Cap Credit card interest rates.
They have already…
Raised minimum wage.
Imposed rent control.
… How has that worked out?
They did that in Arizona some time ago. The payday lenders just added an “origination fee” to cover the difference.
The banks are wanting a piece of the action through the creation of small sized line of credits.
What about personal responsibility? It is a sort of law a sub Saharan African country would pass.
The reality is that nobody should be borrowing money even at 36% APR. That is why there are pawn shops.
Usury is a sin
Cap Credit card interest rates.
They have already…
Raised minimum wage.
Imposed rent control.
… How has that worked out?
Sudden spike in scratch ticket purchases. ... unexplained
“Every time they make a law, they create a business.”
“The bill would cap consumer loan interest rates at 36 percentage points above the main interest rate set by the Federal Reserve”
Even that is ridiculous. I’d say 25% over is more like it.
California legislature has gone full wackadoodle.
Some of these lawmakers are ignorant about economics. Some are corrupt and expect to gain from the outcome. No one with integrity and wisdom would support the interest control and rent control that they are implementing in Califorinia.
No more loans for you then, they price your interest rate based on the risk to the lender and the convenience of getting a quick unsecured loan.
Lenders charge more to people known for not paying their bills on time... Drive by one of these payday loan places and most of the cars in the lot are less than 4 years old...
Shylocks are exempted of course.
The bill would cap consumer loan interest rates at 36 percentage points above the main interest rate set by the Federal Reserve, which is currently around 2%. Consumer advocacy groups say some loan companies charge interest rates as high as 225%.
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36%! 225%!! The mafia makes better loans.
While I generally don’t approve of price controls, this doesn’t bother me if the cap is “high enough.” People who can’t borrow at less than 38% (current fed rate plus the 36%) shouldn’t borrow. Perhaps a much higher day or week rate can be allowed, which then settles into a capped (but high) longer term rate.
Remember all of the complaining about predatory lending during the last recession? Most of that was BS. Anything that approaches this cap rate... that’s what real predatory lending looks like.
Nobody is talking about why interest rates on personal loans are bad.
It’s because they loan money to people who are one paycheck away from living on the street, feeding their kids, not being able to buy their $100 scratch-off lottery tickets.
It’s highly regressive. Good Credit, buy a nice $40k SUV at 0% APR. Slip down a level and you’re at 12%, one more level and you’re at 19%.
Why? That’s where the money is lost. They have the heavy hand of the government and race hustlers making sure they give credit access to poor minorities, thus they recoup the projected losses by charges higher interest rates by people in those pools.