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 Posted: Mon Apr 14, 2008 7:34 pm Subject: Caps on payday loan interest rates? |
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Upon helping someone in this forum I had discovered that in the state of MA there is a law passed that caps the interest rate on small "payday loan" type lenders in that state. It prevents payday loan companies from even operating in that state because the cap is around 20% of the normal interest rate you would have to pay for a "payday loan." Has anyone ever heard of this in any other states and what do you think we could do to raise awareness about this in the hopes that other states will follow suit?
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smckaybiz
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| Posted: Tue Apr 15, 2008 7:58 pm Subject: |
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| Quote: | Massachusetts State Information
Legal Status: Prohibited
Citation:
Small loan act applies. Mass. Gen. Laws Ann. ch. 140 § 96 et seq.;209 Mass. Code Regs. § 26.01. Check cashers are specifically prohibited from making loans unless licensed under the small loan act. 209 Mass. Code Regs. § 45:14( .
Small Loan Rate Cap
23% plus $20 administrative fee upon the granting of a loan
Where to Complain, Get Information:
Regulator: Massachusetts Division of Banks
Address: One South Station Boston MA 02110
Phone: (617) 956-1500
Fax: (617) 956-1599
Regulatory Contact: Kevin McNamara Supervisor |
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cannr
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| Posted: Tue Apr 15, 2008 8:05 pm Subject: |
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Hi, sm! I had to post MA pdl law so we can all see. Yup. They have prohibited pdls; however, small loans can be done with a cap of 23% plus the administrative fee. Of course, the majority of pdls do NOT have a 23% rate on their loans! I wish! There are other states that are set up this way. They say Legal Status - Prohibited. However, the small loan rate would apply. However, like I said, the majority of pdls do not have a percentage rate that low. One can only hope that pdls are prohibited in every state. However, I don't see that happening any time too soon. I mean, they're legal in my state with outrageous % rates. If we could do something to abolish pay day loans altogether, we would be in a better place. People wouldn't get caught in the "trap" or the "endless cycle". One day, hopefully, all states will follow along. But I don't see it any time real soon. Just my opinion.
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cannr
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| Posted: Wed Apr 16, 2008 7:06 am Subject: |
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Yeah, when it says Prohibited, that can be misleading . . . . They aren't really prohibited, like in some states where payday lending is flat out not allowed. What many state's have done is cap the interest rate so low that it's not profitable for payday lenders to lend, effectivly making them go away without outright banning them.
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goudah2424
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