In recent news, I saw that on Oct 1, it became illegal to loan money to a member of the US armed services at more than %36 APR.
My girlfriend is in the car title / payday loan business. She received a memo from corporate stating that they will risk a jail term if they do not have a waiver in every loan they make stating that the debtor is not in military service nor related to anyone that is.
In the last 5 or 10 years, I’ve noticed that short term loan / high risk loan business is on just about every street corner. Just like we’ve noticed the difference in banking in retrospect after reading how the bank branch laws have changed on TSD. I also distinctly recall in the distant past that there was a state district attorney crack down on lease-back non-loans as being against the law because they were circumventing the maximum interest rates allowed.
What happened to the laws on interest rates? Are they gone?
In relation to this question, is there still a law about the speculative nature of a loan? ie. A minimum down payment? Or is that just for cars and houses, not cash?
I can almost guarantee that this law has been made in response to the existance of CashCall, who prey on those that are fiscally irresponsible… they use the same laws that allow a “Cash and Go” type place exist, but for much MUCH larger sums of money. This enable them to charge, for example, 58% interest on loan (such as mine) or even higher (83%, in the case of my brother, whom was National Guard at the time).
As an aside, if Judge Marilyn’s rulings on People’s Court can be trusted, in some states if you loan a person money with an excessive interest rate, not only do they not have to pay the illegal interest, they also do not have to pay back the original loan amouunt.
I think I read once that rent-a-center places and payday loan places are legally allowed to exceed the rate maximums.
The usury laws still exist, and have dramatic penalties. In CA, if you make a usurious (sp?) loan, you need to pay back all the interest times 3 (IIRC).
The law has many, many exceptions however - basically any company in the business of making loans, with a California lender’s license, is exempt. So all your finance companies, credit card companies, etc. can charge what they want without violating the usury law. If you loan money to your brother in law, however, at a similar interest rate, he can hit you up for a penalty.
Because they’re expected to devote all their thoughts and efforts to the defence of the nation without having to worry about problems at home. Any civil proceedings (including foreclosures, evictions, divorce) are suspended while they’re on active duty. It’s called the Servicemembers’ Civil Relief Act and the idea dates to the Civil War
This does not sound correct. I got a small loan from the on-base Naval credit union and no permission from my CO was required. Even if I was ignorant of the reg, I doubt the loan officer would have been.
I’m going to go with What Exit? on this one. As a family member of two current duty Marines, this sounds like something that a CO might *tell * you, but in reality isn’t true.
Active Duty Air Force in tech school here. I was required to attend a mandatory financial briefing a couple of weekends ago, and while they did address payday loan places and why we should avoid them in much the same manner we wish to avoid four hour long financial briefings, they did not say anything about requiring permission from our superiors to get a loan.
Incidentally, another neat perk of being in the military is being able to pull out of an apartment lease without penalty (at least in the state of Texas, I have no idea if this is a federal thing or not) as long as you present a copy of your orders to your landlord on request when you cancel the lease.
Yep - According to this , “In 1980, due to inflation, national banks (banks that generally include N.A. in their name), federally chartered savings banks, installment plan sellers and chartered loan companies were exempted from state usury limits by the federal government through a special law. This effectively overrode all state and local usury laws.”
So apparently, the answer to the question of when loan sharking became legal in the US is “1980”.