DENVER – Democratic Sen. Linda Newell of Littleton joined with Republicans on Monday to kill a measure that aimed to cap credit-card interest rates in Colorado.
The legislation was framed as a priority agenda item for Senate Democrats this year, with leadership pointing to the measure even before the Legislature kicked off earlier this month.
But Newell said the bill would have created an unfair advantage for national banks, and that is why she bucked her party.
She pointed out the measure would have capped rates at 12.5 percent for only Colorado banks, leaving national banks free to charge rates as high as 21 percent.
“It only affects 2 percent (of banks in the state), and those are the Colorado-chartered banks that are trying to do the right thing, and those are the people who might be able to help the people struggling,” Newell said after the vote.
The measure died in the Senate Business, Labor and Technology Committee on a 6-1 vote. Newell was the only Democrat to vote against the measure, though two other Democrats were excused from the committee at the time of the vote.
Assistant Democratic Leader Rollie Heath, of Boulder, supported the bill in committee. He declined to comment on Newell voting against a Democratic agenda item when asked by The Durango Herald shortly after the vote.
Sen. Jessie Ulibarri, D-Westminster, who sponsored the measure, said the aim was to simply curb rates, so consumers could do more to get out of debt.
“This is a very small step forward, but I think it’s our responsibility to step forward and say we have to start leading, not just in the state, but nationally,” Ulibarri said during the committee hearing.
But banks – big and small – lined up to oppose the measure. The Colorado Bankers Association said rates are calculated in order to minimize a bank’s risk, so that loans can continue to be provided.
“We feel strongly that lenders should be able to charge a rate commensurate with the risk involved in the loan,” said Jenifer Waller, vice president of the Colorado Bankers Association. “To penalize the very few state charters that this bill impacts is not equitable.”