and allow the reinstatement of interest rate limits on all manner of personal and business loans – to the enduring benefit of almost all Americans.
Source:
(1) https://supreme.justia.com/cases/federal/us/439/299/
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