Denninger: Veto H.R. 3808; But it May Go That Way Anyhow…

07 Oct

Denninger does a good job of giving a real update and response to the H.R. 3808 Bill…

President Obama has announced that he is accepting comments on this bill.

Here are my comments.

On it’s face, this bill looks simple and would facilitate interstate commerce.

However, despite this appearance, you must not sign it.

Not all that long ago a similar bill was proposed.  It essentially nationalized what had been up until then a State’s Right – usury laws.  These laws set maximum interest rates, and were state-specific.

The credit – that is, bank – industry argued that everyone should have the right to have banking and credit cards on consistent terms across state lines, and that this would promote interstate commerce.

They won.

What happened?

The Banks then shopped for a couple of states where they could bribe the legislature with a bunch of call centers and jobs.  They found South Dakota along with a handful of other states, which had no usury law at all.

By doing this we welcomed into the world the 39% credit card interest rate and destroyed the 50 State’s ability to discern that this was an abusive practice that they should not allow anyone to subject their citizens to.

Now the banks are at it again, and they will once again abuse the law.

Once this law is passed they will find some state that needs jobs, and bribe the legislature to enact ridiculously loose notary laws, such that a notary signature will become effectively meaningless.

This law will force every other State in the Union to accept that signature even though it signifies nothing.

Notarization is an extremely important legal protection.  It provides verification that the person who is alleged to have signed a document in “wet ink” actually did so, and actually made a personal appearance in front of the Notary.

Further, land titles and land transactions, along with the private property rights that vest thereupon, are inherently a state function, and their protection and verification is also a state function.

We must not allow “foreclosure mills” – or any other scheme – to destroy these protections.  HR 3808, while appearing to be innocent and intended to promote commerce, will instead promote and elevate fraud through our financial and land title system.

For this reason you must not sign it.

Update: Report on CNBC now that it will be “pocket vetoed”; since Congress is not in session this effectively kills the bill, since Congress cannot vote to override it, unless Congress was to call itself back into session prior to the expiration of October 10th - which looks darn unlikely.


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  1. donviti

    October 7, 2010 at 1:11 pm

    Usually Delaware falls in line when it comes to Usury Laws that are favorable to banks. Actually, De usually leads the pack.

    Wonder where DE fell in this?