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California pushes bill to limit interest rates on consumer loans



The California Senate pushed ahead with legislation to cut interest rates on consumer credit on Friday, a move that proponents believe will stem the predatory lending practices of the Federal Reserve, which is currently around 2%. Consumer representatives say that some credit companies charge interest rates of up to 225%. This would apply to loans between $ 2,500 and $ 9,999, and it would also require borrowers to provide borrowers with a summary of credit education at the State Assembly late Friday before appealing to Democratic Governor Gavin Newsom. Critics of the bill, including black and Hispanic chambers of commerce, argued that an interest ceiling could put some lenders out of business and cut credit options for endangered Californians. Other critics suggested that this could affect people's ability to build credit. "I would suggest we do not pretend to be naïve about credit," Democratic Senator Holly Mitchell told critics. "Claiming or assuming that you can make loans by exploiting someone who bills you for 200% of a $ 2,500 loan is simply not the case." In the first half of 201

9, lenders including Advance America, Check Into Cash and Axcess Financial spent more than $ 100,000 on lobbying.

The California Senate pushed ahead with legislation on limiting consumer credit rates on Friday, a move that advocates believe is helping to prevent predatory lending practices 36 percentage points above the Federal Reserve's rate of interest, which currently stands at around 2% lies. According to consumer associations, some credit companies charge interest rates of up to 225%.

This would apply to loans between $ 2,500 and $ 9,999, and lenders would need to provide borrowers with a summary of their credit education.

This is expected to get you a final vote in the State Convention later Friday before you go to Democratic Gov. Govin Newsom.

Critics of the bill, including the Black and Hispanic Chambers of Commerce, argued that a rate limit could put some lenders out of business and cut off loans options for endangered Californians. Other critics suggested that this could affect people's ability to build credit.

"I would suggest we do not pretend naivety about loans," Democratic Senator Holly Mitchell told critics. "Claiming or assuming that you can make loans by exploiting someone who bills you for 200% of a $ 2,500 loan is simply not the case." ] The Online Lenders Alliance, which is against the bill, spent $ 66,000 on lobbying in the first half of 2019. Lenders, including Advance America, Check Into Cash and Axcess Financial, spent more than $ 100,000 on lobbying during the same period.


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