Predatory interest rates in Montana

While out grabbing some lunch in downtown Missoula, I was stopped by a gentleman armed with a petition. After having spent five years in Victoria, I was expecting a "save the whales" type of spiel, but he was actually petitioning for a cap on interest rates.

Interest rate puzzle

I have a savings account with ING Direct. When I was checking my account balance recently, I was surprised to see that their interest rate for an ordinary savings account was much lower than their interest rate for a tax-free savings account. Currently, their standard savings account pays 1.2%, while their tax-free account pays two-thirds more: 2%.

I found this baffling. In both cases, an investor puts their money into an account, and ING lends it out to borrowers at a higher rate in the form of mortgages. Whether or not the investor is charged tax by the government shouldn't affect ING's, so I was wondering why the accounts had different rates.