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California offsets the bill to thank consumer interest rates



The California Senate passed legislation Friday to thank the interest rate on consumer loans, a measure that supporters say is designed to blunt predatory lending practices. The bill would thank consumer loan interest rates at 36 percentage points above the main rate set by the Federal Reserve, which is currently around 2%. Consumer advocacy groups say some loan companies require interest rates as high as 225%. This will apply to loans between $ 2,500 and $ 9,999, and it will also require lenders to offer borrowers a summary of their credit training. Critics of the bill, including black and Spanish chambers of commerce, argued that an interest rate cap could put some lenders out of business and cut loan options for vulnerable Californians. Other critics suggested it could hurt people's ability to build credit. "I would suggest that we do not wave the naivety about credit," said Democratic Senator Holly Mitchell in response to critics. "Claiming or assuming you can earn credit by being used by someone who will charge you 200% on a $ 2,500 loan is just not the case." It was passed by a vote of 30-5. The online Lenders Alliance, which opposes the bill, spent $ 66,000 on lobbying in the first half of 201

9. Lenders including Advance America, Check Into Cash and Axcess Financial spent more than $ 100,000 on lobbying in the same timeframe.

The California Senate passed legislation Friday to thank consumer interest rates, a measure that supporters say is designed to blunt predatory lending practices.

The bill would thank consumer loan interest rates at 36 percentage points above the main rate set by the Federal Reserve, which is currently around 2%. Consumer advocacy groups say some loan companies require interest rates as high as 225%.

It will apply to loans between $ 2500 and $ 9999, and it will also require lenders to provide borrowers with a summary of credit training.

The bill is expected to get a final vote in the state assembly later Friday before going to Democratic Prime Minister Gavin Newsom.

Critics of the bill, including Black and Spanish chambers, argued that an interest cap could put some lenders out of business and cut loan options for vulnerable Californians. Other critics suggested it could hurt people's ability to build credit.

"I would suggest that we will not be naive about credit," said Democratic Senator Holly Mitchell in response to critics. "Claiming or assuming you can earn credit by utilizing someone to pay you 200% on a $ 2,500 loan is just not the case."

A vote of 30-5 was adopted. [19659004] The online Lenders Alliance, which opposes 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 in the same timeframe.


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