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Are state interest-rate caps a automated victory for borrowers?

Are state interest-rate caps a automated victory for borrowers?

Are state interest-rate caps a automatic win for borrowers?

Small-dollar, short-term loan providers, unburdened by way of a federal maximum interest rate, may charge borrowers prices of 400% or maybe more because of their loans.

But more states are bringing that number down by setting price caps to control lending that is high-interest. Presently, 18 states and Washington, D.C. , have actually guidelines that restrict short-term loan prices to 36% or lower, in line with the Center for Responsible Lending. Other states are weighing legislation that is similar.

“This legislative seion we’ve seen an increased and renewed fascination with restricting interest levels and restricting the harms of pay day loans,” claims Lisa Stifler, director of state policy for the CRL.