A Look at US Consumer Credit Card Debt and Federal Preemption

Yesterday, the US Senate Committee on the Judiciary held a hearing on the subject of ""Short-Change for Consumers and Short-Shrift for Congress? the Supreme Court's Treatment of Laws That Protect Americans".

Among those testifying was Robert Lawless, Professor of Law and the Galowich-Huizenga Faculty Scholar at the University of Illinois College of Law. (Lawless is also one of the active bloggers on the Credit Slips blog.) In his prepared testimony for yesterday's hearing, he discusses the Supreme Court’s decision in Marquette National Bank v. First of Omaha Serv. Corp. - noting that national consumer lenders in the US operate in an environment that is free of usury restrictions because of the Marquette decision.

An 2004 paper by Mark Furletti titled "The Debate Over the National Bank Act and the Preemption of State Efforts to Regulate Credit Cards" and published by the Payments Card Center at the Federal Reserve Bank of Philadelphia provides more background on the federal pre-emption issue.