Feb. 12, 2009

Restriction on credit card interest rates proposed
Rep. Kirk Pearson's bill may help credit card users in tough economy

As job losses mount and family finances tighten, Rep. Kirk Pearson today announced his measure, House Bill 2195, to revive Washington's restrictions on credit card interest rates. Washington has had a Usury Rate law since statehood that already allows for this, but the law's provision to cap the rates is not currently used because the federal government won't allow us to.

While the federal government has refused to let Washington assert its sovereignty on this issue, Pearson said he believes it's the right thing to do in these extraordinary times.

"We've offered bailouts at the federal level to banks and Wall Street big-wigs as well as stimulus packages that help everyone but the hard-working, middle-class folks who are struggling to make ends meet. They need help, too," said Pearson, R-Monroe. "It isn't fair that folks who have recently lost their jobs, and may have a lapse in credit card payments, could be faced with a situation where their interest rate jumps up over 20 percent and fees mount, all while neither Washington, D.C. nor Washington state is willing to step up and help them."

Regardless of the person's good credit history, Pearson noted, they may be saddled with paying higher interest rates and large fees at a time when they can least afford it.

House Bill 2195 would restrict credit card interest rates to the existing Washington State Usury Rate of 12 percent or 4 percent above the Treasury Bill Rate as calculated by the Federal Reserve, whichever is higher. The bill also includes language that would make states allowing credit card companies to charge more than the Usury Rate to be in violation of the Consumer Protection Act.

Pearson said the legislation is a matter of spreading help fairly and that his bill would be a positive step in the current economy and would help the middle class. Many families, he explained, are facing a situation, where breadwinners are out of work, through no fault of their own, and some for the first time in their lives.

"We need to find meaningful ways like this to help middle-class families with some relief that will help curb rising debt, and help their overall financial situation while they search for employment and take care of their kids," said Pearson.

Washington's Employment Security Department reports over 75,000 new unemployment claims were filed in January, alone. That is the second highest number ever reported, and exceeds December 2001, after the terrorist attacks.

# # #

For more information, contact: Bobbi Cussins, Public Information Officer: (360) 786-7252