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Marquette National Bank vs. First National of Omaha

Home > MN90: Minnesota History in 90 Seconds > Marquette National Bank vs. First National of Omaha

A little-known Supreme Court case in the 1970s had a massive effect on the credit card industry as we know it. It all started with a battle over interest rates led by a bank in Minnesota.

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Producer: Autumn HaegEditorial support: Emily KrumbergerMixing & mastering: Chris Harwood

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Transcript

Welcome to MN90: Minnesota History in 90 Seconds.

Credit card users in 1970s Minnesota had a pretty sweet deal. The had a law that capped interest rates at 12%. This kept credit card fees relatively low and prevented consumers from racking up too much debt.

But one day, a bank in Nebraska – First National of Omaha – started advertising a credit card to Minnesotans that had a 20% interest rate. This caught the attention of Marquette National Bank in Minneapolis. Marquette, which was chartered in Minnesota, claimed this violated the state’s laws. The bank sued First National and the case made its way to the Supreme Court in 1978.

The court ruled that banks were beholden to the interest rate caps of the state in which they were chartered – not the state in which they were advertising. In other words: A bank in Nebraska could sell credit cards with higher rates to Minnesotans. Many scholars say it was one of the most influential cases of the 20th century because it paved the way to de-regulate the credit card industry.

MN90 is produced by AMPERS, diverse radio for Minnesota's communities, made possible by funding from the Minnesota Arts and Cultural Heritage Fund. Online at MN90.org.