Lawmakers in several states have voted to increase the fees or the interest rates that lenders can charge on personal loans used by millions of poor or financially struggling borrowers.
We’re taken for suckers everyday by this kind of bullshit. I believe that there’s an awakening happening among the 98%, and I believe we’re capable of changing our country for the better.
"The lenders argued that interest rate caps had not kept pace with the increased costs of doing business, including running branches and hiring employees. Unless they can make an acceptable profit, the industry says, lenders will not be able to offer loans allowing people with damaged credit to pay for car repairs or medical bills.
"But a recent regulatory filing by one of the nation’s largest subprime consumer lenders, Citigroup’s OneMain Financial unit, shows that making personal loans to people on the financial margins can be a highly profitable business — even before state lending laws were changed. Last year, OneMain’s profit increased 31 percent from 2012.
"Under the previous law, lenders could charge 30 percent interest on loans up to $1,000 and 18 percent on a remaining balance of $6,500. The new law allows for rates of up to 30 percent on the first $4,000 of a loan and 24 percent on the next $4,000.
"North Carolina lawmakers, meanwhile, collected hundreds of thousands of dollars in campaign donations from the consumer finance industry. Speaker Thom Tillis, who supported the bill in the House, was one of the biggest beneficiaries. Mr. Tillis, a Republican who is running for United States Senate, has received more money from the American Financial Services Association than any other Senate candidate, according to OpenSecrets.org.
"Mr. Tillis’s campaign manager, Jordan Shaw, said the donations did not sway his voting record. “He wanted to make sure that people still have these loans as an option,” Mr. Shaw said."