WASHINGTON — The Senate overwhelmingly rejected a measure from Sen. Sheldon Whitehouse late Wednesday that would require national banks to offer credit based on the interest rate limits in cardholders' states.
The amendment did not generate significant support, failing 60 to 35 amid opposition from Democrats with large card operations in their state, including Sen. Tom Carper of Delaware. Even Senate Banking Committee Chairman Chris Dodd, who said he respected the effort, opposed adding the measure to the regulatory reform bill.
The vote came after a long day of wrangling over how to proceed with amendments and the failure to successfully invoke cloture. Democrats won only 57 of the necessary 60 votes, and lost two of their own caucus, including Sen. Maria Cantwell of Washington, who voted against cloture.
Cantwell said on the Senate floor that the bill is too soft on derivatives, and should require all swaps to be cleared. She is seeking changes to toughen the bill that would set minimum requirements for capital behind trades, limit speculation and establish greater transparency in pricing and real-time monitoring of trading activity.
After the cloture vote, Dodd tried to bring Cantwell's amendment up on the Senate floor but was opposed by Sen. Richard Shelby, R-Ala, the banking panel's lead Republican.
For his part, Whitehouse made a last push Wednesday to pass his credit card amendment, arguing it would target an "an inequity in American society that arises out of an inadvertent loophole that the Supreme Court created years ago."
He said a vote on his provision would separate consumer advocates from those defending banks.
"This vote presents all of my colleagues with a clear stark choice," he said. "Whose side you are on will be defined by your vote on this amendment."
Whitehouse's amendment originally focused on barring any lender, including state banks, from exporting interest rate rules from the state in which they are based for any non-mortgage consumer credit offer. The Rhode Island Democrat narrowed the amendment earlier this week to focus exclusively on national banks by excluding state banks and credit unions from its purview.
The measure was fiercely opposed by the credit card industry and the American Bankers Association who argued it would create chaos in the market by subjecting banks to a fractured system where rate offers could continuously change based on where a borrower lives.