Posted on 05/04/2007 11:00:38 AM PDT by bedolido
Oregon moved closer to a total cap on interest rates Thursday, when the state House passed a 36 percent limit on consumer loans under $50,000.
The cap completes House approval of a package of bills aimed at banning the triple-digit interest rates charged by payday and car title lenders.
"This doesn't end consumer lending," said House Speaker Jeff Merkley, D-Portland. "But it will end predatory interest rates."
The House voted 36-21 in support of House Bill 2871, which will join four other bills pending in the Senate. Oregon's payday lenders, who operate about 360 stores, say the legislation will kill their businesses.
In its special session last spring, the Legislature passed a law limiting payday lenders to charging no more than $10 per $100 for an initial fee on small loans and no more than 36 percent annual interest on renewals or rollovers of the loans. That law goes into effect July 1.
This session's bills are aimed at bringing car title and Internet payday lenders under the 36 percent cap and blocking paths lenders might take to skirt the regulations.
Payday and car title lenders typically buy short-term licenses to make small loans, commonly for about $300, over two or three weeks. After the Legislature capped interest rates on those loans, the lenders began buying licenses to issue longer-term conventional consumer loans, which have no limit on interest.
(Excerpt) Read more at oregonlive.com ...
Why is it the business of government what private persons charge another for loans? All this will do is prevent persons with bad credits from obtaining loans in the first place, minorities, women, poor hardest hit etc.. is actually true in this case and it’s the dems doing it (as always).
I was a day late on a credit card payment to Bank of America, while I was deployed - they jacked my interest rate from 6% to 32.27%
What is the difference?
Needless to say, I closed that account.
If the interest rate is higher than you want to pay, don't get a short-term payday loan. If, on the other hand, a loan for two or three days will get you out of a bind, and it's worth the high interest, then I think you, as the consumer, should be allowed to make that choice.
Politicians are convinced that consumers are just too stupid to make their own decisions, so they'll be happy to make them for you. Since he can't imagine ever needing a short-term, high-interest loan, he'll make that judgment the law of the land for everyone.
The driving force behind legislation like this is the banking industry. They don't like competition. They oppose credit unions just as strongly.
wellllllll.... the interest rates at financial institutions (using FDIC guidelines) are based upon the current rate set by the Fed auction. The institutions can charge more if they like... but not less.
These “loan sharks” are not bound by FDIC rules and guidelines and are taking advantage of the poor and financially hurting.
Women, children and minorities hit hardest ! \s
You are correct sir or madam (hard to tell with user id's)
I wonder if these guys operate out of Wash State?
I was stationed there years ago and the state had a 12% limit on any loans. I notice the credit card outfits are not HQ there.
I see nothing wrong with this. Anti-usury laws do nothing but send "sub-subprime lending" into the hands of organized crime.
The trouble is that this kind of lending quickly sends people into even deeper financial stratis, and when they can no longer borrow from “payday” or car title lenders, they often move on to organized crime lenders (or onto welfare). I really don’t think these outfits are making a dent in criminal loan-sharking.
I knew that the Poconos were a place to avoid when I saw them advertising zero money down homes for that area in the worst parts of the Bronx...
“36 percent limit on consumer loans under $50,000.”
LOL
Yeah, that’s a big help. Not.
I agree with you. Payday loan outfits are virtual loansharks.
Sigh! I remember when anything over 10% was called usury!
I agree with this. Usury ought to be treated as criminal, and gov’t involvement for this crime fits within sound biblical principles. Even the poor fools who use these “services” don’t deserve that kind of shellacking.
Those “predatory lenders” you both deride have kept many working people, myself included, afloat during short term financial hardships.
But consider this, if your car breaks down and the rent is due, and you have no “credit”, what do you do?
Myself, I prefer to pay the agreed upon fee at the paycheck advance company, handle the situation, and just keep on going.
Banks wont help, perhaps friends are willing to do so, but why ask them first?
I don’t want pity or charity, I just need a few hundred bucks right now, which is two weeks before my next payday.
Since I am willing to pay the contractual fee (which is less than the penalty of a bounced check) why is it any concern of yours, or the governments?
No disrespect intended, but I believe the very presence of these lenders is symptomatic of a two-pronged social ill: widespread dishonesty among the populace effectively stealing by not paying off debts, and widespread greed among these lenders taking advantage of the situation. This makes everyone miserable, including honest people like you and me who have no intention of defaulting on a loan; the lender assumes you and I are human scum because of the few true scums out there.
The Bible has a lot to offer in general principles on a wide variety of topics, and this happens to be one of them. Incidently, the Levitical usury laws differed depending on whether the borrower was Jew or Gentile. The principle there is that your first stop should be your deacons. They are able to help not only with the money but with wise counsel. Of course, those not in a church will not have this option.
If people want to be stupid and get screwed out of their money, what business is it of yours?
I believe in buyer beware, etc. But the buyer also has to be aware in order to beware. Without some of the truth in lending regulations, I’ll bet a surprising number of those here would find that their next new car loan would contain some disturbing surprises down the road.
Unless you want to hire an attorney to review every loan agreement you sign, you better hope there are some restraints on the lender. Do you *really* understand every line in that 3 legal pages long automobile loan you signed?
The flip side of the coin, related to this discussion of payday loans, is that the poor SOBs that do this are so damn ignorant there is no way we could call their decisions informed. I have a 30 yo dumb ass nephew that took a payday loan at 10%. He thought it was a better deal than charging the money on an 18% credit card. 10% a week vs 18% a year? How pathetic is that? For a high school graduate??
I don't object to people paying usurious rates if, and this is a big if, they actually have a semi-clue what they are doing.
We live in an extremely complex and legalistic society. I think we should all keep in mind that as informed as most of us are, or think we are, without some limits on lending practices more of us than you think could find ourselves getting shafted in a loan situation.
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